TMI Tax Updates - e-Newsletter
October 9, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
Highlights / Catch Notes
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Income Tax:
Levy of penalty @ 100% of the tax sought to be evaded u/s 271(1)(c) – one family giving gift to another family year after year, it can be said to be against human probabilities, but that may not be sufficient to hold the assessee guilty of concealment of income or furnishing of inaccurate particulars. - AT
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Income Tax:
Revision u/s 263 - the conduct of assessee clearly shows the evasionary tactics that are being adopted to wriggle its way out of the corner it has put itself into by its own acts and commissions - AT
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Income Tax:
Salary paid overseas to expatriate of assessee disallowed - Working in India by the head office and the Indian tax paid there on by the head office – provisions of section 44C not applicable - AT
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Income Tax:
Interest accrued/received to the Indian PE from its head office/overseas branches – concept of mutuality cannot override specific provision of law - once the interest received by PE is deemed to be income of PE and there is no bar in the treaty on its taxability then it cannot be excluded from computation of income earned by PE - AT
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Income Tax:
When the very documents have already been considered by the Tribunal then certainly double addition, one in the hand of the person in whose custody the documents are found and secondly in the case of the other person where substantive addition is made, is not permitted - HC
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Income Tax:
Grant of deduction u/s 10B – Registration with STPI - the assessee in this case will be entitled to the benefit of Section 10-B only on complying with the conditions contained prescribed in Section 10-B of the Income Tax Act, and it does not enure to the benefit for the AY in question - HC
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Income Tax:
Challenge to the order passed u/s 143(3) pursuance to the direction passed by DRP u/s 144C(5) - Speaking order - Power of DRP to remand - the order of the DRP is in excess of jurisdiction - AO to pass fresh orders - AT
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Income Tax:
Reopening of assessment u/s 147 and 148 – Non-issuance of notice u/s 143(2) - here is always a requirement of issuing of a notice u/s 143(2) of the Act in a case of an assessment u/s 147 of the Act - assessment is invalid - AT
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Income Tax:
Whether at the time of filing the return, a man of ordinary prudence can form a belief that he has no undisclosed income on the basis of seized material supplied to him - making incorrect claim does not amount to concealment of particulars - AT
Articles
News
Case Laws:
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Income Tax
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2014 (10) TMI 154
Addition u/s 14A on indirect expenses for earning exempt income – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the major investment of the assessee is in its group companies - CIT(A) has restricted the disallowance to ₹ 1. 87 lakhs – there is no reason to interfere with the findings of the CIT(A) – Decided in favour of assessee. Provision made u/s 40(a)(ia) disallowed – Held that:- The AO had invoked the provisions of section 40(a)(ia), though he has also discussed the principles of contingent liability, while making the disallowance - FAA has passed a non-speaking order and just endorsed the views of the AO but he was also of the opinion that provisions of section 40(a)(ia) were applicable - assessee had specifically mentioned during the assessment proceedings, that it had not received the bills under various heads, that provisions of tax deducting at source were not applicable for the provisions made – Relying upon Mahindra & Mahindra Limited, Versus The Deputy Commissioner of Income Tax, 2(2) [2013 (9) TMI 522 - ITAT, MUMBAI] - TDS provisions were not applicable for the provisions made at the year-end - the assessee had made provisions but had not received the bills, that in the subsequent year the provisions made by it were offered for taxation – Decided in favour of assessee. Provision made for leave salary disallowed u/s 43B(f) – Held that:- As it has been decided in assessee’s own case for the earlier assessment year, following the decision in Srikakollu Subba Rao And Co. And Others Versus Union Of India And Others (and Other Writ Petitions) [1988 (3) TMI 46 - ANDHRA PRADESH High Court] - in order to apply the provisions of Sec. 43B not only should be the liability to pay the tax or duty be incurred in the accounting year but also should be statutorily payable in the accounting year - the provision for leave salary is not a statutory liability but only a contractual liability which is payable only if the employees resigns or retired from the services – Decided in favour of assessee. Allocation of Head Office expenses – Claim of deduction u/s 80IA – Held that:- As it has been decided in assessee’s own case for the earlier assessment year, following the decision in M/s. Procter & Gamble Hygiene and Health Care Limited Versus DCIT/ACIT Cir. 7(1), Mumbai [2013 (3) TMI 195 - ITAT MUMBAI] the AO is directed not to reduce the claim of deduction u/s. 80IB of the Act by allocating Head Office expenses to profits derived from eligible units – Decided in favour of assessee. Deduction in exemption u/s. 10B - allocation of head office expenses/expense of other division and interest income earned by 100% EOU under normal income and MAT provisions – Held that:- As it has been decided in assessee’s own case for the earlier assessment year, the issue of interest income earned by the 100% EOU and allocation of head office expenses of other division have been decided in favour of the assessee-company – Decided in favour of assessee. Depreciation on goodwill on acquisition made ongoing concern basis – Held that:- As it has been decided in assessee’s own case for the earlier assessment year, that the AO be directed to allow the depreciation on goodwill and to reduce the total income accordingly – Decided in favour of assessee. Adjustment on carry forward losses not allowed – Held that:- The assessee had made the claim of carry forward of unabsorbed depreciation of the amalgamated company during the assessment proceedings, that in the return such claim was not made, that the FAA had decided the issue against the assessee as he was of the opinion that all the claims of deductions/exemption/set off should be made in the original return only – the matter is remitted back to the AO for fresh adjudication in light of the decisions of Commissioner of Income Tax. Central-I Versus M/s. Pruthvi Brokers & Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] – Decided in favour of assessee. Allowabilty of MAT credit – Held that:- The assessee had failed to follow the directions of the FAA - But, that does not take away his rightful claim of adjustment of tax credit - By not getting credit for so many years it has been sufficiently penalised for disregarding the orders of the FAA - AO, as the representative of the State has a duty towards the tax payers also and that is only due income should be taxed and only due amount of tax should be collected – thus, the matter is remitted back to the AO for verification of the claim made by the assessee - Decided partly in favour of assessee. Unutilised Modvat Credit in closing Stock – Held that:- Following the decision in Commissioner of Income-Tax Versus Indo Nippon Chemicals Co. Ltd. [2003 (1) TMI 8 - SUPREME Court] - the Modvat credit could not be added back to the income of the assessee. - that merely because the Modvat credit was an irreversible credit available to manufacturers upon purchase of duty-paid raw material, that would not amount to income which was liable to be taxed under the Act - income was not generated to the extent of the Modvat credit on unconsumed raw material - it was not permissible for the AO to adopt the “gross method” for valuation of raw materials at the time of purchase and the “net method” for valuation of stock on hand – Decided against revenue.
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2014 (10) TMI 153
Levy of penalty @ 100% of the tax sought to be evaded u/s 271(1)(c) – Held that:- During the accounting year relevant to the assessment year under consideration, Shri Naresh Jain had given the gift to the assessee and to Shri Namit Jain, minor son of the assessee - the assessee would be said to have furnished inaccurate particulars of income if the details supplied by the assessee in the return were found to be incorrect or erroneous or false - The first ground why the gift was not accepted by the AO was that the gift was given without any occasion - merely because the gift was given without any occasion would not be sufficient to hold that the gift is not genuine - It may be only one of the circumstances while considering the genuineness of the gift - The second reason given by the Assessing Officer was that the gift was given without natural love and affection - the donors are close family friends and it cannot be said that natural love and affection remains only between blood relations and not between the friends - There is no salary income from the assessee or no business income from any business in which assessee is also connected - one family giving gift to another family year after year, it can be said to be against human probabilities, but that may not be sufficient to hold the assessee guilty of concealment of income or furnishing of inaccurate particulars. If the details supplied by the assessee in the return of income are found to be incorrect, erroneous or false, then only it can be said that the assessee has furnished inaccurate particulars of income so as to make him liable for penalty u/s 271(1)(c) of the Act - the copy of the income tax returns of the donors and the statements of the donors, the AO has not pointed out any of the details furnished by the assessee to be incorrect, erroneous or false - The AO has not accepted the gift by doubting the creditworthiness of the donors and the genuineness of the transactions. So far as Assessing Officer’s finding that the capacity of the donors is not proved is concerned, that finding was factually incorrect and probably has been arrived at by the AO without properly appreciating the details of the donors furnished before him by the donors themselves, in the form of their income tax returns, which clearly establishes their creditworthiness - The sound financial capacity of the donors was proved from their income tax record - So far as the genuineness of the transactions is concerned, the AO has doubted the genuineness of the gifts on the ground of human probabilities - what is humanly probable is certainly a matter of opinion and, therefore, the denial of the acceptance of gifts in the assessment proceedings on the basis of human probability may be justified, but, the same cannot the basis for the purpose of levying penalty u/s 271(1)(c), specially when there are overwhelming documentary evidences in support of the genuineness of the gifts which is further fortified by the statements of the donors - the assessee cannot be said to have furnished inaccurate particulars of income or have concealed the income so as to make him liable for penalty u/s 271(1)(c) of the Act - CIT(A) was not justified in sustaining the penalty at 100% of the tax sought to be evaded – Decided in favour of assessee.
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2014 (10) TMI 152
Penalty u/s 271(1)(c) – Held that:- No penalty can be imposed on the assesse qua an addition which is occasioned by the operation of a retrospective legislation - Assessee cannot be penalized for a purported wrong which did not exist on statute book at the time the assessee made a claim at the time of filing its return or completion of assessment - there is no justification in the order of the CIT(A) holding that in his view without even retrospective amendment, the assessee could not have made this claim - there existed a judicial debate on such claim, besides all the relevant details were disclosed along with the return by way of audited account statements and certificates - The assessee is following a consistent method of accounting on mercantile basis - There is no adverse qualification by the auditors either on accounting policies or consistency in method of accounting – relying upon Apollo Tyres vs. CIT [2002 (5) TMI 5 - SUPREME Court] - while computing the book profits, revenue authorities cannot interfere in audited accounts. Penalty u/s 271(1)( c) is leviable with respect to the amount of ₹ 4215.03 lacs - The amount accounted for as deferred taxation is based on the same audit report which was provided based on consistent method of accounting policy and it has been accepted so by the C.A. and statutory auditors - The CIT(A) arbitrary held that part of it was liable for penalty - the proposition that once the assessee's accounts are audited and book profits are computed according to the audit report then the Revenue authority cannot interfere with the audited figures. Diminution in value of equity shares and 'provisions for deferred taxation" were made originally and contested by the assessee in appeal - the assessee cannot be penalized for claims which were not disallowable by any express provision on the statute book at the relevant time - once the book profits are computed on the basis of the audited accounts then the AO cannot interfere in the book profits calculations - penalty is impossible on the basis of information furnished the return - If the assesse has furnished all the relevant details and information along with the return, then disallowance of any claim by assessing officer is not exigible to penalty - Besides a judicial debate existed on the issue about AO's power to interfere with audit statement in calculating book profits under sec. 115J. IMACID deposit – Held that:- The assessee had given proper explanation in this behalf, which has been overlooked by CIT(A) - The mistake is bonafide, the entries were made as per regular accounting policy in this behalf. Besides all the relevant particulars for this accounting of IMACD having been filed along with return of income, the penalty retained by the CIT(A) – Decided in favour of assessee.
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2014 (10) TMI 151
Revision u/s 263 - Reopening of assessment u/s 147 - Receipt of share application money with huge share premium – Held that:- Receipt of share application money with huge share premium warranted detailed enquiry by the AO and not a perfunctory enquiry – Relying upon CIT vs Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] revenue authorities are also supposed to consider the surrounding circumstances and apply the test of human probability - the change in management took place in the assessment year 2010-11, i.e. year ended 31/3/2010, i.e. the period 1/4/2009 to 31/3/2010 - The reopening of the assessment and the reassessment proceedings took place during this time - This clearly shows the due diligence being attempted with the contumacious intent to attempt to obtain the seal of approval of the Income-tax department in respect of the bogus share capital introduced - after getting the certified copies the date is not incorporated on the certified copy but on a zerox copy of the certified copy and then by mistake such incorporated Xerox copy is used for making the paper book when all other copies are the certified copies - Even to an untrained mind obviously the sight of a document without the original blue coloured seal in a mass of papers should have drawn attention – thus, the order passed u/s 263 is upheld. Issue of tangible material – Held that:- CIT has the power to give directions for assessment of a particular issue as also the powers to set aside the assessment for fresh consideration on specific issues or de novo - when the CIT is directing to assess a particular income then such directions must be on specific tangible material - the order u/s 263 clearly shows that the CIT did have very tangile information and material on the basis of which she has conducted the enquiry and then has set aside the assessment to conduct enquiry in respect of the three limbs of the transactions and grant the assessee the opportunity to explain its case - even on jurisdiction the CIT has rightly invoked her powers u/s 263 of the Act and it is upheld. The assessee has also not cooperated in the assessment proceedings but in the first appeal has been raising allegations against the AO that he has not accepted documents submitted and has not granted adequate opportunity - This also clearly shows the evasionary tactics that are being adopted to wriggle its way out of the corner it has put itself into by its own acts and commissions - A peculiarity in such cases that is noticed is that sheaves of paper documents are readily produced but when a summon is issued the responsible persons conveniently disappear - only the assessee knows the intricacies of its accounts - It is for the assessee to prove its claim of share capital/ application money introduction and its affairs in respect of its accounts - Merely dumping papers and documents on the table of the assessing authority does not in any way mean compliance - The burden of proof cannot be shifted on the revenue by cart loads of documents - The documents submitted must be explained – Decided against assessee.
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2014 (10) TMI 150
Salary paid overseas to expatriate of assessee disallowed - Working in India by the head office and the Indian tax paid there on by the head office – Held that:- The expatriates were working in India and salary had been subjected to tax for which form no. 16 was also issued to the expatriates - there cannot be any dispute regarding verifiability of thes expenses – Following the decision in Abn Amro Bank N. Versus Joint Commissioner Of Income-tax, Spl. Range 3. [2005 (6) TMI 218 - ITAT CALCUTTA-E] - The expenses had been incurred wholly and exclusively for the Indian branch and no part of thee expenses could be allocated to any other branch by head office - there was no dispute amongst the members in regard to non-applicability of provisions u/s 44C - Decided in favour of assessee. Interest paid to head office and other overseas branches - receipt of interest from Indian branches – Held that:- Following the decision in Sumitomo Mitsui Banking Corporation vs. DDIT [2012 (8) TMI 450 - ITAT, MUMBAI] the interest paid to the head office of the assessee bank by its Indian branch cannot be taxed in India in the hands of assessee bank, a foreign enterprise being payment to self which cannot give rise to income that is taxable in India as per the domestic law - as interest paid by the Indian branch is not chargeable to tax in India, it follows that the provisions of section 195 would not be attracted and there being no failure to deduct tax at source from the said payment of interest made by the PE - a distinction has to be kept in mind between banking and financial institutions and non-banking and financial institutions - If entity is not in the business of giving commercial loans, no notional interest charged is allowed as a deduction to the intra entity borrowing - If the entity is a bank or other financial institution and, therefore, in the business of giving commercial loans, the current interest rate applicable to the funds lend to the PE is deductible to the borrower (PE) - However, as far as assessability in the hands of lender (HO) is concerned the same has to be excluded on the ground of mutuality – Decided in favour of assessee. Interest accrued/received to the Indian PE from its head office/overseas branches – Held that:- Following the decision in Assistant Director of Income-tax (International Taxation) Versus Credit Agricole Indosuez [2013 (9) TMI 364 - ITAT MUMBAI] - the assessee himself had submitted that the amount paid by PE to its HO/branches should not be allowed as deduction so as to bring symmetry between interest income and interest accrued from or to HO - The next limb of submission of revenue is that specific deeming provision u/s 9(1)(v) will override the concept of mutuality – the contention of the revenue is accepted because concept of mutuality cannot override specific provision of law - once the interest received by PE is deemed to be income of PE and there is no bar in the treaty on its taxability then it cannot be excluded from computation of income earned by PE – Decided against assessee. Applicability of the provisions of section 115JB –Minimum Alternate Tax – Held that:- The assessee had prepared its accounts as per the requirements of Banking Regulation Act and while filing the return of income, though it had computed the book profits as per the provisions of section 115JB also, but had given a note that the provisions of section 115JB were not applicable. It is also not disputed that profit and loss account of assessee had not been prepared as per part II & III of schedule VI to the Companies Act - The MAT provisions were brought in statute by the Income Tax Act by Finance Bill, 1996 and it has been observed that company engaged in the power and infrastructure sector will remain exempt from the levy of MAT - This provision was brought in to bring within the tax net the zero tax companies - this makes the intention of legislature very clear that the MAT provisions are applicable only to domestic companies and not to the foreign companies - section 115JB is not applicable in case of banking companies - it has been clarified by the assess that the taxable income had been computed as per the provisions of article 7(3) of the DTAA – Decided in favour of assessee. Interest received on external commercial borrowings given to Indian borrowers – deduction u/s 44C - Held that:- The Indian branch of assessee was performing the services relating to marketing/sales promotion, passing on the lead to the overseas branches, Indian branches did the credit evaluation of the Indian customers and used to send an evaluation report to the head office/overseas branches and Review of terms and conditions of the approval with respect to ECB loan - The syndication fee was received by Indian Branch for the services - But that part of interest earned by head office/foreign branches which was attributable to the PE in India was not returned by assessee - the assessee has admitted that the Indian branches of the bank play an active role in the disbursement of ECB loan and also regularly monitor the same - Therefore, the ECB loans disbursed by the Head office/foreign branches were effectively connected with the Indian branches – interest income had to be appropriated to the PE in India as it had accrued and arisen in India - The AO has taxed 10% of the gross interest – assessee contended that the interest paid to head office/foreign branches are net of tax for which the loan agreements have to be examined which has been filed by way of additional evidence – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of assessee. Treatment of deferred bank guarantee commission – Held that:- Following the decision in CIT vs. Bank of Tokyo Ltd. [1993 (5) TMI 172 - CALCUTTA HIGH COURT] - full commission though payable at the outset did not crystallize into perfect right to receive so far as un-expired period was concerned because the payability or receivability from the view of the assessee bank was counter balanced by the refundability diluting the right to receive into a contingent right as regards un-expired period of the guarantee - The assessee clarified that FEDAI Guidelines places an obligation on the assessee to refund the proportionate commission for the un-expired period – Decided in favour of assessee.
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2014 (10) TMI 149
Sales tax set off u/s 43B disallowed – Exclusion of distribution cost from computation of deduction u/s 80HHC – Held that:- Following the decision in Commissioner of Income Tax-I, Mumbai Versus M/s. Hindustan Lever Ltd. [2014 (4) TMI 1012 - BOMBAY HIGH COURT] – the question with respect to sales tax set off involves is not a substantial question of law – The Tribunal has considered the grievance of the assessee that the AO excluded from the total turnover excise duty and recovery of distribution costs credited to the distribution expenses while computing its eligible deduction u/s 80HHC of the Act – Decided against revenue. Adjustment of brought forward losses and unabsorbed depreciation in respect of the same unit u/s 80HHC – Held that:- As decided in assessee’s own case [Income Tax Appeal No.1440 of 2011] - the court confirmed the order in relation to the deduction under section 80HH – Decided against revenue.
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2014 (10) TMI 148
Unexplained advances – Initial burden discharged or not - Addition made on substantive basis - Held that:- When all the very additions were considered by the ITAT and have been confirmed or considered in the case of firm M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and in the case of Nanak Ram (Dropadi Devi), then the addition cannot be made again in the hands of the assessee - the documents were found in the custody and control of the assessee but when the assessee conveyed that either it pertains to firm or to other persons namely Nanak Ram or Roop Chand, and when both CIT (A) and ITAT have accepted this plea then initial burden was discharged - when the very documents have already been considered by the Tribunal then certainly double addition, one in the hand of the person in whose custody the documents are found and secondly in the case of the other person where substantive addition is made, is not permitted under the IT Act - the addition again cannot be made on the same documents/loose papers in the hands of the assessee and the ITAT rightly came to the aforesaid conclusion. Protective addition was made in the case of assessee whereas substantive addition was either made in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and in the case of Nanak Ram (Dropadi Devi) and when the above additions have finally been sustained, as observed by the ITAT in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and Nanak Ram (Dropadi Devi), then it is a finding of fact and no question of law can be said to arise with the facts found by the ITAT - the addition of these very documents had been sustained in some other case relating to the search or other partners or in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and Nanak Ram (Dropadi Devi), then the Tribunal had rightly deleted the addition as the same cannot be or could not have been made in two hands – tribunal rightly rejected the reference application as it does not give rise to any question of law fit for reference - the reference application does not involve any question of law – Decided against revenue.
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2014 (10) TMI 147
Reopening of assessment u/s 148 - Validity of notice – Computation of income and indexed cost of improvement - Held that:- The AO himself had no reason to believe that any income had escaped the assessment and such reopening of the assessment is clearly at the behest of the audit party objections - any issuance of notice of reopening at the best of the audit party sans satisfaction of the AO himself, such notice must be quashed - What is important while issuing the notice for reopening within four years from the end of relevant assessment year or beyond four years must have a reason to believe that the income chargeable to tax has escaped the assessment – at the time of filing of the return of income, the assessee had in computation of income, claimed long term capital gain after showing the profit on sale of land - The statement of long term capital gain also specifies the particulars, the sale price and the year, indexed cost of the year, indexed cost of improvement and the capital gain - Again, in the computation of tax in the total income, the statement of long term capital gain is making it very clear as to what is indexed cost of improvement - The profit and loss account for the year ending 31st March 2008 shows the profit on sale of land, the balance sheet as on 31.3.2008 also in partners’ capital account has reflected land as an asset and the value has been quantified. The assessee had in computation of income, claimed long term capital gain after showing the profit on sale of land - The statement of long term capital gain also specifies the particulars, the sale price and the year, indexed cost of the year, indexed cost of improvement and the capital gain - the belief of the AO even if would have been there that income chargeable to tax had escaped assessment, the same lacks validity - Any reopening if is resorted to under Section 147 of the Act fundamental requirement of the AO is to have a reason to believe that the income chargeable to tax had escaped assessment - This fundamental requirement is not done away with - as decided in Asstt. Commissioner of Incometax V. Rajesh Jhaveri Stock Brokers (P) Limited, [2007 (5) TMI 197 - SUPREME Court] - such reason to believe need not necessarily be a final decision of the AO and yet when this requirement is not being fulfilled and when the AO himself has no reason to believe that any income chargeable to tax has escaped the assessment, the very notice lacks validity – decided in favour of assessee.
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2014 (10) TMI 146
Grant of deduction u/s 10B – Registration with STPI - Whether the Tribunal was right in holding that the registration with STPI is not a pre-requisite for grant of deduction u/s 10B – Held that:- Assessee is a company engaged in software development, has applied for registration as 100% Export Oriented Unit on 24.3.2005 before the competent authority and got the approval in May, 2005 - The assessee claimed benefit of exemption u/s 10-B of the Act, which falls under Chapter IV - a 100% EOU as provided u/s 10B(1) will be one that is approved by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 and the Rules made under that Act - approval was granted during May, 2005 only and therefore, prior to that date or the assessment year, relevant to the date of registration, the benefit of Section 10-B would not be available as the requirement of approval by the competent authority is not available as on the date, from which the assessee claimed exemption - Section 10B is very clear and unambiguous that approval by the competent authority is pre-requisite for grant of benefit u/s 10-B - it will not be appropriate for the Tribunal to hold that there is no pre-condition that the assessee should have obtain STPI registration before making the claim u/s 10-B. The Circular is nothing but clarification of what the Section 10B really provides for - It is of no avail either to the assessee or to the Department when the provisions of Section 10-B is clear – following the decision in C.I.T. Vs. Gopal plastics Ltd. [1994 (10) TMI 12 - MADRAS High Court] - the assessee in this case will be entitled to the benefit of Section 10-B only on complying with the conditions contained prescribed in Section 10-B of the Income Tax Act, and it does not enure to the benefit for the AY in question, namely, 2005-06. - Decided in favor of revenue.
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2014 (10) TMI 145
Expenses incurred on real estate project - accrual of expneses – Whether the CIT(A) erred in disallowing alternate claim made by the appellant on actual payment basis – Held that:- all the issues rasied by the assessee in its appeal are covered against the assessee by the different orders of the ITAT for the separate assessment years, as aforesaid. Hence, respectfully following the precedent, we dismiss all the aforesaid grounds of the assessee. - Decided against the assessee.
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2014 (10) TMI 144
Addition u/s 69 - Difference in amount in capital account – Investment in house property – Held that:- The assessee has replied before the AO that the flat was purchased in the A.Y. 1998-99 by Shri Surendra Uppal where she has been living since then and it is seen that at the time of search Sh. Surendera Uppal and the assessee were found living at the same address - the assessee included this amount in the Balance Sheet under the “Fixed Assest” schedule forming part of the Balance Sheet - this specific addition to Capital was not depicted as addition to capital separately – thus, the payment for the flat was made in 1998-99 AY and nothing has been placed by the revenue to controvert these facts – Decided against revenue. Unexplained household expenses – Held that:- The averments made and the findings recorded have not been rebutted by the revenue on facts by any evidence whatsoever - the confirmation by the mother of assessee who was a retired Doctor from Central Government Health Services who also confirms the fact that the daughters of the assessee were residing with her all the expenses for telephone, electricity and household expenses for the assessee were being met by her - The education expenses of the daughters of the assessee it is seen were met by the ex-husband of the assessee and the assessee has placed details of alimony settlement monies given by her ex-husband and his family along with copy of affidavit of the ex-husband - None of these have been rebutted by the Revenue – the order of the CIT(A) is upheld – Decided against revenue. Unexplained gift - Genuineness of gift – Held that:- CIT(A) rightly was of the view that the order does not warrant any interference - Copy of the gift deed along with copy of the bank statement of the donor reflecting the gift made by Sh. Surendra Uppal is available - nothing has been placed to controvert the finding that the gift has been made by Shri Surendra Uppal on account of love and affection for the assessee with whom admittedly he was living - The fact that he had been living with the assessee over the years has been admitted by Shri Surendra Uppal in his assessment proceedings over the years prior to the search is available on record - This has not been rebutted by the Revenue – the contention of the revenue cannot be accepted that there ought to have been specific reason for making the gift is of no relevance as admittedly the assessee who has received a flat from Shri Surendra Uppal in 1998 which is registered in her name in the year under consideration was offered professional and consultation fees relatively of very small amount for interior decoration and consultancy does not require the existence of any specific occasion for which a gift of ₹ 25 lacs should be made as affection for the assessee over the years is evident on record – Decided against revenue.
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2014 (10) TMI 143
Challenge to the order passed u/s 143(3) pursuance to the direction passed by DRP u/s 144C(5) - Speaking order - Power of DRP to remand - Income from providing services in relation to 3D seismic data acquisition and processing - Applicability of section 44BB - AO was of the view that the income to be taxed u/s 9(1)(vii) read with section 115A - Held that:- Provisions of section 144C provides the entire mechanism for making a reference to the DRP - the statute has provided sufficient powers to the DRP for considering all the material placed before it and equipped it with vast powers to conduct enquiry before issuing any direction to the AO - The statute contemplates that after empowering the DRP, with such wide powers the DRP shall give clear and speaking directions to the AO for passing the assessment order and the statute ensures that the said power is not delegated to the AO. - The wide sweeping powers vested in the DRP in order to ensure that remand is not made. Thus, the order of the DRP is in excess of jurisdiction and the challenge posed to the same by the assessee is well founded - the AO is directed to pass a speaking draft assessment order considering the fresh evidences admitted by the DRP and calling for whatever evidences the authority deems fit – the order of the DRP is set aside – Decided partly in favor assessee.
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2014 (10) TMI 142
Reopening of assessment u/s 148 – Change in postal address or not - Statutory notices were issued and duly send to the address of the assessee by the AO before the limitation period to re-open - Held that:- Assessee contended that there is no change in the postal address of the assessee and tried to convince us that mandatory statutory notices before re-opening of assessment were not served upon the assesse - the assessee itself has admitted that it has received the re-assessment order and also the appeal notices of the appellate proceedings in the very same postal address where the AO has sent the statutory notices envisaged under the Act before re-opening the assessment. The assessee has not leveled any malafide motive on the part of the AO to deliberately not to have issued the statutory notices before the re-opening of the assessment order and we find no reason why the AO should make up such report that the statutory notices as per the Act, was issued and sent in the postal address of the assessee and it was returned back with remark “left no such person”. When the assessee had admitted to have received the re-assessment order and other appellate notice in the said address where the AO has also sent the Section 148/ 147 notices, there is no reason to disbelieve the AO’s report that in fact statutory notices were issued and sent in the said address to be served upon the assessee before the limitation period - The conduct of the Assessee company to file on the last day of limitation some papers before the AO, strengthens the belief of the AO assesse deliberately avoided the said notice and does not give any scope to suspect the report of the AO, that notices u/s 148/ 147 was duly issued to the Assessee company, and it cannot claim any lapse on the part of the AO and cannot take any benefit out of it - the AO has made detailed enquiry in the remand report regarding the genuineness of the share applicants by sending notice u//s 133(6) and summons u/s 131 and also had send an inspector to serve the notice - merely because transactions happened through banking channel does not ipso facto establish genuineness and creditworthiness of the transactions. The AO in the second remand report has tried his level best to contact the share applicant however, he failed to do so because the share applicants could not be traced in the addresses furnished by the assessee - proper enquiry has been conducted by the AO, before the CIT(A) confirmed the addition - statutory notices were issued and duly send to the address of the assessee by the AO before the limitation period to re-open the assessment and we find that on 30.12.2010 i.e., the last day on which the limitation got over, the assessee had filed its reply to the statutory notices and also has admitted of receiving the re-assessment order and notices of the appellate proceedings – thus, the ground of non-service of statutory notices before re-opening proceedings cannot be countenanced. It is it difficult to subscribe to the contention that by producing merely the name and PAN details of the share applicants the burden on the assessee is discharged - By merely furnishing the said details would not prove the genuineness and creditworthiness of the share applicants – there was no infirmity in the reasoning given by the CIT(A), and proper enquiry has been made by the AO during the remand proceedings and there is no reason for us to interfere in the order – Decided against assessee.
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2014 (10) TMI 141
Admission of additional ground - Reopening of assessment u/s 147 and 148 – Non-issuance of notice u/s 143(2) of the Act as alleged by the assessee-firm had vitiated the conclusion of the assessments u/s 147 read with s. 143(3) of the Act – Held that:- Since the additional ground sought to be raised is legal in nature and goes to the root of the matter and as decided in National Thermal Power Company Limited Versus Commissioner of Income-Tax [1996 (12) TMI 7 - SUPREME Court] – the additional ground is taken up for consideration - in the absence of a notice u/s 143(2) of the Act, the assessment prevails or not is to be examined. Following the decision in B.R.Arora v. ACIT [2014 (6) TMI 473 - ITAT DELHI] - the re-assessments made for the assessment years under consideration have become invalid for not having served the mandatory notices u/s 143(2) of the Act on the assessee – since re-assessment proceedings concluded u/s 147 r.w.s. 143(3) of the Act were invalid for the AYs under dispute, the issues raised by the revenue in its appeals and also the Cross objections of the assessee firm based on the invalid assessment orders have not been addressed to - there is always a requirement of issuing of a notice u/s 143(2) of the Act in a case of an assessment u/s 147 of the Act - Relaxation has been given for issuance of such a notice where a notice u/s 148 was issued between 1.10.1991 to 30.9.2005 - notice issued u/s 148 of the Act on or after 1.10.2005; a notice u/s 143(2) has to be issued within the time stipulated in 143(2) of the Act – where Asstt. Has been framed without issuance of notice u/s. 143(2), Asstt. is invalid, Sec 292BB is not attracted in such cases. - Decided in favour of assessee.
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2014 (10) TMI 140
Computation of income in block period – Undisclosed income and computation - Imposition of penalty u/s 158BFA(2) r.w. section 271(1)(c) – Held that:- Relying upon CIT vs. Ravi Kant Jain [2001 (3) TMI 52 - DELHI High Court] - undisclosed income in block assessments has to be determined on the basis of the seized material - for assessing an assessee for a block period there should be a search conducted u/s 132 - penalty impossible u/s 271(1)(i)(c) and penalty impossible on the undisclosed income in the block period, income for the block period has to be determined on the basis of material seized during the course of search - This material was to be supplied to the assessee before he could be asked to submit his return in response to the notice issued u/s 158BC meaning thereby the material goads any person to compute true undisclosed income - From that very material, true and undisclosed income has to be computed by the assessee and to be disclosed in the block return in response to the notice received u/s 158BC - there is a perceptional difference in the operative force of section 271(1)(i)(c) vis-à-vis section 158BFA(2) - The charge against the assessee u/s 158BFA(2) could be, why they failed to compute true disclosed income out of the seized material - whether the assessees have made a deliberate attempt to disclose nil undisclosed income or they have sufficient reasoning for forming belief that no undisclosed income is available in their hands which is to be disclosed in response to the notice received u/s 158BC. Whether at the time of filing the return, a man of ordinary prudence can form a belief that he has no undisclosed income on the basis of seized material supplied to him - Whether such formation of belief is a bonafide one having regard to the material on the record or it is merely a Performa explanation - It is to be kept in mind that if a claim was not made in the return, then the assessee would be foreclosing his right to dispute the claim and would accept the stand of the Revenue – in COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] making incorrect claim does not amount to concealment of particulars, because the assessee wants to take a particular stand on the given facts. It is true that admissions being a declaration against an interest are good evidence, but they are not conclusive and parties always at liberty to withdraw the admission by proving that they are either mistaken or untrue - In law retracted confession even may form the legal basis of addition, if the AO is satisfied that it was true and was voluntarily made - It is not strict rule of law but it is only a rule of prudence - As a general rule of practice, it is unsafe to rely upon the retracted confession without corroborative evidence - This situation is to be visualized in the background of intellectual compatibility of these two persons vis-à-vis the authorized officer who recorded the statement and who has cross examined the assessee being a trained Revenue Officer and a businessmen engaged in construction and development of properties - when he treated this income in the hands of the assessee on protective basis – AO himself was not sure that these are the income only assessable in the hands of the assessee and in the hands of payer it is to be allowed as business expenditure. When Revenue is not sure whether the payer has actually incurred the expenditure towards purchase of land, whether the capital gain is conclusively to be assessed in the hands of the assessee or it is a protective addition, then how it be expected from the layman to compute true undisclosed income equivalent to the amount ultimately determined by the AO in the assessment order – Decided in favour of assessee.
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Customs
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2014 (10) TMI 155
Recovery of excessive Duty drawback claim - export of goods in discharge of export obligation under advance license - Held that:- Respondent exported goods namely I.C. Engines and parts falling under Tariff Heading 8408 under claim of drawback. They filed brand letter application under Rule 6(1)(a) of Drawback Rules, 1995. Brand rate letters were issued by the jurisdictional Central Excise, Commissionerate, Pune-III. On the basis of said brand rate letters, drawback was sanctioned to the respondent under Rule 6. Subsequently, it was observed by the Customs that the impugned goods were classified under 8408 and the same is mentioned in list of items eligible for AIR of drawback under Rule 3 of the said Drawback Rules, 1995, and that even if the respondent had to file application for brand rate of drawback, they were required to file the same under Rule 7 and not under Rule 6. It is clear that the respondents having exported the goods in discharge of export obligation under advance license, were not entitled of AIR of drawback. This has also been accepted by the department. As such, the respondent were not eligible for AIR of drawback under Rule (3). The applicant has also declared in their application for brand rate of drawback and shipping bills that the goods have been exported for claim of brand rate of drawback - it is ample clear that in case of non-availability of AIR of drawback simultaneously with advance license scheme, the exporter can avail benefit of brand rate of drawback under Rules 6 or Rule 7 of the Drawback Rules, 1995. It is unambiguously clear that brand rate of drawback under Rule 6 can be filed only where amount or rate of drawback has not been determined. Government notes that though the engines are figuring in the relevant All Industry Drawback Schedule but the said AIR rate is not applicable to said goods exported in discharge of export obligation against advance authorization in terms of Clause (b) of Note 7 of Notification No. 36/2005-Cus. (N.T.), dated 2-5-2005. As such, the condition of Rule 6 are not violated and respondent case cannot be taken out of the purview of said rule as held by Commissioner (Appeals) also. Commissioner (Appeals) has given detailed finding on the issue and applicant department has not countered these findings with any valid documentary evidences. The contention regarding availment of Cenvat credit and advance authorization is considered by DBK brand rate fixation authority in Central Excise as discussed above by Commissioner (Appeals). So, this pleading of department has no substance. In case, Customs authorities had any contrary documentary evidences which were not before Central Excise Brand Rate Fixation Authority, then they could have taken up the matter with Central Excise for remedial action, if any. In this case the brand rates fixed by Central Excise are not challenged/reviewed at appropriate level and therefore the brand rates fixed are legally valid. - No infirmity in impugned order - Decided against appellant revenue.
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Service Tax
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2014 (10) TMI 169
Classification of service - Business Auxiliary service or Information technology service - Held that:- From a perusal of the agreement entered into between the appellant and SKF, Sweden, it is clear that the said agreement provided for development, maintenance and installation of software systems by the foreign entity to the appellant and supply of information, data, providing training, etc. In the IT software field, Information Technology Software service was specifically excluded from the scope of ‘Business Auxiliary Services' and the same was made taxable only w.e.f. 16/05/2008 when a separate entry for ‘Information Technology Software Services' was introduced in the statute book. Therefore, we agree with the appellant's contention that the services received by the appellant fall within the category of ‘Information Technology Services' and therefore, would not be liable to service tax for the period to 16/05/2008. On perusal of the agreement, it is seen that there are only two parties involved SKF, Sweden and SKF, India and there is no third party involved. Further, the service received by the SKF India, the appellant herein, is for its own use and not for providing any service to any other party. Therefore, the argument of the Revenue that the services received would fall within the ambit of ‘customer care' is totally bereft of any logic and devoid of any merit. various services received do not come anywhere near the definition of ‘business auxiliary service' or ‘customer care service' as has been held in the impugned order. Thus, we find that the impugned order is clearly unsustainable in law. - Decided in favour of assessee.
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2014 (10) TMI 168
Liability of service tax on purchase and sale of used cars - Whether this service can be considered as sale - Held that:- the property is delivered and the price has been received by the seller of the old car. Therefore, the first transaction cannot be considered as the one which is not a sale. There is no doubt as to the second transaction whether it is a sale or not. once the first transaction is considered as sale it means that the vehicle has been purchased by the appellant subsequently sold by them. Therefore it becomes totally a transaction of purchase and sale of old vehicles - activities are undertaken as value addition by them and it is neither for the seller nor the purchaser. It is an activity undertaken to increase the value of the vehicle so that they get the maximum return out of it. Therefore we cannot say that there is a service element in this transaction either. As regards the invoices produced before us there is no clarity being there as to whether the Commissioner has seen these documents - In any case there is no observation saying that the vehicles were not sold under an invoice by the appellants - appellants have made out a case in their favour completely - Following decision of M/s Sai Service Station Ltd Versus Commissioner of Central Excise, Customs and Service Tax [2014 (4) TMI 640 - CESTAT BANGALORE] - Decided in favour of assessee.
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2014 (10) TMI 167
Denial of refund claim - Consulting Engineer Service - Unjust enrichment - Bar of limitation - Held that:- Activity undertaken by HOSI is in nature of executing the job. HOSI is not providing any technical assistance or consultancy service to ONGC as they are not analyzing any data collected by them. Their mere job is to provide data on hard copy to ONGC for their consideration. In these circumstances, the HOSI is neither providing any consultancy or technical assistance. Further, we find that HOSI is neither a professionally qualified engineer nor they are an engineering firm during the relevant time as per the definition of "Consulting Engineer" under Section 65(31) of the Finance Act, 1994. By Merely employing an engineer, it does not become an engineering firm. Therefore, on merits, we hold that the activity undertaken by the HOSI do not qualify under the category of Consulting Engineer Service. Therefore, HOSI is not required to pay service tax in this case - matter remanded back - Decided in favour of assessee.
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2014 (10) TMI 166
Condonation of delay - Delay in receipt of order - Held that:- Postal authoritys acknowledgement card is not of delivery of order-in-original to the appellant. The only paper or evidence on which the first appellate authority is relying upon is a print-out of the mail tracking system of the Indian post which indicate that registered letter was delivered to the appellant on 28.03.2013. We also note that the appeal having filed by the appellant on 18.09.2013 before the first appellate authority, while the letter which has been relied upon by the first appellate authority, talks about a complaint lodged with the postal authority on 31.08.2013. We are convinced that the reliance placed by the first appellate authority on such a communication is incorrect to come to a conclusion that appellant had received the order-in-original not on 03.09.2013 but on 28.02.2013; Revenue is also unable to produce the acknowledgement due card of the delivery of order-in-original in the appellant’s premises - first appellate authority was not correct in dismissing the appeals on the ground of these being time-barred before him. Accordingly, we set-aside the impugned orders and remand the matters back to the first appellate authority to reconsider the issue afresh on merits of the case and come to a conclusion after following the principles of natural justice - Decided in favour of assessee.
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2014 (10) TMI 165
Condonation of delay - Jurisdiction of Commissioner to condone delay - Held that:- Commissioner (Appeals) has no power to condone the delay after expiry of 30 days period as provided under Section 85 of the Finance Act, 1994. We agree with the submission of the Revenue that there is no power of Commissioner (Appeals) to condone the delay. The wrong mentioning of the period of limitation in the preamble cannot override the statutory provision. We also notice that the Tribunal in the case of Raghav Industries (2008 (5) TMI 537 - CESTAT, NEW DELHI) and Sagar Enterprises (2009 (4) TMI 690 - CESTAT, CHENNAI) dismissed the appeal on the similar ground - No reason to interfere with order of the Commissioner (Appeals) - Decided against assessee.
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2014 (10) TMI 164
Denial of refund claim - Export of services - Period of limitation - claim filed with one year after date of payment of belated service tax - Business Auxiliary Service - CENVAT credit - Held that:- provisions contained in Section 11B of the Central Excise Act, 1944, as made applicable to the Service Tax matters are squarely applicable in this case. In this case the applicant had paid the Service Tax on the services which qualifies as ‘Export of Service’ and the payments were made both in Cash as well as by way of debit of CENVAT Credit A/c. The cash payments were made much beyond the due date of payment of Service Tax. The said claim was filed within one year from the date of payment of tax, but after the expiry of one year from the due date of payment of tax. The Original Adjudicating Authority found that the payment from CENVAT Credit was deemed to be made on the due date of payment of tax, hence the claim is barred by limitation to that extent. - no infirmity in the said findings. - Decided in favour of Revenue.
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2014 (10) TMI 163
Renting of immovable property - Constitutional validity of section 75(5)(h) and section 76 of the Finance Act, 2010 - Held that:- Similar issue has been dealt with in Vir Retail Private Limited v. Union of India [2013 (9) TMI 789 - KARNATAKA HIGH COURT] - The learned counsel appearing for the respondent/Revenue does not dispute this fact. Said directions issued would equally apply to the petitioner herein and accordingly this writ petition is also disposed of by hold ing that subject to decision of the apex court and reserving liberty to petitioner to make necessary application to recall the order if any pursuant to decision of the apex court. Demand relating to cenvat credit - Held that:- Parties have produced voluminous documents. The petitioner has claimed Cenvat credit in respect of certain amounts. Learned counsel contends that authorities were required to consider the same which is seriously disputed by learned counsel appearing for Revenue. In that view of the matter it would be appropriate to direct the petitioner to appear before the Commissioner of Service tax (second respondent) herein and put forth its claim if any seeking for entitlement of Cenvat credit and in turn second respondent shall examine the claim of the petitioner under all heads and pass orders on merits and in accordance with law. It is made clear that no view is expressed with regard to merits of the claim made by the petitioner in so far as the entitlement of Cenvat credit by it. Same is kept open. The petitioner shall appear before the second respondent on June 24, 2013 without waiting for any further notice. Second respondent shall consider the claim on the merits and second respondent is at liberty to examine all the issues and pass orders thereon - Matter remanded back.
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Central Excise
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2014 (10) TMI 162
Benefit of Notification No. 67/95 dt. 16.3.95 - first unit send the goods to second unit without payment of duty but availing cenvat credit - second unit cleared to goods on payment of duty after processing - Held that:- On perusal of the record, we find that in defence of the allegation made in the show cause, the respondents have prayed that if it is held that the respondents are two separate units, in that case, if duty is paid by one unit the same is entitled as Cenvat Credit to the another unit. As the respondent had made this defence in the replies to the show cause notice, the adjudicating authority agreed with this contention of the respondents and passed the order holding that they are entitled to take Cenvat Credit of duty paid by the another unit. The same view has been affirmed by the Ld. Commissioner (Appeals). In these circumstances, we do not find any infirmity with the impugned orders. As in this case, it is the defence of the respondents that if the benefit of notification is denied to them and it is held that the respondents are two different units, in that case, if duty is confirmed against one unit same is entitled as Cenvat Credit to another unit - Decided against Revenue.
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2014 (10) TMI 161
Manufacture - activity of dilution of sulphuric acid and finished product is supplied to the battery companies for use in the batteries - revenue is of the view that the said activity amounts to manufacture - Held that:- The activity undertaken by the applicant is that they are purchasing 98% concentrated sulphuric acid, and as per the requirement of the customers they diluted it with demineralised water, to attain desired concentration. The product that emerged was diluted sulphuric acid (28-50%), which was marketable and it is specifically used in the manufacture of battery manufacturing units. Therefore, in terms of definition under Section 2(f) of the Central Excise Act, 1944, we hold that the appellant are engaged in the activity of manufacture. - Demand of duty and interest confirmed - penalty set aside - appellant allowed to use cenvat credit - Decided partly in favor of assessee.
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2014 (10) TMI 160
Recovery of refund already granted - excess duty paid - revision in price on the basis of debit note - Commissioner (Appeals) proceeded on the basis of amount mentioned in the debit notes would be included in the transaction value which is beyond the definition of the transaction value under Section 4(1)(d) of the Central Excise Act, 1944 - Held that:- It is seen from the order of the Commissioner (Appeals) that the amount of ₹ 4.30 crores was repaid and adjusted by the applicant in the subsequent clearance to M/s. Mando India Steering Systems. Prima facie, we find that the applicant is not the beneficiary of ₹ 4.30 crores - debit notes has a bearing in transaction value which would be examined at the time of appeal hearing at length. waiver of predeposit of entire dues and stay its recovery during the pendency of the appeal is granted - Stay granted.
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2014 (10) TMI 159
Waiver of pre deposit - Refund on input service credit - Notification No.41/2007-(ST) dated 6.10.2007 - Held that:- Commissioner (Appeals) already accepted that the eligibility of refund claim for export made from 1.10.2008 to 31.12.2008 only and not for the export made prior to 1.10.2008. Prima facie, we find that the show-cause notice itself restricted the refund to ₹ 4,22,062/- and main allegation in the show-cause notice that the assessee has submitted the bills pertaining to over one year from the date of LET export as per the notification. Prima facie, we find that the Commissioner (Appeals) observed that the assessee is strictly eligible for refund of the duty which is within the limitation. Hence, the applicant made out a prima facie case for waiver of entire amount of dues. Accordingly, we grant wavier of predeposit of the entire amount of dues and stay its recovery during the pendency of the appeal. - Stay granted.
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2014 (10) TMI 158
Demand of differential duty - Difference in value of goods - Held that:- Similar issue came up before the Hon'ble Apex Court in the case of International Auto Ltd. Vs. Commissioner of Central Excise, Bihar reported in [2005 (3) TMI 132 - SUPREME COURT OF INDIA] wherein it was held that the appellants are not required to pay duty on the free supplies by the principle manufacturer, who after receiving the intermediate products have cleared the finished goods on payment of duty. In appellant's own case also, this Tribunal has held that appellants are not required to pay differential duty in the similar situation. Therefore, following the decision in appellant's own case, we hold that in this appeal also the appellants are not required to pay differential duty as demanded. - Decided in favour of assessee.
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2014 (10) TMI 157
Levy of duty as per CAS-4 - CBEC Circular No. 692/08/2003-CX dated 13.2.2003 - Held that:- Considering the fact that the issue has already been settled by the Apex Court in the case Commissioner of Central Excise, Pune Vs. Cadbury India Ltd. reported in [2006 (8) TMI 2 - SUPREME COURT OF INDIA] wherein it was held that for the period prior to 13.02.2003 also that duty is payable as per Board's Circular No. 692/8/2003-CX dt. 13.2.2003. Therefore, we do not find any infirmity in the impugned orders, same are upheld - Decided against Revenue.
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2014 (10) TMI 156
Wavier of pre-deposit - Denial of input service credit - manufacturing as well as trading activity - Held that:- applicant is not entitled to take CENVAT credit. With regard to the limitation issue and the intention of the applicant to avail credit will be seen at the time of final hearing of the appeal. Therefore, at this stage, we direct the applicant to pre-deposit a sum of ₹ 70,00,000 within eight weeks from today. On such compliance being reported, balance amount of duty, interest and penalty shall remain waived during the pendency of the appeal. - Stay granted partly.
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