TMI Tax Updates - e-Newsletter
October 24, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
-
Income Tax:
Deduction of interest and salary paid to partners u/s 40b (IV) and 40 b(V) - order u/s 144 - The provisions of section 184(5) of the Act is very clear and according to which no further deduction can be allowed by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made to any partner of such firm - AT
-
Income Tax:
Revision u/s 263 - While allowing benefit of section 11 of the Act, the Assessing Officer is also required to examine whether the conditions prescribed under section 13 of the Act is fulfilled or not. But the Assessing Officer did not do this exercise and has computed the refund claimed by the assessee - order of AO is erroneous - revision upheld - AT
-
Income Tax:
Sale of wastages - revenue v/s capital receipt - If it is sale of waste materials generated during the course of construction activities, it would reduce the cost of project; otherwise it would also be revenue receipt. - AT
-
Income Tax:
Validity of the assessment order passed u/s 153C read with Section 153A and 143(3) - satisfaction of the AO of the person searched is essential for assuming the jurisdiction u/s 153C by the AO of such other person - notice u/s 153C issued by the AO of the person searched lacks jurisdiction which is not curable by virtue of provision of Section 292B - AT
-
Income Tax:
Penalty u/s 158BFA(2) - , where complete evidence has been found against the assessee on the basis of which addition of undisclosed income has been made in the hands of assessee, levy of penalty confirmed - AT
-
Income Tax:
Penalty under Section 271(1)(c) - AO has not specified the relevant portion of the clause (c) of the notice under Section 274 rws 271 of the Act for initiating penalty proceedings under Section 271(1)(c) - Notice is invalid - AT
-
Customs:
Levy of Safeguard duty – Import of Patented Premium VAM Top Threaded and Coupled Connection – it would be expedient if the CBEC decides the representation of the petitioner without leaving it to the concerned statutory authorities to decide the issue. - HC
-
Customs:
100% EOU - Improper accounting of the imported materials - Relevant provision of Section 72 was not invoked and there was no charge or SCN in support of such demand; assessee cannot be asked to answer the charge, which is not specifically raised - HC
-
Service Tax:
Liability of Service Tax on GTA Services – Transportation of Inputs – They have been told by the consignor as well as the transporter that they should pay the tax - Despite of being informed from consignor and transporter, tax was not paid - demand confirmed - AT
-
Service Tax:
Liability of Service Tax – direct service tax liability or not due to reverse charge on recipient of services – Appellant was not distributor of mutual fund or agent thereof; was promoting and marketing the services provided by LIC Distributor and in no way was involved in distribution of mutual fund; service rendered was covered under BAS - liable to pay service tax - AT
-
Service Tax:
Refusal for Refund of CENVAT Credit – input services - export of output services - when there is no dispute that credit is admissible on these services and the same is permitted to be utilized, the eligibility for refund of un-utilized credit cannot be measured with a different yardstick. - AT
-
Service Tax:
Refund claim – Appellant contends that payment of service tax was a mistake; the period of limitation would not apply – Authorities working under Central Excise law are bound by provision of limitation prescribed in terms of Section 11B of the Central Excise Act - AT
-
Service Tax:
Deposit of service tax with wrong registration number of other unit – adjustment of service tax payments from the account of one registered unit to the account of another registered unit - there is no provision in the service tax law which prohibits such adjustment. - Adjustment allowed - AT
-
Central Excise:
Valuation of goods - manufacturing of recorded audio and video compact discs (RCDs) / production of duplicate CDs - cost of copyrights not to be included in the value - AT
-
Central Excise:
MRP based Valuation u/s 4A or transaction value u/s 4 - appellant has correctly valued their goods sold to the wholesaler in wholesale packages and valued as per section 4 of the Central Excise Act 1944 i.e. transaction value - AT
-
Central Excise:
Valuation of goods - Captive consumption - cost of production - Determination of assessable value - expenses are to be absorbed in cost on the basis of the normal capacity utilization, as in the present case the actual production was much lower than the production based on the normal capacity utilization and prima facie, this is what the appellant had done. - AT
-
Central Excise:
Valuation - Inclusion of cost of advertising - Every amount collected by the manufacturer from the buyer is not includible. Revenue has not been able to establish from fact that the amounts collected were in connection with sale of excisable goods. - AT
-
Central Excise:
Remission of duty - Goods destroyed in fire accident - The, short circuit in electric wire is not in the hand of a man who could avoid such accident. Therefore, it cannot be the reason that appellant failed to take necessary steps to avoid fire accident. - AT
-
Central Excise:
Area based exemption - refund of duty paid in cash - allegation of wrong availing cenvat credit on GTA service - No proceeding was initiated against the denied cenvat credit and Commissioner (Appeals) observed that the exemption notification would apply only in respect of utilisation of the CENVAT credit - refund allowed - AT
-
Central Excise:
Area based exemption - Refund claim of duty paid in cash - there is no indication that value of the inputs cleared as such would be included in the aggregate value of clearance for the purpose of availing the benefit of exemption notification - AT
Articles
Notifications
News
Case Laws:
-
Income Tax
-
2015 (10) TMI 2027
Revision u/s 263 - whether or not the assessee is eligible for deduction u/s 80-IB - Held that:- In the present case on hand, the revenue did not brought on record any evidence in support of its claim that the assessee did not commence its production during the financial year 2003-04, despite the fact that the assessee has furnished a copy of registration certificate issued by the Directorate of Industry and Commerce indicating the date of commencement of production, i.e. on 19-3-2004. Simply the CIT alleged that it would not be possible for assessee to organise materials and produce goods within a period of 11 days by bringing hypothetical and probability theory to the case without any material evidence. The profit & loss account filed by the assessee shows that it has made sales during the financial year. It is an undisputed fact that the assessee claims depreciation on plant & machinery which was accepted by the A.O. and affirmed by the CIT. It is also an admitted fact that Department has accepted the claim of deduction u/s 80-IB of the Act for all the years starting from the A.Y. 2004-05 to 2006-07. Once the revenue accepted the deduction in earlier years, it cannot be questioned in subsequent years unless there is a change of facts in the subsequent years. Admittedly, in the present case, there is no change in the facts which are existed in the A.Y. 2004-05 to A.Y. 2006-07. A.O. has rightly allowed deduction u/s 80-IB of the Act after proper enquiry and his order does not warrant any interference by the CIT. The CIT assumes jurisdiction and revised the assessment order u/s 263 of the Act without pointing out any mistakes in the A.O’s order with a different opinion, which itself is not a ground for assuming jurisdiction u/s 263 of the Act. Therefore, we quash the CIT’s order u/s 263 and restore the assessment order passed by the assessing officer. - Decided in favour of assessee.
-
2015 (10) TMI 2026
Addition of income from House Property u/s. 23(1 )(a) - CIT(A) confirming the addition by rejecting the submissions of the assessee that no interest on interest free advance was assessable as income from House Property - Held that:- In the present case it is seen that the AO has not made any enquiry, nor any material has been brought on record to show that rent received by the assessee was lesser then the fair market rent nor any inquiry or investigation has been done to find out the effect of interest free deposits and to determine the fair market rent expected to be fetched by the property in question, as per clause (a) of section 23(1). Under these circumstances, AO cannot be allowed to make addition on account of notional interest. Since this issue stands squarely covered with the case of Mrs. Bharati Anirudh Kilachand [2015 (1) TMI 1104 - ITAT MUMBA] it is held that the addition made by the AO is contrary to law and facts and the same is directed to be deleted. - Decided in favour of assessee. Addition on account of disallowance of Bank Interest and Bank Charges on the ground that the Bank Loan is utilized for other than business purpose - Held that:- As it has been argued that part of the loan raised during the year has been utilized for repayment of the old loan. This fact has not been controverted by the Ld. DR. Also stated before us that no disallowance has been made out to the amount of interest paid on the old loans in earlier years. In view of all these facts and circumstances, we direct the AO to allow the proportionate amount of interest paid on amount of loan of Bajaj Finance which has been utilized in making repayment of the old loans. The balance disallowance out of the amount of interest is confirmed. With regard to disallowance of loan processing charges and bank charges it is noted by us that these have been incurred for the purpose of the business of the assessee and therefore these are directed to be allowed. - Decided in favour of assessee in part.
-
2015 (10) TMI 2025
Taxation on capital gain - rectification of mistake - direction given by the Tribunal to the Assessing Officer to tax the capital gain in assessment year 2002-03 is not proper because the Tribunal could not have given such directions - Held that:- It is seen that it is specified in sub section (3) of section 153 that Sub Sections (1), (1A), (1B) and (2) shall not apply where the assessment, reassessment or recomputation is made as per clause (ii) of sub section (3) of section 153 on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order, under sections 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. The provisions of section 150 are applicable in respect of reopening u/s 148 and not for reassessment u/s 153 as per tribunal direction. This is important to note that clause (ii) of sub section (3) of section 153 can be invoked even where the reassessment is called for as per an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. Hence, in our considered opinion, the limitation u/s 150 (2) is not applicable in respect of appeal effect order to be passed u/s 153. Hence, this objection also has no merit. As per above discussion, we have seen that there is no merit in any of the contentions raised by the assessee in the Misc. Application. Therefore, we hold that there is no merit in the Misc. Application of the assessee. - Decided against assessee.
-
2015 (10) TMI 2024
Deduction of interest and salary paid to partners u/s 40b (IV) and 40 b(V) - order u/s 144 - CIT(A) allowed the claim - Held that:- Undisputedly the Assessing Officer has afforded various opportunities to the assessee to produce complete books of account, bills and vouchers, etc. for verification. But the assessee did not produce the books of account and relevant evidence to justify the claim of expenditure, etc. In the absence of complete books of account, the Assessing Officer had no option but to proceed under section 144 of the Act for best judgment assessment. The dispute is raised with regard to further deduction of interest and salary paid to partners and firm in terms of section 40b(iv) and 40b(v) of the Act from the net profit estimated by the Assessing Officer. The provisions of section 184(5) of the Act is very clear and according to which no further deduction can be allowed by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made to any partner of such firm While issuing directions for allowance of interest and salary paid to partners, the ld. CIT(A) has not examined the provisions of section 184(5) of the Act. Therefore, we are of the view that the findings of the ld. CIT(A) are contrary to the provisions of the Act and we accordingly set aside the order of the ld. CIT(A) in this regard and restore that of the Assessing Officer. - Decided in favour of revenue. Undisclosed income under section 68 - CIT(A) disclosed the addition - Held that:- Details of the cash deposit in the bank be re-examined in the light of the cash book duly maintained by the assessee. Therefore, it requires a proper verification by the Assessing Officer. During the course of hearing, our attention was also invited to the fact that while making addition on account of cash deposit in bank, the Assessing Officer has also examined the sundry creditors of ₹ 29.05 lakhs, but he has not made any addition of ₹ 29.05 lakhs, as he has made an addition of ₹ 42.08 lakhs on account of cash deposit in the bank. Therefore, once the matter is restored back for verification of cash deposits, sundry creditors of ₹ 29.05 lakhs be also verified. Accordingly we set aside the order of the ld. CIT(A) and restore the matter to the Assessing Officer with a direction to re-adjudicate the issue by making necessary verification with regard to the cash deposit of ₹ 42.08 lakhs and sundry creditors of ₹ 29.05 lakhs. If need be, sundry creditors may also be summoned for verification. The assessee is also directed to produce all the relevant books of account to justify the cash deposits in the bank and sundry creditors. Accordingly, the order of the ld. CIT(A) is set aside and the matter is restored to the Assessing Officer to re-adjudicate the issue in terms indicated above. - Decided in favour of assessee for statistical purposes.
-
2015 (10) TMI 2023
Validity of proceedings initiated u/s 153C - rejection of books of accounts - unaccounted income in respect of automobile business - Held that:- In the absence of any defect noticed in the automobile business, we are of the view that the assessing officer was not justified in rejecting the book results of automobile business and estimating the income of the assessee. We notice that the Ld. CIT(A) also has upheld the rejection of books of accounts without bringing on record any defects in the books of accounts. Accordingly, we set aside the order of Ld. CIT(A) as well as A.O. with regard to the rejection of books of accounts Since we have held that the rejection of books of accounts was not proper, the consequent estimation of profit from automobile business is also liable to be cancelled. Accordingly the orders of the lower authorities on this issue also set aside, meaning thereby the income disclosed by the assessee in respect of automobile business in the revised return of income shall remain. Claim of set off - Held that:- We have noticed that the Ld. CIT(A) has given telescoping benefit in respect of ₹ 92 lakhs offered by the assessee against the income estimated from automobile business. Since we have cancelled the estimation of income from automobile business, the additional income of ₹ 92 lakhs assessed by the assessing officer is required to be sustained, subject to the claim of set off claimed before the tax authorities. The nature of additional income of ₹ 92 lakhs offered in 2008-09 is the unaccounted payment made for purchase of the property (Cash outflow). So one is income component and another one is investment component. In these kind of situations only, i.e., when cash inflow and cash flow are assessed as income, normally the claim of set off of one against the another shall be claimed. There is justification in making such a claim, since both income and investment should not be assessed separately, otherwise it may result in double assessment of same income. Hence, we find merit in the contention of the assessee that the unaccounted income of ₹ 20 lakhs offered in the assessment year 2007-08 should be adjusted against the undisclosed investment made in assessment year 2008-09. Accordingly, we direct the assessing officer to allow set off of this amount also.
-
2015 (10) TMI 2022
Disallowance of Deduction u/s 80HHD – Exclusion of payments received in Indian Rupees from Foreign Airlines and Embassies - Held that:- Once the RBI accepts a particular receipt to have been received in convertible foreign exchange, the deduction u/s 80HHC and 80HHD should be granted to the assessee. In the instant case, admittedly, the assessee had received monies in accordance with the scheme approved by RBI and hence the assessee is entitled for deduction u/s 80HHD of the Act in respect of amounts received in Indian Rupees from Foreign Airlines and Foreign Embassies. It is pertinent to note that the Learned Assessing Officer had granted deduction u/s 80HHD of the Act in the set aside assessment proceedings for the Asst Year 1999-2000 on the same issue to the same assessee. Hence in view of the aforesaid facts and circumstances and provisions of the Act, we direct the Learned Assessing Officer to grant deduction u/s 80HHD of the Act to the assessee - Decided in favour of assessee. Disallowance of deduction u/s 80HHC for sale proceeds of Flight Kitchen Services - Held that:- As relying on assessee’s own case reported in [2011 (8) TMI 411 - CALCUTTA HIGH COURT] the assessee is entitled for deduction u/s 80HHC of the Act in respect of export of food and beverages to out bound flight s of International Airlines and for the proceeds received thereon in convertible foreign exchange and hold that the assessee had complied with the provisions of section 80HHC of the Act in this regard.- Decided in favour of assessee. Disallowance of running and maintenance expenditure of aircrafts - Held that:- Reliance on Sayaji Iron And Engg. Co. case [2001 (7) TMI 70 - GUJARAT High Court] is well placed and supports the case of the assessee. We also find lot of force in the arguments of the Learned AR that if at all there is any personal element involved in the aforesaid expenditure, the same have to be taxed as perquisite in the hands of the directors and it is only for the TDS officer to look into the violations, if any, on the same and hence on that ground also, no disallowance of expenditure could be appreciated. We find that the Learned Assessing Officer had made the enti re addition based on surmises and conjectures and made on ad hoc basis. It is well founded proposition that what is apparent is real and the allegation to prove the cont rary is on the person making such allegation. In view of the aforesaid fact s and ci rcumstances and respectfully following the judicial precedent s thereon, we have no hesitation in deleting the addition made in the sum of ₹ 42,80,883/- on an estimated basis - Decided in favour of assessee. Addition towards notional gain on foreign currency loan - Held that:- In view of the case of CIT vs Woodward Governor India P. Ltd [2009 (4) TMI 4 - SUPREME COURT ] we hold that the sum of ₹ 4,15,36,381/- being the exchange gain would be taxable in the hands of the assessee for the Asst Year 2002-03 and correspondingly the Learned AO is also directed to grant deduction for the exchange loss due to restatement for the Asst Year 2003-04. - Decided against assessee. Disallowance of Interest on borrowed funds used for non-business purposes - Held that:- Advances were made by the assessee to various parties during the course of its business and are strategic investment s. We also hold that the borrowed funds were not diverted for non-business purposes as sufficient own funds were available with the assessee to make interest free advances to its group concerns. We also hold that when borrowed funds and own funds were inextricably mixed in the same bank account and if the own funds are more than the amounts advanced interest free to sister concerns, then the presumption could be drawn in favour of the assessee that those advances were made only out of own funds of the assessee. We further hold that from the aforesaid fact s available on record, the assessee had advanced monies to various concerns during the course of its business to further strengthen its business interests with the said parties and as a measure of commercial expediency. Accordingly we hold that the action of the Learned Assessing Officer in disallowing a sum is not warranted - Decided in favour of assessee. Disallowance of legal expenses - Held that:- The legal expenses incurred by the assessee were in respect of payments made to various renowned counsels for pursuing the various legal disputes of the assessee arising out of its business. We do not appreciate the view of the Learned CITA that additional evidences filed by the assessee in the form of details and bills for legal expenses were not admitted by him after calling for a remand report from the Learned Assessing Officer. In fact the remand report it self was called for from the Learned Assessing Officer only after admission of additional evidences by the Learned CIT(Appeals). Moreover, the assessee had duly filed objections to the remand report that had the original bills for legal expenses been called for by the Learned Assessing Officer, it could have been filed by the assessee. It is also observed that no adverse comments were given by the Learned AO regarding the incurrence of legal expenses except stating that original bills were not filed. In view of this, we have no hesitation in deleting the addition made towards disallowance of legal expenses- Decided in favour of assessee. Disallowance of proportionate management expenses u/s 14A - Held that:- The relevant assessment year under appeal is 2002-03 at which point of time, the provisions of Rule 8D was not in force and the same was made applicable only from Asst Year 2008-09 as decided in the decision of Godrej & Boyce Manufacturing (2010 (8) TMI 77 - BOMBAY HIGH COURT). However, it is not in dispute that the assessee had derived taxable income as well as tax free income and incurred expenditure for deriving both the incomes and hence disallowance is definitely warranted in terms of section 14A which is brought in the statute book with retrospective effect from 1.4.1962. The disallowance had to be made only on an estimated basis with regard to the expenditure incurred for the purpose of earning tax free income. Respectfully following the judicial precedent, we direct the Learned AO to disallow 1% of dividend income under this issue - Decided against assessee. Addition of indirect taxes such as sales tax, expenditure tax, etc as part of turnover for the purpose of deduction u/s 80HHD - CIT(A) deleted the addition - Held that:- This issue is now squarely covered by the decision of the apex court in the case of CIT vs Lakshmi Machine Works Ltd (2007 (4) TMI 202 - SUPREME Court ) wherein it was held that “Section 80HHC(3) is a benef icial section. It was intended to provide incentives to promote exports. The incentive was to exempt profits relatable to exports. In the case of combined business of an assessee having export business and domestic business, the Legislature intended to have a formula to ascertain export profits by apportioning the total business profits on the basis of turnovers. Apportionment of profits on the basis of turnover was accepted as a method of arriving at export profits. This method earlier existed under the Excess Profits Tax Act and it existed in the Business Profits Tax Act. Therefore, just as commission received by an assessee is relatable to exports and yet it cannot form part of turnover, excise duty and sales tax also cannot form part of the “turnover”. The excise duty and sales tax are indirect taxes and are recovered by the assessee on behalf of the Government. Therefore, if they are made relatable to exports, the formula u/s 80HHC would become unworkable - Decided against revenue. Apportionment of common expenses to Bangalore unit for claiming deduction u/s. 80IA - Held that:- We restore this issue to the file of the Learned Assessing Officer to decide the issue afresh on the basis of detail s filed by the assessee following the decision of the Tribunal in assessee’s own case for A.Y. 2000-01 - Decided in favour of assessee for statistical purposes. Disallowance of Pre-opening expenses as capital in nature relating to Vanyavilas and Udayvilas - Held that:- We hold that the expenditure were incurred for expansion of the same business and not for setting up of the new business. Instead these expenditures were incurred by the assessee after the business is set up. It is ultimately only a new unit of the assessee by way of two fresh hotels (Vanyavilas and Udayvilas) which is nothing but an expansion of the existing hotel business of the assessee with complete interconnection and interlacing of funds with common administ ration, common management, common fund and common place of business. Thus we hold that the entire expenditure relating to Hotel Vanyavilas and relating to Hotel Udayvilas to be treated as revenue expenditure. - Decided against revenue. Addition on account of provision for repairs and replacement of bad and doubtful debts - Held that:- From the perusal of the agreement between the assessee and Hotel Raj Bilash, it is apparent that the disallowance was made by the AO out of misconception about contractual obligation in earning management fees and arbitrarily added back an amount on account of management fees from Hotel Raj Bilash. It is a contractual obligations as well as entitlement of assessee-company and which was in no way comparable with the computation of taxable income under the Income Tax Act. Therefore, in our considered opinion, the ld. CIT(A) was justified in deleting the addition made by the AO - Decided against revenue. Addition on account of excess provision of technical fees - Held that:- The income on account of technical services in respect of managed hotels are initially booked on provisional basis by the assessee for want of finalization of accounts of those managed hotels, and later based on Chartered Accountant’s certificate the correct income is booked and provision al ready made is adjusted accordingly. It may either be increased or reduced. Hence we have no hesitation to delete this addition - Decided against revenue. Addition on account of advances written off - Held that:- It is seen that the assessee has debited the sum in its profit and loss account under the head “Advances written off” pursuant to the directions of the Delhi High Court order received during the Asst Year 2002-03 (i.e. the year under appeal). This court order is very much in the public domain and cannot be construed as an additional evidence filed by the assessee before the Learned CIT(Appeals). Even otherwise, we find that the revenue’s case is not going to get strengthened by setting aside this issue to the file of the Learned AO as the conclusion could not be anything different in this issue.We hold that the Learned CIT(Appeals) had adjudicated this issue and granted relief to the assessee with proper reasoning. Hence we are not inclined to interfere with the Learned CIT(Appeals)’s - Decided against revenue. Disallowance on account of staff welfare expenses - Held that:- It is seen that the addition has been made only on an ad hoc basis by the Learned Assessing Officer. It is seen that the learned counsel for the revenue had sought to withdraw this ground before the Hon’ble High Court while pursuing the appeal in the earlier year based on the inst ructions from the Income Tax Department which is clearly stated in para 2 of the order of the High Court. This only leads to a situation that probably the revenue in its wisdom thought it fit not to pursue this issue before the High Court as the addition made thereon may not get sustained in the High Court. We find that this issue is covered in favour of the assessee by the decision of this Tribunal in assessee’s own case for the Asst Year 2001-02 - Decided against revenue. Disallowance of repairs, renewals, replacement and advertisement - Held that:- We find that the addition has been made only on an ad hoc basis which is not in accordance with law - Respectfully following the decision of the coordinate bench of the Tribunal on this impugned issue in assessee’s own case for the Asst Year 1996-97 addition deleted - Decided against revenue. Disallowance of interest u/s 14A on the ground that loan has been utilized for investment in shares for earning dividend which is exempt - Held that:- he assessee is having sufficient interest free funds to make investment in shares of domestic companies to the tune of ₹ 144.08 crores, wherein the dividend earned would be tax free and in view of the fact that the AO had not brought the nexus between the borrowed funds and the amount invested in the shares of domestic companies, and in view of the fact that the investments in subsidiaries were made out of strategic investment s, we are not inclined to interfere with the decision of the Learned CIT(Appeals) on this issue deleting the addition - We also hold that dividend, if any, derived from investment in shares of foreign companies made by the assessee would become taxable and hence disallowance u/s 14A would not operate in this regard - Decided against revenue. Disallowance of depreciation on additions of assets - CIT(A) allowed the claim - Held that:- It is not in dispute that the bills for additions to fixed assets were filed by the assessee before the Learned CIT(Appeals) for the first time and accordingly a remand report was called for from the Learned Assessing Officer who had not given any adverse findings with regard to this issue. Hence there cannot be any grievance on the part of the revenue to agitate this ground before us. Accordingly, we are not inclined to interfere with the decision of the Learned CIT(Appeals) on this issue - Decided against revenue. Computation of deduction u/s 80IA - Held that:- For the purpose of computing deduction u/s 80IA, the deduction u/s 80HHD need not be reduced as both the deductions are independent and accordingly the grounds of appeal raised by the assessee in this regard are allowed. - Decided against revenue.
-
2015 (10) TMI 2021
Scope of assessments made u/s 153A - Held that:- The only reason for initiating the proceedings u/s 153C of the Act is the admission made in the sworn statement, which has been later retracted by the assessee. The materials found during the course of survey operations conducted in the hands of lessee, in our view, could not also be placed reliance, since the lessee himself has denied the entries made in the loose sheets found during the course of survey and hence the loose sheets itself remain uncorroborated. The admission made in the sworn statement may be sufficient to initiate proceedings u/s 153C of the Act. However the additions made without reference to any of the seized materials are liable to be deleted, since these assessment years fall under the category of completed proceedings and no incriminating material supporting the additions made in these years were found during the course of search proceedings.In view of the foregoing discussions, we set aside the order of the Ld CIT(A) passed for AY 2002-03 to 2007-08 and quash the assessment orders passed for these years. - Decided in favour of assessee. Agricultural income declared by the assessee was assessed under section 68 of the Act by rejecting the claim of availability of agricultural activity - Held that:- In the case of A.T. Rayudu, the father of the assessee, we have directed the AO to disallow 25% of the agricultural income and we had followed the decision rendered by the coordinate bench in the case of A.Ammaji and M/s Avnash estates & resorts Ltd. Consistent with the view taken in the above said cases, we direct the AO to disallow 25% of the agricultural income and assess the same as income of the assessee under the head income from other sources. - Decided in favour of assessee in part Undisclosed jewellery - Held that:- Assessee has furnished the ownership details of the jewellery, but the said details were rejected by the assessing officer by pointing out certain defects. In respect of the jewelleries claimed to belong to the sister of Shri Avnash, the same was rejected on the reasoning that the customs documents were not available. Similarly the claim made by his wife was rejected on the reasoning that the parents and grant parents of Avnas’s wife did not furnish wealth tax returns. However, in our view, what is required to be seen is –Whether the assessee could be considered to have made investment in jewellery out of his undisclosed income. The family status, the locker details, the recovery made from bed room, claim made by his sister, the submissions made by the parents of Avnas’s wife, if considered from the angle of human probabilities, in our view, would give negative answer. Accordingly, we are of the view that the addition of ₹ 30.00 lakhs made purely on the basis of sworn statement, that too without any corroborative materials, was not justified. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the said addition. - Decided in favour of assessee. Addition towards deemed dividend under section 2(22)(e) - Held that:- We notice from the details of loans availed by the sister concerns that the personal guarantee has been given by the assessee and also by the parents of the assessee. In some cases, the sister concerns have also provided guarantee. Hence, it is not really a case, where the assessee alone has given the personal guarantee. Further we notice that the assessee has not given any of his securities as collateral security in connection with the loan availed by the sister concerns. Hence, we are unable to accept the contentions of the assessee that the advances received by the assessee should be considered as normal business transactions.However, we notice that the Ld CIT(A) has set aside the matter to the file of the AO in order to ascertain the correct amount of ‘accumulated profits’ and also to work out the correct amount of advances received by the assessee - Decided in favour of assessee for statistical purposes. Enhancement of rental income - Held that:- We have noticed that the loose sheets have been impounded from lessee and according to Ld A.R, the lessee himself has not accepted the contents of the loose paper. In our view, it is the lessee who has to first rebut the contents of the impounded materials. Only if it is conclusively established that the lessee has paid the rent as stated in the loose sheets, then the assessee should be question and a decision has to be taken. In the instant case, the assessing officer has not brought any material to show that the contents of loose papers have been accepted by the lessee from whom they were impounded or the contents of the loose papers have been established. Under these set of facts, we are of the view that the assessing officer has made the addition on inferences without proving the contents of the loose papers and the same cannot be sustained. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition made towards rental income. - Decided in favour of assessee.
-
2015 (10) TMI 2020
Transfer pricing adjustment - selection of comparables - Held that:- M/S.Accel Transmatic Limited (seg.), Avani Cincom Technologies Ltd., Celestial labs Limited and KALS Infosystems Ltd., are concerned, this Tribunal in the case of First Advantage Offshore Services Pvt. Ltd. Vs. DCIT [2012 (9) TMI 924 - ITAT BANGALORE] held that the aforesaid companies are not comparable companies in the case of software development services provider. As far as comparable companies listed at Sl.No.11 & 14 of the final list of comparable companies chosen by the TPO viz., M/S.Ishir Infotech Ltd. And Lucid Software Ltd. and companies listed at Sl.No.16 of the final list of comparable companies chosen by the TPO viz., M/S.Megasoft Limited is concerned, this Tribunal in the case of First Advantage Offshore Services Pvt. Ltd. Vs. DCIT IT (TP) [2012 (9) TMI 924 - ITAT BANGALORE] held that the aforesaid companies are not comparable companies in the case of software development services provider. The nature of services rendered by the Assessee in this appeal and the Assessee in the case of First Advantage Offshore Services Pvt.Ltd.(supra) are one and the same. This fact would be clear from the fact that the very same 26 companies were chosen as comparable in the case of the Assessee as well as in the case of First Advantage Offshore Services Pvt.Ltd.(supra). As far as comparable companies listed at Sl.No.10, 24 & 26 of the final list of comparable companies chosen by the TPO viz., M/S.Infosys Technologies Limited, Tata Elxsi Ltd. (Seg.) & Wipro Limited are concerned, this Tribunal in the case of M/S. Curam Software International Pvt.Ltd. Vs. ITO [2014 (2) TMI 229 - ITAT BANGALORE] has held that the aforesaid companies are not comparable companies in the case of software development services provider As far as comparable companies at Sl.No.5, 18, 19 and 25 of the final list of comparable companies chosen by the TPO are concerned, viz., M/S. E-Zest Solutions Ltd., Persistent Systems Ltd., Quintegra Solutions Limited and Third ware Solutions Ltd., this Tribunal in the case of 3DPLM Software Solutions Ltd. I.T (2014 (12) TMI 612 - ITAT BANGALORE) order was pleased to hold that the aforesaid companies are not comparable with a company engaged in Software Development Services such as the Assessee. As far as comparable chosen by the TPO at Sl.No.8 of the final list of comparable viz., M/S.Helios & Matheson Information Technology Ltd., we find that the said company has been held to be not comparable with a software service provider like the Assessee by the ITAT Pune Bench in the case of PTC Software (India)Pvt.Ltd. [2013 (4) TMI 741 - ITAT PUNE] Flextronics Software Systems Ltd., iGate Global Solutions Ltd.,Mindtree Ltd., Persistent Systems Ltd,Persistent Systems Ltd,Tata Elxsi Ltd., Wipro Ltd. and Infosys Technologies Ltd. should be excluded from the list of comparable companies as relying on Trilogy E-Business Software India Pvt.Ltd. [2013 (1) TMI 672 - ITAT BANGALORE] . The AO is directed to compute the Arithmetic mean by excluding the aforesaid companies from the list of comparable. The AO/TPO is directed to compute the arithmetic mean of the profit margins of the remaining comparable companies after excluding the companies from the final list of 26 comparable companies chosen by the TPO and compare the same with the profit margin of the Assessee in accordance with the provisions of Sec.92C of the Act. Computation of deduction u/s 10A - Held that:- Taking into consideration the decision rendered by the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that it would be just and appropriate to direct the Assessing Officer to exclude telecommunication charges, consultancy charges, repairs and maintenance and certain other expenses incurred by the Assessee (including expenses incurred in foreign currency), both from export turnover and total turnover, as has been prayed for by the assessee in ground - Decided in favour of assessee.
-
2015 (10) TMI 2019
Disallowance u/s 14A - Held that:- If some disallowance was required to be made, as per law, then, only the amount of ‘tax free’ investments was to be considered. Analysis of the aforesaid details clearly suggest that the total amount of ‘tax free’ investment was aggregating to ₹ 189.25 millions as against aggregate amount of ‘own funds’ of the assessee to the tune ₹ 2,555.07 millions. Thus, apparently the amount of ‘own funds’ is in far excess of amount of ‘tax free’ investments of the assessee company. In other words, the assessee company has got sufficient amount of surplus funds. Further, our attention was also drawn to the balance sheet of the assessee company available at page no.1 to 10 of the paper book filed by the assesee company. We found that the figures shown in the aforesaid chart, submitted by the Ld. Counsel, duly tally with the figures shown in the balance sheet. Thus, claim of the assessee that amount of ‘own funds’ of the assessee company are in far excess of the amount of ‘tax free’ investment appear to be factually correct to us. Hon’ble jurisdictional High Court in the case of HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] has held that where the assessee’s own funds and other non-interest bearing funds were more than investment in tax free securities, then no disallowance was required to be made out of the interest expenses u/s 14A - Decided in favour of assessee. Disallowance of 21% of brokerage, stamp duty and custodial services charges - disallowance on the ground that the said expenditure was incurred for the purpose of earning tax free income - Held that:- It is observed by us that the Ld. CIT(A) has been quite fair in deleting the disallowance of ₹ 78,49,487/- made out of the brokerage expenditure of ₹ 1,56,98,973/-, on the ground that these were paid for Government Securities, ICD & other debt instruments. With respect to other expenditure aggregating to ₹ 9,09,960/-, it is noted that admitted case of the assessee is that these have been incurred for the purpose of acquisition of shares. Ld. CIT(A) has been very reasonable in restricting the disallowance to 21% of the said amount of expenses. Thus, the disallowance sustained is now of a very miniscule amount. The argument of the Ld Counsel, that no amount at all can be correlated with the dividend income, is not acceptable. Thus, on this issue we find that order of Ld. CIT(A) is quite justified and no interference is called for and therefore - Decided against assessee. Ad hoc disallowance - Held that:- Ld. Counsel fairly stated that no suo moto disallowance has been made by the assessee company in the computation sheet filed along with return of income, and it seems that Ld CIT(A) has mentioned it so in his order, by mistake . We have ourselves seen the computation sheet of income enclosed at PB-11-12 of the paper book filed by the assessee company. It is noted by us that no such disallowance has been made in the computation sheet as has been mentioned by the Ld. CIT(A) in its order with respect to proportionate indirect expenses disallowable u/s 14A. Under this mistaken belief, Ld. CIT(A) has presumed that the disallowance made by AO has resulted in double taxation. We find that the basic premise of the Ld. CIT(A) appears to be factually incorrect. There seems to be some error in mis appreciation of facts on the part of the Ld. CIT(A) in this regard. Therefore, in the interest of justice, we find it appropriate to send this issue back to the file of the Ld. CIT(A) to re-adjudicate the same after giving adequate opportunity of hearing to the assessee and after taking into consideration correct facts. - Decided in favour of revenue for statistical purposes. Disallowance of bad debts written off - Held that:- It is held that the assessee is eligible for the claim of deduction, both u/s 36(1)(vii) as well as u/s 37(1) of the Income Tax Act, 1961. The only constraint before us is that there is no clear finding, of either of the lower authorities, with regards to the facts that whether any credit for the TDS was claimed and granted to the assessee in the impugned year or in the subsequent years pertaining to those TDS certificates for which impugned amount of bad debts is being claimed. Therefore, we send this issue back to the file of the AO for the limited purpose of verification of the fact whether any claim has been granted to the assessee in this year or in any subsequent year with respect to these TDS certificates. If claim of assessee that no credit has been granted to the assessee, for want of these TDS certificates, is found to be factually correct, then the amount of bad debts claimed by the assessee shall be allowed as deduction. Decided in favour of assessee for statistical purposes. Taxation on interest on deep discount bonds - whether amount of interest had accrued to the assessee company and since the assessee was following mercantile system of accounting, aforesaid interest income was liable to be included in its taxable income of the year under consideration? - Held that:- it is noted that the assessee’s income fall in higher tax brackets and good amount of taxes are being paid by assessee every year. Under these circumstances, the Revenue is not going to suffer with the amount of tax, whether the interest income is taxed in the impugned year or in the next year, so long as, Return has been filed by the assesse showing taxable income and taxes have been paid thereon, in both the years. In our considered opinion, liberal approach should be adopted by the revenue and unnecessary litigation should be avoided. We derive support from the judgment of Hon’ble Supreme Court in the case of Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT]. It is further noted by us that the assessee has already been taxed on this income in the year of sale of bonds. Thus, as on date, the assessee is suffering with the amount of double addition on the same income. In our view, such kind of situation should have been avoided, as far as possible. Keeping in view these facts and circumstances of the case, we delete the addition - Decided in favour of assessee. Disallowance u/s 36(1)(xi) for making computer systems of the assessee as Y2K compliant - Held that:- Revenue should avoid highly technical approach in such cases. If legislature has brought beneficial provisions on the statute, then, there should be an endeavor to ensure that the assesse is able to rightfully claim the benefits of the beneficial provisions. In our considered view, since the claim has been found genuine and the audit report was filed by the assessee, during the course of assessment proceedings and the same was examined by AO in which nothing wrong, has been found, thus, the assessee would be entitled for the benefits of the claim and Ld. CIT(A) is justified in granting relief to the assessee in this regard - Decided in favour of assessee. Disallowance of bad debts on account of writing off of non-convertible debentures - Held that:- In the amended law there is no requirement of proving the impugned amount of debt as ‘bad’. Further, it has been also been provided under the law that subsequently if any recovery is made out of the amounts claimed as bad debt, then the same would be included in the income of the assessee in the year in which recovery is made. Thus, the law is now plain and simple. It has been so clarified in this very manner by Hon’ble Supreme Court also in the case of T.R.F. Ltd. (2010 (2) TMI 211 - SUPREME COURT). It is further noted by us that no doubts, whatsover, have been expressed by the AO on the genuineness of the claim or about the nature of the claim. The objection raised by the AO in the assessment order is not sustainable under the law and therefore, the Ld. CIT(A) has rightly deleted the addition made by the AO. Similarly with regard to interest also, when the principle amount itself is allowable as bad debt, then interest amount would also be allowable and accordingly we hold that Ld. CIT(A) has rightly deleted the disallowance made by the AO - Decided in favour of assessee. Penalty order u/s 271(1)(C) - Held that:- Out of the disallowances mentioned we have deleted the disallowances on account of interest on deep discount bonds and software expenses. Therefore, with respect these two disallowances, the basis of levy of penalty cease to exist and therefore, consequently, penalty also cannot survive and accordingly we uphold the order of Ld. CIT(A) in deleting the penalty on both these issues. With respect to the remaining disallowance, with regard to bad debts it is noted that this amount represented dues from various parties towards non-receipt of TDS certificates. This issue has been sent back by us to the file of the AO for re-deciding the same. Therefore, as on date, this addition does not survive. Consequently, the penalty order on this addition is also set aside. The AO shall be at liberty to initiate the penalty proceedings, if considered appropriate, after this issue is re-decided by the AO, as per law. Addition invoking provisions of section 94(7) - disallowance of loss - Held that:- Section 94(7) is not retrospective and therefore, it cannot be invoked in the year under consideration. Further, Hon’ble Supreme Court in the case of Walfort Share and Stock Brokers (P) Ltd. [2010 (7) TMI 15 - SUPREME COURT ] has observed that in absence of section 94(7), the transactions done by the assessee in this regard were permitted under the income tax law and thus losses resulting there from could not have been disallowed. Thus, respectfully following the judgment of Hon’ble Supreme Court, we find that Ld. CIT(A) has wrongly disallowed the loss. Thus, reversing the action of Ld. CIT(A), we direct the AO to allow the loss - Decided in favour of assessee. Disallowance of expenditure on software expenses - Held that:- Expenditure incurred on the software expenses are revenue in nature and AO was not justified in disallowing the same. See CIT Versus Raychem RPG Ltd. [2011 (7) TMI 953 - Bombay High Court ] - Decided in favour of assessee.
-
2015 (10) TMI 2018
Revision u/s 263 - CIT(A) directed the Assessing Officer to make a fresh assessment considering the computation of income as per provisions of section 11 of the Act and adjudicate properly the issue restored back by the Tribunal with certain directions - whether the case of the assessee certainly falls under clause (ii) of sub-section (3) of section 153? - period of limitation for initiation of rectification proceedings - Held that:- In the instant case, the Tribunal vide order dated 30.1.2009 directed the Assessing Officer to adjudicate the issue relating to the claim of exemption under section 11 of the Act and keeping in view registration under section 12A of the Act granted to the assessee without setting aside or cancelling the assessment order. It is also obvious from the record that when original assessment was framed, registration under section 12A of the Act was not available to the assessee, therefore, there was no question of adjudication of claim of exemption under section 11 of the Act and the Assessing Officer has computed the income as per the relevant provisions of the Act. Since the Assessing Officer has acted in accordance with law, the assessment order cannot be called to be illegal or irregular and that is why the Tribunal has not set aside or cancelled the assessment order. But on account of change of circumstances, the Tribunal has directed the Assessing Officer to adjudicate the issue of claim of exemption under section 11 of the Act in the light of registration under section 12A of the Act granted to the assessee. Since the Tribunal has neither set aside nor cancelled the assessment order and issued directions for compliance to the Assessing Officer, the case of the assessee certainly falls under clause (ii) of sub-section (3) of section 153 of the Act and for this subsection, no time limit is prescribed under the Act. Therefore, it cannot be said that the order passed by the Assessing Officer was barred by limitation. But from a careful perusal of the order passed by the Assessing Officer, we find that the Assessing Officer has simply computed the quantum of refund instead of adjudicating the claim of exemption raised under section 11 of the Act in the light of grant of registration under section 12A of the Act to the assessee as per the directions of the Tribunal. While allowing benefit of section 11 of the Act, the Assessing Officer is also required to examine whether the conditions prescribed under section 13 of the Act is fulfilled or not. But the Assessing Officer did not do this exercise and has computed the refund claimed by the assessee. Therefore, the order of the Assessing Officer is certainly erroneous and prejudicial to the interest of the Revenue which was rightly set aside by the ld. Commissioner of Income-tax. As already held in the foregoing paragraphs that the assessment orders passed by the Assessing Officer vide his order dated 8.8.2013 are not barred by time, as no time limit is prescribed for passing an order under section 153(3)(ii) of the Act. We accordingly find no infirmity in the orders of the ld. Commissioner of Income-tax, who has rightly set aside the orders of the Assessing Officer, as it was not passed in compliance of the directions of the Tribunal. We accordingly confirm the orders of the ld. Commissioner of Income-tax in both the assessment years. - Decided against assessee.
-
2015 (10) TMI 2017
Rejection of books of account - Estimation of profit & assessment of income surrendered by the assessee separately - unauthorized payment - Held that:- In the instant case, we are of the view that the trade practice prevailing in this trade and also the manner of maintenance of vouchers regarding payments made towards various expenses would constitute sufficient material to disturb the earlier year’s assessments also, which were not pending on the date of initiation of search. Accordingly, we do not find merit in the contentions of the assessee and accordingly, reject the same. In view of the admission of the partner of the firm that he has been following same practice in the earlier years also, one has to presume that the defects noticed in the maintenance of books in AY 2008-09 to 2010-11 were also prevailing in the earlier years also. Accordingly, we are of the view that there is no infirmity in the order of Ld CIT(A) in confirming rejection of books of account for all the years under consideration. The net profit rate of 5% and 7% estimated by the Ld CIT(A) for the years under consideration also appears to be high, when we consider the rate of net profit declared by the assessee. At the time of hearing, the Ld Counsel submitted that the deficiencies, if any, is automatically made good by the assessee by offering additional income in AY 2008-09 to 2010-11. Accordingly he submitted that the net profit rate declared by the assessee should have been accepted for the earlier years. However, the said contentions cannot be accepted, since we have upheld the rejection of book results and hence the net profit is required to be estimated. However, in view of the foregoing discussions, we are of the view that the rate of net profit should be determined by considering the net profit rate declared by the assessee for the earlier years, which shall be modified to take care of or to cover up the deficiencies. From the chart furnished by the assessee, we notice that the rate of net profit declared by the assessee before partners’ remuneration and interest work out to 1.46%, 3%, 3.46% and 6.83% respectively for AY 2004-05, 2005-06, 2006-07 and 2007-08. Accordingly, in our view, the rate of net profit may be adopted @ 2.5%, 3.5%, 4% and 7% respectively for AY 2004-05, 2005-06, 2006-07 and 2007-08. Rejection of claim for deduction of depreciation - Held that:- The capital expenditure incurred is not allowed as deduction, but the deterioration in their value is allowed as deduction with the name “depreciation”. Hence, it is called non-cash expenditure and also called statutory deduction. While estimating the income, the trading results only are estimated on the basis of sales/gross receipts, meaning thereby, what is estimated is only the net profit before allowing any non-cash expenditure/statutory deductions. Further, the quantum of depreciation would also depend upon the value of assets. Even if the level of operations and other things are equal between the two, the depreciation amount will be different due to the difference in the value of assets. Hence the total income shall also result in different figures between the two business men. The above said illustration would support the contentions of the assessee that the depreciation should be allowed separately. Accordingly, we direct the AO to allow the depreciation admissible to the assessee against the income estimated by us in the preceding paragraphs. Next contention of the assessee that it was using its vehicles for transport purposes and hence the vehicles are entitled for higher rate of depreciation. Since the contentions urged by the assessee require factual verification, we set aside this issue to the file of the AO, who shall examine the claim of the assessee afresh and shall take appropriate decision in accordance with the law. Deduction for remuneration and interest payable to the partners - Held that:- As from the Statement of facts filed by the assessee before the Ld CIT(A), we notice that the assessing officer has assessed the remuneration and interest in the hands of the partners, even though it was not allowed as deduction in the hands of the assessee firm. Under these set of facts, we do not find any infirmity in the decision of Ld CIT(A) in directing the AO to allow the deduction for remuneration and interest payable to the partners.
-
2015 (10) TMI 2016
Expenditure set off against interest income - whether the receipt of interest on borrowed funds put in FDRs with the bank was capital receipt or revenue receipt? - Held that:- In the instant case, the assessee has raised loans and borrowed funds from different persons to set up shopping malls, multiplexes and associated activities related thereto. In between construction period, funds were parked with the bank in fixed deposits and/or in mutual funds. The assessee earned on fixed deposits and earned gains in respect of investment in mutual funds. In addition to interest, the assessee has sold scrap which was the alleged result of the construction raised. The Assessing Officer while framing the assessment has taxed interest from FDRs, sale of wastage and mutual funds as income from other sources. It has not been brought on record that the surplus funds were put in FDRs on account of commercial expediency. Since the funds were not required at the relevant point of time in construction activities, the same were parked with bank to earn interest. Therefore, the interest earned on surplus funds parked with bank and in mutual funds are not inextricably linked with the construction of shopping malls, multiplex and other associate activities, etc. Therefore, the aforesaid interest earned on mutual funds by the assessee cannot be capitalized and have been rightly treated by the Revenue as income from other sources. We accordingly set aside the order of the ld. CIT(A) and restore that of the Assessing Officer. - Decided in favour of revenue. Sale of wastages - revenue v/s capital receipt - Held that:- It is not clear from the orders of the lower authorities whether sale of wastage was at all generated during the construction activities or connected or inextricably linked with the construction of shopping mall and multiplexes. If it is sale of waste materials generated during the course of construction activities, it would reduce the cost of project; otherwise it would also be revenue receipt. With these directions, we restore the matter to the file of the Assessing Officer to verify the nature of sale of wastage material. We accordingly set aside the order of the ld. CIT(A) in this regard and restore the matter to the Assessing Officer to examine the nature of sale of waste material in terms indicated above and treat it accordingly. - Decided in favour of revenue for statistical purposes.
-
2015 (10) TMI 2015
Validity of the assessment order passed u/s 153C read with Section 153A and 143(3) - Held that:- As per Section 292B, any notice, summons or other proceeding would not be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding provided such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. However, before issuing of notice u/s 153C, the satisfaction of the Assessing Officer of the person searched is essential for assuming the jurisdiction u/s 153C by the Assessing Officer of such other person. Therefore, in the absence of satisfaction by the Assessing Officer of the person searched, the Assessing Officer of the present assessee does not get any jurisdiction to issue such notice. Accordingly, notice u/s 153C issued by the Assessing Officer of the person searched lacks jurisdiction which is not curable by virtue of provision of Section 292B. In view of above, we respectfully following the decision of Hon’ble Apex Court in the case of Manish Maheshwari (2007 (2) TMI 148 - SUPREME COURT OF INDIA) and decision of Lalitkumar M. Patel (2013 (7) TMI 778 - GUJARAT HIGH COURT), hold that the notices issued u/s 153C were invalid; accordingly the same are quashed. Consequently, the assessment orders framed u/s 153C r.w.s. 153A are also quashed. Since the assessment order itself has been quashed, the other grounds of the assessee’s appeal which is with regard to determination of the income of the assessee needs no adjudication. - Decided in favour of assessee.
-
2015 (10) TMI 2014
Interest earned by the appellant during pre operation period on the grant received from government of India - Held that:- Going through the serial No. 31 to 40 of the paper book and various copies of orders of Ministry of Textile about agreement of subsidy, which required to be considered before deciding the nature of interest income, therefore, we set aside this issue to the Assessing Officer and is directed to give a reasonable opportunity of being heard to the assessee. The assessee is also directed to cooperate with the Assessing Officer and furnished all required details. Accordingly, we set aside this issue to the Assessing Officer for de novo Interest disallowed against interest free loan given to the related concern - whether there was no business expediency of the assessee to give interest free advances to the sister concern? - CIT(A) allowed the claim - Held that:- CIT(A) has thoroughly examined this issue on facts as well as on legal side of the case. The appellant had filed detailed information as to when the share capital was received and how the part of share capital was advanced to his sister concern on which no interest has been charged. Even in respect of credit transactions on account of sweep transfer in the bank account against which loan was advanced to M/s JTPL Texmart Pvt. Ltd. The ld CIT(A) has held that sweep transfer is the amount from FDRs, which were earlier got by the appellant when the requirement of funds was there for making such loan to M/s JTPL Texmart Pvt. Ltd., such FDR amount was automatically transferred from FDR account to current account. The assessee had not advanced interest bearing fund to its sister concern, therefore, charging of interest on advance to sister concern and reduction from the pre-operative expenses was not justified. The ld DR had not controverted the finding given by the ld CIT(A). Therefore, we uphold the order of the ld CIT(A) on this ground - Decided against revenue.
-
2015 (10) TMI 2013
Revision under section 263 - the assessee has claimed depreciation at 60% on computer equipments, UPS and SAP instead of depreciation at the rate of 15% on computer peripheral and at the rate of 25% on SAP licence, and and that the assessee has claimed additional depreciation of ₹ 23.35 lakhs on fire safety equipments, weigh scale, printer, storage tank etc - Held that:- The Hon'ble Delhi High Court in the case of BSES Yamuna Power ltd. (2012 (12) TMI 118 - ITAT DELHI) has held that depreciation at the rate of 60% will be admissible on computer peripherals. Prior to this decision, there are large number of orders at the end of the ITAT, and the ITAT is unanimous in its approach on this issue. Thus, a possible view can be taken by the AO with regard to the admissibility of depreciation on UPS, scanner etc. at the rate of 60%. It is one of the possible views, which the AO has taken. As far as the depreciation at the rate of 60% allowed to the assessee on SAP licence is concerned, we are of the view that the AO has investigated the issue and took an opinion that it might have not been reflected specifically in the assessment order. If the ld.Commissioner has a different opinion on this issue, then it would become a debatable one. According to the assessee, in various judgements, it has been held that the software expense is to be allowed as revenue expenditure. Considering the nature of its debatable-ness, we are of the view that the assessment order cannot be branded as an erroneous order on this issue. The assessee as an entity ought to be engaged in the manufacturing activity. It ought to have installed plant & machinery. It is not necessary that new machinery should be part of the manufacturing activity. The additional deprecation will be admissible. This also to be termed as debatable issue and the ld.AO has taken a view of this aspect, which could not be subject to action under section 263. The AO has invited the explanation of the assessee, gone through the details submitted by it, and thereafter, allowed the depreciation including additional depreciation as per law. His view may not get approval from the point of view of the ld.Commissioner, but, the opinion of the AO is also a possible view, and therefore, no action under section 263 can be justified. On due consideration of these facts and circumstances, we allow the appeal of the assessee, and quash the order passed by the ld.Commissioner under section 263 of the Act. - Decided in favour of assessee.
-
2015 (10) TMI 2012
Disclosure made by assessee during the course of search - whether though the assessee has disclosed the income in the note appended with the return of income, but his income can be assessed lower than the returned income? - CIT(A) deleted the addition in part - Held that:- The assessee has made a disclosure of ₹ 10 crores during the course of search. While filing of the return, on verification of all the materials, he re-affirmed his disclosure at ₹ 2 crores. His admission during the course of search, coupled with the re-affirmation at the time of filing of return, would denude him to say that disclosure was under misconception of facts, because, he was not supplied the seized material. This disclosure was made after the perusal of evidence. Therefore, he cannot say there is no evidence against the assessee for assessing the income of ₹ 2 crores. As discussed, earlier statement made under section 132(4) is admissible evidence. We have upheld the findings of the CIT(A) for deletion of ₹ 8 crores on the ground that there was no corroborative evidence with the Revenue in support of that addition, but, the moment the assessee has re-affirmed the disclosure of ₹ 2 crores, it becomes an absolute evidence. This disclosure was made after due deliberation and consultation with the tax consultant. Therefore, there is no mistake of facts or misconception about the law on this amount. The ld.First Appellate Authority has rightly confirmed the addition to this extent. - Decided against assessee and revenue.
-
2015 (10) TMI 2011
Addition under section 68 - unexplained share application money - CIT(A) deleted the addition - Held that:- CIT(A) granted relief to the assessee on the basis of remand report of the AO and other relevant and supportive evidence and documents and the CIT(A) also considered surrounding circumstances and correctly reached to a conclusion that the CIT(A) has discharged its onus cast upon him u/s 68 of the Act by establishing the identity of the investors, along with their creditworthiness and genuineness of the transaction. We may also point out that the case of the assessee was selected for scrutiny through CASS and it is not the case of scrutiny at the instance of Investigation Wing or any other revenue intelligence agency. Finally, respectfully following the ratio of the decision of Allahabad High Court in the case of CIT vs M/s Kaiser Construction & Engineers (2013 (2) TMI 701 - ITAT AGRA) about the acceptability and reliability of the remand report favoring the assessee and judgment of Hon’ble Supreme Court in the case of CIT vs Lovely Export (P) Ltd. (2008 (1) TMI 575 - SUPREME COURT OF INDIA) and CIT vs Anshika Consultants Pvt. Ltd. (2015 (4) TMI 842 - DELHI HIGH COURT), we have no hesitation to hold that in the extant case the identity of the investors, genuineness of the transaction and the creditworthiness of the share applicants have been established by the assessee by way of submission of particulars of the share applicants along with copies of the balance sheets, statement of bank account, income tax reports and PAN details etc. and the onus was shifted on the AO to demolish these supportive evidence and documents. AO himself in his remand report dated 23.5.11 concluded that all the share applicants are existing assesses and the contention/explanation in regard to the impugned contribution appears to be correct - Decided against revenue.
-
2015 (10) TMI 2010
Penalty u/s 158BFA(2) - sale consideration received in cash, over and above the consideration stated in the sale deed - Held that:- Where the addition was made on the basis of estimation of investment in property, the Tribunal held that in the absence of any evidence found in the course of search that the assessee had incurred any unaccounted expenditure on construction of the said property, there was no merit in levy of penalty under section 158BFA(2) of the Act. As pointed out evidence of sale consideration received in cash, over and above the consideration stated in the sale deed in respect of property sold by the assessee, was found during the course of search of the person who had purchased the property of the assessee. In view of direct evidence of a transaction entered into by the assessee with the purchaser, though not found from the premises of the assessee, but from the premises of the purchaser, during the search operations and also in view of the admission of the partners of searched person and their cross-examination by the assessee, where complete evidence has been found against the assessee on the basis of which addition of undisclosed income has been made in the hands of assessee, we find no merit in the reliance placed upon by the learned Authorized Representative for the assessee. Accordingly, setting-aside the order of CIT(A), we direct the Assessing Officer to levy penalty under section 158BFA(2) of the Act on differential income of ₹ 17,22,500/-. The grounds of appeal raised by the Revenue are thus, allowed. - Decided against assessee.
-
2015 (10) TMI 2009
Applicability of provisions of section 115JB - banking business - Held that:- Allow the appeal of the assessee on the ground that the bank is not required to prepare its P&L accounts in accordance with the provisions of part-II & of schedule VI of Companies Act, 1956 and therefore, the provisions of MAT insec.115JB of the IT Act, is not applicable to the assessee. See M/s Indian Bank Vs Addl.CIT [2011 (8) TMI 1112 - ITAT CHENNAI] - Decided in favour of assessee. Deduction u/s 36(1)(viia) - whether provisions of section 36(1)(viia) provides for limiting the deduction tot eh amount of provisions made in the accounts? - Held that:- The creation of a special reserve u/s.32A or Sec.36(1)(viii) of the Act cannot be equated with creation of PBDD u/s.36(1)(viia) of the Act. Creation of provision u/s.36(1)(viia) of the Act is governed by certain rules like Rule 6ABA of the rules in respect of rural advances. It cannot be created at the bank’s whims and fancy. Moreover the assessee is not making a claim for creation of PBDD in the books of accounts of PY relevant to AY 08-09. The excess reserve created in the subsequent year cannot be equated to the PBDD created in the books for the present AY. The decisions relied upon by the learned counsel for the assessee do not lay down a proposition that excess provision created in the subsequent year can supplement the inadequate created in an earlier year. The decisions relied upon by the learned counsel for the assessee lay down proposition that the assessee should be given liberty to create a reserve in the books of accounts of the relevant AY. For the reasons given above, we reject the second alternate submission made by the learned counsel for the assessee. Thus the assessee will be entitled to deduction u/s.36(1)(viia) - Decided in favour of assessee in part. Deduction u/s 36(1)(viia) - bad debts written off pertaining to non-rural branches without adjusting the same against the provisions made u/s 326(1)(viia) - Held that:- CBDT itself has recognized the position that a bank would be entitled to both the deduction, one under clause (vii) on the basis of actual write off and another, on the basis of clause (viia) in respect of a mere provision. Further, to prevent double deduction, the proviso to clause (vii) was inserted which says that in respect of bad debt(s) arising out of rural advances, the deduction on account of actual write off would be limited to the excess of the amount written off over the amount of the provision allowed under clause (viia). Thus, the proviso to clause (vii) stood introduced in order to protect the revenue. It would be meaningless to invoke the said proviso where there is no threat of double deduction in case of rural advances, which are covered by the provisions of clause (viia) there would be no such double deduction. U/s 36(1)(vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year, while the proviso will operate in cases under clause (viia) to limit deduction to the extent of difference between the debt or part thereof written off in the previous year and credit balance in the provision for bad and doubtful debts account made under clause (viia). The proviso to Section 36(1)(vii) will relate to cases covered under Section 36(1)(viia) and has to be read with Section 36(2)(v) of the Act. Thus, the proviso would not permit benefit of double deduction, operating with reference to rural loans. Therefore, we hold that provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields – Decided in favor of assessee. See Catholic Syrian Bank Ltd. Versus Commissioner of Income Tax, Thrissur [2012 (2) TMI 262 - SUPREME COURT OF INDIA] - Decided against revenue. Depreciation on “held to maturity”(HTM) investment - Held that:- As decided in case of UCO Bank [1999 (9) TMI 4 - SUPREME Court] Preparation of the balance-sheet in accordance with the statutory provision would not disentitle the assessee in submitting the Income-tax return on the real taxable income in accordance with the method of accounting adopted by the assessee consistently and regularly. That cannot be discarded by the departmental authorities on the ground that the assessee was maintaining the balance-sheet in the statutory form on the basis of the cost of the investments. In such cases, there is no question of following two different methods for valuing its stock-in-trade (investments) because the bank was required to prepare the balance-sheet in the prescribed form and it had no option to change it. For the purpose of income tax as stated earlier, what is to be taxed is the real income which is to be deduced on the basis of the accounting system regularly maintained by the assessee and that was done by the assessee in the present case Addition u/s 36(1)(viii) - whether the assesssee is not a specified entity prior to amendment in the IT Act,w.e.f.1/4/2008 and not doing an eligible business to be entitled for deduction u/s 326(1)(viii)? - Held that:- As decided in Union Bank of India case [2012 (6) TMI 500 - ITAT MUMBAI] even otherwise the assessee is a Govt. company since the Central Government holds more than 51% of the share capital of the bank and as defined inSec.617 of the Companies Act, the assessee is a Government Company. Hence the deduction u/s 36(1)(viii) has to be allowed to the assessee as it is engaged in the business of providing long term finance for industrial, agriculture and infrastructure development in India and is a Government Company. The assessee is a financial Corporation “within themeaning of Sec.36(1)(viii) since it is a Government Company. However, the deduction available under this section will be restricted to the amount transferred to Special reserve subject to the limit of prescribed percentage of profits derived from providing long term finance for the approved purposes mentioned in Sec.36(1)(viii). For the purpose of determining the deduction available to the assessee u/s 36(1)(vii) the issue is remitted back to the file of the AO subject to the above direction the appeal of the assessee on this issue is allowed - Decided against revenue. Disallowance made u/s 14A - CIT(A) allowed the claim - Held that:- This issue is covered by the order of ITAT, Bangalore Bench in assessee’s own case for previous AYs the claim of the assessee before the AO that tax free income for the bank is mainly from investments held by the bank. The investment activities of the bank are carried out by the Treasury Department at Head Office. Even without earning any free income, these expenditure would have been incurred by the bank since the bank has to hold SLR securities to carry on the business and the expenditure is of fixed in nature. Therefore, there is no expenditure incurred directly by the bank for earning any tax free income. Since the expenditure would have been incurred by the bank even without the earning of tax free income, no part of the expenditure can be related to earning the tax free income. In the light of the above undisputed fact and in view of the decision of the Hon’ble Karnataka High Court in the case of CCI Ltd. (2012 (4) TMI 282 - KARNATAKA HIGH COURT), we are of the view that no disallowance can be made u/s.14A of the Act. The addition made in this regard is directed to be deleted. - Decided against revenue.
-
2015 (10) TMI 2008
Disallowance of the Foreign Exchange loss under section 43A - Held that:- It is seen from the ECB loan agreement, which was filed based on a speci fic query from the Bench by the A.R. that the loan was utilized for general corporate purposes and not for acquisition of any fixed assets. Hence, we hold that the borrowings were utilized on Revenue Account and the provisions of section 43A of the Act were not applicable at all in the fact s of the case. Based on this, it could logically be concluded that any exchange fluctuat ion arising out of the restatement of the said loan at the end of the year, be it gain or loss, would also fall on revenue account and hence, automatically comes under the ambit of taxation if it is a gain and allowable as an expenditure if it is a loss. This issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of CIT –vs.- Woodward Governor India P. Ltd. reported in (2009 (4) TMI 4 - SUPREME COURT ) - Thus we hold that the sum being the exchange loss would be allowed as deduction under section 37(1) of the Act for the assessment year 2005-06. - Decided in favour of assessee. Addition made towards employees’ contribution to Provident Fund (E.P.F.) - amount remitted beyond the due date prescribed under the P.F. Act but before the due date of filing the return of income under sect ion 139(1) - CIT(A) deleted the addition - Held that:- This issue is directly covered in favour of the assessee by the decision of the Apex Court in Vinay Cement Limited reported in (2007 (3) TMI 346 - Supreme Court of India) wherein it has been held that “statutory item like EPF is paid before the due date of filing the return of income be allowed irrespective of the fact where the contribution related to the employee and employer”. From the verification of the dates as stated in the assessment order, it is observed that the assessee had duly remitted the entire EPF dues before the due date of filing the return of income. We are not inclined to interfere with the decision of the ld. CIT(Appeal's). Accordingly, Ground raised by the Revenue is dismissed. - Decided in favour of assessee. Addition made on account of cess on green leaves - CIT(A) deleted the addition - Held that:- Rule 8 of the Income-tax Rules, 1962, requires that the computation is to be made as if by fiction the entire income out of the tea grown and manufactured as income assessable under the Income-tax Act, 1961 - The entire amount paid as cess on green leaf seems to be eligible for deduction with regard to which we do not find any confusion. See CIT –vs.- AFT Industries Limited [2004 (7) TMI 81 - CALCUTTA High Court] - Decided in favour of assessee. Income from other sources - CIT(A) deleted the addition - Held that:- It is seen from the assessment order that the aforesaid three receipt s had been duly accepted by the Assessing Officer as business income in the assessment proceedings itself, which was also the claim of the assessee in i ts revised return. However, while adopting the figure of income from other sources, the Assessing Officer did not adopt the figures as stated in the revised return but adopted a totally different figure. Hence, in the facts and circumstances of the case, we deem it fit and appropriate, in the interest of justice and fair play, to set aside this issue to the file of the Assessing Officer to adopt the correct figure of income from other sources after verification of proper workings in this regard from the assessee. - Decided in favour of revenue for statistical purposes. Miscellaneous receipts arose from tea business - CIT(A) treating the same as business income as against the treatment by the Assessing Officer as income from other sources - Held that:- Items A to J were only arising out of tea business totalling to ₹ 14,02,968/- and accordingly to be treated as income from business. Since no details could be filed regarding the sundry receipt s before us, the same is considered as the income from other sources. Interest on income-tax refund could definitely be construed only as income from other sources. We direct the Assessing Officer to re-compute accordingly. - Decided in favour of revenue for statistical purposes.
-
2015 (10) TMI 2007
Addition as peak deposit - Held that:- During the assessment proceedings enquiries were made from the bank and it was found that the introduction to the said account had been made by Smt. Prem Kumari wife of the assessee and the withdrawals and the deposits have been made by Shri Kapoor Singh and his sons Vikas and Rajiv from time to time. The Bank Manager has given in writing that accounts statement shows that most of the payments have been made to Shri Kapoor Singh and his sons. Thus Section 132 (4A) of the Act is very much attracted in the present case as the pass book was in the custody of the assessee and not that of in the custody of assessee’s sons. Thus, it is clearly established that the account of Shri Sube Singh was operated by the assessee and not by assessee’s sons. Therefore, the Assessing Officer has rightly added the said amounts in the hands of the assessee and the CIT(A) has also confirm it with proper reasoning in respect of the Assessment Year 2000-2001 and 2002- 2003. - Decided against assessee. Addition on “Kanyadan” given - piece of evidence found and seized during search that the appellant has made noting of its undisclosed income on this paper - Held that:- The assessee stated before the Investigation Officer that these entries pertain to some “Kanyadan” given by him. But during the statement at the time of search the assessee clearly stated that the expenses incurred for the marriage of his daughter was ₹ 1.25 lakhs (page no. 17 of the Paper Book filed by AR). As relates to the case law cited by the AR that of Malabar Oil Marketing Co. [2003 (9) TMI 295 - ITAT BOMBAY-F] the same is relevant as in the said case, it was held that mere notings on the loose paper without any corroborative evidence, cannot be assessed as “income” in the hands of the assessee. It further held that there being no material on record to suggest that the assessee has received any amount apart from the amounts received by it per account payee cheques. The Assessing Officer as well as the CIT(A) has not given any reasons or justification as to how the figures mentioned in the loose paper pertains to denomination of thousand. Thus, no case for addition on this account is made out by the Revenue. - Decided against revenue.
-
2015 (10) TMI 2006
Penalty under Section 271(1)(c) - irregular notice - Held that:- The Assessing Officer has not specified the relevant portion of the clause (c) of the notice under Section 274 rws 271 of the Act for initiating penalty proceedings under Section 271(1)(c) of the Act for Assessment Years 2006-07 to 2008-09. Therefore, respectfully following the decision of CIT Vs. Manjunatha Cotton & Ginning Factory (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) we hold that the notices issued under Section 274 rws 271 of the Act in the case on hand for Assessment Years 2006-07 to 2008-09 are invalid. We, therefore, cancel the impugned orders of the authorities below levying penalty under Section 271(1)(c) of the Act for all the three assessment years involved. - Decided in favour of assessee.
-
2015 (10) TMI 2005
Gain or loss earned on sale and purchase of shares and securities - capital gain v/s busniss income - Held that:- The Tribunal noted that so far as rule of consistency was concerned, even prior to assessment year 2004-05 assessee was showing the shares as investments and that the same should have been applied in assessment year 2004-05 also, where assessee had himself changed the method of accounting in comparison to earlier year as well as in the subsequent years. This observation of the Bench is sought to be emphasized by the Ld. Representative for the assessee before us to support his plea that the orders of the Tribunal for assessment years 2005-06 and 2006-07 in assessee’s own case be disregarded and instead the position prior to assessment year 2004-05 be applied as per rule of consistency. In our considered opinion, the decision in the case of Shri Chhitubhai N Patel(2012 (12) TMI 780 - ITAT, MUMBAI) has been rendered in the background of its own facts and circumstances. In fact, the Tribunal subsequently noticed that “since there are decisions on both sides on this point, therefore, each case has to be decided on its own facts” The aforesaid observation of the Tribunal itself suggests that each case is to be decided having regard to the totality of its facts and circumstances. Therefore, in our view the decision in the case of Shri Chhitubhai N Patel(supra) relied upon does not help the assessee in the present case. We, therefore, hold that the gain/loss on purchase and sale of shares, may it be long term or short term, be assessed as business income and not as capital gain being canvassed by the assessee. - Decided against assessee.
-
2015 (10) TMI 2004
Addition u/s 68 - unexplained cash credit - CIT(A) deleted the addition - Held that:- CIT (Appeals) noticed that the additions made by the Assessing Officer on the basis of transactions in the bank account of Mr. Dharmendra Kumar Nagar has no relevance at all because the same relate to the share capital which has already been accepted and the actual increase in unsecured loans is attributed to the amount advanced by Mr. Rajendra Singh. Hence, the genuineness of unsecured loans is required to be examined only in the case of Mr. Rajendra Singh who advanced loan of ₹ 60 lakhs. The CIT (Appeals) noticed that Mr. Rajendra Singh is an old income-tax assessee and that the entire amount has been advanced through banking channels and for that purpose Mr. Rajendra Singh had not only filed a personal balance sheet but had also filed copy of the saving bank account maintained with City Bank and had further explained the source of the funds so advanced. Therefore, the identity, source, capacity and genuineness of the transactions as required for Section 68 of the Act has been prima facie established - Decided in favour of assessee. Addition on on account of unexplained advances received from patients - CIT(A) deleted the addition - Held that:- In the year under consideration, no fruitful purpose shall serve to the Revenue because if the patient’s advance is sustained during the year under consideration, then the consequential effect has to be given in subsequent years by way of reducing the similar amount out of income offered in subsequent year. Otherwise it will amount to double assessment. It is not the case of the Assessing Officer that the patients’ advance has not been offered for taxation at all in subsequent year.- Decided in favour of assessee. Addition on failure to establish the genuineness of creditors - Held that:- The Assessing Officer, though had not mentioned under which provision the additions are being made. It appears that the said additions have been made u/s 68 of the Act because it is the only section under which any sum found credited in the books of account can be added back. In the case of Jatia Investment Co. [1992 (8) TMI 16 - CALCUTTA High Court] it is held that in case no cash has been received by the assessee, then no addition can be made u/s 68 of the Act. In the instant case, the assessee had not received any amount in the form of cash from the sundry creditors. In fact, they represented the outstanding balance amount against the purchases which has been duly verified by the Assessing Officer and found genuine. The learned DR could not point out any fault of factual inaccuracy in the order of CIT(Appeals) - Decided in favour of assessee.
-
Customs
-
2015 (10) TMI 2035
Levy of Safeguard duty – Import of Patented Premium VAM Top Threaded and Coupled Connection – Whether petition under Article 226 of the Constitution of India is maintainable and petitioner is entitled to the grant of any interim relief or not? - Petitioner contends that goods imported fall within excluded category of notification issued by Central Government dated 13th August, 2014 – Department was of the view that the goods would not fall under excluded category and would attract safeguard duty. Held That:- Issue involved is a pure question of law and does not involve any question of fact – Jurisdiction of Respondent authorities is under challenge, it cannot be said that petition under Article 226 is not maintainable; petition thus maintainable – Notification excludes Non-API and Patented Premium Joints/Premium Connections/Premium Threaded Pipes and Tubes; there cannot be non-API pipes of API grade - Respondents are directed to allow clearance of subject goods as and when imported subject to bank guarantee to the extent of 25% of duty that may be assessed; failing on which, will have to deposit full duty. CBEC directed to decide the representations dated 16th December, 2014, 12th February, 2015 and 13th March, 2015 filed by the petitioner on or before 23rd October, 2015 and a copy of such decision shall be placed before this court on or before the returnable date.
-
2015 (10) TMI 2034
100% EOU - Improper accounting of the imported materials - Manufacture of cotton yarn - Whether mentioning of Section 72 of the Customs Act, 1962 along with Section 28 would render the SCN outside the purview of Section 72 and wrong mention of provision of law in SCN is sufficient to invalidate the exercise of that power? – Exemption claimed under Notification No.53/97 (Cus) – Department contended that time limit specified under Section 28(1) was not applicable and that applicable provisions were those of Section 72(1) which did not specify any time limit; mere wrong mentioning of provision would not render the entire exercise futile. Held That:- Relevant provision of Section 72 was not invoked and there was no charge or SCN in support of such demand; assessee cannot be asked to answer the charge, which is not specifically raised – There is no question of suppression of facts on part of assessee - First question of law does not arise, since the SCN does not support such a plea – SCN is bereft of demand to support claim under Section 72; second question of law is not relevant to the facts of the present case – Decided in favour of assessee.
-
2015 (10) TMI 2033
Revocation of registration of Authorised courier – Smuggling of Gold - Assessee contended that no SCN or notice issued setting out grounds on which registration revoked nor an opportunity of being heard is given to put forth their contentions – Revenue contended that allegations are serious and it is not for the first time assessee has been involved in such incidence; thus revocation cannot be set out as unreasonable – Held That:- No SCN or notice issued which states the ground of revocation of registration as per Regulation 14 – Independent SCN should have been issued for incidence of 8th September, 2015 - Principal Commissioner was not justified in suspending the registration; order is thus unsustainable – Authorities are still free to take steps as per Regulation 14 – Decided in favour of appellant.
-
2015 (10) TMI 2032
Petitioner imported two motor cars; subject to conditions – Petitioner is alleged not to comply with conditions of import – Detention and restraint order passed on goods imported - Whether Petitioner is entitled to club his foreign exchange earnings from all sources? – bank guarantees furnished by petitioner are sought to be encashed. Held That:- Petitioner needs to respond to notuces and to put forward his contentions, supported by all necessary documents before the second respondent; Respondent thereafter shall consider the same and take a decision in the matter – Same is not set aside. Bank guarantees can be encashed only after a proper determination of issues – Until quantification is made and petitioner is found liable for some amount there is no justification for the issue of Ext.P11; same is unsustainable and set aside - Interim order granted shall continue to be in force until a decision is taken by the Joint Director of Foreign Trade – Decision made partly in favour of assessee.
-
2015 (10) TMI 2031
Customs House Agent - Notice issued under Section 124 of Customs Act - License revoked but itself expired on 25.10.2014; made petitions infructous - Appellant rejected the applications of Respondent for renewal of the license - Held That:- Order refusing to renew licence has already been challenged thus issues raised in writ appeals do not actually warrant any adjudication, as they are virtually infructuous - Appeal disposed without expressing any opinion on the findings; MP's closed - Contempt petition filed by respondent will not be pressed.
-
2015 (10) TMI 2030
Waiver of detention and storage charges – No response given by Second Respondent to letter of Assistant Commissioner dated 06.08.2015; thus complaint lodged by petitioner on 11.08.2015 to Commissioner of Customs – Nothing moved since then – Held That:- Second Respondent directed to pass appropriate orders for waiver of demurrage charges upto 14.08.2015 on recommendation of First Respondent vide letter dated 06.08.2015 – Order to be passed within four weeks – Decided in favour of Petitioner.
-
2015 (10) TMI 2029
Order of attachment of immovable property - Attach not the property of defaulter of duty/penalty amount but that of a third party - Acts of authorities are patently wrongful and illegal and affects right, title and interest of Petitioner - Stand of Department is that execution of Gift Deed and its subsequent registration will not in any manner affect the power of authorities to recover government dues. Held That:- It is not as if there are no remedies available to question the alleged wrongful act and to establish that it not legal and valid - Petitioner can seek relief as are permissible in law by filing a suit in Civil Court - Keeping all the questions open, writ petition disposed.
-
2015 (10) TMI 2028
Release on bail - Offences punishable under Sections 22(c), 23(c) and 28 of Narcotic Drugs and Psychotropic Substances Act, 1985 – Petitioner contended that article seized is not contraband and she is not involved in any other criminal cases nor have any criminal antecedents - FSL report did not mention the percentage of drugs in article – Bail shall be granted conditionally – Respondent contended that they made out prima facie case about the accused’s involvement in offence and she have been carrying KETAMINE in her back-pack in a concealed manner - Court should be satisfied that during bail, the petitioner is not going to commit any other offence. Held That:- Contraband article is mentioned at Sl. No. 110A of Schedule-H to the NDPS Act thus not prohibited – Some minute details such as it is not mentioned that when the back pack checked was offloaded and brought to airport authorities for inspection; whether the bag was locked and who had the key and how they opened the bag; are missing - Contraband article seized from exclusive possession of Petitioner at the time of seizure; no prima facie material given in support of same – Petition allowed thus bail granted conditionally on execution of bond and such other terms – Decided in favour of Petitioner.
-
Service Tax
-
2015 (10) TMI 2037
Deposit of service tax with wrong registration number of other unit – Rectification of incorrect registration number mentioned in challan of a different unit – Assessee requested to count the amount of service tax deposited towards the other unit – Held That:- In this case, the Assistant Commissioner, Service Tax in charge of the appellant's Mumbai unit has categorically mentioned that the impugned amount of service tax (Rs.25 lakhs) deposited has not been utilised towards paying service tax by the Bombay unit. - in the case of KK Kedia [2014 (10) TMI 602 - CESTAT NEW DELHI] CESTAT, in effect, has held that such adjustment can be permitted The CESTAT judgement in the case of Plastichemix Industries [2015 (10) TMI 2036 - CESTAT AHMEDABAD] makes a summary observation that there is no provision under the present service tax law for adjustment of service tax payments from the account of one registered unit to the account of another registered unit. It however does not say that there is any provision in the service tax law which prohibits such adjustment. Issue is not so much in law but it is just a case of wrong registration number with no malafide intention of the assessee as same was brought to Revenue’s notice by assessee himself – No short or delayed payment on part of assessee – Commissionerate of Cochin issued a Trade Notice No. 3/2014 60 squarely covers the issue - Impugned order is set aside in favour of assessee.
-
2015 (10) TMI 2036
Deposit of service tax with wrong registration number of other unit instead of appellant's own registration number - request for adjustment and due credit with the service tax liability of the appellant unit - Held that:- there is no provision under the present service tax law for adjustment of service tax payments from the account of one registered unit to the account of another registered unit. The only course for the appellant is to make the payment of the confirmed demand along with interest. However, the other unit of the appellant is eligible to take credit of the amount paid in their relevant records. - Decided against the assessee.
-
2015 (10) TMI 2003
Commercial training or coaching services - course of One Year Pre-Sea Training Graduate Engineers (GME) - Scope of exclusive clause of the Section 65(27) of Finance Act, 1994 - consulting engineering service received from abroad - reverse charge – Held That:- - Decision made in the cases of Indian Institute of Aircraft Engineering vs. UOI [2013 (5) TMI 592 - DELHI HIGH COURT] and Indian National Shipowners Association vs. UOI [2008 (12) TMI 41 - BOMBAY HIGH COURT] followed - Appellant is granted stay and recoveries stayed till the disposal of this case.
-
2015 (10) TMI 2002
Liability of Service Tax on GTA Services – Transportation of Inputs – Appellant contended that they were not the receiver of services; thus demand not sustainable leave alone invocation of extended period – Revenue drew attention to Rule 4(a) and Rule 4(b) of Service Tax Rules and submits that law is very clear; extended period has been rightly invoked and tax has been rightly demanded – Held That:- They have been told by the consignor as well as the transporter that they should pay the tax - Despite of being informed from consignor and transporter, tax was not paid; three business partners had an understanding that service tax liability would fall on Appellant – Further, no boan-fide query raised to Department for liability of tax and thus claim for non-invocation of extended period cannot be sustained - Penalties imposed under Section 76 and Section 78 of Finance Act, 1994 are dropped by invoking the provisions of Section 80 of Finance Act, 1994 but demand for service tax, interest thereon and imposition of late fee are upheld – Decided in favour of Revenue.
-
2015 (10) TMI 2001
Liability of service tax – Commercial or Construction Services – Appellant contends that activity undertaken of laying optical fibre cables is not taxable as per circular no. 123/5/2010-TRU dated 24/05/2010 while Revenue contends that same is taxable – Held That:- Revenue tried to differentiate the case law on ground that appellant herein had undertaken the activity of laying of ‘optical fibers cables’ but missed out the point that they are also used by Telecommunications Service Providers – Demand of tax fails and impugned order liable to be set aside – Decided in favour of Assessee.
-
2015 (10) TMI 2000
Liability of Service Tax – BAS - direct service tax liability or not due to reverse charge on recipient of services – Received brokerage from LIC Distributor for providing service of distribution of mutual - Service tax liability was on the recipient under Rule 2(1)(d)(vi) – Department contends that Appellant was not a distributor of mutual fund or an agent of such distributor and therefore Rule 2(1)(d)(vi) is not applicable thus liable to service tax. Held That:- Appellant was not distributor of mutual fund or agent thereof; was promoting and marketing the services provided by LIC Distributor and in no way was involved in distribution of mutual fund; service rendered was covered under BAS – Contention of Appellant that it was under bona fide belief that it was not liable to service tax is totally untenable – Demand confirmed invoking extended period of limitation - Decided against the assessee.
-
2015 (10) TMI 1999
Refusal for Refund of CENVAT Credit – input services - export of output services - Event Management Service and Mandap Keeper services and Event Management Services & Sponsorship Services – Activities relating to Business - Appellant contends that two separate yardsticks for availing CENVAT credit and for refund of the same cannot be there and rejection of refund was not justified – Revenue contends that Appellants failed to specify their role in the sponsorship services thus refund of credit not allowed. Held That:- The appellant being a Company which undertakes major sponsorship services the events sponsored and carried out also is of the like nature. During the disputed period the definition of input services was very wide and included almost all activities related to business. Further when there is no dispute that credit is admissible on these services and the same is permitted to be utilized, the eligibility for refund of un-utilized credit cannot be measured with a different yardstick. The appellant being a BPO, exporting services, having large number of employees and a huge customer base in India and abroad the impugned services cannot be said to be not related to the activities relating to business of the appellant. - Impugned services cannot be said to be not related to the activities relating to business; Rejection of order of refund claim is unsustainable - Impugned order is set aside and appeal is allowed – Decided in favour of the Appellant.
-
2015 (10) TMI 1998
Valuation - reduction of value of material supplied from the value of service - issue of sale tax / VAT was under dispute with the state government, which has now settled - appellant had paid sales tax / VAT after settlement - Benefit of Notification No.12/2003-ST dated 20.6.2003 - management, maintenance or repair service - Held that:- On the aspect of liability of the sales tax/ VAT on the goods supplied by the Appellant, the matter went up to Hon'ble Supreme Court and after the intervention of the Hon'ble Supreme Court, the disputed parties, namely the appellant and the respective state governments had settled the issue - it is prudent to remit the case to the adjudicating authority for deciding the issue of abatement of value of the materials supplied and applicability of Notification No.12/2003-ST dated 20.6.2003 afresh. Consequently, the impugned orders are set aside and the matter is remitted to the ld. adjudicating authority - Matter remanded back - Decided in favour of assessee.
-
2015 (10) TMI 1997
Sanction of refund claim filed beyond period of limitation – Appellant contends that payment of service tax was a mistake; the period of limitation would not apply – Revenue contends that Tribunal has to work within the provisions of law and cannot extend the period of limitation – Held that:- Authorities working under Central Excise law are bound by provision of limitation prescribed in terms of Section 11B of the Central Excise Act – Limitation period cannot be extended in any circumstances including the payments made by an error of law or under mistake. – Found no merits in the appeal and rejected – Decided against the assessee.
-
2015 (10) TMI 1996
Waiver of Pre-Deposit – Construction of bridges – Work orders could not be produced - Appellant offers to deposit ₹ 2.00 Lakh and prays the matter to be remanded to Commissioner(Appeals) – Revenue contends that nature of work done could not be ascertained; no objection in remanding the case to Commissioner(Appeals). Held That:- Commissioner (Appeals) did not go into the merits of the case; matter remanded back as such – Deposit of ₹ 2.00 Lakh admitted - All issues kept open.
-
Central Excise
-
2015 (10) TMI 1993
Denial of refund claim - subsequent revision in the price after removal of goods - sale of petrol and diesel, to Oil marketing Companies (OMCs) - whether the Appellants are entitled to the refund of excess duty paid during the period from April, 2003 to January, 2004 - reduction of freight charges from the transaction value - Held that:- Department itself has gone on a wrong premise from the very beginning, inasmuch as it was considered that the difference in the transaction values was on account of the freight charges between the factory gate and the place of delivery of the goods by the respondents. Both Revenue as well as the respondent have not disputed the fact of sale of the petroleum products were under the Multilateral Product Sale-Purchase Agreement dated 31st March, 2002. It has been mutually agreed that in case of sale from North Eastern Region, the basic price be reduced by an amount equivalent to the notional freight, which in our opinion, does not refer to incurring of actual freight. It is evident that the Respondent had initially paid the duty on the basic price without deducting the notional freight element from the price, but after realization of the mistake, filed the refund claim. We do not find any reason to dis-agree with the conclusion arrived at by the ld. Commissioner (Appeals). Accordingly, the Respondent in principle are entitled to the refund claim. - Decided in favor of assessee. The issue of correctness or otherwise of the transaction value determined on the basis of the said Agreements, which is neither raised in the demand notice nor in the grounds of appeal, cannot be re-opened at this stage, which would otherwise result into traveling beyond the scope of the show-cause notice as held by the Hon'ble Supreme Court in the case of Champdany Industries Ltd. [2009 (9) TMI 7 - SUPREME COURT OF INDIA]. - Decided in favor of assessee. Both sides agree that it is necessary to ascertain the fact whether initial transaction value was higher and subsequent transaction value after deducting the notional freight, applying clause 5.4 of the agreement, became lower before allowing the said claim to the respondent. - For the limited purposes of verification of this fact, in our opinion, it is prudent to remand the case to the adjudicating authority, who shall ascertain the said facts after taking into consideration all the evidences on record and the evidences that would be produced by both sides. Needless to mention, a reasonable opportunity of hearing be granted to the Respondent-assessee - Matter remanded back - Decided partly Revenue.
-
2015 (10) TMI 1992
Valuation of goods - Inclusion of cost of copyrights - manufacturing of recorded audio and video compact discs (RCDs) / production of duplicate CDs - assessee is in no position to manufacture RCDs without the DAT/master supplied by the music companies / merchant manufactures and that they are in no position to sell such RCDs to any other person/company, since all copy rights are vested with the particular music company / merchant manufacturer - Held that:- In the case of KRCD (I) Pvt. Ltd. Vs. CCE,Mumbai [2015 (4) TMI 856 - SUPREME COURT], it is held that royalty payable for such music/picture cannot extend to art work that is necessary for the production of duplicate CDs, as no part of it is in fact taken into account by either the distributor who is the copyright holder or the appellant in the job work done by the appellant. - Central Excise Valuation (Determination of Price of Excisable Goods) Rules of 2000, go to show that the value of goodwill contained in a brand name would not form part of the assessable value of goods that are produced and sold only to the owner of the goodwill - Following the same, Decided in favour of assessee.
-
2015 (10) TMI 1991
MRP based Valuation u/s 4A or transaction value u/s 4 - whether the goods supplied to the distributor in wholesale packages are liable to be assessed under section 4(A) of the Central Excise Act 1944 or not - Held that:- As per the definition of multi piece packages and the definition of wholesale packages, we find that sub clause 2(x) of the standard of Weight and Measures (Package Commodities) Rule 1977 is applicable to the facts of this case, as the fasteners are sold by the appellant to wholesaler in bulk enabling the wholesaler to sell distribute or deliver such fastener to the consumer in smaller quantity. As per Rule 29 of the said rules the appellant were not required to affix MRP on the product which were cleared as wholesale packages, therefore, the provisions of the SWM (PC) Rules are not applicable to the facts of this case which is squarely covered by the guidelines issued by the Hon'ble Apex Court in the case of Jayanti Food Processing (P) Ltd. (2007 (8) TMI 3 - Supreme Court). In these circumstances, we hold that appellant has correctly valued their goods sold to the wholesaler in wholesale packages and valued as per section 4 of the Central Excise Act 1944 i.e. transaction value - Decided in favour of assessee.
-
2015 (10) TMI 1990
Valuation of goods - Captive consumption - duty to be levied on the basis of 110% of the cost of production - Determination of assessable value - Clearances of de-natured rectified spirit - Held that:- prima facie, the expenses on account of salaries and wages, direct expenses, depreciation, works over heads and administrative over heads are to be absorbed in cost on the basis of the normal capacity utilization, as in the present case the actual production was much lower than the production based on the normal capacity utilization and prima facie, this is what the appellant had done. However, we find that there are considerable expenses each year on utilities which in terms of the para 5.9 of the CS Format guidelines are to be treated as variable over heads and the cost of variable over heads is to be absorbed in costing based on the actual captive utilization while this is the cost of utilities have been absorbed by the appellant on the basis of normal capacity utilization which prima facie is not correct and on this point, the department has a case. Therefore, out of the total duty demand confirmed by the Commissioner in our prima facie view, at least, the duty demand based on the absorption of cost of utilities in the costing may be upheld. As regards, the plea of the Appellant regarding Revenue, the neutrality, prima facie we are not convinced with this plea. In view of the above discussion we are of the view that this is not the case for total waiver. - Partial stay granted.
-
2015 (10) TMI 1989
Valuation - Inclusion of cost of advertising - held that:- There has to be written agreement with an enforcement clause to enforce the legal right to insist on advertisement under the agreement. In the absence of any such agreement with such a clause then in that event, the advertisement expenses incurred by the dealers on their own account cannot be added to the account of the assessee. - It is clear that what has been held is that unless purchase and distribution of such material by dealers is mandatory, the value of the same can not be added. Further more the transaction value will only contain the amounts collected in connection with sale of excisable goods. Every amount collected by the manufacturer from the buyer is not includible. Revenue has not been able to establish from fact that the amounts collected were in connection with sale of excisable goods. The respondents have clearly stated that the diaries and calendars are made and supplied at the request of dealers and it is not mandatory since only few dealers are buying these things - Decided against Revenue.
-
2015 (10) TMI 1988
SSI Exemption - clearance of the goods, bearing in the brand name of the loan licensees - Clubbing of clearances - Held that:- assessee paid the duty on the goods bearing brand name of the loan licensees. - Duty paid on the branded goods is more than duty now being demanded, should neutralize entire demand required to be verified and matter was remanded. - In the case of Pharmanza (India) (2009 (1) TMI 556 - CESTAT, AHMEDABAD), the Tribunal dropped the demand for the extended period of limitation on the identical situation. Hence, we do not find any merit in the appeal filed by the Revenue. As there is no suppression of fact, penalty imposed under Section 11 AC cannot be sustained. - Matter remanded back - Decided in favour of Revenue.
-
2015 (10) TMI 1987
CENVAT Credit - duty paid documents - CVD paid on capital goods - Job work - manufacture of exempted goods using capital goods by the Job worker - Held that:- On merits itself, the demands are not sustainable. It is not under dispute that the goods were imported and CVD was paid. The respondent-assessee has produced the triplicate copy of the bill of entry at the time of taking the credit. It is only after the audit was done that the said copy was not available. We also note that installation certificate was issued by the Superintendent after visiting the factory and seeing the bill of entry etc. Under the circumstances, the view taken by the Commissioner is correct. Similarly, we find that no case has been made by the Revenue that the respondent has used the machine exclusively for the manufacture of exempted goods. The respondent was manufacturing the goods on job work basis, which were not exempt but were dutiable and duty was paid by their customer. In any case, we find that the said machines were removed from their Aurangabad plant on reversal of the entire amount of the cenvat credit taken on the capital goods and in view of the fact that the entire amount of cenvat credit was reversed only later on, nothing survives in the matter - Decided against Revenue.
-
2015 (10) TMI 1986
Manufacture of aluminium circles as intermediate product - marketability of aluminium circles - Manufacturer of aluminium utensils as finished goods - Benefit of Notification No.6/2000-Sr.No.206 - Confiscation of goods - Imposition of redemption fine and penalty - Held that:- It is not under dispute that the appellant themselves were purchasing such aluminium circles from the market. This itself shows that the goods are marketable. We, therefore, do not find any strength in the submissions of the appellant that the goods produced are not marketable. - Demand confirmed invoking extended period of limitation with penalty u/s 11AC - Amount of redemption fine reduced - Penalty on the partner of the firm reduced - Decided partly in favour of assessee.
-
2015 (10) TMI 1985
Remission of duty - Goods destroyed in fire accident - Non intimation to the Department within 24 hrs - Appellant failed to take necessary steps to avoid fire accident - Appellant has not produced the evidence whether they have availed the duty element in the claim from Insurance company or not - Held that:- fire continued from 17th to 18th April 2002. Only on 19th April 2002 appellant could have intimated to the Department but inadvertently they failed to intimate the Department. As 20th and 21st April were holidays, therefore, appellant could intimate to the Department only on 22.04.2002. Not giving intimation on 19th April will not be fetal for claim of remission of duty when it is the fact on record that fire took place in the premises of the appellant. Therefore, claim of remission of duty cannot be denied on this ground. In the fire accident the factory building, capital goods and all excisable goods have been lost. No prudent men would invite fire accident to avoid payment of excise duty. It is a fact on record that fire accident took place due to short circuit in electric wire. The, short circuit in electric wire is not in the hand of a man who could avoid such accident. Therefore, it cannot be the reason that appellant failed to take necessary steps to avoid fire accident. Therefore, on this ground also claim of remission of duty cannot be denied. Appellant has produced the document on record that insurance company has not sanctioned the amount of duty as claim of insurance to the appellant. In these circumstances, it cannot be said that appellant has received duty element in their insurance claim. Therefore, on this ground also claim of remission of duty cannot be denied. - appellant is entitled for claim of remission of duty. Consequently, demand of duty along with interest cannot be confirmed against the appellant and consequently, penalty is not imposable - Decided in favour of assessee.
-
2015 (10) TMI 1984
Reversal of Cenvat / Modvat Credit - Removal of Capital goods after use - Transfer of credit - Penalty under Rule 25 of the CER 2002 - Held that:- Rule 3 (5) of the Cenvat Credit Rules, 2004 provides for the reversal of Cenvat Credit only when the goods are removed as such . In the facts of the case as admitted, the goods have been used for about 10 years. Thus, the goods are not removed as such , no credit is required to be reversed. Further, in the second proviso to Rule 3 (5), wherein it was provided that 2.5% allowance of the credit taken, is to be given for each quarter of use. Under the facts and circumstances, the appellant is held to be entitled to 100% rebate on this count also - Decided in favour of assessee.
-
2015 (10) TMI 1983
Area based exemption - refund of duty paid in cash - revenue contended that cenvat credit availed on GTA service was not available and therefore to be reduced from refund claim - Benefit of Notification No. 39/2001-CE dated 31.07.2001 - Held that:- Benefit of exemption notification would be extended on the condition that manufacturer first utilise the whole of credit available to them and pays only balance amount by cash, which is refundable. In the instant case, according to the adjudicating authority, the Respondent is not eligible to utilise the CENVAT credit for payment of GTA services for outward transportation services. We find, this issue is no more res-integra in view of the decision of the Hon'ble Gujarat High Court in the case of CCE & Cus. vs. Parle Products Pvt. Limited [2010 (6) TMI 228 - Gujarat HIGH COURT]. The other issue is that the adjudicating authority disallowed CENVAT credit utilised for outward transportation. No proceeding was initiated against the denied cenvat credit and Commissioner (Appeals) observed that the exemption notification would apply only in respect of utilisation of the CENVAT credit. It is further observed that if at all, there is a case of wrong utilisation of CENVAT credit, right course of action would have been initiation of proceedings under the provisions of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004. There is no dispute that, no proceeding was initiated for deduction of CENVAT credit, therefore, benefit of the exemption notification can not be denied. - No reason to interfere the order of the Commissioner (Appeals). - Decided in favour of assessee.
-
2015 (10) TMI 1982
Area based exemption - Refund claim of duty paid in cash - Commissioner (Appeals) excluded the reversal of CENVAT credit on inputs, cleared as such, which is part of the notification. - Held that:- Refund is eligible on the specified goods appeared in annexure to the said notification, cleared from a unit located in Kutch district of Gujarat from so much of the duty of excise or the additional duty of excise, as the case may be leviable thereon, as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by the utilising CENVAT credit under Cenvat Credit Rules, 2001. We find that refund of duty would be related to the specified goods cleared by the manufacturer. The Commissioner (Appeals) observed that value of the inputs cleared as such cannot be clubbed value of excisable goods manufactured and cleared by the assessee for arriving at the aggregate value of clearance for extending the benefit of exemption notification. We find that on plain reading of notification, there is no indication that value of the inputs cleared as such would be included in the aggregate value of clearance for the purpose of availing the benefit of exemption notification. - there is no reason to interfere the order of Commissioner (Appeals). - Decided against Revenue.
-
CST, VAT & Sales Tax
-
2015 (10) TMI 1995
Detention of goods - valuation of the product adopted by the respondent so as to arrive the actual taxes to be paid - Held that:- Petitioner along with his counsel is directed to appear before the respondent on 04.09.2015 at 11.00 a.m. with all the documents and substantiate his claim. If the petitioner is able to substantiate his claim with regard to the price to be adopted, the same shall be considered and necessary calculation be arrived at by the respondent and thereafter actual tax to be paid be intimated to the petitioner and on such intimation, the petitioner is directed to pay the taxes forthwith and on such payment, the goods are directed to be released forthwith. It is needless to mention that if the petitioner's claim is not substantiated by documents, the respondent is at liberty to proceed in the manner known to law, as per notice dated 20.08.2015. - Petition disposed of.
-
2015 (10) TMI 1994
Detention of goods - Imposition of compounding fees - Held that:- petitioner is willing to pay one time tax and in order to give a quietus to the issue, for the purpose of release of goods, on payment of one time tax viz., ₹ 61,736/-, ₹ 60,988/- and ₹ 60,534/- respectively by the petitioner, the respondent shall release the goods forthwith along with the respective goods vehicles. - Appeal disposed of.
|
