TMI Tax Updates - e-Newsletter
December 12, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
CBDT Revises the monetary limits for filing of appeals by the Department before ITAT, High Courts and SLP before Supreme Court - measures for reducing litigation
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Income Tax:
Disallowance made under Section 40(a)(ia) - The Sine qua non for the application of Section 40(a)(ia) of the Act to apply is claiming of the amount sought to be disallowed as an expenditure / deduction to determine the taxable income of the assessee - HC
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Income Tax:
Exemption u/s 10A - the disallowed expenditure, becomes a part of the income derived from the activity of export of software and entitled to the deduction under Section 10A of the Act - HC
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Income Tax:
Income from house property - the unrealized rent cannot be taken to be taxable in the hands of the assessee under the head "income from house property" when it is not realizable - HC
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Income Tax:
Claim of Loss - purchase and sale of shares - speculation loss or not - before application of the Explanation to section 73, aggregation of the business profit or loss is to be worked out irrespective of the fact whether it is from share delivery transaction or derivative transactions - AT
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Income Tax:
Claim of Loss in the revised return - failure to fulfill the conditions u/s 139(5) - In case, the revised return of income is not accepted, then how can the issue be so elaborately decided on merits? Once the merits of deduction have been considered by both the AO and CIT(A), claim allowed - AT
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Income Tax:
Disallowance of depreciation - The expression "put to use" for 180 days has been wrongly changed by the AO for "6 months" - asset was put to use on or before 30.09.2007, thus the asset for which depreciation claimed was used for a period of more than 180 days - AT
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Income Tax:
Disallowance of miscellaneous expenses - Merely because some expenditure is claimed on the basis of self made vouchers cannot make the expenditure disallowable. - AT
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Income Tax:
Revision u/s 263 - the action of the Principal CIT is not based on facts on record and no application of mind while considering the proceedings under section 263. - AT
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Income Tax:
Penalty under section 271D - Though the assessee has made an endavour to project the loan taken as amount received as a trustee by virtue of power of attorney but, in our view, such plea of the assessee is on thin ground. Had it been a case of holding the money of the lady in trust, the assessee would not have shown it as loan in its books of account and financial statement. - AT
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Customs:
Once the statute is clear that where the subject matter is ‘gold’, the Settlement Commission would not have any jurisdiction to entertain the application under Section 127B, any order passed in contravention of the statute cannot be sustained on the ground of estoppel. - HC
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Customs:
Denial of exemption claim - imported parts - The systems are wind operated electricity generator with its components and parts thereof including rotor and wind turbine controller. This clearly throws light that not only a complete system is exempt but also the components and parts thereof are equally entitled to exempt from ACD - AT
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Service Tax:
Demand of service tax - Authorization dealer service - three service provided to the Retail customers - the value of services is included in the dealers margin and no service charge is received from the service recipient. If at all, in the light of the above, it is the transaction between the two dealers which could have been subject to tax - AT
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Service Tax:
Demand of service tax on Security Agency Services - Appellants were aware the levy of tax and they have not paid the tax and therefore it is a fit case to invoke the extended period of limitation. Hence, the extended period of limitation would be invoked in this case. - AT
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Service Tax:
Services provided to group companies - adjudicating authority has correctly classified the services rendered by the employees of the appellant under ‘Business Support Service' and ‘Management Consultancy Services'. - AT
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Service Tax:
Denial of refund claim - Accumulated CENVAT Credit - FIRCs received for the exports made are not in the name of the appellant - unable to find out legal provisions which provides that in case of change in the name, refund claim is not admissible - AT
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VAT:
Detention of goods - Evasion of tax - Though the quantity in both the bills was the same but the rates and amounts varied. It was concurrently concluded by all the authorities that the transaction was an attempt to evade tax on the part of the appellant - demand confirmed - HC
Articles
Notifications
Customs-
61/2015 - dated
11-12-2015
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ADD
Seeks to levy definitive anti-dumping duty on import of Cold Rolled Flat Products of Stainless Steel originating in, or exported from the People's Republic of China, Korea, European Union, South Africa, Taiwan (Chinese Taipei), Thailand and USA for a period of five years
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60/2015 - dated
10-12-2015
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ADD
Seeks to levy provisional anti-dumping duty on Purified Terephthalic Acid, originating in, or exported from the Peoples Republic of China, Iran, Indonesia, Malaysia and Taiwan for a period not exceeding six months
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F. No. D-22011/47/2015 - dated
7-12-2015
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Safeguard
Initiation of safeguard investigation concerning imports of “Hot Rolled flat sheets and plates (excluding hot rolled flat products in coil form) of alloy or non-alloy steel” into India.
DGFT-
26/2015-20 - dated
11-12-2015
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FTP
Export Policy of Onions- revision in Minimum Export Price (MEP)
Income Tax-
S.O. 3303(E) - dated
7-12-2015
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IT
Notification u/s 35AC - Notifies the various institutions Approved by the National Committee.
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (12) TMI 570
Reopening of assessment - Entitlement to the deduction u/s 80P(e) denied - Held that:- The jurisdictional condition under Section 147 of the said Act is the formation of belief by the Assessment Officer that income chargeable to tax has escaped assessment. In the present matter, the Assessment Officer expressly did not accept the audit objection and later on acted under the dictate of superior authorities. In IL & FS Investment Managers Ltd vs Income Tax Officers and Ors (2006 (11) TMI 181 - BOMBAY High Court), the Division Bench of this Court has in paragraph no.8 held such initiation of reassessment on the directions of superiors is bad in law. There also the Assessment Officer had opposed the reopening. - Decided in favour of assessee.
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2015 (12) TMI 569
Validity of reassessment proceedings - whether barred by the period of limitation - Held that:- Provisions of Section 149 of the Income Tax Act, 1961 prescribe a limitation of six years at the relevant time. Accordingly, it is not in dispute that the issuance of notice dated 12.1.1965 is within six years of assessment year 1959-60. But the question referred to is about the order of reassessment dated 18.3.1970. We find that the provisions of Section 153 ( 2) at the relevant time prescribed limitation of four years from the end of assessment year in which notice under Section 148 of the Income Tax Act, 1961 is served upon assessee. Here, though notice is dated 25.1.1965, admittedly, it is served on assessee in September 1965 i.e. in financial year 1965-66 which expired on 31.3.1966. The assessment year for the purposes of Section 153 (2) (a) in present facts , therefore, shall be 196566 only and the order has been passed on 18.3.1970 i.e. before 31.3.1970. It is, therefore, within the stipulated time limit of four years. As such, it cannot be said that it is barred by limitation. - Decided in favour of the Department. Penalty under Section 271(1)(c) - Held that:- The order imposing penalty cannot be passed if the appeal against basic order of assessment is pending before the Competent superior Authority. Here, on 24.2.1972 though 1st Appellate Authority had disposed of the appeal, further appeal of assessee before the ITAT was very much pending. The order imposing penalty, therefore, appears to be premature and, therefore, illegal and without jurisdiction. The notices for initiation of those proceedings are, dated 12.1.1972, 3.2.1972 and 27.9.1972 i.e. during the pendency of appeal before the ITAT. Essential ingredients of Section 275 (1) are clearly not in contemplation of notice issuing authority on these dates. The form or language of these notices shows clear non-application of mind in this respect. It is obvious that such notices initiating the penalty proceedings could not have been issued before 26.3.1974. - Decided in favour of assessee
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2015 (12) TMI 568
Disallowance made under Section 40(a)(ia) - CIT(A) deleted the addition - Held that:- We note that both the order i.e. of the Commissioner of Income Tax (Appeals) as well as the impugned order of the Tribunal have recorded a finding of fact that the Respondent Assessee has not claimed any expenditure while computing its income chargeable to tax. As a consequence, there can be no occasion to disallow such expenditure under Section 40(a)(ia) of the Act. It is clear from plain reading of Section 40(a)(ia) of the Act that the failure to deduct the TDS in the absence of the same having been claimed as an expenditure while determining the income, would not attract disallowance. The consequence of failure to deduct the tax is found in Section 201 of the Act and it does not in any way permit the addition of an amount, which has not subjected tax deduction at source. The Sine qua non for the application of Section 40(a)(ia) of the Act to apply is claiming of the amount sought to be disallowed as an expenditure / deduction to determine the taxable income of the assessee. In the present case, the Revenue is not challenging the concurrent finding of the fact that the amount of ₹ 4.58 crores, which is being sought to be added to the Respondent's income has not been considered i.e. deducted to arrive at its income. Thus in such a case, the stand of Revenue contrary to the clear provisions of section 40(a)(ia) of the Act is unsustainable. - Decided against revenue.
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2015 (12) TMI 567
Entitlement for deduction u/s 36(1) (viii) - Tribunal was correct in its opinion that the Respondent company was in the business of providing long term finance for development of housing in India, thereby making it entitled for deduction u/s 36(1) (viii), when it had in fact stopped the business of providing housing loans from the financial year 2001-02 - Held that:- We find that the impugned order of the Tribunal renders a finding of fact that the Respondent-Assessee during the subject Assessment Year was in the business of providing finance for construction of residential houses. This conclusion is drawn after noticing the fact that there is not only an increase in the loans advanced during the subject Assessment Year to individuals but also over 700 new housing loans were sanctioned during the subject Assessment Year as was evident from is statutory returns filed with the National Housing Bank. The aforesaid finding of facts would by itself establish that the Respondent-Assessee is entitled to the Section 36(1)(viii) of the Act. The finding rendered by the Tribunal in the impugned order is a finding of fact and the Revenue has not been able to show that the finding of fact is in any manner perverse or arbitrary. - Decided against revenue.
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2015 (12) TMI 566
Disallowance u/s 40(a) (ia) - as per revenue benefit of deduction under Section 10A cannot be extended to such income, which is a result of disallowance - whether disallowance of expenditure under Section 43B of the Act was added to the income of the Assessee therein but deduction under Section 10A of the Act was sought to be denied to the extent of disallowed expenditure? - Held that:- The plain consequence of disallowance of the expenditure would be to add back the disallowed expenditure to the Respondent-Assessee's income. The entire income of the Respondent-Assessee is attributable to the activity of export of computer softwares and is entitled to deduction under Section 10A of the Act. In the circumstances, the disallowed expenditure, becomes a part of the income derived from the activity of export of software and entitled to the deduction under Section 10A of the Act. In these circumstances, as the issue stands concluded by the decision of this Court in the case of Gem Plus Jewellery India Ltd. (2010 (6) TMI 65 - BOMBAY HIGH COURT) against the Revenue and in favour of the Respondent Assessee.
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2015 (12) TMI 565
Taxability of unrealized rent - taxable on accrual basis or receipt basis - Applicability of Section 25AA in respect of only that rent which was unrealisable due to the circumstances of Rule 4 read with explanation to Section 23(1) of the I.T. Act - Held that:- the unrealized rent cannot be taken to be taxable in the hands of the assessee under the head "income from house property" when it is not realizable. From a perusal of the orders passed by the Assessing Officer, the CIT(A) and the Tribunal, we notice that no aid was taken by the Assessing Officer either in his order or before the CIT(A) or the Tribunal from the said rule. However, no argument was raised based on Rule 4 of the Rules and, therefore, no reference was made by the Tribunal to Rule 4 of the Rules. Moreover, the revenue could not refer to any material on record to show that the assessee was ever confronted to establish the requirements of Rule 4 of the Rules to claim benefit of unrealized rent. Accordingly, the substantial question of law claimed on that basis does not arise. Adverting to the judgments in D.C. Anand and sons and D.M. Vakil's cases (1945 (9) TMI 1 - BOMBAY HIGH COURT ) relied upon by the learned counsel for the appellant-revenue, it may be noticed that the principle of law enunciated therein, is well recognized, however, in view of the findings noticed hereinbefore, no benefit can be derived by the revenue from the aforesaid pronouncements. - Decided against revenue
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2015 (12) TMI 564
Deduction u/s 80IB - CIT(A) allowed the claim - DR relied on the orders of AO and contends that ld. CIT(A) has failed to appreciate that assessee cannot be regarded as a developer of the impugned housing projects in terms of sec. 80IB (10) - Held that:- If the development plans and other approvals are in the name of assessee, its claim for deduction u/s 80(IB) cannot be denied on the basis that some other agency was involved in construction. This is quite understandable as for all practical purposes, the assessee retains the status of a developer of housing project in the record of JDA, other concerned regulatory laws and agencies of govt. related to housing and urban development and IT department takes a view which is at variance with concerned govt. departments. This leads to an anomalous situation of contradiction amongst the govt. departments, which has been duly addressed by Hon’ble Karnataka High Court in Shravanee Construction [2012 (7) TMI 88 - KARNATAKA HIGH COURT ]. Respectfully following these judgments which are on similar facts, we are inclined to hold that assessee is eligible for claim u/s 80 (IB)(10). - Decided in favour of assessee
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2015 (12) TMI 563
Eligibility for deduction u/s 80IA - Held that:- Assessing Officer is not entitled, in the consequential proceedings, the scope of which is confined to giving effect to the order of the Tribunal, to sit in judgment over the view taken by the Tribunal on the issue in dispute, and if at all there is any grievance on account of the finding given by the Tribunal on the point at dispute, it should pursue the other appellate legal remedies provided in the statute itself, but cannot dilute the direction of the Tribunal. Accordingly, respectfully following the said order of the Tribunal [2012 (8) TMI 633 - ITAT HYDERABAD] we are inclined to hold that the assessee is entitled to deduction under S.80IA of the Act. In the present case, the assessee is in infra development activity, the nature of expenditures are similar and it is maintaining the books on contract basis and the revenue is recognized from long term construction contracts on the percentage of completion method as mentioned in Accounting Standard (AS) – 7 ‘Construction Contracts’ notified by the Companies Accounting Standard Rules, 2006. Percentage of completion is determined on the basis of surveys performed. From the above, the profit generated by each project can be determined by applying the percentage of completion method under projects eligible for deduction u/s 80IA or non eligible projects. In our considered view, this cannot be the reason to deny the benefit to the assessee u/s 80IA of the Act. On analyzing the assessment order, AO had inferred from subsection (5) of section 80IA of the Act, stated that to claim deduction u/s 80IA, the profit of eligible business should be computed as if such eligible business was only source of the income of the assessee during the previous year relevant to the AY. Thus, according to AO, the assessee is bound to maintain separate accounts for the works. Since the assessee is dealing in the numerous projects at the same time and also the projects are not time bound, it is impractical to present books of account on project wise and year wise. The method adopted by the assessee is based on the accounting standard approved by the ICAI. These standards are tested and proven method. Considering the above findings, we observe that assessee is following the proper method of accounting and appropriate books to claim deduction u/s 80IA of the Act. - Decided in favour of assessee.
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2015 (12) TMI 562
Loss in respect of delivery based transactions in respect of purchase and sale of shares - whether to be treated as speculation loss or not? - Held that:- From the provisions of section 43(5)(d) of the Act, it is clear that the definition of ‘speculative transaction’ as contained in section 43(5) of the Act is only for purpose of sections 28 to 41 of the Act. It does not apply to the other sections of the Act. As per the definition of section 43(5) of the Act, trading of shares which is done by taking delivery does not come under the purview of the said section. Similarly, as per clause (d) of section 43(5), derivative transaction in shares is also not speculation transaction as defined in the said section. Therefore, both profit/loss from all share delivery transactions and derivative transactions have the same meaning as far as Section 43(5) of the Act is concerned. It thus follows that both will have the same treatment as far as application of the said section is concerned. Thus we hold that the claim of the assessee for set off of loss from share dealing should be allowed from the profits from F & O in share transactions, the character of the income being the same and also hold that before application of the Explanation to section 73, aggregation of the business profit or loss is to be worked out irrespective of the fact whether it is from share delivery transaction or derivative transactions. - Decided in favour of assessee.
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2015 (12) TMI 561
Transfer pricing adjustment - transfer pricing adjustment on account of AMP expenses for marketing intangibles - Held that:- The Hon’ble High Court in assessee’s own case for the A.Y. 2008-09 has restored the computation of the transfer pricing adjustment on account of AMP expenses for marketing intangibles to the tribunal, which has been dealt with by us in a separate order. In disposing of the appeal of the assessee against the transfer pricing adjustment towards AMP expenses for the said A.Y. 2008-09, we have restored the matter to the file of TPO/AO for deciding it in conformity with our directions as deduced from the judgment of the Hon’ble Delhi High Court in the case of Sony Ericson Mobile Communication India (P) Ltd. ([2015 (3) TMI 580 - DELHI HIGH COURT] ). As admittedly the AMP expenses are one composite amount and there is no separately identifiable advertisement expenses relatable to promotion of TV channels of its AEs, the acceptance of the view point of the ld. AR in treating the entire amount of AMP expenses as deductible u/s 37(1), would amount to considering the entire AMP spend for business purpose, thereby leaving nothing for the promotion of brand of its AE, which will be contrary to the judgment of the Hon’ble High Court in assessee’s own case for the A.Y. 2008-09. Under such circumstances, we set aside the impugned order on this issue also and send it to the file of AO/TPO for deciding it afresh after hearing the assessee. Needless to say, the AO, while disposing of this issue, will keep into consideration the context and the ratio of the decision rendered by the Hon’ble High Court in the assessee’s own case for AYs 2002-03 to 2004-05. - Decided partly in favour of assessee for statistical purposes.
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2015 (12) TMI 560
Loss while carrying on of the business activities - whether allowable under sections 28 and 29 and / or 37 of the Act - whether the provisions of section 36(1)(vii) of the Act are not applicable since it is not the claim of bad debts i.e. write off of any debtors on account of raw material or machinery? - Held that:- The claim of the assessee has to be seen from the angle of the provisions of section 37(1) of the Act, wherein it is provided that all expenditure relating to carrying on of the business is to be allowed as deduction while computing the income chargeable under the head profit from business or profession, where the expenditure is not in the nature described in sections 30 to 36 of the Act and not being in the nature of capital expenditure. The provision made by the assessee in its books of account on account of non-recovery of advance made for the purchase of machinery cannot be said to be a provision made on account of bad debts and hence, the provisions of section 36(1)(vii) of the Act are not attracted. The said advance though was for the purchase of a capital asset, but since the capital asset never came into existence, the bar envisaged in section 37(1) of the Act do not apply. The expenditure claimed by the assessee is not covered by any of the provisions of sections 30 to 36 of the Act and being not a capital expenditure and having been incurred for the purpose of carrying on of the business, is eligible for deduction under section 37(1) of the Act. The advance made by the assessee for the purchase of equipments, which in turn, was to be used in the line of business carried on by the assessee and in the absence of machinery having been delivered to the assessee and also because of Insolvency proceedings filed, where there is no chance of recovery of advance made by the assessee, we find merit in the claim of the assessee in writing off of the said advance as business loss in its hands. Non-claiming of a loss in original Return of Income - whether is not an omission or wrong statement which entitles an assessee to file a Revised Return of Income? - Held that:- The CIT(A) was of the view that the revised return of income filed by the assessee does not fulfill the conditions laid down under section 139(5) of the Act. It may be considered at this juncture that in the original return of income, the assessee had not made any claim of deduction on account of write off of the advance paid to Italian company, such claim was made only in the revised return of income. In case, the revised return of income is not accepted, then how can the issue be so elaborately decided on merits? Once the merits of deduction have been considered by both the Assessing Officer and CIT(A), which admittedly was claimed only in the revised return of income, we find no merit in the order of CIT(A) in this regard and accordingly, we allow the ground of appeal No.2 raised by the assessee. Further, the perusal of the assessment order itself reflects that the working of income is, as per the revised return of income, ₹ 15.97 crores and in these circumstances, there is no merit in rejecting the revised return of income filed by the assessee.
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2015 (12) TMI 559
Assessment order passed under section 153C r.w.s. 143(3) - Held that:- It is not the case of assessee that the jurisdiction invoked under section 153C of the Act by the Assessing Officer is not correctly invoked. The assessee has not challenged the addition made in its hands for the captioned assessment year on the basis of incriminating documents found from his possession. In view thereof, the assessment order passed under section 153C r.w.s. 143(3) of the Act has been correctly passed. The objection of the assessee before us was that in respect of second addition of ₹ 1,25,000/- since no incriminating documents were found, since assessment has not abated, no proceedings can be completed under section 153C r.w.s. 143(3) of the Act. We find no merit in the said stand of the assessee, in view of incriminating documents found from the possession of the assessee in respect of travelling expenses and addition having been made on that account, the assessment order passed under section 153C r.w.s. 143(3) of the Act has been correctly made. Coming to the merits of addition in the case of assesseee we find that though the information has been received by the Assessing Officer from the return of income filed by the assessee itself, in the original assessment order passed under section 143(3), the said amount was added as income of the assessee where the said assessment order is still in force as the said assessment has not been abated, no further addition is warranted. Since the addition has already been made in the hands of assessee, there is no merit in making this addition once again while passing the order under section 153C r.w.s. 143(3) of the Act. Accordingly, we delete the said addition and allow the grounds of appeal raised by the assessee on merit
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2015 (12) TMI 558
Undisclosed cash credit - Held that:- What we find is that a credit of ₹ 3 lakhs appears both in the statement of affairs as on 31.03.2005 as well as as on 31.03.2006 in the name of Shri. Govinda Reddy. These statement of affairs were filed along with the returns of income for A. Ys.2005-06 and 2006-07. Amount remaining the same, if at all it had to be added as unproved credit, it ought to have been done in the year in which assessee had received the credit. As assessee had given full particulars of the creditor and also gave explanation as to how the credit has come into the books of the assessee. In the circumstances, we are of the opinion that the addition for the amount of ₹ 3 lakhs made during the impugned assessment year was uncalled for. Such addition stands deleted. - Decided in favour of assesee. Addition on account of ‘house lease amount’ - Held that:- It is clear that one of the cheques for ₹ 1,50,000/- was dated.25.04.2005. If that be so, ‘house lease amount’ that ought have been there in the statement of affairs as on 31.03.2005 was ₹ 6 lakhs and not ₹ 7,50,000/-. AO had clearly given a finding that assessee was unable to show entries in its books of account for receipt of such amounts. Closing cash and bank balance as on 31.03.2005 came only to ₹ 44,499/- and hence evidently did not include the post dated cheque of ₹ 1,50,000/-. Thus the version of the assessee that whole of the amount represented receipt from Shri. Mohammed Sarshad as lease advance cannot be believed. However at the same time, we find that the sum of ₹ 7,50,000/- which appears in statement of affairs as on 31.03.2006 is the very same amount that appeared in the statement of affairs as on 31.03.2005 also and the addition had its genesis from this entry. In our opinion, a sum of ₹ 6 lakhs out of ₹ 7,50,000/- stands explained by the assessee as part of the opening balance. However, the balance sum of ₹ 1,50,000/- which assessee received during the relevant previous year being not reflected in its books of account could not be considered as the source for explaining ₹ 7,50,000/- shown as dues in its statement of affairs as on 31.03.2006. In the circumstances we are of the opinion that assessee should be given a relief of ₹ 6 lakhs for the sums received by him during the preceding previous year. Accordingly we restrict the addition to a sum of ₹ 1,50,000/-. Addition to the extent of ₹ 6 lakhs is deleted. - Decided partly in favour of assessee.
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2015 (12) TMI 557
Reopening of assessment - Held that:- Where no return has been filed by an assessee and the AO wants to invoke jurisdiction vested upon him u/s.147 of the Act, the reasons mentioned by the AO for reopening should show a logical thought process which would show how he came to a conclusion that the total income of the such person exceeded the maximum amount which was not chargeable to tax. Now if we have a look at the reasons recorded by the AO in the case before us, what is mentioned is that he wanted to verify the source of income for the advance of ₹ 10.77 lakhs given by the assessee to her husband. There is nothing here whatsoever mentioned regarding any lacunae in the confirmation filed by the assessee in the course of her husband’s assessment proceedings or regarding any investigation done by the AO that could bring out something which would show an escapement of income. Argument of the Ld. DR is that in a case where assessee has not filed a return at all, the reasons that are to be given for reopening should not be seen with the same eyes as in the case of an assessee who had filed a return of income earlier. Even if we accept this contention, reasons given by the Ld. AO for issue of notice u/s.148 of the Act, does not give even a hint of any escapement of income or tax. As for the reliance placed by the CIT (A) on the Hon’ble Apex Court judgment in the case of GKN Driveshafts (2002 (11) TMI 7 - SUPREME Court) question there was whether reasons had to be furnished to an assessee and his reply disposed off, before concluding the assessment. In our opinion this case will not support the case of the Revenue here. In the circumstances of the case we are convinced that reopening was resorted only on suspicions and the test of relevancy is not satisfied. Ex-consequenti we hold the reassessment invalid. - Decided in favour of assessee.
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2015 (12) TMI 556
Disallowance of depreciation on Wind Mill - put to use - CIT(A) allowed the claim - Held that:- As per cl. (i) of sub-s. (1) of s. 32 the depreciation on the assets of an undertaking engaged in generation or generation and distribution of power is at a percentage as prescribed as per rates on the actual cost thereof. Thus sub-cl. (i) of sub-s. (1) of s. 32 provides the depreciation at a prescribed rate on the assets of specified undertaking on the actual cost instead of WDV. Explanation 5 to sub-s. (1) of s. 32 makes it clear that the provisions of sub-s. (1) to s. 32 of IT Act shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income. The expression "put to use" for 180 days has been wrongly changed by the AO for "6 months". It is an admitted case that the Wind Mill was commissioned on 30th September, 2007 and further it is also an admitted case that the metering arrangement was also made by inter-connecting with the grid sub station of RRVPNL, Barmer. Thus all the installation of the Wind Mill, laying down of the transmission lines, and installation of meter and connection of the meter with the supply line of the assessee were completed on 30.09.2007. Therefore, in the opinion of the Bench the asset was put to use on or before 30.09.2007, thus the asset for which depreciation claimed was used for a period of more than 180 days. Our view is also supported by Judgment passed of K.K.S.K. LEATHER PROCESSORS (P) LTD [ 2009 (11) TMI 556 - ITAT MADRAS-D] - Decided against revenue .
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2015 (12) TMI 555
Rejection of books of account - non-maintenance of stock register - G.P. addition - Held that:- As far as the gross profit addition in respect of M/s. S.R. Presstress Industries, Mantri Industries and M/s. Mantri Pole Udyog are concerned, the assessee maintained proper books of account duly supported by the audit report in form 3 CD. The mistakes pointed out by the AO for rejecting the books of account are untenable inasmuch as assessee's taxable profits can be ascertained on the basis of documents and records furnished by the assessee. In view thereof, see no justification in rejecting the books of account and estimation of gross profit. Consequently books are upheld, addition in this behalf is deleted. Disallowance of miscellaneous expenses, it is observed that the expenditure is incurred wholly and exclusively for the purpose of business. Merely because some expenditure is claimed on the basis of self made vouchers cannot make the expenditure disallowable. - Decided in favour of assessee.
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2015 (12) TMI 554
Revision u/s 263 - denial of depreciation at 50% claimed and allowed by the A.O. on ‘new commercial vehicles’ - Held that:- As seen from the invoices, assessee has purchased EISHER Vehicle with 90PS Max. Eng. Power which was registered as ‘Campers Vans’ on 27.02.2009. The total value of this asset was at ₹ 13,38,235. Since this vehicle was purchased in the previous year relevant for A.Y. 2009-2010, assessee has claimed depreciation in that year at 50% as per the Rules. Since the vehicle was put to use for less than 180 days in that year, having been registered on February, 2009, assessee claimed only 25% (half of 50%) of the depreciation and opening WDV of this year stood at ₹ 10,03,676. Since assessee claim of 50% depreciation on that vehicle was made in earlier year and as no action was undertaken by the Principal CIT to modify that, we are of the opinion that Principal CIT erred in directing the A.O. to restrict the depreciation to 15% in this year. This action of the Principal CIT, without considering the facts on record cannot be upheld, leave alone on legal principles. Coming to the other asset which was acquired during the year, it was TATA ACE purchased at cost of ₹ 2,93,444 and registered as ‘goods carriage LMV’ on 27.04.2009. This vehicle was put to use as per the provisions before 1st October, 2009 during the year. Thus, it is entitled for depreciation at 50%. If at all, the Principal CIT would have to consider that there is an error, he should have restricted himself to the new vehicle acquired during the year. But he has considered restricting the amount even on the vehicle which was purchased in earlier year and on which depreciation was allowed at 50% in that year. In that regard, the action of the Principal CIT is not based on facts on record and no application of mind while considering the proceedings under section 263. Coming to the eligibility of depreciation at 50%, there is no dispute that under the Rules new commercial vehicles acquired between 01.01.2009 to 01.10.2009 are eligible for depreciation at 50%. Nowhere in the Rules it was prescribed that they are to ‘put to use in the business of running them on hire’. The Coordinate Bench in the case of Avanti Feeds Ltd., vs. DCIT, Circle 1(1), Hyderabad (2009 (1) TMI 543 - ITAT HYDERABAD) analysed the Rules as applicable between the period 01.10.1998 and 31.03.1999 and came to the conclusion that new commercial asset acquired during the above period was eligible for higher depreciation at 40% as applicable in that year. Since the Rule provides that new commercial vehicles put to use are eligible for depreciation at 50% which is an incentive provision, Principal CIT cannot restrict the same by bringing a new condition that they have put to use in the business of running them on hire, when the Rules does not prescribe so. In view of the above, we cannot approve the action of the Principal CIT in exercising the jurisdiction under section 263 to set aside the validly completed assessment under section 143(3). In view of that, the order of Principal CIT u/s 263 is set aside and that of the A.O. is restored. - Decided in favour of assessee.
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2015 (12) TMI 553
Penalty under section 271D - Held that:- The assessee has tried to wriggle out from rigours of sections 269SS and 271D of the Act by contending that such entries in the Balance Sheet and books of account are as a result of mistake committed by the Accountant but, in our view, such plea of the assessee is not acceptable as it is not a bona fide plea. Though the assessee has made an endavour to project the loan taken as amount received as a trustee by virtue of power of attorney but, in our view, such plea of the assessee is on thin ground. Had it been a case of holding the money of the lady in trust, the assessee would not have shown it as loan in its books of account and financial statement. As far as the contention of the assessee that the transaction is bona fide and there is no accounted money, hence, provisions of section 263SS is not applicable, we are unable to accept such contention of the assessee. On reading of the provisions of section 269SS of the Act, it is very clear that it is applicable to a situation where cash loan is accepted in excess of the prescribed limit. Therefore, there is nothing in the said provision to show that it will apply only in a case where unaccounted cash is introduced or transaction is not bona fide. Therefore, in the facts of the present case, since it is proved that the assessee has received cash loan of ₹ 2.50 lakh in violation of provisions contained in section 269SS, imposition of penalty, in our view, is justified. - Decided against assessee.
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2015 (12) TMI 552
Penalty under section 271(1)(c) - unexplained cash credit - CIT(A) deleted addition - Held that:- The major addition which was made by the AO was on account of unexplained cash credit in the form of sale of shares which was duly shown in the return of income by the assessee as long term capital gain subject to tax @ 10% under section 112 of the Act, whereas the co-ordinate Bench in assessee’s own case for AY 2004-05has held it to be a short-term capital gain and to be taxed accordingly, which means that necessary details and information were provided in the income-tax return except the proper head of income which was short term capital gain but was shown as long term capital gain by the assessee. Such a mistake cannot be construed as a concealment of income u/s 271(1)(c). Therefore, in view of above, as well as relief given by co-ordinate Bench to the assessee in assessee’s own case for AY 2004-05 against the order of AO u/s 143(3), we do not find any reason to interfere with the order of CIT(A). We uphold the same. - Decided against revenue
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2015 (12) TMI 551
Undisclosed investment, unexplained loans and unexplained share application money - assessments u/s. 153A/153C - CIT(A) deleted the addition admitting additional evidence - Held that:- We do not see any additional evidence being admitted by the CIT(A) in disposing of this issue. Assessee only stated the dates and amounts involved and entire information was available with AO consequent to the search and seizure proceedings. Since the Revenue has raised the ground only on the issue of additional evidence and since we do not find any additional evidence being taken/ admitted by the CIT(A), there is no merit in the Revenue's ground. Accordingly, the same is rejected. Order of CIT(A) in deleting the additions cannot be upheld. It is true that ITAT Special Bench in the case of All Cargo Logistics Ltd., Vs. DCIT [2012 (7) TMI 222 - ITAT MUMBAI(SB)] held that in cases where assessments are not abated, the assessment u/s. 153A will be made on the basis of incriminating material. However, this opinion that not upheld by the jurisdictional High Court in the case of Gopal Lal Badruka Vs. DCIT [2012 (6) TMI 657 - ANDHRA PRADESH HIGH COURT] which was rendered on 15-12-2011 much before the order of the CIT(A). In fact, CIT(A) is bound to follow the jurisdictional High Court order. Not only the jurisdictional High Court, but also the Hon'ble Allahabad High Court and Delhi High Courts (supra) have held that for completing the assessments u/s. 153A/153C, AO could take into consideration material other than what was available during the search and seizure operation. In view of this, we are of the opinion that the order of CIT(A) cannot be upheld. It is one of the contentions of AO that Assessee has not furnished any information in the course of assessment proceedings. Therefore, without going into the merits of the additions made, we are of the opinion that these issues should be re-examined by the AO by giving proper opportunity to Assessee. Decided in favour of revenue for statistical purposes.
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Customs
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2015 (12) TMI 538
Revocation of CHA License - violation of Regulations 12, 18(1) and 13(n) of the Customs House Agents Licensing Regulation,2004 - Held that:- If the respondent agent admits the violation and breach of the regulations based on which the licence is issued, then, being out of business and from 15.10.2009 till date instead of inquiry being held denovo or further from such stage it was held to be vitiated, the permanent revocation can be set aside, but by maintaining the same for specific period or restricting it to the period already undergone namely from 15.10.2009 till today. Mr.Shetty has no clear instructions in that regard. Hence, we do not adopt this course, else the Court would be accused of extending misplaced sympathy and which is likely to be misused in future cases by others. Tribunal was justified in finding fault with the inquiry but it could not have allowed the appeal of the original appellant in its entirety. The Tribunal's conclusion that the final order of revocation cannot have any existence in the eyes of law because the inquiry was held in breach of principles of natural justice without any proof of prejudice being caused to the respondent, cannot be sustained. The nonobservance of the principles of natural justice in this case would not mean the whole inquiry is wiped out or the inquiry cannot be held from the stage at which the breach is committed and after rectifying it. That wrong is capable of being remedied. After all the adverse material are disclosed to the Agent and the persons whose version is proposed to be relied upon are made available for questioning by the Appellant, the inquiry can proceed and be concluded. That would be a fair course to adopt so as to protect both sides. - till the Inquiry is concluded and which must be concluded within the time stipulated above, the order of suspension of licence stands, but without prejudice to the rights and contentions of both sides - Petition disposed of.
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2015 (12) TMI 537
Power of Settlement Commission to entertain the matter pertaining to Gold - Seizure of goods - Illicit import of goods - Imposition of interest and penalty - Held that:- Respondent sought to place reliance on the decision of this Court in Commissioner of Customs v. Ashok Kumar Jain: [2013 (8) TMI 317 - DELHI HIGH COURT]. But, the decision in Ashok Kumar Jain (supra) was distinguished inasmuch as the issue of Section 123 had not been considered at all. It was finally observed, upon a plain reading of the provisions, that an application under Section 127B cannot be made in respect of, inter alia, ‘gold’ which is specifically an item to which Section 123 applies. That being the position, the application filed by the respondent under Section 127B could not have been proceeded with at all. The learned counsel for the respondent No.1 submitted that the petitioner/revenue never objected before the Settlement Commission and even accepted the penalty and fine which were imposed by the Settlement Commission. It was also contended that the petitioner had gone to the extent of issuing a release letter dated 08.06.2015 subsequent to the order of the Settlement Commission. But, we cannot agree with this submission of the learned counsel for the respondent No.1 inasmuch as there cannot be any estoppel against the statute. Once the statute is clear that where the subject matter is ‘gold’, the Settlement Commission would not have any jurisdiction to entertain the application under Section 127B, any order passed in contravention of the statute cannot be sustained on the ground of estoppel. - Impugned order is set aside - Decided in favour of Revenue.
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2015 (12) TMI 536
Seizure of currency - confiscation under Section 121 of the Customs Act, 1962 - Smuggling - Held that:- Even before the appellate authority, no evidence was produced to prove that the said sum was relating to the sale proceeds of the smuggled goods, which were sold by the petitioner herein, who was having the knowledge or reason to believe that the goods are smuggled goods. - Before this Court also, such kind of evidence has not been produced. In the absence of such kind of evidence, the third respondent has rightly passed the order to release the said sum to the petitioner. On the contrary, there is absolutely nothing in the order of the appellate authority, either for upholding the confiscation of the said amount from the office of the petitioner or for setting aside the order of the third respondent or for rejecting the appeal filed by the petitioner herein. - Court is of firm view that merely on the contradictory statements of somebody, the confiscation of anything from anybody is against law. - Decided in favour of appellant.
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2015 (12) TMI 535
Confiscation under Section 111(d) and (l) - attempt to smuggle the goods (gold jewellery) in India in the baggages - Provisional release of seized goods - Held that:- DRI, Chennai Zonal Unit, on specific intelligence, had intercepted the petitioner at Anna International Airport, chennai, and on enquiry, it was revealed that the petitioner was coming from Sharjah via Trivandrum. On scrutiny of the Customs Declaration form by DRI, it was found that against the column, 'total value of dutiable goods carried' by him, it was mentioned as 'Nil'. On enquiry by DRI as to whether he is in possession of any dutiable goods or foreign origin gold, he replied in the negative. - Senior Standing Counsel appearing for the respondent that since the passenger had attempted to smuggle the goods into India by concealing the same in his person as well as in his hand baggage and checked-in-baggage, without declaring the same to the Customs, in order to evade the payment of Customs duty, the afore stated goods are liable for confiscation under the provisions of Section 111(d) and 111 (l) of the Customs Act, 1962 and hence, it cannot be released provisionally under Section 110 of the Customs Act, 1962 as contended by the learned counsel for the petitioner. Petitioner had attempted to smuggle the goods into India only with an intention to evade payment of Customs duty and in the absence of any contention refuting the same from the learned counsel for the petitioner, this Court is of the view that the goods confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, cannot be released provisionally as sought for by the petitioner. - when the goods were confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, the question of provisional release under Section 110 of the Customs Act, 1962 does not arise. Therefore, this Court is of view that only after the completion of adjudication process, the adjudicating authority would decide whether the goods confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, could be released or not. - Decided against the petitioner.
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2015 (12) TMI 534
Restoration of appeal - Appeal dismissed for non compliance with pre deposit order - Held that:- Predeposit direction made on 8.6.2012 not being carried out in accordance with law by appellant nor the appellant appeared on 30.7.2012 to explain the position of default of compliance to the Bench, appeal was dismissed. After one year, the restoration application came to record of Tribunal. Even on the date of filing of restoration application, the appellant had not at all paid the directed amount of predeposit in accordance with law - default as handicaps the Tribunal to consider restoration application which was more than one year old from the stay order and also one year old from the date of dismissal order. Restoration of appeal in spite of defiant attitude of appellant shall cause prejudice to the interest of Revenue. - Decided against assessee.
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2015 (12) TMI 533
Restoration of appeal - Appeal dismissed for non compliance of pre deposit order - Held that:- Allegation against the appellants is that they have not fulfilled the export obligation and EODC has not been produced by them. It is the appellant’s contention that they have now obtained EODC / Redemption against EPCG Authorisation from the Ministry of Commerce and Industry, which stands produced before us today. The said certificate is required to be examined by the lower adjudicating authority for which purpose we set aside the impugned order and remand the matter to the original adjudicating authority for undertaking the verification and decide the matter accordingly - Appeal disposed of.
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2015 (12) TMI 532
Denial of exemption claim - imported parts for manufacture of hydraulic systems which are used in the windmills - Notification No. 12/12-CE dated 17/03/12 - Held that:- It is noticed that respondent being a manufacturer of hydraulic systems used in windmill, parts of the hydraulic systems used in wind mill was to generate non-conventional energy devices or systems. The goods characterized as 'non-conventional energy devices or systems' specified under list 8 appended to the notification is exempt from ACD on import. Therefore moot question that comes up is whether the parts used in the hydraulic systems meant for manufacture of non-conventional energy device or system shall enjoy or eligible to exemption of ACD. When the entry under sl.no. 13 under list 8 of the notification is read minutely that throws light that non-conventional energy devices itself is exempt from ACD. So also systems specified under list 8 appended to that notification is exempt from levy of ACD. What is called systems is elaborated in sl.no.13 under list 8 to the notification. The systems are wind operated electricity generator with its components and parts thereof including rotor and wind turbine controller. This clearly throws light that not only a complete system is exempt but also the components and parts thereof are equally entitled to exempt from ACD. - Decided against Revenue.
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2015 (12) TMI 531
Suspension of Custom Broker license - Held that:- Under Regulation 21, the Commissioner of Customs is required to issue a notice in writing to the Customs Broker within a period of 90 days from the date of receipt of the offence report stating the grounds on which it is proposed to revoke the licence. It is on record that the enquiry was ordered on 18.11.2014 i.e. after a period of exceeding 90 days from the date of receipt of offence report which was received on 26.07.2014 by the Commissioner. In this view of the matter, we find that there is no justification in continuing the suspension. It is not the argument of Revenue that the time limit prescribed in Regulation 21 is only directory and not mandatory. Therefore, the proceedings under CBLR for suspension are vitiated. - joint reading of erstwhile Regulations 20 & 22 (now Regulations 19 & 20) leads to the inference that the order of suspension passed under 20(2) ibid and its continuation under Regulation 20(3) ibid is only an interim measure and the authority has to take further steps i.e. suspend the licence permanently or revoke the licence under Regulation 22 within the time limit prescribed. Otherwise the order of suspension stopping the right of a person to carry on its business cannot continue. - No justification for suspension of CHA License - Decided in favour of Appellant.
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2015 (12) TMI 530
Rectification of mistake - Import of boric acid against valid DFIA - Application for rectification since previous order dismised as time barred - Held that:- no merit in this application - Decided against Assessee.
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Corporate Laws
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2015 (12) TMI 524
Winding up proceedings - application for to in abeyance the winding up proceedings against the company including impugned action of taking physical possession of the running company by the Official Liquidator as informed vide letter dated 26.10.2015 till the reference case/appeal is finally disposed of by the authorities under the SICA - maintainability of application - Held that:- As per Section 445 of the Companies Act, 1956 when the order of winding up passed by this Court, all the officers of the company in liquidation shall be deemed to be discharged except when the business of the company continued. It is an admitted fact that the Chief Financial Officer, who has verified the present application has not produced the authority given by the Board of Directors for filing the present proceedings, when inquired it is stated that the Board of Directors had given the authority to Mr.Sanjeev Jain, Chief Financial Officer to file the proceedings before this Court and to file the affidavits in May, 2014. However, admittedly after the order of winding up is passed by this Court, applicant is having no authority from the concerned Board of Directors to initiate the proceedings before this Court, therefore, in absence of valid authority given to the Chief Financial Officer, this application is not maintainable and therefore also the same is required to be dismissed. Symbolic possession of the properties of the applicant – company in liquidation has been taken over by the provisional liquidator in August 2014, inventory has been prepared. Lead secured creditor of all consortium bank has already initiated proceedings under Section 13 of the SARFAESI Act and therefore also as per further proviso of Section 15(1) of SICA, the reference itself is abated. However, we may not decide that issue at this stage. But, primafacie, this contention is required to be kept in mind while considering this application. Further, all the preconditions of Section 15 of SICA are complied with or not is also not gone into by this Court in detail as it is not required in the present proceedings. In view of the aforesaid facts, as a Company Judge, this Court cannot modify the order passed by the Hon'ble Division Bench and therefore the applicant is required to approach before the Hon'ble Division Bench for the relief prayed for in the present proceedings, the impugned communication dated 26.10.2015 is nothing but an action taken by the Official Liquidator in pursuance to the direction given by this Court and therefore, it is not proper for this Court to entertain this application as the same is not maintainable.
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Service Tax
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2015 (12) TMI 550
Waiver of pre deposit - Commercial or Industrial construction service - abatement under Notification No. 1/2006-ST dated 1/03/2006 - Held that:- Commissioner had categorically observed that the applicant could not adduce evidences to justify the claim that the services rendered by them are only 'Works Contract Service', consequently, he has confirmed the demand of service tax for the services rendered by them viz. assembling of tower etc. under the category of erection, commissioning or installation of telecommunication towers. Thus the issue is related to appreciation of evidences adduced by both sides. Also, he has denied the abatement on the ground that the Applicant failed to fulfil the condition of Notification No.01/2006 ST dt.01.03.2006. It is the claim of the Applicant that they have reversed total CENVAT credit of ₹ 70,563/- attributable to the input service availed in providing the out put service for which benefit of Notification 01/2006 ST dt.01.03.2006 was denied to them. We find that the said reversal was made after passing of the impugned Order as is evident from their letter dt.20.06.2013 - Partial stay granted.
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2015 (12) TMI 549
Demand of service tax - Authorization dealer service - three service provided to the Retail customers - Held that:- Contents of the Agreement between the Maruti Udyog Ltd. and respondent only state that for the services rendered by the Servicing Dealers, the Selling Dealer shall pay the bills of the free services. We find that this is an internal arrangement between two dealers and has nothing to do with the payment for the service provided by the Selling Dealer to the customer of the car. The show cause notice has been issued to the Selling Dealer demanding service tax for the services rendered to the Customer. As far as this transaction is concerned, as noted in the judgments above, the value of services is included in the dealers margin and no service charge is received from the service recipient. If at all, in the light of the above, it is the transaction between the two dealers which could have been subject to tax - Decided against Revenue.
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2015 (12) TMI 548
Demand of service tax - Security Agency Services - Invocation of extended period of limitation - Imposition of penalty - Held that:- Leviability of the Service Tax on Security Agency Services on the appellants is not in dispute. It is submitted that the demand of service tax for the period April 1999 to 11.3.2004 by show cause notice dated 29.6.2004 is hit by limitation. - Appellants were aware the levy of tax and they have not paid the tax and therefore it is a fit case to invoke the extended period of limitation. Hence, the extended period of limitation would be invoked in this case. Central Excise officers during the visit had detected the non-payment of the tax. So, the imposition of penalty is warranted. However, considering the overall facts and circumstances of the case, in our view, the imposition of penalty under Section 78 of the Finance Act, 1994 is sufficient. We agree with the submission of Learned Advocate that the Adjudicating Authority had not given the option to pay penalty 25% of the tax alongwith the entire amount of tax and interest, within the specified period. So, they are entitled to get such option under Section 78 of the Act 1994. - we modify the impugned order in so far as the demand of Service Tax alongwith interest is upheld. The penalty imposed under Section 78 is also upheld and the other penalties are set aside. - Decided partly in favour of assessee.
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2015 (12) TMI 547
Demand of service tax - services provided to group companies - Business Support Service, Management Consultancy Services and/or Manpower Recruitment Service & Supply Agency Service - Imposition of penalty - Held that:- Appellant's employees are rendering various services to the group companies; appellant is also recovering some amount from the group companies and recording the same as receipts under salary and wages. It is to be noted that the show-cause notice in the case in hand seeks to demand the service tax liability under "Business Support Service" and "Management Consultancy Services" for the substantial amount and a small amount towards "Manpower Recruitment Service & Supply Agency Service". We find that the services rendered by the employees of the appellant are in respect of running the business of the group companies efficiently. The top most level of the employees to the middle management and lower management levels of the employees are rendering the services which could be in support of the business of the group companies as also the advisory function in respect of various departments. In our view, the lower authorities, in this case has correctly classified the services rendered by the employees of the appellant under ‘Business Support Service' and ‘Management Consultancy Services'. We do not find any reason to interfere in such a reasoned order by the lower authorities. Accordingly, we hold that the services rendered in this case by the appellant employees are liable to service tax and the tax liability and the interest thereon as confirmed by the Adjudicating authority and upheld by the first appellate authority are correct and no interference is called for. - However, penalty is set aside - Decided partly in favour of assessee.
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2015 (12) TMI 546
Penalty u/s 78 - Goods Transport Agency Service - Held that:- In the light of the judgement of the Hon’ble High Court of Madras in the case of K.M.B. Granites Pvt. Ltd. (2014 (11) TMI 87 - Madras High Court), it is clear that transport service even when it is provided by the individual lorry/truck operators, is chargeable to service tax. - appellant is pleading that they should not be imposed penalty as during the relevant period, law of service tax in case of transportation service was not very clear. In the light of the facts and pleading of the appellant and considering the provisions of Section 80(1) of Finance Act, 1994, it is held that the penalty imposed under Section 78 of Finance Act, 1994 on the appellant is not sustainable - Decided in favour of assessee.
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2015 (12) TMI 545
Denial of refund claim - management or business consultant service received from abroad - Nexus between input and output service - Held that:- input service has been used for providing output service and therefore there is nexus and the appellant is eligible for the refund which has been rejected and demanded back - Decided in favour of assessee.
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2015 (12) TMI 544
Denial on Input services credit on car insurance - Held that:- cars are owned by the appellant and insurance charges have been paid for the car by themselves only. These cars have been used for company’s director as well as for official purpose. In these circumstances, relying on the decision of Hon’ble High Court of Bombay in the case of C.C.E., Nagpur v. Ultratech Cement Ltd. - [2010 (10) TMI 13 - BOMBAY HIGH COURT ] wherein it has been held that any services availed by the manufacturer/producer of the goods in the course of the company business they are entitled to take Cenvat credit. Consequently, I hold that appellant is entitled to take Cenvat credit. - Decided in favour of assessee.
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2015 (12) TMI 543
Denial of refund claim - Accumulated CENVAT Credit - FIRCs received for the exports made are not in the name of the appellant - Held that:- unable to find out legal provisions which provides that in case of change in the name, refund claim is not admissible. In the case of recovery of short-levy, short collection of revenue, show-cause notices are issued and amount is collected in similar cases. In such a situation, when it comes to refund, rejection of the claim only on the ground without support of any legal provision cannot be sustained - Decided in favour of assessee.
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2015 (12) TMI 542
Demand of service tax - Management, maintenance or repair service - Held that:- First Appellate Authority, has misdirected himself and classified the services rendered by the appellant under consultancy service. We find that the First Appellate Authority has been frugal in words while recording the reasoning for upholding the order of the adjudicating authority. The First Appellate Authority is required to give detailed reason why he has upholding their order of the adjudicating authority. In the absence of any detailed reasoning, we are unable to go into the matter. - Decided in favour of assessee.
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2015 (12) TMI 541
Denial of CENVAT Credit - whether the appellant is entitled to take input service on the rent paid for Pandal and Shamiana services as per Rule 2(1) of Cenvat Credit Rules, 2004 or not - Held that:- relying on the decision of the Hon’ble Bombay High Court in the case of Ultratech Cement Ltd. - [2010 (10) TMI 13 - BOMBAY HIGH COURT], the appellant is entitled to avail input service credit on Pandal and Shamiana services. Consequently, I set aside the impugned order - Decided in favour of assessee.
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2015 (12) TMI 540
CENVAT Credit - Service Tax paid on travel agent expenses - Held that:- authorities of the Department are taking a view that order does not cover the admissibility of Cenvat credit of tax paid on travel agents service. He submits that travel agents services are used for business travel of the company officials and the issue is no longer res integra and is covered by precedent decisions. Therefore, it is made clear that the said Final Order covers this issue also - Decided in favour of assessee.
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2015 (12) TMI 539
CENVAT Credit - Car parking service as input - Held that:- In the case of Ultra Tech Cement Ltd. v. C.C.E., Nagpur - [2010 (12) TMI 90 - CESTAT, MUMBAI] wherein the Hon’ble High Court of Bombay has held that any service availed by them in the course of the business of a manufacturing, the assessee is entitled to take Cenvat credit. Admittedly in this case the car parking services has been availed by the appellant for parking of cars relates to the management of the appellants. The activity is directly related to the business of manufacturing of the appellant. Therefore, I hold that appellant is entitled to take Cenvat credit. - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2015 (12) TMI 529
Detention of goods - Evasion of tax - Transportation of goods by ingenuine documents - Held that:- After considering the entire material on record and the documents, it has been recorded that the documents accompanying the goods were not genuine. The goods which were intercepted by the detaining officer were meant for trade. The dealer had made an attempt to evade the payment of tax by transporting the goods by ingenuine documents. - Though the quantity in both the bills was the same but the rates and amounts varied. It was concurrently concluded by all the authorities that the transaction was an attempt to evade tax on the part of the appellant. - The only attempt on the part of the learned counsel for the appellant is to reappraise the evidence. We do not find that the findings of fact recorded by the authorities below are illegal or perverse in any manner. The view taken by them is a plausible view which cannot be faulted. No substantial question of law arises - Decided against Assessee.
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2015 (12) TMI 528
Denial of concessional rate of taxes of 2% - non production of 'C' forms related to interstate sales as well as export documents before the 2nd respondent who passed the assessment order - Held that:- Additional Government Pleader fairly submitted that the 3rd respondent may be directed to issue fresh notice by granting time and on receipt of the same, the petitioner may be directed to submit C- Forms as well as export documents and on receipt of the same, the 3rd respondent may be directed to consider the same and pass appropriate orders within a time frame. - In view of the submissions made by the learned counsel for the petitioner and the learned Additional Government Pleader (Taxes), this Court is of the view that the impugned order passed by the 2nd respondent dated 17.01.2014 is liable to be set aside and the petitioner must be given an opportunity to produce the 'C' forms. - Matter remanded back - Decided in favour of assessee.
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2015 (12) TMI 527
Power of tribunal to grant stay under GVAT - Whether the Tribunal erred in granting stay against recovery till the disposal of appeal by the first appellate authority - Held that:- As can be seen from the impugned order passed by the Tribunal, it has considered the merits of the case and has found as a matter of fact that a strong prima facie case has been made out in favour of the assessee. It is in the light of the prima facie view expressed by the Tribunal viz., that its earlier decision in the case of M/s Vardan Petrochemical (P) Ltd. v. State of Gujarat would be applicable in the facts of the present case, that the Tribunal has thought it fit to restore the matter to the file of the Deputy Commissioner for the purpose of deciding the same on merits. - It is well settled that the powers to direct payment of predeposit are discretionary powers and such discretion is required to be exercised by the concerned authority in a reasonable manner. Having regard to the finding recorded by the Tribunal whereby, it has recorded a prima facie view in favour of the assessee, it cannot be said that the discretion exercised by it in refusing the amount of pre-deposit is, in any manner, unreasonable, or arbitrary so as to give rise to any question of law. - it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law warranting interference. - Decided against Revenue.
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2015 (12) TMI 526
Validity of revision order to enhance the turnover and rate of tax - Jurisdiction - Violation of principle of natural justice - Held that:- Revisional show-cause notice records that sales of raw material were not brought under the net turnover. In reply thereto the petitioner stated that they had sold raw fish purchased at the harbour. They placed copies of the invoices and their ledger before the revisional authority. If the second respondent was of the view that the information provided by the petitioner was insufficient, and information regarding the amounts received on the sale of fish should have been placed before him, nothing prevented him from seeking such information. The petitioner has not been given an opportunity of being heard, as he has not been informed of the nature of information which the second respondent considered necessary to examine the petitioner's plea that they had only sold raw fish which is exempt from tax under entry 24 of the First Schedule to the Act. The impugned assessment order is in violation of the principles of natural justice and is, accordingly, set aside. - Petition disposed of.
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2015 (12) TMI 525
Whether for levy of exemption fee/composition fee in lieu of turnover tax under the extent Rajasthan Sales Tax Act, 1994, exempted goods notified by the State of Rajasthan under the Notification No. F.4(11) FD Group-4/95-86 dated March 27, 1995, i.e., cigarette and products of tobacco could be reckoned for computation of turnover tax - Held that:- section 13A(2)(i) makes it amply evident that the taxable turnover shall not include the sale and purchase of exempted goods. Admittedly consequent to additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 vide notification dated March 27, 1995 by the State Government had declared cigarettes and products of tobacco exempted from purchase and sales tax under the Act of 1994. In these circumstances the sale of the respondent/assessee to the extent of ₹ 33,60,806 from its business in cigarette and products of tobacco could not have been reckoned for determination of taxable turnover and levy of exemption/composition fee in lieu thereof. The findings of the Deputy Commissioner (Appeals) as upheld by the Tax Board, are valid and legal. I find nothing perverse therein. No question of law as sought to be agitated in this revision petition is made out. In fact the revision petition has been mechanically filed as is evident from the generality of grounds agitated in support of the petition - Decided against Revenue.
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Indian Laws
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2015 (12) TMI 523
Contempt application - punishing the opposite party for willful disobedience - Held that:- Once this Court has directed the Board to pass a reasoned and speaking order the Board could not wash of its hand saying that legal issues are involved and matter is sub-judice. In his submission it amounts to willful disobedience of the order of this Court dated 7.8.2014. Whereas Sri Mehta submits that the order of the writ Court has been complied with in its letters and spirit. The parties wants to make further submissions. As prayed list on 28th October, 2015. Matter shall not be treated as tied up or part heard before this Court.
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2015 (12) TMI 522
RTI - Information in relation to Saguvali Chit registers from the year 1933-34 till the date of the application - Held that:- Central Information Commission or State Information Commission has no power under S.18 to provide access to the information which has been requested for by any person but which has been denied to him. Remedy for such person who has been refused information is provided under Section 19 of Act. Nature of power under S.18 is supervisory in character whereas procedure under Section 19 is appellate procedure and a person who is aggrieved by refusal in receiving information which he has sought for can only seek redress in manner provided in statute, namely, by following procedure under Section 19. It has been further held that Section 7 read with Section 19 provides complete statutory mechanism to person who is aggrieved by refusal to receive information. Such person has to get information by following aforesaid statutory provisions. Sections 18 and 19 of Act serve two different purposes and lay down two different procedures and they provide two different remedies. One cannot be substitute for other. In the instant case, if the Public Information Officer has failed to furnish the information within 30 days from the date of receipt of the application, the application is deemed to have been refused. In such a situation, the remedy available to the second respondent is to file an appeal under Section 19(1) of the Act before the First Appellate Authority. The complaint made before the first respondent under Section 18(1) of the Act was not maintainable. Therefore, the order passed by the first respondent at Annexure-K and other subsequent orders are not valid. Writ petition allowed
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2015 (12) TMI 521
Meaning, ambit and scope of the words “legality and propriety” under Section 15(6) of the Haryana Urban (Control of Rent & Eviction) Act, 1973 - whether the High Court (as revisional authority) under Section 15(6) could interfere with the findings of fact of the first appellate Court/first appellate authority? - Held that:- None of the above Rent Control Acts entitles the High Court to interfere with the findings of fact recorded by the First Appellate Court/First Appellate Authority because on reappreciation of the evidence, its view is different from the Court/Authority below. The consideration or examination of the evidence by the High Court in revisional jurisdiction under these Acts is confined to find out that finding of facts recorded by the Court/Authority below is according to law and does not suffer from any error of law. A finding of fact recorded by Court/Authority below, if perverse or has been arrived at without consideration of the material evidence or such finding is based on no evidence or misreading of the evidence or is grossly erroneous that, if allowed to stand, it would result in gross miscarriage of justice, is open to correction because it is not treated as a finding according to law. In that event, the High Court in exercise of its revisional jurisdiction under the above Rent Control Acts shall be entitled to set aside the impugned order as being not legal or proper. The High Court is entitled to satisfy itself the correctness or legality or propriety of any decision or order impugned before it as indicated above. However, to satisfy itself to the regularity, correctness, legality or propriety of the impugned decision or the order, the High Court shall not exercise its power as an appellate power to reappreciate or re-assess the evidence for coming to a different finding on facts. Revisional power is not and cannot be equated with the power of reconsideration of all questions of fact as a court of first appeal. Where the High Court is required to be satisfied that the decision is according to law, it may examine whether the order impugned before it suffers from procedural illegality or irregularity. Civil Appeals and Special Leave Petitions shall now be posted before the regular Benches for decision in light of the above.
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