TMI Tax Updates - e-Newsletter
December 30, 2017
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
-
GST:
Restriction of refund - Recipient of goods under Deemed export scheme or under payment of tax @0.1% IGST (or @0.05 % CGST + @0.05 SGST) for use in export shall not be allowed to pay IGST on export goods or services and claim refund of IGST so paid. - Rule 96 amended - See Sub-Rule (9)
-
GST:
Refund of tax to certain persons - Rule 95 as amended
-
GST:
Refund of input tax credit - zero-rated supply of goods or services or both - Even the cases, where person supplying on Deemed export basis has paid the tax @0.1% IGST (or @0.05 % CGST + @0.05 SGST) refund shall be allowed - Rule 89 amended - See Sub-Rule 4B
-
GST:
Refund of input tax credit - zero-rated supply of goods or services or both - Even the recipient of Deemed Export Goods shall be eligible for refund - Rule 89 amended - See Sub-Rule 4A
-
GST:
Refund of input tax credit in case of zero-rated supply of goods or services or both - Rule 89 amended - See Sub-Rule 4
-
GST:
Amendment of registration shall not be be effective from a date earlier than the date of submission of the application in FORM GST REG-14, except with specific permission - Rule 19 as amended - - See Sub-Rule 1A
-
GST:
Unique Identity Number assigned to to certain special entities shall be applicable to the territory of India - Rule 17 as amended - See Sub-Rule 1A
-
GST:
Filing of Returns under GST- regarding
-
GST:
The Central Goods and Services Tax (Fourteenth Amendment) Rules, 2017
-
GST:
Notifies the date (1st day of February, 2018) from which E-Way Bill Rules shall come into force
-
GST:
Partially waiver of the late fee payable for failure to furnish the return in FORM GSTR-4
-
GST:
Extends the due dates for monthly furnishing of FORM GSTR-1 for taxpayers with aggregate turnover of more than ₹ 1.5 crores
-
GST:
Extends the due dates for quarterly furnishing of FORM GSTR-1 for taxpayers with aggregate turnover of upto ₹ 1.5 crore
-
GST:
Scheme of budgetary support for cash component of CGST and IGST for eligible industrial units for residual period in States of North Eastern region and Himalayan states
-
Customs:
Subject:- Sale of goods and display of prices at duty free shops in Indian currency – amendment of circular 31/2016 - Customs dated 6th July 2016
-
Indian Laws:
Indian Advance Pricing Agreement regime moves forward with signing of three APAs by CBDT in December, 2017
-
Indian Laws:
Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified
-
Service Tax:
Rejection of VCES application - The Revenue has only taken a different interpretation as far as the classification of services. This cannot tantamount to substantial misdeclaration - tax liability accepted in the VCES by the appellant is not being interfered - AT
-
Service Tax:
Voluntary Compliance Encouragement Scheme (VCES) - rejection of the application - Appellant submitted that, merely because the appellant had been issued with a notice for the earlier period, would not mean that the First Proviso to subsection (1) of Section 106 of the Finance Act, would come into operation - tribunal rejected the contention.
Articles
Notifications
Circulars / Instructions / Orders
News
-
Frequently Asked Questions - GST
-
Scheme of budgetary support for cash component of CGST and IGST for eligible industrial units for residual period in States of North Eastern region and Himalayan states
-
Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified
-
Rs.14,500 crore raised through BHARAT 22 ETF
-
GDP Growth Rate
-
Direct Benefit Transfer (DBT) Scheme
-
Linking of Jan Dhan Accounts with Aadhaar
-
Operation Clean Money
-
Highlights of the Monthly Account of the Government of India upto November 2017
-
EEPC India’s e-catalogue launched by Secretary Department of Commerce
-
Indian Advance Pricing Agreement regime moves forward with signing of three APAs by CBDT in December, 2017
-
RBI Reference Rate for US $
-
Government Cautions People Against Risks in Investing in Virtual ‘Currencies’; Says VCs are like Ponzi Schemes
-
India Signs Loan Agreement with the World Bank for USD 40 Million for “U.P. Pro-Poor Tourism Development Project”
Case Laws:
-
GST
-
2017 (12) TMI 1462
Restriction on Input Tax credit under GST - Held that: - It is open to the petitioner to claim whatever it wish to; in the event the credit sought is denied, the respective entitlement of the parties shall be subject to the final decision - notice issued.
-
Income Tax
-
2017 (12) TMI 1481
Addition of difference in receipt as per receipts of the assessee mentioned in 26AS and receipts shown by the assessee to the net profit ratio @1.96% - Held that:- The assessee had disclosed a total turnover of ₹ 9,92,47,244/- in the return of income. The differential amount was not shown in the return of income on the ground that such amount was received from the Municipal Corporation in the subsequent financial year. It is an admitted position that such income had accrued to the assessee in the financial year 2010-11 and hence, all the authorities below, including the Tribunal, held that such income would be the income of the assessee in financial year 2010-11 relatable to assessment year 2011-12. However, the differential amount which was shown by the assessee in the subsequent year was in fact receipt and not the profit of the assessee. The entire amount of ₹ 11,63,87,407/- would, therefore, be turnover of the assessee. Accordingly, the Tribunal was wholly justified in computing the profit at the rate of 1.96% of the differential amount and holding the same to be the income of the assessee. Even according to the revenue in the memorandum of appeal, it has been stated that the income embedded in the receipts could not be shifted to the next financial year. Therefore, it is only the income embedded in the receipts that was required to be taxed and not the entire amount of the receipts.
-
2017 (12) TMI 1480
Reopening of assessment - bogus purchases so made by the assessee at 12.5%. - Held that:- As found form record that factum of assessee having taken bills from bogus supplier, who did not supplied any goods to assessee had been established as per detailed inquiries conducted by AO. Under these facts and circumstances after considering various judicial pronouncements to the facts of instant case, the CIT(A) has upheld the addition to the extent of 10% of GP on the bogus purchases in place of 12.5% as estimated by the AO. Nothing was placed before so as to persuade me to deviate from the findings of CIT(A) for estimating profit at 10% in place of profit of 12.5% as shown by the AO. Accordingly, do not find any reason to interfere in the order of CIT(A). - Decided against assessee. Also as reopening was made on the basis of information from Sales Tax Department and DGIT (Investigation), Mumbai. As per the reasons recorded for reopening, upheld the reopening of assessment.
-
2017 (12) TMI 1479
Bogus purchases - profit estimation - Held that:- Factum of purchases from bogus suppliers have been established. Under these facts and circumstances, the CIT(A) has very reasonably restricted the addition to the extent of 12.5% and had given further relief to the extent of profit already declared by the assessee @6.5%. Thus, net addition so sustained by the CIT(A) is to the extent of 6.25% of the alleged bogus purchases.
-
2017 (12) TMI 1478
Higher depreciation at 30% on Trailers, Dumpers & Motor Lorries, which were used for transportation business - CIT-A allowed the claim - Held that:- Transportation business carried out by the assessee by using Trailers, Dumpers & Motor Lorries is not an incidental to the business of the assessee. Out of the gross receipts of ₹ 55,75,16,582/-, the assessee received ₹ 22,99,64,332/-. The ld. Departmental Representative failed to produce any material to show that the above finding given by the ld. CIT(A) is not correct. Therefore, by considering the facts and circumstances of the case, we are of the opinion that there is no infirmity in the order passed by the ld. CIT(A). - Decided against revenue
-
2017 (12) TMI 1477
Bogus purchases - estimation of income - Held that:- Since in the case of M/s. Modern Road Maker Pvt. Ltd. the Tribunal has given the reasons [2017 (12) TMI 1394 - ITAT MUMBAI], respectfully following the same, direct the Assessing Officer to estimate the profit @5%. Since in all the appeals filed by the assessee the issue involved is common, we therefore following the decision for A.Y. 2006-07 direct the Assessing Officer to estimate the profit @5%.
-
2017 (12) TMI 1476
Addition being interest u/s.244A on Income Tax Refund for A.Y.2009-10 - Held that:- In our opinion, assessee has received the said information from the Assessing Officer during the course of assessment proceedings which took place during financial year 2014-15. The said amount of interest has therefore been provided in the Financial Year 2015-16, which is also subject to certain rectification on factual grounds as the amount of set off of different years is not correct. They have made separate entry in general voucher dated 01/04/2015 mentioning “Being the jv pass for interest received form Income Tax Dep. for the A.Y. 2009-10. Interest income booked in F.Y. 2015-16”. In our considered opinion, in such circumstances no addition can be made. In the result, this ground of appeal is in favour of the assessee. Late payment of employees’ contributions of provident fund and ESIC by invoking Section 36(1)(va) - Held that:- Since assesses had no deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper. See CIT vs Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] - Decided against assessee.
-
2017 (12) TMI 1475
Exemption u/s 10(23C)(vi) withdrawn - undue benefit to one person - expenditure incurred on this tour of group of teacher along with Director - payments as remuneration paid to the persons for rendering services and not merely payments for being the specified persons - Held that:- When the qualification and experience of the persons who were managing the affairs of the society and also involved in the day to day affairs and teaching work is not denied then salaries and allowances or remuneration paid to these persons cannot be held as unreasonable or excessive. Thus we hold that the payment is made on account of salary against the services rendered by these persons and not merely on account of their status then the same cannot be said to be a undue benefit to attract the provisions of Section 13(3) of the Income Tax Act. Except one person,all others are the teachers of the assessee society and not falling in the category of specified persons as per section 13(3). When the expenditure was incurred for the tour of the entire group then it cannot be considered as undue benefit only one i.e. Director. It is not a case of the Department that all 23 persons are falling in the category of the specified persons. We find that only the Director namely Shri Vaibhav Singh was considered by the ld. CIT(E) as specified persons while raising the objection of payment of salary. Therefore, out of the group of 23 persons, the Director cannot be picked out to invoke the provisions of section 13(3) of the Income Tax Act. Further it is not the finding of the ld. CIT(E) that the tour was undertaken for their personal trip then the education tour by the teaching staff along with the Director has to be considered as one event and expenditure. Hence, we are of the view that the expenditure incurred on this tour of group of teacher along with Director cannot be held as undue benefit to one person. In view of the above facts and circumstances of the case as discussed above the impugned order passed by the ld. CIT(E) is set aside and consequently the approval u/s 10(23C)(vi) granted to the assessee is restored. - Decided in favour of assessee.
-
2017 (12) TMI 1474
Levy of penalty u/s 271(1)(c) - addition on account on account of difference of opinion - Held that:- The admission or a rejection of a claim is a subjective matter and whether a claim is accepted or rejected has nothing to do with furnishing of inaccurate particulars of income, what is a correct claim and what is incorrect claim is a matter of opinion. Raising a legal claim, even if it ultimately found to be legally unacceptable, cannot amount to furnishing of inaccurate particulars of income. A bonafide claim by the assessee being visited with penal consequences only because it has not been accepted by the tax authorities or judicial authorities, is an absurdity. In any event the connation of expression inaccurate particulars do not extent to the issues of interpretation of laws and as such making a claim, which is found unacceptable in law, cannot be treated as furnishing of inaccurate particulars of income. In this case, no information/figures in the return of income was found to be incorrect or inaccurate. The same was reflected in books of accounts. All books of accounts were maintained and Audited by the assessee. Only Notional interest was calculated and was disallowed from actual interest expenditure paid to bank. Disallowance was merely on account on account of difference of opinion and has nothing to do with concealment of income or furnishing of inaccurate particulars. It is clear that mere disallowance in the assessment proceedings could not be the sole basis for levying penalty u/s.271(1)(c). - Decided in favour of assessee.
-
2017 (12) TMI 1473
Penalty levied u/s 271E - assessee repaid loan in cash in aggregating was exceeding ₹ 20,000/-, the assessee contravened the provisions of Section 269T - Held that:- It is not clear as to how and from where the Jt. CIT has pickedup the date of 20/02/2010 on which the reported repayment of loan in violation of section 269T of the Act has taken place. The lady Smt. Pratixaben A. Joshi who is the wife of the appellant has filed an affidavit that the money in question was received by her from her father-in-law and the same was given to the appellant/husband for the on-going construction of the house. Though an affidavit which was filed by the Pratixaben A. Joshi is not on record but statement of ld. AR has been noted that this fact is correct. Clearly, the transaction between a wife and a husband who was staying together under the same roof is eligible for relaxation from the purview of repayment of loan etc. as provided in section 273B of the Act. Ld. Jt. CIT has not given any source of loan from where this so called loan was taken. Therefore, in our considered opinion this is not a fit case, where penalty should be levied - Decided in favour of assessee
-
2017 (12) TMI 1472
Bifurcation of brought forward losses and unabsorbed depreciation - Held that:- As long as brought forward losses and unabsorbed depreciation can be directly relatable to the undertakings transferred to the resulting company (i.e. Advantage Retail Pvt Ltd) in this case, the same is to be carried forward in the hands of resulting company. What it essentially requires is that the explanation of the assessee, on how is it directly relatable to the units transferred to resulting company, is to be examined on merits and, if no defects are found in the same, it is to be accepted. These explanations cannot be brushed aside on the ground that separate books of accounts are not maintained, which is not a condition precedent for invoking section 72A(4)(a) anyway, or that these explanations were not furnished at the time of demerger. Nor, for that purpose, rejection of the explanation on the basis of sweeping generalizations or vague reasons can meet our approval either. The approach adopted by the authorities below, thus, does not meet our approval. We are of the considered view that the matter is required to be remitted to the file of the Assessing Officer for adjudication de novo in the light of our observations above, in accordance with the law, by way of a speaking order dealing with specific justifications for bifurcation, as may be given by the assessee, after giving a fair and reasonable opportunity of hearing to the assessee.
-
2017 (12) TMI 1471
Disallowance u/s.14A r.w.Rule 8D - Held that:- As assessee's own interest free fund of the assessee are much more than the investments made. Hence, no disallowance under Rule 8D(2)(ii) is warranted.We direct the Assessing Officer to re-compute disallowance under Rule 8D 2(iii) in same terms by excluding strategic investments. Accordingly, Ground No. 1 raised in appeal by assessee is partly allowed in the terms, aforesaid. Disallowance of employees contribution to ESIC and PF - delayed payment on ESIC and PF - contention of assessee is that amount has been deposited before due date of filing return of income - Held that:- Hon’ble Jurisdictional High Court in the case of CIT Vs. Ghatge Patil Transports Ltd. (2014 (10) TMI 402 - BOMBAY HIGH COURT) has held that where contributions to ESIC and PF are made before due date of filing return of income, the assessee is eligible to claim benefit of the same. It has not been disputed by Revenue that the assessee has deposited the amounts towards ESIC and PF before due date of filing return of income. - Decided in favour of assessee. Disallowance of donations made for celebration of Ambedkar Jayanti, Construction of dome to Darshak Tarun Mandal and for distribution of school accessories - allowable business expenses - Held that:- In assessment year immediately proceeding the assessment year under appeal, the assessee had made donations to various such organizations. The Coordinate Bench of the Tribunal held that such donations are allowable expenditure under section 37(1) of the Act. - Decided in favour of assessee Disallowance u/s.43B on account of leave encashment - Held that:- The nature of disallowance in the assessment year under appeal is similar to the one adjudicated by Tribunal in assessee’s own case in immediately preceding assessment year. In line with the earlier order of Co-ordinate Bench in assessee’s own case for assessment year 2008-09, we direct the Assessing Officer to allow the claim of assessee to the extent of permissible under the provisions of section 43B(f) of the Act. Disallowance of various payments covered u/s.43B - Held that:- A perusal of impugned order shows that assessee had failed to furnish details of input tax credit adjustment before the Assessing Officer. The assessee filed a chart containing the working of CENVAT credit along with service tax return before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) citing provisions of Rule 46A of the Income Tax Rules refused to accept the additional evidences filed by assessee. In our considered view, this issue needs a re-visit to the file of Assessing officer. The assessee is directed to furnish the details of input tax credit and adjustment claimed against it before the Assessing Officer. The Assessing Officer after examining the same shall decide this issue afresh, after affording opportunity of hearing to the assessee, in accordance with law. Disallowance of gifts to various organizations on festivals - Held that:- Expenditure towards such gifts and donations and held the same to be allowable under the provision of section 37 of the Act. The Assessing Officer has partly accepted the gifts/donations made by assessee and Commissioner of Income Tax (Appeals) upheld the same. Following the order of Co-ordinate Bench, we hold that contributions and donations made by assessee to various organizations on festivals as allowable expenditure under the provision of section 37 of the Act. - Decided in favour of assessee Disallowance of provision for unapproved sales - Held that:- The fact that the provision is created on last day of the year and is reversed in the subsequent assessment year has not been rebutted by the department. In effect the provision created in earlier year is offered to tax in the next assessment year would not result in any revenue loss. The assessee is creating this reserve in accordance with AS-7. Further, the provision is only to the extent of 1% of unapproved sales, which appears to be quiet reasonable in the facts of the case. The entire transaction is revenue neutral. Since, the Revenue at no point of time has raised doubt that the provision created by assessee in the preceding year has not been reversed in the immediately subsequent assessment year, coupled with the fact that assessee is following this method of accounting regularly and the Department has accepted the same in preceding and subsequent assessment years, we find no reason to sustain such disallowance. Disallowance of interest u/s. 36(1) (iii) - S=sufficeincy of own funds - Held that:- A perusal of the balance sheet and break up of the interest free funds/own funds available with the assessee show that the assessee is having interest free funds to the tune of ₹ 665.35 Crores. The extent of loans advanced to sister concerns and other associate concerns is not emanating from the orders of the authorities below. The ld. AR of the assessee has also not furnished the amount advanced as loan to sister concerns/ associate concerns. Thus, we are of considered view that this issue needs a re-visit to the file of Assessing Officer. The Assessing Officer shall examine the extent of loans under question vis-a-vis availability of interest free own funds of the assessee - Decided in favour of assessee for statistical purpose. Disallowance on account of non-collection of share premium from employees under ESOP scheme - Held that:- This issue is identical to the one adjudicated by the Co-ordinate Bench in assessment year 2008-09 as held that issue of allowability of ESOP expenses on the date of exercising of option by the assessee was held to be an ascertained liability and not contingent liability by the Special Bench of Bangalore Tribunal in Biocon Ltd. Vs. DCIT (2013 (8) TMI 629 - ITAT BANGALORE). The Special Bench held the said discount on ESOP was to be allowed as deduction under section 37(1) of the Act, during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option - Decided against revenue Addition on account of rental income - Held that:- Commissioner of Income Tax (Appeals) accepted the contentions of assessee and deleted the addition made on account of rental income to the extent it is pertains to next year i.e assessment year 2010-11. The ld. DR has not been able to controvert the well reasoned findings of First Appellate Authority. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) Addition on account of difference in share of profit received from M/s. Phoenix Venture - Held that:- The appellant being one of the members of the AOP M/s. Phoenix Ventures, had received the share of profit as well as professional fees. Portion of the receipts were capitalized and added to the cost of the asset and the balance was debited to the P & L account by M/s. Phoenix Ventures, whereas the appellant has credited the entire amount in the P & L account and this is the reason for the difference which was not appreciated by the AO. In view of this, the AO is directed to delete the addition made. Revenue has not been able to controvert the findings of Commissioner of Income Tax (Appeals) above.
-
2017 (12) TMI 1470
Additions on account of unexplained investment in money lending business - Held that:- We are of considered view that no addition can be made in the hands of assessee in absence of any corroborative evidence to link some suspicious entries found in the books of third party. As has been pointed earlier that mere recording of names closely resembling to the name of assessee in the books of Soni group does not give rise to presumption that the said names are pseudonym/coded names of assessee unless live connection is drawn by way of supporting evidence. Here, we would like to mention that before absolving the assessee completely from the additions made on basis of alleged cash transactions, we direct the Assessing Officer to re-examine the seized material. If the Assessing Officer finds that any transaction in cash is recorded in the name of assessee i.e. Nanchand B Shah or Nanchand Bhogilal Shah, the Assessing Officer may make addition of the same, in accordance with law. Before making any addition, if circumstances so arise, the Assessing Officer shall grant opportunity of hearing to the assessee, in accordance with law. Hence, the impugned order is set aside and appeals of assessee are allowed in principle, subject to the aforesaid directions. Alternate plea of allowing benefit of telescopy - In case the Assessing Officer during re-examination of seized material comes across any cash transaction recorded in the name of assessee, as has been specified above, the issue of telescopy may arise. In that eventuality, the alternate plea of the assessee would not be tenable as the date on which cash ₹ 40 Lacs is seized is subsequent in time vis-a-vis the time of investment. Moreover, the assessee has already offered ₹ 40 lacs cash seized in the names of his various concerns, now adjusting the same against cash transactions with Soni Group, if any, would not arise.
-
2017 (12) TMI 1469
Penalty u/s 271B - books of accounts were not submitted to CA prior to 30.09.2005 - reasonable cause for delay - Held that:- Assessee has not explained before us the reasonable cause for delayin getting the tax audited done. The ld. Counsel only stated that the tax audit report was signed on 21.12.2005 and the return was filed on 28.12.2005 and explained us that tax auditor delayed the accounts, is not acceptable in view of the tax auditor certificate mentioned above.The assessee has explained the delay between 21.12.2005 to 28.12.2005 which is not relevant here, because this is the further delay after getting the delayed tax audit report. The counsel for the assessee has failed to explain the delay between 30.09.2005 to 21.12.2005 therefore, we are of the view that it is failure on the part of the assessee. Unless it is proved that there was reasonable cause for the failure, there is no escape from the imposition of penalty. The assessee has failed to submit the relevant papers/documents to the CA to get the accounts audited. The assessee has failed to explain the delay in submitting the books of accounts to his CA. - Decided against assessee.
-
2017 (12) TMI 1468
Penalty under section 271(1)(C) - defective notice - Held that:- As decided in M/s MANJUNATHA COTTON AND GINNING FACTORY & OTHS. case [2013 (7) TMI 620 - KARNATAKA HIGH COURT] it is apparent that if the penalty proceedings have initiated on one limb and if the same are confirmed on another limb it is not proper. In the present case penalty proceedings are initiated for furnishing of inaccurate particulars of income and the penalty would have been levied stating concealment of income as well as furnishing of inaccurate particulars of income, both the charges. Therefore, it is apparent that the penalty levied by the Ld. assessing officer is vague, ambiguous and not specific. In view of this we cancel the penalty levied by the Ld. assessing officer and confirmed by the Ld. CIT (A) of ₹ 222142/– under section 271 (1) (C) of the act. In the result solitary issue raised in the appeal of the assessee is allowed.
-
2017 (12) TMI 1467
Bogus purchases - profit estimation - Held that:- We have given a thoughtful consideration to the order passed by the CIT(A), and find that he had by way of a very well reasoned order restricted the addition in the hands of the assessee to the extent of 12.5% of the aggregate of the suspected bogus purchases. We find no reason to take a different view, thus uphold the same. The Ground of appeal no. 1(i) &1(ii) are dismissed.
-
2017 (12) TMI 1466
Levy of penalty u/s.271(1)(c) - no clear satisfaction recorded by the AO at the time of initiation of penalty proceedings - Held that:- AO is found to have used “or” at one place, “and” at other place and “concealed the particulars of your income” at one place and “furnished inaccurate particulars of such income” at other place etc.. Nowhere, the correct limb of clause (c) to section 271(1) of the Act is clearly referred to. In view of the documents (assessment order/penalty order/notices u/s.274) in our considered view, without going into the merits of the penalty as well as the nature of additional income offered by the assessee in the return of income files u/s.153A. The ambiguity in the mind of the AO is obvious at the time of initiation as well as levy of penalty proceedings. - Decided in favour of assessee.
-
2017 (12) TMI 1465
Adjustments made under section 10B(7) - restriction of claim of deduction under section 10A - profit margin shown by the assessee was higher than profit margin of the comparables selected by the assessee in its TP study report - Held that:- The issue arising in the present appeal is identical to the issue before the Tribunal in the case of M/s. Honeywell Automation India Ltd. Vs. DCIT (2015 (3) TMI 494 - ITAT PUNE)and following the same parity of reasoning, we find no merit in the orders of authorities below in restricting the claim of deduction under section 10A/10B of the Act and held that there is no merit in re-computing the deduction under section 10A of unit No.2, Pune in accordance with the provisions of section 10A(7) of the Act. Accordingly, we reverse the same and delete addition.
-
2017 (12) TMI 1464
Penalty proceedings u/s 271(l)(c) - levy penalty immediately after the culmination of the assessment proceedings - Held that:- Once the statute provides an assessing authority the discretion to either levy penalty u/s 271(l)(c) immediately after the assessment or after waiting for the outcome of appellate proceedings, it is expected that such a discretion would be carefully exercised by the relevant assessing authority. In the instant case, the facts on record clearly establish that the AO deemed it fit not to levy penalty immediately after the culmination of the assessment proceedings. Show-cause notice dated 12th April, 2017 issued by the AO is also silent on the point as to why suddenly the case warrants levy of penalty without awaiting the outcome of the first appellate proceedings. The reason behind separate limitations as prescribed by the legislature need be understood in this context. There may be a case where the discretion to levy penalty will be in order where immediately after the assessment, the AO chooses to levy penalty, because in his view the material in assessment proceedings requires such an action. I Moreover, taking a prima facie view in the matter, we also find that if at all the AO wanted to levy the penalty without waiting for the orders of the Tribunal in quantum appellate proceedings then, as per the provisions of section 271(l)(c), such an order could only have been passed by 30th April, 2014 and 30th April, 2015 for AY 2006-07 & AY 2007- 08 respectively. Moreover, we find that even equity demands stay of penalty proceedings be granted in the instant case. Provisions of section 275 adequately safeguard the interest of revenue and hence even after the disposal of the appeals by the Tribunal, adequate time is available with the AO for levy of penalty. Thus we grant a stay against penalty proceedings u/s 271(l)(c) of the Act initiated by the AO in the instant case, vide show cause notices dated 12th April, 2017, for a period of six months or till disposal of appeals whichever is earlier.
-
2017 (12) TMI 1463
Revision u/s 263 - addition of gifts - proceedings u/s 153A - Held that:- Since no information relating to the impugned gifts was found during the course of search the Assessing Officer could not have made any addition vis-à-vis the said gifts in the order passed u/s 153A and, therefore, the Ld.Pr.CIT cannot now hold the order of the Assessing Officer as erroneous for not making addition on account of the same. The Hon’ble Delhi High Court in the case of CIT vs Mahesh Gupta(2016 (12) TMI 684 - DELHI HIGH COURT) has in identical factual matrix, where the order sought to be revised was passed u/s 153A and the addition sought to be made was not based on any incriminating material found during search, held the assumption of jurisdiction by the CIT u/s 263 as bad - Decided in favour of assessee.
-
Customs
-
2017 (12) TMI 1461
Maintainability of petition - prohibition of petitioner from working in all sections of the Mumbai Customs Zones I, II & III pending post-decisional hearing by the competent authority - Held that: - the petitioner has ample opportunities available in law to resist the action - also, the alternate and equally efficacious remedy of approaching the Customs, Excise and Service Tax Appellate Tribunal can be also availed of. In the circumstances, the Writ Petition should not be entertained - petition dismissed being not maintainable.
-
2017 (12) TMI 1460
Jurisdiction - provisional release of the seized vessel - Whether the Tribunal has jurisdiction to entertain an Appeal against a letter allowing provisional release of Vessel “Sagar Fortune” under Section 110A of the Customs Act, 1962? Held that: - To our mind the communication / letter dated 25th September 2017 is a decision taken by the adjudicating authority and is appealable to the Tribunal under Section 129(1)(a) of the Act - in the cases of Shiv Mahal Textiles [2012 (12) TMI 998 - HIGH COURT OF RAJASTHAN] the Revenue has successfully urged before the Court that an appeal from an order passed under Section 110 A of the Act is available. Appeal dismissed - decided in favor of respondent-assessee.
-
2017 (12) TMI 1459
Permission to re-export the cargo - jurisdiction of CESTAT to pass interim orders for permitting re-export of the cargo imported by the petitioner - the cargo imported by the petitioner has been defined as spurious, which is not on account of the fact that it is unfit for human consumption and is on account of the fact that there is a mis-match in the batch number of the products, which consists of four alphabets and six numericals - Held that: - the first option to be given to the petitioner/importer is for re-export of the product and it is only thereafter the respondent could exercise the power to order for confiscation of the consignment. This option has not been given to the petitioner. This Court is of the view that such option should be extended to the petitioner, as otherwise, it may lead to civil consequences. Therefore, to that extent, this Court is inclined to interfere with the impugned order. The finding rendered by the respondents rejecting the petitioner's request for re-export of the cargo is set aside and the respondents are directed to permit the petitioner to re-export the cargo within a period of one month from the date of receipt of a copy of this order - petition allowed in part.
-
2017 (12) TMI 1458
100% EOU - Benefit of N/N. 13/1981 dated 9th February, 1981 - Misdeclaration of imported goods - Old and Used Diesel Car Engines - Old and Used Car Bonnets - redemption fine - penalty. Held that: - the reasoning of the Tribunal cannot be faulted inasmuch as there was no factual verification of the market value. No attempt was made by the revenue to ascertain the local market value of the used engines and in absence of such attempt to obtain market value, the estimation of the local market value is suspect. There is no substance in Mr. Jetly's contention that additional evidence ought not to have been allowed. Once the department failed to object to admission of document and its contents, it was not open for the revenue to question the impugned order on the basis that the additional evidence ought not to have been allowed. Even otherwise, it is seen that the documents sought to be introduced were not new documents which were not available with the authorities below but were only produced before the Tribunal at the time of disposal of the appeals since they were already part of the documents filed before the authorities below. Appeal dismissed - decided against appellant.
-
2017 (12) TMI 1457
Benefit of Advance license - discharge of export obligation - non-production of documents to establish the discharge of export obligation - Held that: - the very basis for the differential demand confirmed against the petitioner in Exts. P2 and P5 orders has been removed - in view of the Export Obligation Discharge Certificate issued to the petitioner by the 3rd respondent, the petitioner shall be deemed to have discharged his export obligation in terms of the advance licence granted to him - petition allowed.
-
2017 (12) TMI 1456
Applications u/s 127B(1) of the CA, 1962 - applications were rejected by the CCESC on the ground that there does not appear to be any meeting ground between the assertions of the applicant and the Revenue and in such a situation the case is not amenable for settlement. Held that: - the essential requirement for the CCESC to consider the application in terms of Section 127B of the Act is that the applicants should make a full and true disclosure of all material facts relevant to their duty liability, which had not been earlier been disclosed, and also make disclosure of the manner in which the said liability was incurred - the Court is of the view that in the present case the CCESC ought not to have declined to examine the petitioners applications only because there was no meeting ground between the petitioners and the revenue. The applications filed by the petitioners before it are restored to its file to be taken up for fresh hearing and decision on merits.
-
2017 (12) TMI 1455
Penalty u/s 112 of CA - smuggling - It appeared that the Pashmina shawls in question was imported into India contrary to prohibitions imposed under the Customs Act and were liable to confiscation - Held that: - the allegations in the show cause notice are only presumptive. There is no evidence on record by which this appellant can be linked with the seized Pashmina shawls at Barhni LCS - almost all the goods were found to be legally imported. The seizure of a small part of the goods originally seized on the belief of being smuggled is bad and not tenable in view of adequate evidence led by the appellant - confiscation with penalty set aside - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1454
DEPB benefit - whether the Customs Authority has the power to cancel the registration of DEPB, as it appeared to them that the goods exported by the appellants were not covered under Standard Input Output Norms (SION) and as per Foreign Trade Policy and thus DEPB credit for the exported goods appeared to be not admissible to them? - Held that: - The power to determine and modify DEPB credit vests only with DGFT Authorities. Customs Authorities duty is to verify the exporter's declaration, quantity and value of export products. Only DGFT decides to grant credit, the Customs Authorities cannot modify the credit. As per the Government policy, the jurisdiction to initiate recovery of excess credit or wrong credit lies with the DGFT. It is for the Customs to get in touch with the DGFT Authorities to initiate action for recovery of the excess credit availed by the appellants - cancellation of registration of the DEPB Credit by the Customs authorities set aside - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1453
100% EOU - non-fulfillment of export obligation - appellant were unable to procure the requisite foreign exchange in the initial period of LOP, fixed by the Development Commissioner - Held that: - the Central Board of Excise and Customs vide its Circular No. 21/95-Cus., dated 10-3-1995 has clarified that the liability of customs duty on goods imported by 100% EOU arises either at the stage of the unit being debonded or if any of the conditions of customs notification stand violated or remain unfulfilled - Admittedly in the present case, the Development Commissioner has extended the EOU status of the appellant till 2019 and hence it is not only premature on the part of the adjudicating authority to confirm the demand but is also without any basis - appeal allowed - decided in favor of appellant.
-
Corporate Laws
-
2017 (12) TMI 1452
Voluntary winding up - Held that:- The Court having considered the contents of the present report and having considered that as stated in the report, since the Voluntary Liquidator has already discharged his functions and the Official Liquidator having found that the affairs of the company does not seem to have been conducted in the manner prejudicial to the interest of its members, as also to the public interest, the prayers sought in the present report could be considered. In view of above, the company is ordered to be dissolved in terms of Section 497(6) of the Act. The Voluntary Liquidator shall deposit the amount of ₹ 10,000/- being expenses relating to filing of the present report with the Official Liquidator within a period of two weeks from today. The Voluntary Liquidator shall also preserve the books of accounts of the company for a period of five years from today.
-
2017 (12) TMI 1450
Arbitration proceedings - whether the dispute is arbitrable and as per SHA the same should be referred to Arbitration? - exists valid arbitration agreement between the parties? - Whether dispute cannot be referred to arbitration even though some of the respondents are not a party to SHA? - Oppression and mismanagement - Held that:- It is clear that even a non-signatory parties to some agreements can pray and be referred to Arbitration provided they satisfy the prerequisites under sec 44 and 45 of the Arbitration Act 1996. Therefore, it cannot be said that the matter cannot be referred to arbitration because respondents No. 3 to 7 in the CP were not a party to SHA. Since the respondents, No. 3 and 4 are the nominee directors of Rishima, the respondent No. 2 and R-5 to R-7 are also nominee directors. Therefore, on account of non-party to the arbitration agreement, it cannot be said that matter cannot be referred to arbitration. On the above basis, it is clear that the alleged dispute is relating to affirmative voting right and Article 112 of the AOA which is covered by SHA and dispute redressal mechanism is provided in SHA and under Article 122 of the AOA. Therefore, there exists valid arbitration agreement between the parties and respondents No. 3 to 7 are only nominee directors. Thus, they are not a necessary party in the case, and their non-party to SHA will not in any way affect the reference to arbitration. It is also clear from the above that petition under Sec. 241 and 242 is only dressed up a petition with a purpose to bypass the arbitration agreement. So, the issues No. l, 2 and 4 are decided in the affirmative in favour of the petitioner. Regarding the issue No. 3, it is decided that the dispute is arbitrable and should be referred to arbitration and only on the ground of that some of the respondents are not a party to SHA, application for referring the matter to arbitration cannot be refused.On the above basis, it is clear that the interim application filed by the applicant deserves to be allowed.
-
Insolvency & Bankruptcy
-
2017 (12) TMI 1451
Corporate insolvency process - ‘existence of a dispute’ - Held that:- Having heard learned counsel for the appellant, while we agree that initiation of ‘Corporate Insolvency Resolution Process’ under ‘I&B Code’ cannot be nullified by any order passed by SEBI nor can be a ground to reject an application under Section 9 of the ‘I&B Code’ but as there is an ‘existence of dispute’ with regard to the invoices raised by the Appellant-’Operational Creditor’, we hold that the application under Section 9 of the ‘I&B Code’ was not maintainable. - Appeal dismissed.
-
Service Tax
-
2017 (12) TMI 1444
Levy of service tax - construction contract executed on turnkey basis - indivisible contracts - Held that: - Upon appreciation of evidence, the tribunal has come to the conclusion that there is an indivisible contract. On the aspect as to whether Service Tax can be levied in respect of composite contract or indivisible contract, the Hon'ble Supreme Court in Commissioner of Central Excise & Customs, Kerala Vs. Larsen & Toubro Limited [2015 (8) TMI 749 - SUPREME COURT] has held that assessees are correct in their submission that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. Upon consideration of the clauses in the contract, the tribunal has arrived at a categorical finding of fact that there is an indivisible contract. No concrete material, contra, is placed, before us for reversal of such finding. Decided against Revenue.
-
2017 (12) TMI 1443
Penalty - the appellant did not pay the service tax and it was only paid when the intelligence visited the premises of the appellant - Held that: - the appellant paid the service tax along with interest during investigation and before the issue of SCN. The appellant entertained a bona fide belief that their activities are not liable to service tax during the period in dispute and it is only on 06/11/2006, the Board clarified the issue - there cannot be a suppression with intent to evade tax when the assessee entertained a bona fide belief on the basis of certain decisions in favor of the assessee - penalty set aside - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1442
Voluntary Compliance Encouragement Scheme (VCES) - rejection of the application - Appellant submitted that, merely because the appellant had been issued with a notice for the earlier period, would not mean that the First Proviso to subsection (1) of Section 106 of the Finance Act, would come into operation - Held that: - identical issue decided in the case of Durgapur Diesel Sales & Service & Another Versus Superintendent (Service Tax) Central Excise Durgapur – I Division & Others [2015 (2) TMI 50 - CALCUTTA HIGH COURT] where it was held that The second proviso envisaged an embargo in making a declaration even for a subsequent period on the same issue - appeal dismissed - decided against appellant.
-
2017 (12) TMI 1441
CENVAT credit - consultancy services - denial on the ground that the project for which consultancy was received was fully abandoned without its implementation - Held that: - CENVAT credit once rightly availed is indefeasible and subsequent development of abandoning of plant will not make the appellant liable to reverse the CENVAT credit which was rightly availed by them - the credit was rightly availed during the period 2004-06 for the purpose of availing the Management Consultancy Service received by the appellant during the said period - credit remains allowed - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1440
Rejection of VCES application - the Revenue noticed that the appellant has failed to declare his service tax liability properly and by-alleging substantial misdeclration of service tax dues in the VCES declaration, a SCN was issued - Held that: - the total amount of consideration received by the appellant has not been found to be any different from what was declared - Revenue has not made out a case of substantial misdeclaration in this case. They have not brought on record any contract or document which indicates that the appellant has not made full declaration of the service tax liability for the disputed period. The Revenue has only taken a different interpretation as far as the classification of services. This cannot tantamount to substantial misdeclaration - tax liability accepted in the VCES by the appellant is not being interfered - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1439
Transmission & distribution of electricity - N/N. 45/2010-ST dated 20.07.2010 - negative list - POT rules - Held that: - the adjudicating authority has not dealt with the assessee’s stand of the services being covered by the negative list and as such his views are not available - the stand of the Revenue is that the consideration received subsequent to 01.07.2012 would also be taxable is required to be adjudged and examined in the light of the point of Taxable Rules, 2011 - matter needs to be remanded to the adjudicating authority for fresh decision - appeal allowed by way of remand.
-
2017 (12) TMI 1438
Penalties u/s 76 and 77 - delayed payment of tax with interest - Held that: - since there was not intent to evade duty involved, tax with interest was paid although after delay - penalty u/s 77 dropped by invoking section 80. Penalty u/s 76 - Held that: - since the appellant has paid the dues after a lapse of longer period, therefore he is liable to pay the penalty under Section 76 as held by the original authority - penalty u/s 76 upheld. Appeal allowed in part.
-
Central Excise
-
2017 (12) TMI 1437
CENVAT credit - relevant documnets for clearing the goods - inputs in question were duly received at Malanpur Unit and used in the manufacture of the Plastic Laminates and Paper Laminates which were removed by the Appellant from Malanpur Unit on payment of appropriate Central Excise Duty under paper invoices to the buyers - Held that: - in absence of any provision akin to erstwhile Rule 57GG wherefrom provision of gate passes were omitted by N/N. 15/1994 dated 30/03/1994 and invoices were brought in their place as valid documents under which goods could be cleared from the factory by the manufacturer or could further be passed on by the dealer to the third party; and that N/N. 15/1994 the Government having not issued the instructions replacing gate passes with the invoice as valid documents allowing endorsement of the invoices from availing Cenvat Credit and the fact that the unit at Haridwar is not operating under the Cenvat Scheme, their final product being exempted, we perceive that no substantial question arises for consideration - appeal dismissed.
-
2017 (12) TMI 1436
Maintainability of appeal - Penalty - Valuation - Held that: - the decision in the case of Commissioner of Customs, Central Excise and Service Tax, Indore Versus Avtec Limited [2017 (12) TMI 1424 - MADHYA PRADESH HIGH COURT] shall apply mutatis-mutandis in the present case also, where it was held that if multiple questions are involved in the matter, then the department has to raise all these issues before the Supreme Court by filing an appeal under Section 35L of the Central Excise Act, 1944 - present appeal also dismissed following the above case.
-
2017 (12) TMI 1435
Clandestine removal - statement of some of the supplier of fabric were recorded who admitted that they are receiving processed fabric without payment of excise duty and some of the supplier denied the receipt of goods without payment of duty - Held that: - Certain documents were resumed but there is no independent witnesses to say that these documents have been recovered from the premises of the appellant. Therefore, in the absence of panchnama, the documents recovered from the possession of the appellant cannot be relied upon as a piece of evidence as per the supplementary instructions. Further, the revenue has relied upon the various statements of suppliers and the appellant. Although, some of the statements have been retracted but apart from that, the statements were not examined in chief during the course of adjudication in terms of Section 9D of the Central Excise Act, 1944. Therefore, same cannot be relied upon. Demand not sustainable - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1434
CENVAT credit - Return of inputs for rectification - applicability of Rule 3(5) of CCR, 2004 - Held that: - the goods were returned to the supplier for rectification but the appellants have not produced any proof that the repaired goods were received back - further, the appellants have not followed the procedure as prescribed in Rule 16 of the CCR, 2004. Demand of differential duty upheld - penalty u/r 25 is set aside as the appellant is a state government undertaking and there is no intention to evade duty on the part of the appellant. Appeal allowed in part.
-
2017 (12) TMI 1433
N/N. 6/2006-CE - international competitive bidding - case of appellant is that the goods were meant only for supply against international competitive bidding and hence, asserted that thy will be eligible for the benefit of N/N. 6/2006 - Held that: - the Project Authority Certificate available on record, indicates that the goods under dispute are meant to be supplied by the appellant to the power plant being executed by Jindal Power Ltd. for the mega power plant at Raigarh. This satisfies the main condition of the N/N. 6/2006 (Sl. No.91) - in similar circumstances, the benefit of alternate N/N. 21/2002 Cus. has been held to be allowable in the decision of the Tribunal in the case of Kent Introl Pvt. Ltd. [2014 (2) TMI 633 - CESTAT MUMBAI], where it was held that So long as the goods are exempt, the condition to be satisfied by the domestic suppliers is that they should be supplied under International Competitive Bidding which the appellant has fulfilled in these appeals and is eligible for exemption - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1432
Finalisation of provisional assessment - adjustment of excess paid duty with short paid duty - Held that: - the adjustment of excess payment of duty against short payment thereof during the provisional assessment period has been ordered before determining the ultimate demand or refund, in the light of the Hon'ble High Court of Karnataka decision in the case of Toyota Kirloskar Auto Parts Ltd. [2011 (10) TMI 201 - KARNATAKA HIGH COURT] - the impugned order set aside and matter remanded back to the original authority to pass de novo order - appeal allowed by way of remand.
-
2017 (12) TMI 1431
Clandestine removal - entire case of the Revenue is based upon the shortages of coloured tobacco detected at the time of their visit in the appellants’ factory - Held that: - It was not possible to convert 630 kgs coloured tobacco into marketable final product i.e. branded chewing tobacco and remove it within one day. It is settled law that he who asserts must prove his assertion by producing cogent evidence and/or producing witness. No evidence has been adduced to prove allegation of clandestine removal, therefore, even otherwise, the demand of duty and imposition of penalty are not justified. Apart from the shortages, there is virtually no evidence on record to show the clandestine activities of the appellants - In the absence of any identification of the buyers, transporters, receipt of consideration etc., the findings of the clandestine activities cannot be upheld. Appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1430
CENVAT credit - inputs not received - basic allegations in the Show Cause Notice was that M/s Arora Aromatics did not receive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu & Kashmir to the appellants factory and therefore, Cenvat credit was not admissible. Held that: - The present system of assessment in Central Excise is record based. The Officer assessing the duty is not required to be present when the goods are being manufactured to witness the process of manufacture. The adjudication is to be done on the basis of evidence produced before the Adjudicating Authority. As per Evidence Act evidence in totality is to be taken into consideration and therefore, finding recorded in the impugned Order by the Original Authority who passed the said Order dated 29/01/2010 is bad in law. The Original Authority did not understand the process either of assessments or of adjudication. Further the investigations were not undertaken to find out wherefrom the inputs were received by the appellant for the goods they manufactured and on which they paid duty and which were exported, if they had been received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs. The Original Authority was pre-determined to adjudicate the matter in the manner in which he has decided the issue and he was not just and fair and did not discharge his duty as an independent adjudicator. Demand set aside - appeal allowed - decided in favor of appellant.
-
2017 (12) TMI 1429
Refund claim - CBEC Board’s Circular No.120/01/2010-ST dated 19/01/2010 - Whether the Commissioner (Appeals) have rightly set aside the impugned Order-in-Original and remanded the matter back with the direction to consider the matter afresh on the basis of all the documents/information, by giving opportunity of hearing? Held that: - CBEC Board’s Circular No.120/01/2010-ST dated 19/01/2010 categorically clarified that irrespective of when the credit was taken, the refund should be granted if otherwise in order - there is no error in the finding of the Learned Commissioner (Appeals) wherein he have directed the Adjudicating Authority to reconsider the refund claim in accordance with law, more particularly in view of Board Circular which have been issued subsequent to the passing of the Order-in-Original - appeal dismissed - decided against Revenue.
-
2017 (12) TMI 1428
100% EOU - CENVAT credit - whether Cenvat Credit taken by them can be disputed by the Revenue without issuing show cause notice under the provisions of Rule 14 of CCR, 2004 read with Section 73(i) of the Finance Act? - Held that: - the eligibility to Cenvat Credit cannot be challenged without issue of SCN under the CCR as the provisions of the FA read with CCR provide for an issue of SCN under Rule 14 of CCR, 2004 read with Section 73(i) of the Finance Act or Section 11 A of the Excise Act - In the instant appeals admittedly no SCN have been issued for disallowance of Cenvat Credit - appeal allowed - decided in favor of appellant.
-
CST, VAT & Sales Tax
-
2017 (12) TMI 1427
Principles of natural justice - It is the case of the petitioners that it is only when the second petitioner received the notice of demand dated 15.11.2017 together with the earlier notices that the petitioners came to know about the impugned orders having been passed and the demand raised by the third respondent on behalf of the respondent State authorities - Held that: - the matter could not be proceeded before the assessing authority, the court is of the view that it would be in the interest of justice if the ex parte orders dated 30.8.2013 and 30.9.2013 are quashed and set aside and the matter is remanded to the assessing authority to decide the same afresh after affording the petitioners an opportunity of hearing as well as producing necessary documents in support of their case - petition allowed by way of remand.
-
2017 (12) TMI 1426
Revision of assessment - Levy of tax @ 5% to 100% EOU - absence of documentary proof - disallowance of exemption of turnover - Held that: - the necessity to set aside the impugned assessment orders does not arise, as, on the date of passing of the assessment orders, the documents now in the possession of the petitioner were not placed before the Assessing Officer. Therefore, the Assessing Officer cannot be faulted for having completed the assessment in the manner done so in the impugned assessment orders. However, the claim for exemption is an incentive granted to a local manufacturer when he effects sales to 100% export oriented units. Therefore, the claim for exemption should not be denied on technicalities, but the claim has to be verified and if the petitioner produces necessary documents to the satisfaction of the Assessing Officer that they effected sales to 100% export oriented units, then the benefit of exemption should accrue to the petitioner. The Assessing Officer is directed to afford an opportunity of personal hearing to the petitioner, peruse the documents and if the documents are in order, sanction the claim for exemption by passing revised orders - petition allowed by way of remand.
-
2017 (12) TMI 1425
Levy of tax - Whether the 'export sale' will also be a 'sale' which does not attract the levy of tax under Section 3(4) of the Act? - Held that: - similar issue decided in the case of Tube Investments of India Ltd. (Formerly known as M/s. TI Diamond Chain Ltd.) Versus The State of Tamil Nadu, represented by the Commercial Tax Officer [2010 (10) TMI 938 - MADRAS HIGH COURT], where it was held that Section 3(4) of the Act will have no application since situs of the export sales of the petitioners for the purpose of said Section was the State of Tamilnadu and by virtue of the said factual position, the applicability of Section 3(4) stands excluded for the exigibility of tax - tax revision dismissed.
-
Indian Laws
-
2017 (12) TMI 1449
Smuggling - Heroin - seizure of contraband item - offence under Section 8(c) read with 21(c) of the NDPS Act - acquittal of offences - Held that: - As regards the contention that there was violation of Section 42 of the NDPS Act, this Court did not find any infraction. In fact, Section 42 of the NDPS At will not apply to this case and only Section 43 of the NDPS Act will apply, since the interception and seizure was in a public place. Applicability of provisions of Section 50 of the NDPS Act - Held that: - it is seen from the evidence of Krishnamoorthy [P.W.1] and Chandran [P.W.5] that when the Officers intercepted and introduced themselves, Ibrahim [A1] came forward to hand over the travel bag [M.O.2] from Shakila [A2] and took out heroin from inside the bag and gave it to the Officers - the bag was with Shakila [A2] and Ibrahim [A1] took the bag from Shakila [A2] and handed over the same to the Officers. - provisions of Section 50 of the NDPS Act will not apply to the facts and circumstances of the case. Confession statement of the appellant - Held that: - when the accused was produced before the Remanding Magistrate, he did not complain of ill-treatment by the Officers and the Magistrate has recorded 'No Complaint' on the Remand Application [Ex.P.11] - this Court has no reason to believe that the accused was subjected to torture and the confession was obtained thereafter. That apart, this is not a case based on circumstantial evidence. In other words, the culpability of the appellant is not fixed merely on the confession statement. Even without the confession statement, the possession of the drug has been established by the prosecution through cogent evidence. The trial Court had acquitted Shakila [A2], because the evidence showed that she was merely pulling the trolley bag [M.O.2], which was given to her by Ibrahim [A2] and when the Officers intercepted, it was Ibrahim [A1], who took out the contraband from the trolley bag and handed over the same to the Officers - appeal dismissed being devoid of merits.
-
2017 (12) TMI 1448
Refund of license fee paid - Termination of licenses granted - cancellation of entry permits - termination on the ground of failure of the petitioners to supply information demanded from them and for non payment of licence fee which was claimed with retrospective effect from 1979 - Held that: - the petitioners paid the amount at the rate of 2% without any demur from 4th October 1995. Moreover, there is no challenge to the demand made at the rate of 2% from the aforesaid date. However, for a period prior to the said date, no such demand can be validly made. The demand of licence fee at the rate of 10% from 3rd September 1984 is lawful. However, there is no legal basis for increasing the same to 11% till 26th December 2001. The second respondent is justified in demanding the licence fee at the rate of 15% from 1st July 2007. If there is any subsequent increase, there is no specific challenge to the same in the petition. Thus, the first respondent was entitled to recover licence fee at the rate of 10% of the annual turnover from 3rd September 1984 till 26th December 2001 - The second respondent is justified in demanding the licence fee at the rate of 15% from 1st July 2007. The first respondent was not competent to demand licence fee at the rate of 2% for the period prior to 4th October 1995. The first respondent was entitled to recover licence fee at the rate of 10% of the annual turnover from 3rd September 1984 till 26th December 2001. From 26th December 2001, the recovery at the rate of 11% was lawful. From 1st July 2007, the levy at the rate of 15% is justified. We, therefore, propose to direct the Director of Civil Aviation to appoint a competent officer to make an adjudication on the question whether the petitioners have recovered the aforesaid amounts paid to the first or second respondents, from the companies or airlines which employed the third petitioner. Only if the petitioners satisfy the competent officer that the amounts have not been recovered from third parties, the petitioners will be entitled to refund. Even, the computation of the amount of refund with interest will have to be made by the said officer. The refund will carry interest at the rate of 6% per annum from the respective dates of payment.
-
2017 (12) TMI 1447
Seizure of goods - contraband and other documents - Held that: - Admittedly, in this case, the contraband was not seized pursuant to the search of the person of the accused. It is the specific case of the prosecution that the contraband was seized from amongst churidar materials kept inside the carton [M.O.13] in Rajeshwar Textiles. - The provisions of Section 50 of the NDPS Act will apply only when the contraband has been recovered from the search of the person of the accused and not from a bag or box, etc. There can be no pale of doubt that if an illicit article has been recovered from the search of the person of the accused in violation of Section 50 of the NDPS Act, the recovery will become suspect - In this case, the conviction of the appellant has been for possession of 3.750 kgs of heroin in a carton amongst churidar materials in the premises of Rajeshwar Textiles, where both Madhan [A1] and Chaval [A2] were available at the time of seizure. It was only on their showing, the carton [M.O.13] was opened and searched and heroin was recovered from amongst churidar materials. This Court is unable to countenance this submission, because Exs.P.4 to 10 and M.Os.1 to 7 are not illicit articles per se under the NDPS Act. The possession of these exhibits and material objects, viz., visiting card, delivery receipt, mobile phones, Indian currency, US dollars and Sri Lankan currency will not attract punishment under the NDPS Act, because they do not come within the definition of a Narcotic drug or a psychotropic substance. These documents and material objects will assume significance only as corroborative pieces of evidence and mere possession of that will not entail conviction under the NDPS Act. When a case under Section 420 IPC/135 of the Customs Act is committed to the Special Court, the question is, what procedure the Special Court should follow, whether the procedure under Chapter XIX or the procedure under Chapter XVIII of the Code? This has been answered by Section 44(1)(d) of the PMLA. Section 44(1)(d) states that the trial of the scheduled offence and the trial of the money-laundering case shall be conducted in accordance with Chapter XVIII of the Code. Such a dichotomy cannot happen under the NDPS Act, because the offence under the NDPS Act is not dependent upon the commission of an offence under another enactment, whereas, the offence under Section 3 of the PMLA is dependent upon the commission of an offence mentioned in the schedule to the PMLA. Hence, the comparison is misconceived. This Court does not find any infirmity in the conviction of the appellants by the Special Court warranting interference. As to the sentence, the trial Court has imposed the sentence of 14 years for each charge against the appellants. Interest of justice will be served if the sentence is reduced to 10 years Rigorous Imprisonment, that being the minimum for the convicted offences - the sentence imposed in C.C.No.4 of 2013 by the II Additional Special Court for NDPS Cases, Chennai is reduced to 10 years Rigorous Imprisonment. Appeal disposed off.
-
2017 (12) TMI 1446
Whether the order of acquittal passed by the learned Judicial Magistrate-I, Sankari is liable to be set aside? - cheque bounced - statutory presumption under Section 118 of Negotiable Instrument Act, 1881 Held that: - the trial Court had completely erred in shifting the onus of proof on the appellant/complainant. The trial Court has also misinterpreted the provisions of the Act, as well as the rulings relied upon to arrive at the conclusion of finding on the accused not guilty of the offence under Section 138 of NI Act. Therefore, the order of acquittal passed by the learned Judicial Magistrate No.I, Sankagiri warrants interference by this Court. Appeal allowed.
-
2017 (12) TMI 1445
Hawala transactions - Offence alleged under Sections 420, 465, 467, 468, 471, 477A, 120B of Indian Penal Code 1860 - maintainability of appeal - alternative remedy of appeal - Held that: - the preliminary objection of the respondent has no merits and the petitioner has rightly invoked statutory remedy under Section 397 read with 401 of Cr.P.C., rather than invoking inherent jurisdiction - there is no hesitation in holding that it is not only within the jurisdiction, but is an obligation of this Court to look into as to whether the taking of cognizance and issuance of process was mechanical without there being any prima facie case for bringing home the charge of the offences alleged against the petitioner. The allegations in the case concern hawala, total amount of which as alleged now is likely to be more than ₹ 5000 crores. Bogus bill of entry is the genus of the scam. Total 861 Bills of Entry were under scrutiny by Custom Department, out of which at least 454 bill of entries have been found to be bogus amounting to ₹ 2846 crores - The petitioner is neither director nor any authorized person for any of these seven companies, and there is neither any allegation that any of these companies were formed and controlled by the petitioner, nor that the bank accounts of any of these companies were managed by the petitioner. Neither there is any allegation or material to show that the petitioner was fraudulently sending abroad his undisclosed income by the alleged modus operandi, nor is there any iota of allegation or material to show that he was receiving cash from any person whatsoever to fraudulently send the same abroad i.e. for hawala to earn any commission. In absence of any such tangible material, there is no strong and reasonable basis for such degree of suspicion, that the petitioner may have received commission towards the hawala scam, which can be considered sufficient for proceeding against the petitioner and subjecting him to rigours of trial. I am satisfied that there is no prima facie material against him. The trial Court has committed manifest error in taking cognizance and issuing process against the petitioner for proceedings against him for the alleged offence vide the impugned order, when there is no prima facie material sufficient to proceed against him - petition allowed.
|
