TMI Tax Updates - e-Newsletter
October 9, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Provision for transit breakages - There is no reasonable scientific method adopted by the Assessees to estimate the transit breakages so as to justify creating of provision for such breakages.The provision would, in the circumstances, be a provision for a contingent liability and, therefore, in terms of the AS 29 ought not be recognised. - HC
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Income Tax:
Application of the petitioners for registration as a “Valuer of Immovable Property” u/s 34AB of the Wealth Tax Act, 1957 rejected - it is not necessary to gain the experience under the Rules, after the acquisition of the educational qualifications - department to reconsider the application - HC
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Income Tax:
Interpretation of section 9(1)(vii) and Article 12(4) of the Indo German DTAA - once the fees are not falling within above provisions, then, further question and of applying section 44D and Section 115A of the Income Tax Act, 1961 would not arise - HC
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Income Tax:
Determination of arm’s length price (ALP) - TPA - working capital adjustment has to be allowed based on the working capital requirements of the assessee and the comparable companies irrespective of the fact, whether such adjustment is negative or positive. - AT
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Income Tax:
Registration under Section 12AA refused - Whatever may be the correctness or otherwise of the said findings of the learned CIT, it is only the amended objects that have to be considered for purpose of grant of Registration. Thus, in our view, the objections of the ld. CIT with regard to the provisions of section 13(1)(b) of the Act, are therefore no longer relevant. - AT
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Income Tax:
Entitlement to exemption u/s.11 - Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The assessee is operating on no profit basis. - The proviso to Sec.2(15) not applicable - exemption allowed - AT
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Income Tax:
Entitlement to exemption u/s 11 - If interest, rent and other income are excluded and compared with the expenditure on operations incurred by the Assessee, it becomes clear that the Assessee does not have profit motive. The proviso to Sec.2(15) of the Act is therefore not applicable - AT
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Income Tax:
Levy of interest u/s 220(2) - Once the Tribunal’s order is vacated and the original order is revived, the original demand that remained unpaid also gets revived. - charging interest u/s.220(2) of the Act for the entire period from the date of original demand notice till the time when the order giving effect to the Hon'ble High Court of Karnataka was passed. is correct - AT
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Income Tax:
Disallowance under section 40(a)(ia) - secondment of employees to the assessee in India - such reimbursement of expenses are not income in the hands of the non-resident and therefore, TDS provisions are not applicable. - AT
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Income Tax:
Addition relating to alleged commission / interest - even if the loan provided by the family members of the assessee to Bajaj Group is not actual loan and is only accommodation entry then also, the commission on such accommodation entry belongs to the respective family member and that family member has already included in his income interest @ 12% and alleged commission payment of 5% is not in addition to interest of 12% - AT
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Income Tax:
Validity of search warrant - notwithstanding that the authorization for search has been issued in joint names, assessment or reassessment shall be made separately in the names of each of the persons mentioned in such authorization. - AT
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Income Tax:
Deduction u/s 80IB(4)(iii) - assessee company had leased out the five/four floors to particular tenants, the tenants were carrying on their operation as independent units as the activities were functionally different - The assessee had successfully satisfied the functional test of an independent unit - deduction allowed - AT
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Income Tax:
Withholding of taxes u/s 195 - The recipient of commission is non-resident and had no permanent establishment in India. No income had accrued or arisen to the non-resident U/s 9 in the India - AT
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Customs:
As the redemption fine as a general principle has a nexus with the margin of profit and the goods were otherwise freely importable, we find the redemption fine to be excessive in the wake of the facts that the duty evaded due to undervaluation was only ₹ 13,103/-. - redemption fine of ₹ 20,000/- is reasonable - AT
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Customs:
Penalty u/s 114(ii) - CHA is not guilty of aiding and abetting. - the CHA had the authorisation which it appears was not produced due to clerical error, but the fact has been stated and accepted by the exporter - No penalty on CHA - AT
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Service Tax:
Default in availing benefit of Service Tax Voluntary Compliance Encouragement Scheme 2013 – Admitted tax dues not remitted and deposited even under the scheme, the Petitioner cannot fault the authorities for addressing the impugned communications, recovering 'tax dues' by coercive means - HC
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Service Tax:
Correctness of quantum of refund granted under Rule 5 of the CENVAT Credit Rules, 2004 – if the revenue wants to reduce the value of the invoices from the export turnover, the same also should be removed from the total turnover of the export - AT
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Service Tax:
Waiver of penalty imposed under Section 76, 77 & 78 - Considering the ambiguity prevailing on payment of service tax during the relevant period Appellant's contention merits justification for bonafide cause for invoking Section 80 - AT
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Central Excise:
Delay in sanction of refund claim - Demand of interest - Amounts paid at the time of investigation cannot be denied interest on the grounds that the amount paid was not duty and not entitled to interest. - AT
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Central Excise:
Imposition of penalty - In the instant case, duty had already been paid before the issuance of show cause notice. The appellant was therefore entitled to pay 25% penalty only. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (10) TMI 491
Provision for transit breakages - whether has a scientific basis or is contingent in nature and as such is not an allowable deduction while computing the total income of the Assessee? - Held that:- The Court is unable to discern any uniform scientific method followed by the Appellant in making provision for the breakages. As noticed by the ITAT in its order dated 16th March 2009, the explanation offered by the Appellant was that on an ad hoc basis it fixed a rate per case of bottles. In the case of Andhra Pradesh, the rate was ₹ 10 per case, for Goa and Karnataka it was ₹ 15 per case. Also the breakages are known within a period of 15 to 30 days after despatch of the goods. The Court also concurs with the view of the ITAT that with the first Assessee having entered the line of business only from AY 2001-02, it cannot be said to have gathered sufficient experience to have reasonably estimated such breakages for the AYs in question. In the circumstances, the 'liability' on that score could at best be described as a 'contingent liability' as defined in AS-29. There is no reasonable scientific method adopted by the Assessees to estimate the transit breakages so as to justify creating of provision for such breakages.The provision would, in the circumstances, be a provision for a contingent liability and, therefore, in terms of the AS 29 ought not be recognised. The actual transit breakages as and when they occur are allowable as revenue expenditure in the accounting year in which such breakages occur.Consequently, the question framed is answered in favour of the Revenue and against the Assessees. It is clarified that while giving an appeal effect to this order, the AO shall allow the actual transit breakages for AY 2001-02 as revenue expenditure consistent with the settled legal position. The Assessees would also be permitted to get the benefit of the reversal of the provision for transit breakages made in the AYs in question accordance with law.
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2015 (10) TMI 490
Revision u/s 263 - fresh assessment order passed in both the assessment years i.e. 1985-86 and 1987-88 in which the claim of the appellant under Sections 88HH and 80I was allowed - Held that:- Admittedly, the appellant's unit came into existence in the assessment year 1980-81 prior to the insertion of Section 80I of the Act, which came into effect from 1.4.1981. Consequently, we are of the opinion that since the appellant's industry was already existing prior to insertion of Section 80I of the Act, the benefit of the provision of Section 80I could not be given to the appellant as it was not a new industry, which came into existence after 1.4.1981. Consequently, the appellant is not entitled for any deduction under Section 80I of the Act. Section 80 HH was inserted w.e.f.1.4.1974, where incentives were given for establishing a new industrial undertaking in a backward area. Sub-clause (ii) of Section 80HH of the Act laid down certain conditions which were required to be fulfilled before claiming deduction. In this regard, one such condition was that the industrial undertaking has begun or begins to manufacture or produce articles after 31.12.1970. In the instant case, admittedly, the appellant's unit came into existence and started business in the assessment year 1980-81 by doing job works i.e. repair of transformers but started manufacturing activity from the assessment year 1985-86 and, consequently, claimed deduction under Section 80HH of the Act from that assessment year onwards. In our opinion, the reasoning adopted by the Tribunal is patently erroneous. The Tribunal has not considered sub-clause (iv) of Section 80HH of the Act, which only allows the assessee to claim deduction from that assessment year in which the industrial undertaking began to manufacture or produce the articles. From this provision, it is apparently clear that even though the undertaking came into existence from the assessment year 1980-81, but started the manufacturing process in the assessment year 1985-86, it would be entitled for deduction under Section 80HH from that year, namely, 1985-86. The finding that the appellant's unit was not a new unit in the year from which it started manufacturing is erroneous and misconceived. Section 80HH does not provide that the industrial undertaking should be a new undertaking and starts manufacturing from that year itself. The essential requirement is, the year in which the manufacturing activity starts and, consequently, appellant cannot be non-suited on the ground that its unit was not the new unit when it started its manufacturing activity. In the light of the aforesaid, we are of the opinion that the appellant was entitled for deduction under Section 80HH of the Act and the Tribunal as well as the subordinate authorities committed a manifest error in rejecting the claim of the appellant on this aspect. Upon a perusal of the order of the Commissioner of Income Tax, we find that a specific finding has been recorded that the assessment was erroneous and prejudicial to the interest of the revenue. The learned counsel for the appellant could not point out anything to the contrary. Consequently, we are of the opinion that once a specific finding has been recorded by the Commissioner that the assessment order was erroneous and prejudicial to the interest of the revenue, the Commissioner had validly passed an order under Section 263 of the Act. - Decided partly in favour of assessee.
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2015 (10) TMI 489
Application of the petitioners for registration as a “Valuer of Immovable Property” under Section 34AB of the Wealth Tax Act, 1957 rejected - reasoning given by the said respondent on rejection of application was that the applicants must have been practicing as a Consulting Engineer, Valuer of real estate, Surveyor or Architect for a period of not less than ten years after having obtained the qualification as defined in Rules 8A(2)(i) and it was noticed that the applicant had obtained the graduate Degree in Civil Engineering in 2009 and, therefore, the experience acquired prior to the acquisition of the degree would be of no benefit - Held that:- Very recently, the same issue came up before the Apex Court in K.K.Dixit Vs. Rajasthan Housing Board & others [2015 (10) TMI 376 - SUPREME COURT] wherein the promotions were to the posts of Project Engineer (Senior) from amongst the Project Engineer (Juniors) who were Diploma holders with 7 years total experience of service. The dispute was again between Diploma holders and the Degree holders. Accordingly, it was held that the qualifications of AIME and the experience of service had to be post the acquisition of the degree. In the present case, as noticed, the issue is not of any dispute inter se the Diploma holders and Degree holders. The Rules provide that a person has to be a graduate in Civil Engineering and he must have the experience of working either under Government, private employment or on the academic side. In the alternative, the experience as a Consulting Engineer, Valuer of not less than 10 years, has been made mandatory, subject to certain conditions. The observations made by the Apex Court in the case of A.K.Raghumani Singh (2000 (4) TMI 819 - SUPREME COURT) and Anil Kumar Gupta (1999 (11) TMI 867 - SUPREME COURT) would squarely apply and the respondents were not justified in reading the qualification into the conjective word and implying that experience had to be subsequent to the acquisition of the degree. In such circumstances, the question of law is answered in favour of the writ petitioners that it is not necessary to gain the experience under the Rules, after the acquisition of the educational qualifications and accordingly, the order dated 31.12.2014 (Annexure P11), is quashed and the writ petition is allowed. The respondents shall reconsider the applications of the petitioners, afresh and decide the same within a period of 2 months from the receipt of a certified copy of this order.
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2015 (10) TMI 488
Eligibility for exemption under Section 10A - Assessee is engaged in the business of software related services such as software design and development - Held that:- As rightly noted by the ITAT itself, this is not a case where any new claim for deduction under Section 10A of the Act has been made by the Assessee. This claim had been made in the original return itself. It is only the figure of profit that was changed in the revised computation as a result of wrongly showing a receipt in USDs without converting it into rupees. The ITAT has, in fact, remitted the matter back to the file of the AO to compute the deduction in accordance with law. The Court does not see any prejudice being caused to the Revenue as a result of the above directions. It is consistent with the law explained by this Court in the above decisions after considering the effect of the decision of the Supreme Court in Goetze (India) Ltd. (2006 (3) TMI 75 - SUPREME Court). Consequently, as regards the issue of the deduction under Section 10A of the Act, the Court declines to frame a question. - Decided against the Revenue Entitlement of the Assessee to the deduction under Section 80HHE - Assessee has established a Shared Service Centre (“SSC”) at Gurgaon for rendering information technology related services and business process management services for which it claimed deduction under Section 80 HHE - According to the AO, no deduction under Section 10A would be allowed to the Assessee either for the same or any subsequent assessment year since it had claimed deduction under Section 80HHE of the Act in AY 2000-01. - CIT (A) reversed the order of the AO and restored the matter to the file of the AO with the direction to allow the exemption under Section 10A also confirmed by ITAT - Held that:- The decisions of this Court in Commissioner of Income Tax v. Interra Software India (P) Ltd. (2010 (12) TMI 142 - DELHI HIGH COURT), Commissioner of Income-tax v. Damco Solutions (P) Ltd. [2010 (10) TMI 592 - DELHI HIGH COURT ] and Commissioner of Income Tax v. EDS Electronics Data Systems (India) (P) Ltd. (2012 (11) TMI 586 - DELHI HIGH COURT) answer the question in favour of the Assessee and against the Revenue. These decisions explain that the making of a claim under Section 80HHE of the Act in one assessment year will not preclude an Assessee from claiming the benefit under Section 10A of the Act in respect of the same unit in a succeeding assessment year. It was explained that the purpose of the Section 80HHE(5) of the Act was to avoid double benefit but that would not mean that if for a particular assessment year the Assessee wants to claim a benefit only under Section 10A of the Act and not Section 80HHE, that would be denied to the Assessee. - Decided against the Revenue
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2015 (10) TMI 487
Disallowance of depreciation - assessee could not prove that he had started production and that the excise documents produced were only photocopies and were not the original and, therefore, reliance could be placed on these documents - ITAT allowed the claim - Held that:- The Tribunal after considering the evidence found that the assessee had started the production of poly chips plant at Nasik on 29th March, 1996 and operated the plant during the relevant previous year, which was borne out from the excise records and the raw material purchased and consumed by the assessee. The Tribunal had further given a finding that the excise records were verified by the excise authorities and the genuineness of those documents could not be doubted. In Commissioner of Income Tax Vs. Mentha and Allied Products (2009 (11) TMI 539 - Allahabad High Court) held that the assessee was entitled to claim depreciation on plant and machinery, even though it was used during the year for trial production. Once a finding has been given by the Tribunal that the assessee has operated the plant during the relevant previous year, the assessee became entitled for depreciation and was rightly allowed by the first appellate authority. - Decided in favour of assessee. Disallowance of foreign travelling expenses on 34 persons - disallowance on basis of a tax audit report on the ground that the names of the persons, who had travelled were not given - ITAT allowed the claim - Held that:- Tribunal found that the names of the 34 persons were placed before the first appellate authority, which was examined and accepted and no adverse material was found by the departmental representative. The Tribunal found that 34 persons, who had travelled were dealers and distributors of the assessee and such trip was organized to promote the business of the assessee and, therefore, was entitled for such allowance. This being a finding of fact, which is not perverse, we are of the opinion that no substantial question of law arises.- Decided in favour of assessee. Disallowance of commission - expenditure increased as compared to the expenditure incurred in the previous year - Held that:- Tribunal found that cheques were paid to commission agents, who in turn, were regular income tax assessees'. We are of the opinion that when genuineness of the payments was not doubted by the department, the assessee was entitled to claim such allowance as business expenditure, which could not be disallowed on the ground that the expenditure on the commission in the year in question had increased as compared to the expenditure incurred in the previous year.- Decided in favour of assessee.
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2015 (10) TMI 486
Interpretation of section 9(1)(vii) of the Income Tax Act, 1961 and Article 12(4) of the Indo German Double Taxation Avoidance Agreement - Held that:- The nature of work is that the assessee is approached by certain parties for issuance of this standard certificate. The process of evaluation in the form of audit of activities undertaken by the clients is carried out through the audit parties of the assessee. Based on the report of such audit party, a certificate to individual clients/applicants are issued. This is after reviewing the report and several stages of audit work which has been carried out. The certificates are issued for specific and certain period. These are neither technical nor managerial nor consultancy services. There is no advice given but insofar as this activity is concerned, the record indicates that the audit work and certification would not come within the realm of fees for technical services. In the circumstances, there is nothing in the activities which could enable the revenue to bring them within the purview of section 9 (1)(vii) and Article 12(4) of Indo German Double Taxation Avoidance Agreement. There is a finding of fact and which is rendered after examination of the assessee's records and the service and their nature. Having analysed all this, the Tribunal concluded that the assessee's services are not of the nature falling within statutory provision. In these circumstances, the findings of fact at paragraph 9 and 10.3 of the order under challenge cannot be termed as perverse or vitiated by any error of law apparent on the face of the record. It is fairly conceded that once the fees are not falling within above provisions, then, further question and of applying section 44D and Section 115A of the Income Tax Act, 1961 would not arise.
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2015 (10) TMI 485
Interest under Section 234D - Held that:- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala [2001 (10) TMI 4 - SUPREME Court]. In this view of the matter, we uphold the action of the Assessing Officer in charging the assessee the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable under Sections 234D of the Act, if any, while giving effect to this order. - Decided against assessee. Transfer pricing adjustment - Exclusion of Comparables Sought for by the assessee - Held that:- Bodhtree Consulting Ltd. (‘Bodhtree’) - We find that a co-ordinate bench of this Tribunal in the case of CISCO Systems (India) Pvt. Ltd. (2014 (11) TMI 849 - ITAT BANGALORE) for Assessment Year 2009-10, following the decisions of the Mumbai Benches of the ITAT in Nethawk Networks Pvt. Ltd. [2013 (11) TMI 967 - ITAT MUMBAI ] and Wills Processing Services (I) Pvt. Ltd. [2014 (4) TMI 814 - ITAT MUMBAI] had omitted this company from the list of comparables to a software development service provider as it was established to be in software product company. Infosys Technologies Ltd. (‘Infosys’) be omitted from the list of comparables to a mere software development service provider since it was found to be functionally dis-similar and different, being a market leader engaged in software products, owned significant IPRs and intangibles, had significant R&D activities, brand attributable profits etc. Following the aforesaid decision of the co-ordinate bench of this Tribunal in the case of CISCO India Pvt. Ltd. (2014 (11) TMI 849 - ITAT BANGALORE) for Assessment Year 2009-10, we hold that ‘Infosys’ cannot be regarded as a comparable to a captive software development service provider, like the assessee in the case on hand, and consequently direct the Assessing Officer / TPO to exclude this company from the list of comparables. Tata Elxsi Ltd. (Seg.) being into software development service segments such as embedded product design services, industrial design and engineering services, systems integrating services, Visual Computing Labs , etc. cannot be regarded as comparable to a pure software development service provider, like is the assessee in the case on hand. Foreign Exchange Gain/Loss - computation of operating revenue - Held that:- It has not been disputed that the foreign exchange gain/loss has arisen as a consequence of the realization of the consideration for rendering software development services and therefore there is no reason for its exclusion from the operating revenues for the purpose of calculating the operating margin of the assessee. Following the decision of Triology E Business Software India Pvt. Ltd. (2013 (1) TMI 672 - ITAT BANGALORE ) and Amba Research India Pvt. Ltd. (2015 (10) TMI 461 - ITAT BANGALORE), we hold that operating revenue should be computed by including the foreign exchange gain/loss. - Decided against revenue.
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2015 (10) TMI 484
Determination of arm’s length price (ALP) in respect of an international transaction entered into with its Associated Enterprise (AE) - accepting/rejecting certain comparables - Held that:- Bodhtree Consulting Ltd. and KALS Information Systems Ltd. should be excluded from the list of comparable companies for the purpose of determining the ALP. It is also relevant to point out that in the case of CISCO Systems India Pvt. Ltd. (2014 (11) TMI 849 - ITAT BANGALORE) the very same 11 companies had been chosen by the TPO as comparables, thereby making it clear that the assessee in the present case and CISCO Systems India Pvt. Ltd. have the same business profile. Working capital adjustment - Held that:- The assessee has taken a specific plea that the TPO has used incorrect value of receivables and payables for comparable companies. In Annexure-II to the submissions before the CIT(Appeals), the assessee has also given the details which are enclosed to this order. Perusal of the order of the CIT(Appeals) shows that none of these contentions have been considered by him. We are, therefore, of the view that the order of CIT(Appeals) on this issue should be set aside and the AO/TPO should be directed to examine the details and arrive at the correct working capital adjustment. We hold and direct accordingly. Treating foreign exchange gain or loss and provision for bad debts as non-operating in nature and fringe benefit tax as part of operating cost - Held that:- Exchange Fluctuation gains are required to be added to operating revenue. Following the same, the AO is directed to accept the claim of the Assessee in this regard. As far as provision for bad debts are concerned, the TPO has accepted that the same would be part of operating expenses provided the same is incurred every year for at least three years and the manner in which provision is made is consistent. The Assessee in reply to the query of the TPO on the above aspect has not furnished any details. We are of the view that the Assessee should be afforded opportunity to explain its position on the above and the AO is directed to consider the same in accordance with law. As far as Fringe Benefit Tax (FBT) is concerned, the same was not considered by the TPO as part of operating cost in the case of comparables and therefore the same should also not be considered as part of operating cost of the Assessee. We hold accordingly and direct the AO to compute the operating cost of the Assessee Working capital adjustment has to be allowed on the basis of requirements of working capital in the case of the assessee and the comparable companies. Just because if on a proper working of the working capital adjustment, it reflects a negative working capital adjustment, that cannot be the basis not to grant working capital adjustment. In other words, working capital adjustment has to be allowed based on the working capital requirements of the assessee and the comparable companies irrespective of the fact, whether such adjustment is negative or positive. To this extent, we are of the view that the observations of the CIT(Appeals) are incorrect. We have already directed the AO/TPO to work out the proper working capital adjustment. This ground of appeal is therefore treated as allowed for statistical purposes.
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2015 (10) TMI 483
Transfer pricing adjustment - selection of comparable - Held that:- Accentia Technologies Ltd. (Seg.) - as during the previous year there were extra ordinary events that took place in this company which warrants exclusion of this company as a comparable. We therefore hold that this company cannot be considered as a comparable. Acropetal Technologies Ltd. (Seg.) - On a perusal of the Note No.15 of notes to accounts which gives segmental revenue of this company, it is clear that the major source of income for this company is from providing Engineering Design Service and Information Technology Services. The functions performed by the Engineering Design Services segment of the company cannot be considered as comparable to the ITES/BPO functions performed by the Assessee. The performance of Engineering Design Services is regarded as providing high end services among the BPO which requires high skill whereas the services performed by the Assessee are routine low end ITES functions. We therefore hold that this company could not have been selected as a comparable, especially when it performs engineering design services which only a Knowledge Process Outsourcing [KPO] would do and not a Business Process Outsourcing [BPO]. Coral Hubs Ltd. cannot be considered as a comparable - It may also be relevant to point out that the TPO in his order has observed that this company is retained as a comparable on the basis of detailed discussion in the TP order for the A.Y. 2007-08. In fact in A.Y. 2007-08, there was no determination of ALP and therefore there was no occasion for any order being passed by the TPO. It is also seen that this company entered into an area of business known as New Vertical Digital Library & Print on Demand in F.Y. 2007-08. Crossdomain Solutions Ltd. - It is seen that the business profile of this company is re-engineered payroll service. This company is also engaged in the development of information systems. These activities are totally different from the activities of the assessee which perform very limited/low end functions back office services. The business of Cross Domain ranges from high end KPO services, development of product suites and routine low end ITES service. However, there is no bifurcation available for such verticals of services. Therefore the assessee contends that Cross Domain cannot be compared to a routine ITES service provider. We are of the view that in the absence of any reasons given to the contrary either by the TPO or the DRP for regarding this company as a comparable, this company should be excluded from the list of comparables, accepting the plea of the Assessee Eclerx Services Ltd. cannot be regarded as a comparable for the reason that it was functionally different. Infosys BPO Ltd. - chedule 13 to the profit & loss account of this company for the F.Y. 2007-08 shows that this company incurred huge selling and marketing expenses. Page 133 of the annual report of this company for the F.Y. 2007-08 shows that this company realizing its brand value has chosen to value the same on the basis of its earnings and that of Infosys. The brand value of the Assessee and Infosys has been valued at ₹ 31,863 Crores. Infosys BPO, being a subsidiary of Infosys, has an element of brand value associated with it. This is also clear from the presence of brand related expenses incurred by this company. Presence of a brand commands premium price and the customers would be willing to pay, for the services/products of the company. Mold-tek Technologies Ltd. - submission of the assessee before us is that it is in the business of Knowledge Process Outsourcing and cannot be considered as a comparable. Wipro Ltd. company owns substantial intellectual property on software products. This company cannot therefore be regarded as a comparable. For the reasons given while disregarding Infosys BPO Ltd. as a comparable, this company is also directed to be excluded from the list of comparables. Hon’ble High Court of Karnataka in the case of CIT v. Tata EIxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] has held that while computing deduction under section 10A of Act, expenditure incurred by the assessee, if excluded from the export turnover, should also be excluded from the total turnover. In view of the aforesaid decision of the Hon’ble High Court of Karnataka, the AO is directed to reduce the expenses incurred for travelling and internet connection charges from the export turnover as well as the total turnover, while computing deduction u/s. 10A of the Act. We hold and direct accordingly. Similarly in the additional ground, the assessee has prayed that the foreign exchange loss should also be added to the total turnover and export turnover as against the action of the AO in excluding the said loss only from the Export turnover following the decision in the case of TATA ELXSI (supra) of the Hon’ble Karnataka High Court. We held that the said loss should be excluded both from ETO and TTO. We hold and direct accordingly. - Decided in favour of assessee
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2015 (10) TMI 482
Registration under Section 12AA refused - Held that:- Objects of the assessee trust are charitable in nature, coming under the provisions of Section 2(15) of the Act. The only objection of the ld. CIT for grant of Registration was that the objects of the Trust contained in Deed dt.4.6.2005 showed that the trust was set up for the benefit of a particular community. Whatever may be the correctness or otherwise of the said findings of the learned CIT, it is only the amended objects that have to be considered for purpose of grant of Registration. Thus, in our view, the objections of the ld. CIT with regard to the provisions of section 13(1)(b) of the Act, are therefore no longer relevant. In this view of the matter, the CIT is directed to accord the assessee trust Registration under Section 12AA of the Act. In any case, the grant of registration is only a step in the process for claim of exemption under Section 11 to 13 of the Act to enable the Assessing Officer to ensure that the assessee complies with the requirements contained therein to claim exemption. - Decided in favour of assessee.
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2015 (10) TMI 481
Exemption u/s 11 - charitable activity u/s 2(15) - earning profit despite no profit motive - main objective of the assessee is promotion of industrial growth in Karnataka - In the course of carrying on its activities, the benefit arising from such promotion - According to the AO, the Assessee was carrying on any other object of general public utility and therefore the proviso to Sec.2(15) of the Act would apply to the case of the Assessee - Held that:- The main aim and object for which the Assessee was established is to (a) Promote rapid and orderly development of industries in the stale. (b)Assist in implementation of policies of Government within the purview of KIAD Act. (c) Facilitate in establishing infrastructure projects.(d)Function on No Profit - No Loss basis. For the above purpose, the Assessee (a)Acquire land and form industrial areas in the state.(b)Provide basic infrastructure in the industrial areas.( ) Acquire land for Single Unit Complexes.(d)Acquire land for Government agencies for their schemes and infrastructure projects. The dominant and main object of the Assessee is charitable and not for making profits. Keeping in mind the above factual aspects and the provisions of the KIDA Act [Karnataka Industrial Areas Development Act, 1966], and principle laid down in the case of India trade Promotion Organization (2015 (1) TMI 928 - DELHI HIGH COURT ), in our view, will clearly show that the Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The assessee is operating on no profit basis. This is substantiated by the actual income received on operations of the Assessee and the expenditure incurred set out in the earlier paragraphs of this order. The proviso to Sec.2(15) of the Act is therefore not applicable to the case of the Assessee. We therefore hold that the Assessee is entitled to the benefits of Sec.11 of the Act. The AO has not disputed the conditions necessary for allowing exemption u/s.11 of the Act, except the applicability of proviso to Sec.2(15) of the Act. In view of our conclusions that the said proviso is not applicable to the case of the Assessee, we hold that the Assessee s income is not includible in the total income and therefore the income returned by the Assessee is directed to be accepted. - Decided in favour of assessee.
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2015 (10) TMI 480
Entitlement to exemption u/s 11 - assessee is a Karnataka Urban Water Supply and Drainage Board - Assessee explained that its main source of income was from ETP charges and Water Charges - Held that:- The principle laid down in the case of India Trade Promotion Organization Vs. DGIT(Exemption) and others [2015 (1) TMI 928 - DELHI HIGH COURT] if applied to the facts of the present case, will clearly show that the Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The assessee is operating on no profit basis. This is substantiated by the actual income received on operations of the Assessee and the expenditure incurred set out in para-14 of this order. The income of the Assessee is primarily consists of Establishment, Administration and Supervision Charges, Water charges, interest, rent and other income (comprising of hire charges, fines, sale of scrap, tender forms etc.). If interest, rent and other income are excluded and compared with the expenditure on operations incurred by the Assessee, it becomes clear that the Assessee does not have profit motive. The proviso to Sec.2(15) of the Act is therefore not applicable to the case of the Assessee. We therefore hold that the Assessee is entitled to the benefits of Sec.11 of the Act for the impugned assessment years. The AO has not disputed the conditions necessary for allowing exemption u/s.11 of the Act, except the applicability of proviso to Sec.2(15) of the Act. In view of our conclusions that the said proviso is not applicable to the case of the Assessee, we hold that the Assessee’s income is not includible in the total income and therefore the income returned by the Assessee is directed to be accepted. - Decided in favour of assessee.
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2015 (10) TMI 479
Exemption under Section 54 - assessee was in receipt of sale consideration from sale of 12 flats received from the developer consequent to a joint development Agreement (‘JDA’) entered into between the assessee and Wing commander Santosh Kumar Sharma, the developer in respect of certain lands - reopening of assessment - Assessing Officer determined the LTCG on transfer of 60% of the undivided portion of land at ₹ 1,85,10,384; STCG on sale of 11 flats was computed at ₹ 1,34,13,797 and LTCG attributable to the sale of undivided interest of land in respect of the 11 flats at ₹ 2,73,751 - rejevtion of additional ground - Held that:- action of the learned CIT (Appeals) in rejecting the admission of the additional grounds raised by the assessee on allegations of mala fide intention on the part of the assessee is without basis as the information in this regard was with the authorities below from 24.1.2012. The intention of law is that the income of an assessee is to be brought to tax correctly in the correct year. If an item of income is taxable in a particular year, then the Assessing Officer can tax that amount in that year only. The scheme of the Act does not envisage that if a particular item of income has escaped taxation in one year, it can be brought to tax in another year solely for the reason that the time limit to reopen the assessment in that year has expired. On an appreciation of the facts additional ground raised by the assessee in respect of the year of chargeability of capital gains on transfer of 60% of land to the developer pursuant to JDA dt.18.1.2006 requires to be admitted as it goes to the very root of the matter. - remand the same to his file for consideration and adjudication thereon after affording the assessee adequate opportunity of being heard and to file details/submissions required. It is ordered accordingly - Decided in favour of assessee for statistical purposes. Chargeability of capital gains arising out of the said land by virtue of JDA and GPA dt.18.1.2006 within the ambit of the provision of Section 2(47)(v) of the Act rws 53A of the Transfer of Property Act - Held that:- Since the issue of the year of chargeability of capital gains on transfer of land to the developer vide JDA dt.18.1.2006, raised at Ground No.2, in respect of additional ground, preferred by the assessee on 18.12.2013 and denied admission by the learned CIT (Appeals), has now been admitted for consideration by us and restored to the file of the learned CIT (Appeals) for examination and adjudication, we are of the view that the finding therein would have a bearing on the issues raised in the grounds raised - We, therefore, deem it fit to refrain from adjudicating these grounds at this juncture.- Decided in favour of assessee for statistical purposes. Exemption u/s.54F - CIT (Appeals) has directed the Assessing Officer to disallow the cost of improvement amounting to ₹ 5 lakhs, which claim of the assessee, the Assessing Officer had allowed - Held that:- On a perusal of the impugned order, it is evidently clear that the learned CIT (Appeals)’s action led to an enhancement of the assessee's income to the extent of ₹ 5 lakhs whereby the exemption under Section 54F of the Act was directed to be reduced from ₹ 32,87,252 to ₹ 27,87,252. In such circumstances, as per the provisions of Section 251(2) of the Act, the learned CIT (Appeals) was required to afford the assessee reasonable opportunity of showing cause against such enhancement; which we find the learned CIT (Appeals) failed to do. In this factual matrix, we find that the action of the learned CIT (Appeals)’s action in disallowing the cost of improvement of ₹ 5 lakhs, already allowed by the Assessing Officer to the assessee, to be in gross violation of the provisions of section 251(2) of the Act, rendering the same illegal and unsustainable in law. We, therefore, reverse the order of the learned CIT (Appeals) and restore that of the Assessing Officer on this issue. - Decided in favour of assessee. Cost of Acquisition of 11 flats sold - Held that:- we find that the Assessing Officer’s computation of the cost of acquisition to the assessee in respect to the11 flats sold in the year under consideration was done after obtaining the cost of construction from the developer to arrive at the figure of ₹ 1,97,32,354 (i.e. 18,939 sq. ft. @ ₹ 1,042 per sq. ft.), as allowed in the order of assessment, appears to be in order. We are of the view that the finding of the learned CIT (Appeals), in reducing the cost of acquisition of the 11 flats sold by the assessee in this year from ₹ 1,97,32,354 to Rs.;1,49,40,196 by unilaterally reducing the built up area from 18,939 sq. ft. to 14,338 sq. ft. is not sustainable on facts and therefore set aside the same and restore the finding of the Assessing Officer in the order of assessment. It is ordered accordingly - Decided in favour of assessee. The action of the learned CIT (Appeals) in reducing the cost of construction of the 11 flats sold by the assessee in the period under consideration, to be in gross violation of the provisions of section 251(2) of the Act, rendering the same illegal and unsustainable in law. We, therefore, reverse the order of the learned CIT (Appeals) and restore the order of the Assessing Officer on this issue. Consequently, Ground No.6 of the assessee's appeal is allowed on this alternate argument also.
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2015 (10) TMI 478
Levy of interest under Section 220(2) - contention of the assessee that the Assessing Officer has wrongly computed the interest under Section 220(2) from the date of original demand i.e. 30.4.2013 till the date of order giving effect to the order of the Hon'ble High Court on 22.3.2012 - Held that:- In case the Hon'ble High Court had confirmed the relief granted by Tribunal, the inevitable conclusion will be that the original notice of demand will survive and the default existed even in the period between the order of the Tribunal and that of the Hon'ble High Court and therefore interest u/s.220(2) of the Act was liable to be paid. Once the Tribunal’s order is vacated and the original order is revived, the original demand that remained unpaid also gets revived. The principle of continuing liability is applicable to the Income Tax Act, being a Scheduled Act. The principle of continuing liability was highlighted in the CBDT Circular No.334 dt.3.4.1982. In view of the above, we hold that the learned CIT (Appeals) was right in upholding the decision of the Assessing Officer in charging interest u/s.220(2) of the Act for the entire period from the date of original demand notice till the time when the order giving effect to the Hon'ble High Court of Karnataka was passed. Provisions of Section 220(1A) of the Act; in terms of which the demand would be valid till the disposal of appeal before the last appellate authority was introduced only in Finance Act, 2014 w.e.f. 1.10.2014 and therefore does not apply to the case on hand. We, however, find from a perusal of the impugned order that the learned CIT (Appeals) has neither invoked the provisions of Section 220(1A) of the Act nor even discussed the same while deciding the issue. We are of the view that the issue raised by the assessee does not require adjudication for deciding the issue at hand and these grounds are therefore dismissed as infructuous. - Decided against assessee.
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2015 (10) TMI 477
Disallowance under section 40(a)(ia) - secondment of employees to the assessee in India and the reimbursement of expenses to the associated enterprise in US - CIT(a) allowed the claim - Held that:- The issues against which the Revenue has filed this appeal before us are covered in favour of the assessee by the decision of this Tribunal in assessee’s own case for the earlier assessment year. As regards the disallowance under section 40(a)(ia) is concerned, we find that the Tribunal had followed the decision of Coordinate Bench of this Tribunal in the case of IDS Software India P. Ltd. [2009 (1) TMI 363 - ITAT BANGALORE-A ] wherein the issue of secondment of employees to the assessee in India and the reimbursement of expenses to the associated enterprise in US has been considered at length and it has been held that such reimbursement of expenses are not income in the hands of the non-resident and therefore, TDS provisions are not applicable. Further, it has also been held that it is also not in the nature of fees for technical services. - Decided in favour of assessee. Disallowance under section 10A - Held that:- This issue is covered by the decision of the Jurisdictional High Court in the case of Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] wherein it was held that if any item is reduced from export turnover, then the same has to be reduced from total turnover also for computation of deduction under section 10A of the Act. Merely because the department has filed an appeal before the Hon’ble Supreme Court, it does not loose its precedential value. As the Ld. CIT(A) has followed the judicial precedent on the issue in giving relief to the assessee, we do not see any reason to interfere with the same.- Decided in favour of assessee.
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2015 (10) TMI 476
Validity of search warrant - Block Asstt. Order - whether there was no individual search warrant in the name of the appellant, no Block Asstt. Order could be passed in his case? - Held that:- We refer to provision of Section 292CC of the Act. We find that this section was inserted by Finance Act, 2012 with retrospective from 01.04.1976. As per this Section, it is provided that notwithstanding that the authorization for search has been issued in joint names, assessment or reassessment shall be made separately in the names of each of the persons mentioned in such authorization. Hence, as per this retrospective amendment in the Income Tax Act, the issue in dispute in the present case has to be decided in favour of the Revenue and against the assessee. Addition relating to alleged commission/interest - Held that:- Even as per assessment order, only amount received is commission amount of 5% in respect of accommodation entries said to have been provided by family members of the assessee. It may be that the amount in fact was paid by the Bajaj Group to the assessee because the assessee was working with Bajaj Group and since the alleged accommodation entries are admittedly in the name of family members of the assessee, such commission income for providing accommodation entries in fact belongs to respective family members and such family member is already accounting for interest income in respect of the alleged accommodation entries and such interest income already taken into account by the family members is at the rate of 12% whereas the commission is said to have been received at the rate of 5% only. Under this factual position, we are of the considered opinion that separate addition made in the hands of the assessee on account of alleged payment in respect of alleged accommodation entries is not justified because even if the loan provided by the family members of the assessee to Bajaj Group is not actual loan and is only accommodation entry then also, the commission on such accommodation entry belongs to the respective family member and that family member has already included in his income interest @ 12% and alleged commission payment of 5% is not in addition to interest of 12%. We, therefore, delete this addition in the present case - Decided in favour of assessee. Addition in respect of alleged Salary - Held that:- The assessee has received salary of ₹ 84,000/- for AY 2000-01 and ₹ 1,02,000/- for AY 2001-02. But in both these years, assessee has shown salary income of only ₹ 62,400/- per year. On this basis, Ld. CIT(A) has confirmed the addition of the difference in salary income received by the assessee as per seized material and declared by the assessee in return of income of ₹ 21,600/- in AY 2000-01 and ₹ 39,600/- AY 2001-02. Ld. AR of the assessee could not controvert this finding of the Ld. CIT(A) by establishing that the amount of salary received by the assessee in these two assessment years as per seized material and as per return of income filed by the assessee for these two years is same. Hence, we do not find any reason to interfere in the order of the CIT(A) on this issue. - Decided against assessee.
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2015 (10) TMI 475
Deduction under Section 80IB(4)(iii) denied - eligibility of functional test of an independent unit - Held that:- In the instant case, even though the assessee company had leased out the five/four floors to particular tenants, the tenants were carrying on their operation as independent units as the activities were functionally different. Each floor was physically identified for all functional purposes. Facilities and instrumentations were provided independently. Activities were carried on as independent units.In such circumstances, it was very difficult to ignore the contention of the assessee. The assessee had constructed multistoried buildings for the purpose of developing infrastructure facilities as approved by the Ministry of Commerce & Industry itself was a testimony that the assessee company had developed the infrastructure facility in the form of multi-storied structure to accommodate independent units to operate for themselves. Those identities and indualities did not disappear only for the reason that the entire developed area had been leased out to a single company. It was not possible to insist that every floor of the structure should be leased out to different companies. The test is not that who operates the independent units run in the multi-storied structure. It is also not the question whether all the stories are occupied by one tenant or different tenants. The test to be applied is the functional test. The unit must physically independent with physically independent with independent facilities and instrumentation, power connection, door number and the facility of functioning independently i.e every unit must be in a position to carry on its activities without depending upon other units even though all the units are situated under the same roof but in different floors. The assessee had successfully satisfied the above stated functional test of an independent unit - we uphold the impugned orders of the learned CIT (Appeals) in allowing the assessee's claim for deduction under Section 80IA(4)(iii) of the Act for Assessment Years 2005-06 and 2011-12 - Decided in favour of assessee.
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2015 (10) TMI 474
Revision u/s 263 - since for A. Y. 2010-11 the claim of deduction u/s.80IB(10) was denied, as per the CIT for the impugned assessment year also such claim could not be allowed, project being the very same - According to CIT(A) DVO who carried out the inspection in the presence of the accountant of the assessee had given a clear finding that a number of residential units were having built-up area in excess of 1500 sft. Therefore according to him, assessee was not eligible for the deduction u/s.80IB(10) - Held that:- Assessee had at no point of time ever stated that any of the units being built in County-I had built-up area in excess of 1,500 sft. AO had no information on this aspect. This came to his notice only during the course of assessment proceedings for A. Y. 2010-11 when there was a reference to the DVO. But nevertheless as noted by the CIT it is clear from the sale deed entered by Chamundeswari Buildtek P. Ltd, with various buyers, that the vendor was Chamundeswari Buildtek P. Ltd and the buyers were actually buying the plots from them. Agreements entered by such buyers with the assessee for construction of residential units were separate. These aspects have not been looked into by the AO. These were very relevant in deciding whether the assessee was a developer or only a contractor. When the AO does not make the enquiries that is lawfully expected of him and which any prudent man would have done, if placed in similar circumstances, it would definitely render the order erroneous and prejudicial to the interests of Revenue. Not only was there units which had built-up area in excess of 1500 sft, but also the agreements and the power of attorney did have a bearing on the question as to whether assessee was indeed eligible for claim of deduction u/s.80IB(10) of the Act. AO had never considered these aspects nor made enquiries which were required of him. No doubt inadequate enquiry by itself will not render an order erroneous or prejudicial to the interests of Revenue. But an enquiry which by itself is only a farce and does not do justice to the duty cast on a statutory authority would be equivalent to non-enquiry. No error in the order of CIT in considering the order of AO erroneous and prejudicial to the interests of Revenue. CIT had while setting aside the assessment only directed a fresh assessment after giving opportunity to the assessee. Thus assessee would have an opportunity to place the judicial precedence that he wants to rely on when the matter is taken up by the AO afresh. At this juncture we do not find any reason to interfere with the order of CIT. - Decided against assessee.
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2015 (10) TMI 473
Registration granted u/s. 12AA withdrawn - derecognizing approval granted u/s. 80G(5) - Held that:- There was no requirement of making an application for renewal of recognition granted u/s. 80G of the Act, as the recognition granted to the assessee will hold good in perpetuity. In such circumstances, the proper course to have been adopted by the CIT was to have filed the application of the assessee seeking extension of recognition u/s. 80G(5) of the Act. The action of the CIT in further withdrawing registration already granted to the assessee u/s. 12AA of the Act is also not proper. CIT has proceeded on the basis of an incorrect appreciation of facts inasmuch as, he has presumed that the assessee existed for religious purpose and not for charitable purpose. It appears that the assessee has also not explained the position properly in the proceedings before the CIT, as to the true nature of the use of land. We are therefore of the view that it would be just and proper to set aside the orders of the CIT and remand the issue of withdrawing recognition u/s. 12AA of the Act for fresh consideration by the CIT. As far as recognition u/s. 80G(5) of the Act is concerned, we hold that the recognition already granted will continue to operate and the order passed by the CIT provided the registration u/s.12AA of the Act continues. Insofar as order passed u/s. 12AA(3) is concerned, the issue will be considered afresh by the CIT after affording the assessee opportunity of being heard. We may also clarify that in the event of registration u/s. 12AA of the Act being withdrawn, the CIT is at liberty to take appropriate action for withdrawing recognition granted u/s. 80G of the Act to the assessee. - Decided in favour of assessee for statistical purposes
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2015 (10) TMI 472
Addition under the head “ labour charges shown payable” - CIT(A) deleted the addition - assessee’s audit report had shown this sum as provision on current liabilities - Held that:- Its P & L forming part of the case file reveals diamond cutting labour charges expenses of ₹ 28,01,793/- up to 31/03/2007 i.e. much more than ₹ 2 lacs stated in assessment order. There is no other material quoted either in assessment or during arguments before us so as to dispute genuineness of this expenditure claim of ₹ 17,30,383/-. - Decided against revenue. Depreciation disallowance - Held that:- Identical depreciation claim qua the very machines stands allowed in a scrutiny assessment framed for preceding assessment year 2006-07. The hon’ble jurisdictional high court in ACIT vs. S K Patel Family Trust [2012 (6) TMI 790 - GUJARAT HIGH COURT] holds that once a block of assets is put to sue, segregation of assets forming part thereof for the purpose of granting depreciation on the ground that the same had not been put to use; is not justifiable. This lordships quote earlier decision reported as CIT vs. Sonal Hem Industries (2009 (2) TMI 84 - GUJARAT HIGH COURT). The Revenue does not point out distinction on facts and law. Its corresponding ground is accordingly rejected.- Decided against revenue. Low household withdrawal addition - Held that:- It has come on record that assessee is a bachelor, and his father has already made withdrawal of ₹ 5,83,000/- sufficient for the family. - Decided against revenue.
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2015 (10) TMI 471
Disallowance of shortage of 4349.35 kg. claimed by the assessee in the process of making hosiery goods out of grey cloth - Held that:- The assessee has taken the stock at the end of the year and as duly supported for shortage of claim with the tax audit report dated 22.09.2009. The assessee has al so submitted the detail s of quantity of grey cloth received, quantity of processing as well as the shortage arising in the process. Copies of bills from various suppliers of grey cloth have been shown in support of the quantity-wise purchase details submitted by the assessee. The Assessing Officer was not justified in disallowing the claim of shortage of stock of 4349.35 kg. of raw material amounting ₹ 8,81,679/- without giving cognizance to the facts of the manufacturing process of such goods which has result of shortage/wastage which comes in the process of making grey cloth ready for making hosiery goods as well as cutting of grey cloth for making hosiery items. This fact has neither been taken care by the Assessing Officer and nor by the ld. CIT(Appeals) in their orders. Therefore, we delete the addition made by the lower authorities and allow the claim of the assessee. - Decided in favour of assessee.
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2015 (10) TMI 470
Revision u/s 263 by CIT(A) - CIT found that there was increase in the share capital to the extent of ₹ 34,36,04,000/- not verified by AO - The share application money to the extent of ₹ 18 crores was pending for allotment and this was also not verified by the Assessing Officer - Reserve and surplus, unsecured loan, mobilization advance, sundry creditors, excess payment were also not verified by the Assessing Officer - Held that:- It is incumbent on the part of the Assessing Officer to disclose the reasons in the assessment order for allowing or disallowing a claim of the assessee. In the absence of any reasons in the assessment order for allowing the claim of the assessee, this Tribunal is of the considered opinion that the CIT has rightly exercised his jurisdiction u/s 263 of the Act. - Decided against assessee.
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2015 (10) TMI 469
Disallowance of alleged loss due to embezzlement suffered by the assessee - Held that:- As the very basic issue of admissibility of deduction in respect of the loss die to embezzlement is required to be, in the light of the above discussions, required to be decided afresh, we donot consider it appropriate to deal with other peripheral issues raised in the orders of the authorities below. Suffice to say that the matter will be decided afresh, uninfluenced by the findings in the first round of proceedings (which have come to a naught due to the matter having been restored to the file of the Assessing Officer due to the proceedings in the first round having been held to be vitiated in law due to violation of principles of natural justice), by way of a speaking order on a standalone basis, after taking into account all such documents, including documents relating to legal proceedings, as the assessee may rely upon and after giving a fair and reasonable opportunity of hearing to the assessee. We consider it appropriate to clarify that, on merits, the assessee is at liberty to raise all such arguments as he may deem fit and proper. For the reasons set out above, we once again remit the matter to the file of the Assessing Officer for fresh adjudication de novo, in terms of our directions above, inter alia in the light of the legal proceedings in respect of the embezzlement that the assessee claims to have suffered. With these directions, the matter stands restored to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes.
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2015 (10) TMI 468
Determination of arm’s length price - whether method adopted by the Assessing Officer to determine arm’s length price is not correct and is in violation of the Transfer Pricing Regulation as existing in India? - whether the actual profit can be calculated on the basis of comparing the gross profit of subsequent years of the assessee itself? - CIT(A) deleted the addition - Held that:- According to Provisions of Section Rule 10B(4), the data to be used in analyzing the comparability of uncontrolled transaction with an international transaction shall be data relating to financial year in which international transaction has been entered into: provided that data related to period not being more than two years prior to such financial year may also be considered if such data reveals facts which could have an influence to transactions being compared. There in nothing in the provisions of Rule 10B(4) that data of subsequent years should be taken into to determine arm’s length price. In this factual and legal background, it is evident that method adopted by Assessing Officer to determine arm’s length price is not correct and not in accordance with transfer pricing regulation as existing in India. Accordingly, addition made by Assessing Officer by way of Transfer Pricing Adjustment on this account was rightly deleted by CIT(A). This reasoned finding of CIT(A) needs no interference from our side, we uphold the same. - Decided against revenue.
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2015 (10) TMI 467
Rectification u/s 154 - allowability of deduction u/s 35 for expenditure on scientific research - Held that:- On a consideration of the peculiar facts and circumstances of the case we hold that rectification order in the facts as they stand does not amount to a review as admittedly the ground was not decided by the CIT(A) by mistake while passing the order dated 12.1.2011. We have taken ourselves through the order of the Tribunal followed by the CIT(A), wherein the expenditure has been denied for no fault to the assessee and merely because the AO chooses not to refer the matter to the prescribed authority does not warrant any interference. We find that the incurring of expenditure has not been doubted. Respectfully following the order of the Tribunal the departmental appeal is dismissed. Since the relief granted by the CIT(A) has been confirmed by us on the reasoning that non-adjudication of the specific ground in appeal by the CIT(A) in his order dated 12.01.2011 which necessitated the filing of rectification petition u/s 154 cannot be said to an act of reviewing the order as admittedly in the order dated 12.1.2011 mistake rectifiable u/s 154 had occurred which was corrected in the order dated 16.2.2012. Thus, since the order dated 16.2.2012 has been confirmed the assessee’s appeal becomes infructuous.- Department appeal is dismissed and the assessee’s appeal becomes infructuous.
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2015 (10) TMI 466
Withholding of taxes u/s 195 - payments made by the assessee to non-resident for purchase of new designs of furniture - whether CIT(A) erred holding no withholding of tax being transfer of special knowledge and in ignoring the fact that Circular No. 786 dated 07/2/2000 has been withdrawn with retrospective effect by circular No. 7/2009 dated 22/10/2009? - Held that:- The assessee exported granite to USA and paid commission of ₹ 85,21,582/- on export sale made to M/s Amshum & Ash, USA and also paid ₹ 12,61,181/- towards advertisement charges to M/s BNP Media USA for advertisement of its product in an international monthly magazine “Stone World” printed and published in USA. The recipient of commission rendered services outside the India and claimed as business income. The recipient of commission is non-resident and had no permanent establishment in India. No income had accrued or arisen to the non-resident U/s 9 of the Act in the India. We upheld the order of the learned CIT(A) and held that no TDS U/s 195 of the Act is liable to be deducted. - Decided against assessee.
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2015 (10) TMI 465
Disallowance u/s 14A as per Rule 8D - assessee submitted that it had not incurred any expenditure for earning dividend income since it was a passive activity and also objected to the proposed invocation of section 14A and applicability of Rule 8D of the IT Rules - Held that:- We find force in the submission of ld. Counsel for the assessee that the entire expenditure could not be appropriated towards the earning of exempt income and, therefore, we estimate the expenditure incurred towards earning of exempt income at ₹ 4 lacs out of the total expenses of ₹ 8,58,737/-. We direct accordingly. - Decided partly in favour of assessee.
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2015 (10) TMI 464
Disallowance of expenses on ‘Renovation/ Up gradation of property’ - Held that:- There is force in the submissions made by ld. Counsel for the assessee, considering the nature of assessee’s business, as also the period between the incurring of expenditure and the inquiries made by ld. CIT(A). However, at the same time in the absence of concrete evidence, it cannot be held that entire expenditure has to be allowed. We, therefore, restrict the disallowance to 5% of the total expenditure claimed by the assessee. - Decided in favour of assessee in part.
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2015 (10) TMI 463
Penalty levied u/s.271(1)(c) - value of 485.26 carats of diamonds found and seized during the course of search on the mini-bus belonging to M/s. Patel Ambalal Hargovandas & Co., Angadia's in Mumbai - CIT(A) deleted the penalty - Held that:- The Assessee produced complete stock register and supporting documents in this regard and not only this, assessee was able to establish the correlation of diamonds seized in the course of search with the purchases made in the year relevant to assessment year 2003-04 and the return of income for assessment year 2003-04 was filed much before the date of search and in the audited financial statements of the years ended on 31-03-2003, 31-03-2004, 31-03-2005 and closing stock shown by assessee includes the stock seized. We further find that the valuation shown by assessee in accounts in respect of seized diamonds is ₹ 67,66,360/- which is almost at par with the valuation made by Department at ₹ 67,93,643/-. The opening stock and closing stock for the year 2003-04 was the same as there was no purchase and sale during the year at Mumbai office. There was only purchase and sale at Surat office. In view of these facts and circumstances, we are of the view that there are ample evidences which prove that the diamond seized are explained and purchased from disclosed sources as these are fully disclosed in the books of accounts. Accordingly, we accept the explanation of the assessee and the orders of the lower authorities on this issue are reversed. This issue of assessee's appeal is allowed on merits - no infirmity in the deletion of penalty by learned CIT(A) and the same is hereby confirmed - Decided in favour of assessee.
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2015 (10) TMI 462
Disallowance of interest allegedly chargeable on interest free advances given to family members - Held that:- Commercial expediency has been explained to be the business interest of the assessee advancing interest free loans as opposed to the interest of the person receiving the loan. Hence, merely because the assessee has got sufficient interest-free funds in its books will not prevent disallowance of the interest expenditure if the assessee has advanced money free of interest without any commercial expediency attached to such advance. Considering the fact that there is no evidence or even a claim that any commercial expediency was involved in giving the interest free advances to Mrs. Sunita Chaudhary and Mr. Samir Choudhary,the disallowance of interest expenditure was accordingly rightly upheld. - Decided against assessee.
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Customs
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2015 (10) TMI 496
Valuation - Misdeclaration - Undervaluation - violation of the principles of natural justice - Held that:- Proprietor of the appellant having admitted to the valuation and having forgone the requirement of a show cause notice or personal hearing. It is pertinent to mention here that the said voluntary statement of the proprietor was never retracted and even during the proceedings before Commissioner (Appeals) the plea that the statement was taken under duress was not taken. - while the appellant's contentions about valuation and differential duty are totally untenable, we do observe that redemption fine of ₹ 2 Lacs has been imposed on the goods imported vide Bill of Entry No. 859681 on which the differential duty works out to only ₹ 13,103/- computed on the basis of undervaluation of 10%. As the redemption fine as a general principle has a nexus with the margin of profit and the goods were otherwise freely importable, we find the redemption fine to be excessive in the wake of the facts that the duty evaded due to undervaluation was only ₹ 13,103/-. We are of the view that given the level of undervaluation (just 10%) and the amount of duty sought to be evaded (Rs.13,103/-), redemption fine of ₹ 20,000/- is reasonable. However as penalty has been imposed in view of the duty evaded on imports under all the 29 Bills of Entry, the penalty of ₹ 50,000/- cannot be said to be unreasonable warranting appellate intervention. - Decided partly in favour of assessee.
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2015 (10) TMI 495
Improper importation of goods – Purchase of POY without payment – Demand of Duty – Goods of Assesse were seized by Customs Officer and after thorough investigation, it was found that assesse was indulged in purchase of POY without payment of customs duty, without cover of proper document – Show cause notice was issued proposing to confiscate seized goods and to demand customs duty – Held that:- Assesse had not placed any documents that they received goods from brokers except statements –So confiscation of seized goods was justified and consequent demand of duty on provisional release of goods was liable to be upheld – Authorised Signatory of M/s Shabnam stated that they have cleared quantity of 7200 imported POY to assesse without payment of duty – Hence, confiscation of goods and demand of duty were also liable to be upheld –There was no material available to impose penalty on brokers as they had no knowledge that goods were liable for confiscation – Taking into account overall facts and circumstances, Director and partner of Assesse-company and M/s Shabnam required to be waived – Demand of duty upheld except demand of Anti Dumping Duty – Confiscation of goods upheld and redemption fine reduced – Decided against Assesses.
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2015 (10) TMI 494
Penalty u/s 114(ii) - Shortage of goods found - Misdeclaration - Held that:- Under the facts and circumstances that is no lapse on the part of the CHA. The CHA acted on the instructions of the exporter and documents given. He had identified exporter before the Customs Authorities. Further the said exporters have accepted the responsibility for the mis-declaration in the sq. ft. of the carpets under export. Further no elements of aiding and abetting have come on record. Further in view of the goods subjected to examination and the L.E.O. issued, the CHA cannot be held responsible for lack of duty in mis-declaration of sq. ft. Area of the carpets under export, which cannot be made out by visual examination and the same have come on record only at the stage of second examination where the consignment was opened and 100% measured. Thus, I hold that the CHA is not guilty of aiding and abetting. I further hold that the CHA had the authorisation which it appears was not produced due to clerical error, but the fact has been stated and accepted by the exporter. That the penalty retained in the impugned order is set aside. - Decided in favour of Appellant.
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2015 (10) TMI 493
Levy of anti dumping duty - indiscriminate dumping of fused magnesia from China - Held that:- Complaint of M/s. Birla Periclase, at whose instance the duty was imposed was not genuine and the losses suffered by it were on account of some other factors. A specific recommendation is made for withdrawal of the duty with retrospective effect. With that, the case of the petitioner becomes strengthened. It is not known as to whether any formal order has been issued to give effect to the order, dated 09.06.2003 passed by the 2nd respondent. - Petition disposed of certain directions.
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Corporate Laws
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2015 (10) TMI 492
Valuation of Shares as per the Valuation report made under Section 433, 434 and 439 of the Companies Act - Appellant raised objections to the report to which reply was filed by the respondent - Court ordered that shares of the company be valued by an approved auditor – Order of the Court modified directing the Appellant to purchase the shares of the Respondent – Respondent was allowed to make publications in case of default and time for payment of dues was fixed - Held That:- Court found variation in the Value of shares in the stand of the company without any reason and hence it directed the company to purchase the shares as per Valuation Report - Court directed the appellant to bear 50% of the cost paid to the valuer - Contention raised by the appellant before the Division Bench has been reiterated - There is no infirmity factual or legal in the order of the Division Bench to warrant interference – Decided in favour of the Respondent.
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Service Tax
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2015 (10) TMI 520
Waiver of Pre-deposit – Services rendered amenable to service tax or not - Appellant facilitates Indian Railways to procure advertisements - Pay the charges directly to the railways and takes a commission – Held That:- Pre-deposit of tax is onerous - Order of the Tribunal modified – Stay granted partially.
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2015 (10) TMI 519
Default in availing benefit of Service Tax Voluntary Compliance Encouragement Scheme 2013 – Petition for seeking Writ of Certiorari – Petitioner had to submit 50% of his dues within the time prescribed under the scheme and defaulted – Held That:- Admitted tax dues not remitted and deposited even under the scheme, the Petitioner cannot fault the authorities for addressing the impugned communications, recovering 'tax dues' by coercive means – Petitioner is clearly in arrears of the dues and has no legal right thus cannot insist on the recovery – Found no merit – Appeal dismissed and decided in favour of the Respondent.
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2015 (10) TMI 518
Waiver of pre-deposit - Service of sale of space for time for advertisement - Dispute arises with regards to the quantum of pre-deposit - Appellant held pre-deposit as directed by the Tribunal was unfair and excessive, still deposited some amount - Revenue held the amount as directed by the Tribunal was reasonable and justified - Held That:- Ends of justice would be met if the Tribunal is directed to hear the appeal on merits without insisting for any further deposit – Stay granted.
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2015 (10) TMI 517
Correctness of quantum of refund granted under Rule 5 of the CENVAT Credit Rules, 2004– Appeal filed by the Revenue - Revenue disputes on the quantum of refund claimed which has been sanctioned to the appellant including the amount which is not due to them – Held That:- if the revenue wants to reduce the value of the invoices from the export turnover, the same also should be removed from the total turnover of the export - There is no infirmity or illegality in the Order-in-Appeal which has set aside the Order-in-Original and the impugned order is correct and legal – Appeal of the Revenue rejected – Decided in favour of the assessee.
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2015 (10) TMI 516
Denial of refund claim - Notification No.41/2007-ST as amended by the Notification No. 17/2009-ST, dated 6.10.2007 and 7.7.2009 - Held that:- appellate Commissioner was satisfied that all conditions for claiming refund of service tax were fulfilled, except that on account of a clerical error, the assessee/claimant failed to affix stamp on some of the bills. Revenue in the present appeal does not dispute the findings of fact recorded by the appellate Commissioner in support of the conclusion that the assessee established its claim for grant of refund of the service tax incurred on receipt of taxable services which were used for export of rice and broken rice, which was the condition for granting refund under Notification No.17/2009-ST and 41/2009-ST. Revenue’s present appeal reiterates the self same grounds as had found disfavor with the primary and the lower appellate authority. - Decided against Revenue.
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2015 (10) TMI 515
Waiver of penalty imposed under Section 76, 77 & 78 of Finance Act - Appellant contested to set aside penalties imposed under Section 76 and 78 of the Finance Act, 1944 – Appellant serves as authorized distributor under the head Business Auxiliary Service – Appellant states entire service tax deposited even though service tax was not reimbursed in full and non-payment of tax under confusion of taxability is justified - Revenue contends for restoring Section 76 penalty and states Appellants are liable for penalty under Section 77 & 78 and Commissioner (Appeals) has no discretion to reduce penalty imposed under Section 76 – Held That:- Considering the ambiguity prevailing on payment of service tax during the relevant period Appellant's contention merits justification for bonafide cause for invoking Section 80 - Reasonable cause has been established in the present case for waiver of penalties – Decided in favour of the Assessee.
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Central Excise
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2015 (10) TMI 512
Area based exemption - Denial of benefit under Notification No. 50/2003-CE - Imposition of interest and penalty - Invocation of extended period of limitation - Held that:- In this case it is admitted fact that on 15th July, 2009 the appellant filed a declaration for claiming of benefit of exemption Notification No. 50/2003-CE with effect from 27th February 2008 onwards and thereafter show cause notice has been issued by invoking extended period of limitation on 19th July, 2011 - in this case extended period of limitation is not invokable as show cause notice has been issued by invoking extended period of limitation, therefore, impugned order is set aside. - Decision in the case of Surya Polypack Pvt. Ltd. vs. CCE [2014 (10) TMI 559 - CESTAT NEW DELHI (LB)] - Decided in favour of assessee.
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2015 (10) TMI 511
Delay in sanction of refund claim - Demand of interest - Held that:- If a refund claim is not paid within 3 months from the date of its receipt then interest at prescribed rates become payable from the date of completion of 3 months till the same is paid. In the present case, a refund amount of ₹ 1,91,250.00 was appropriated with respect to some confirmed dues which was later on set aside. For this amount of ₹ 1,91,250.00 refund claim earlier filed was appropriated which was not held proper. In the present factual matrix, interest on the amount of ₹ 1,91,250.00 will become due from completion of 3 months from the date of refund claim originally filed under Section 11BB of the Central Excise Act, 1944. There is no scope for postponement of payment of interest after completion of 3 months from the date of filing the refund claim. Appellant’s claim regarding interest from completion of 3 months from filing of first refund claim is allowed. Amounts paid at the time of investigation cannot be denied interest on the grounds that the amount paid was not duty and not entitled to interest. Similarly, in the case of CCE Kanpur Vs Kothari Products Ltd (supra) CESTAT Delhi held that interest has to be paid on delayed sanction of refund on account of penalty and interest when appropriated earlier. - Decided in favour of assessee.
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2015 (10) TMI 510
Denial of CENVAT Credit - Whether CENVAT credit will be admissible with respect to lead ingots, used for internal lining of chemical reaction vessels - held that:- CESTAT Delhi relied upon the case law of Union of India vs. Hindustan Zinc Ltd. [2006 (5) TMI 44 - HIGH COURT RAJASTHAN] and Union of India vs. Hindustan Zinc Ltd. [2006 (11) TMI 551 - SUPREME COURT OF INDIA]. M.S. Plates, beam, angles, channels etc. are also not capable of being used directly as component or parts of the machinery for maintenance and repair. Further, CESTAT Mumbai in the case of Century Rayon vs Commissioner of Central Excise, Mumbai-III (2003 (11) TMI 507 - CESTAT, MUMBAI) also held that lead ingots used for making corrosion resistant lining will be eligible for CENVAT credit. - In view of settled proposition of law CENVAT credit with respect to lead ingots used for protective coating/lining of the chemical reaction vessels will be eligible for CENVAT credit - Decided in favour of assessee.
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2015 (10) TMI 509
Penalty u/s 11Ac - Benefit of reduced penalty - whether the appellant was entitled to the first and second proviso to Section 11AC of the Central Excise Act, 1944 with regard to the payment of penalty to the tune of 25% - Held that:- Penalty equal to the duty amount of ₹ 93,112.00 was imposed. It is also clear that the duty had already been deposited prior to the issuance of the show cause notice. We also find that the Superintendent,Central Excise, Agra had issued an order dated 01.08.2013 in which it was indicated that the appellant had deposited a sum of ₹ 23,278.00 i.e. 25% of the penalty. - adjudicating order requires the quantification of the penalty to be made in terms of the first and second proviso of Section 11AC of the Act so that an incentive is given to the assessee to pay the duty and interest within the stipulated period in order to avail payment of duty at reduced rate of 25%, failing which, the total amount of penalty becomes payable. This option was not given in the instant case and, therefore, to that extent the order in original imposing penalty is in violation of the first proviso to Section 11AC of the Act. - duty had already been paid before the issuance of show cause notice. The appellant was therefore entitled to pay 25% penalty only. - Decided in favour of assessee.
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2015 (10) TMI 507
Whether CESTAT was justified in allowing appeal of respondent by placing sole reliance in the case of Jayant Agro Organics Ltd., [2003 (9) TMI 133 - CESTAT, MUMBAI] - Held that:- Decision of the Tribunal in the case of M/s Jayant Agro Organics Limited (supra) has been confirmed by the Supreme Court, no infirmity can be found in the impugned order passed by the Tribunal whereby its earlier decision in the case of Jayant Agro Organics Limited (supra) has merely been applied to the facts of the present case. - appeal does not give rise to a question of law, much less, a substantial question of law so as to warrant interfernece - Decided against Revenue.
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2015 (10) TMI 506
Denial of exemption claim - benefit of Notification 67/95 - Captive consumption - Supreme Court dismissed the appeal as the tax amount involved in this appeal is approximately ₹ 7 lakhs. The appeal was filed against the decision of Tribunal [2004 (9) TMI 217 - CESTAT, NEW DELHI]; wherein Tribunal held that exemption provided under the Notification 67/95-CE is not available in respect of the steel structures manufactured by the respondent, as the exemption is available only for "capital goods" manufactured in the factory.
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2015 (10) TMI 505
Valuation (Central Excise) - MRP - Demand - Cenvat/Modvat Credit - Supreme Court dismissed the appeal of the assessee finding no error in the order of Tribunal [2004 (8) TMI 204 - CESTAT, NEW DELHI]. Tribunal held that no illegality in the impugned order regarding confirmation of duty against the appellants of the amount detailed therein; however, Tribunal reduced the penalty.
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2015 (10) TMI 504
Valuation of goods - Invocation of extended period of limitation - Supreme Court dismissed the appeal after granting permission to the assessee to withdraw the appeal. The appeal was filed against the decision of Tribunal [2005 (3) TMI 216 - CESTAT, MUMBAI]; wherein Tribunal held that value of Audio Tape, inlay cards and screen printing frames is required to be included in the assessable value of the pre-recorded audio cassettes manufactured and cleared by the assessee to music companies during the period in dispute. The extended period of limitation is also available to the Department for the reason that the assessee suppressed the fact that they have not included the value of the three items supplied free of cost in the assessable value of pre-recorded audio cassettes.
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2015 (10) TMI 503
Demand - Manufacture - Cenvat/Modvat - Packing material - Mandatory penalty and interest - Confiscation of plant and machinery - Valuation - Cum-duty price - Supreme Court dismissed the appeal filed by Revenue finding no error in Tribunal's order [2004 (4) TMI 404 - CESTAT, CHENNAI]; wherein tribunal held that subject activity did not amount ot manufacture - Larger period of limitation is not invokable - Personal penalty is also not imposable.
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2015 (10) TMI 502
Valuation - Packing material - Demand - Limitation - Supreme Court dismissed the appeal following decision of Nizam Sugar Fectory v. Collector of Central Excise, A.P. reported in [2006 (4) TMI 127 - SUPREME COURT OF INDIA]. The appeal was filed agains the decision of Tribunal [2003 (12) TMI 399 - CESTAT, mumbai] wherein tribunal in a majority order set aside the demand as time barred.
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2015 (10) TMI 501
Denial of SSi exemption - Brand name - Supreme Court dismissed the appeal filed by the Revenue holding that the decision is squarely covered by the judgment in ‘Tarai Food Ltd. v. Commissioner of Central Excise, Meerut-II’ [2006 (4) TMI 131 - SUPREME COURT OF INDIA]. The appeal was filed against the decision of tribunal [2002 (12) TMI 455 - CEGAT, NEW DELHI]; wherein Tribunal held that brand name of M/s. Frito Lay India is not shown on the packages and therefore, the bulk potato chips manufactured and cleared by the respondent cannot be treated as branded.
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2015 (10) TMI 500
Valuation of goods - Captive consumption - Held that:- Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000, which was prevailing at that time will have no application in the present case where the goods are only partly sold under ex-factory basis and partly cleared for capitation consumption. No reason to interfere with impugned order [2003 (9) TMI 252 - CESTAT, BANGALORE] - Decided against Revenue.
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2015 (10) TMI 499
Benefit of exemption Notification No. 5/99-C.E. - Supreme Court dismissed the appeal filed by the Revenue is dismissed since the appeal is filed against the finding of fact - The appeal was filed against the order of Tribunal [2003 (10) TMI 337 - CESTAT, NEW DELHI]; wherein Tribunal held that there was no evidence to establish that the power operative jiggers were installed since April, 1995 and therefore the demand of duty from April, 1995 was legally unsustainable.
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2015 (10) TMI 498
Duty demand - Valuation - addition of ‘Assistance Material’ - Tribunal relied upon International Auto Limited v. Commnr. of Central Excise, Bihar, reported in [2005 (3) TMI 132 - SUPREME COURT OF INDIA] - Held that:- After going through the facts of this case in detail we agree with the conclusion of the Tribunal that the case is covered by the judgment of this Court in International Auto Ltd. Thus, we do not find any merit in this appeal. - Decided against Revenue.
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2015 (10) TMI 497
Manufacture - assembly of CNG Kit - whether the very act of collecting various components and fitting them into a box for installation in the CNG would amount to manufacture - Supreme Court after hearing the parties and condoning the delay found the appeal to be devoid of merit and hence dismissed the appeal. The appeal was filed by Revenue against the decision of Tribunal [2014 (7) TMI 275 - CESTAT NEW DELHI]; wherein Tribunal held that appellant do not manufacture any of the subject items. There is also no dispute that on the sale of the CNG kit, sales tax is paid on the value of the CNG kit and wherever the appellant installed the kit in a customer's vehicle, service tax is paid on the installation charges.
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CST, VAT & Sales Tax
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2015 (10) TMI 514
Valuation - inclusion of value of land in taxable turnover of builders/developers selling flats/apartments/units and paying VAT under lumpsum scheme - Held that:- Assessment orders have been passed in all the cases as these cases are relating to lump sum tax payment - It is not disputed by learned counsel for the petitioner(s) that the appeal lies against the assessment orders passed by respondent No.3. Accordingly, we do not consider it appropriate to entertain the writ petitions at this stage. - Petition disposed of.
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2015 (10) TMI 513
Revision of assessment order - period of limitation - Denial of exemption claim - Deduction on profits - Held that:- Order of the Appellate Deputy Commissioner dated January 29, 2005 cannot be faulted as he had merely followed the law laid down by this court in Girdharlal and Company[1994 (11) TMI 394 - ANDHRA PRADESH HIGH COURT]. The Additional Commissioner, while revising the said order, has not even dealt with this aspect. While the Tribunal has decided the appeal on its merits, the fact remains that the assessing authority could not have exercised his powers under section 14(4) on existing material, and the revisional authority could not have revised the original assessment order dated January 8, 2001 more than six years thereafter. We see no reason, therefore, to interfere with the order of the Tribunal, in setting aside the order of the Additional Commissioner (CT) dated November 28, 2008, albeit for reasons other than those referred to in the order of the Tribunal. It is wholly unnecessary for this court, therefore, to examine the question whether or not the order passed by the revisional authority, under section 20(2) of the APGST Act, is a second revision. - Decided against Revenue.
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