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TMI Updates - Newsletter dated: February 28, 2018


  1. Income Tax : Genuineness of royalty paid to the Director - colorable devise to reduce the tax liability or not - It has been held in the present case that the assessee company did not own the copyright. It was only granted a license to use the same - the payment of royalty for the same is nothing unusual - HC

  2. Income Tax : Special Audit u/s 142(2A) - from the record, it does not appear to be either absence of an opportunity of hearing altogether or the absence of any reasons at all - The same requires no interference under Article 226 - writ petition dismissed - HC

  3. Income Tax : Addition on account of difference in Arm’s Length Price - characterization of the business function of the taxpayer - When the taxpayer is not proved to be a risk bearer in the nature of credit risk, price risk, inventory risk, storage and handling risk etc., it cannot be treated as a trader. - Tri

  4. Income Tax : Addition on the sale of plot of land - The nature of land had gone irreversible change from agricultural to residential plots - this was an adventure in the nature of trade and income has to be taxed under the head ‘profit and gains of business and profession’ - Tri

  5. Customs : Refund of IGST on Export– Invoice mis-match Cases –Alternative Mechanism with Officer Interface

  6. Customs : Customs Broker - Prohibition imposed - The power to frame Rules given to the Board in the various fields enumerated in Clauses (a) to (g) of sub-Section (2) of Section 146 of the Act are not restrictive in any manner, but they provide for different fields for which Regulations can provide for. - HC

  7. Customs : Customs Broker - Prohibition and suspensions - Departmental Authorities including the Appellate Authorities and also the CESTAT under Section 129-A of the Act are better equipped and manned with experts in the field to measure the pros and cons of the cases arising under the Customs Act, 1962 and therefore they are better disposed of to deal with the situations - HC

  8. Customs : The role of the CHA in the Customs procedures is significant. The CHA is expected to safeguard the interest of exporter of the goods as well as the Customs - even though the appellant is guilty, the violations are not so grave as to justify the revocation of the custom licence - Tri

  9. DGFT : Export of all varieties of onions are permitted for export without any MEP or LC w.e.f. 02.02.2018 till further orders.

  10. Service Tax : Penalty - service tax is paid along with interest before issuance of SCN - applicability of Section 73(3) of the FA - levy of penalty waived for more than one reason - Tri

  11. Service Tax : Business Auxiliary Services - the discount passed on by the manufacturer to the appellant cannot be construed as a commission and the same is not the subject matter of levy of service tax. - Tri

  12. Central Excise : Consideration of mega power policy benefits in proportion to the long term PPA tied up in case of provisional mega power projects

  13. Central Excise : Excisability - paper scrap generated in the factory - scrap of paper cannot be considered as a product different from the paper and Mere mentioning in the tariff is not sufficient to attract excise levy - Tri

  14. Central Excise : SSI exemption - denial of benefit of Job work - The requirement of declaration under N/N. 214/86, is not a mere facility. The declaration serves the purpose of shifting responsibility on payment of duty from the hob workers to principal manufacturer who undertakes to pay the duty liability in respect of goods. In the absence of the declaration no liability can be fixed on the principal manufacturer. - Tri

  15. Central Excise : Classification of Canvass and Tarpaulin - parts and accessories of motor vehicle or not - these Tarpaulin would be correctly classifiable under heading 6306 and not as ‘parts or accessories of motor vehicles’ under heading 8708. - Tri



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Case Laws:

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Party Name, Court Name, Date of Decision, Full Text of Headnote, Decision etc.

  1. 2018 (2) TMI 1641

    Rejection of books of accounts - N.P. estimation - Held that - There is not even a single specific instance quoted in assessee s books indicating the stated irregularities. We afforded ample opportunities to DR to refer to any findings on record which could indicate that the same suffered from all the said specific shortcomings. There is no such material referred before us in support of assessment findings. BR BR It thus turns out to be a case wh....... + More

  2. 2018 (2) TMI 1642

    Disallowance u/s 36(1)(iii) - Addition being notional interest on alleged interest free advances given by the assessee - whether the advances were given out of own funds of the assessee - Held that - Since the interest free own funds of the assessee far exceed the interest free advances, the disallowance u/s 36(1)(iii) was not warranted in view of various judicial pronouncements relied on by Learned A. R. Hon ble Allahabad High Court in the case ....... + More

  3. 2018 (2) TMI 1643

    Addition on the sale of plot of land under the head Profits & Gains of Business or Profession - Held that - Although the land was agricultural land and situated in the limits of city of Dausa. It was developed into 23 plots of various sizes and sold during the year. The nature of land had gone irreversible change from agricultural to residential plots, therefore, we are agree with the finding of the ld. CIT(A) that this was an adventure in th....... + More

  4. 2018 (2) TMI 1636

    Addition for depositing the employee s contribution to PF & ESI beyond the prescribed time limit - Held that - If Employee s contribution towards PF, if paid after the due date under the respective Acts but before filing of return of income u/s 139(1), cannot be disallowed u/s 43B or u/s 36(l)(va). The ESI & PF were deposited within the Financial year and hence deduction could not be denied in view of decisions of various courts, ratio of....... + More

  5. 2018 (2) TMI 1637

    Disallowance of export commission - assessee has failed to substantiate its claim that the services were rendered by the commission agent Mrs. Marjan V. Modaress. Who was the wife of the Importer - business expediency of payment of commission - CIT-A deleted the addition - Held that - Though principle of res-judicata does not strictly apply on Income Tax proceedings, yet principle of consistency demands that if any expenditure is allowed in the p....... + More

  6. 2018 (2) TMI 1638

    Penalty u/s 271(1)(c) - defective notice - AO has issued vague notice without striking off inappropriate portion in the notice whether the penalty has been levied for concealment of particulars of income or furnishing of inaccurate particulars of income - Held that - With the view taken by the coordinate bench in the case of M/s. Cenzar Industries Ltd. vs. ITO (2018 (1) TMI 236 - ITAT MUMBAI), we are of the considered view that the penalty procee....... + More

  7. 2018 (2) TMI 1639

    Addition on account of difference in Arm s Length Price - characterization of the business function of the taxpayer - whether the taxpayer is a business support services provider or a trader and the FOB value of goods sourced from India by the taxpayer is to be included in the operating cost of the taxpayer in order to compute its margin? - Held that - In view of the undisputed fact that AEs of the taxpayer is into trading activities of various p....... + More

  8. 2018 (2) TMI 1640

    Reopening of assessment - Non independent application of mind by AO - Held that - Unearthing of tangible/incriminating material against the assessee after completion of assessment u/s 143 (3) or after issuance of intimation u/s 143 (1) is sine qua non for issuance of the notice u/s 148 of the Act. BR BR In the instant case, the entire exercise of recording of reasons and issuance of notice u/s 148 is based upon the report received by the AO from ....... + More

  9. 2018 (2) TMI 1635

    Validity of reopening of assessment - assessee eligibility deduction u/s 80IA - proceedings u/s 154 were pending on the same issue - Held that - All relevant materials and facts necessary for assessments were available with the AO at the time of original assessee passed u/s 143(3) and further the claim of deduction allowed while passing the order u/s 143(3) would not be excessive even if proposed adjustment of loss of previous year is made agains....... + More

  10. 2018 (2) TMI 1634

    Disallowance of interest - AR submitted that the entire interest paid by assessee on loan taken for acquiring capital asset deserves to be allowed - AO was of opinion that since interest in question on housing loan, had already been claimed as deduction u/s 24(b), the same could not be taken into consideration for computation u/s 48 and interest amount was added to income of assessee - Held that - From these judicial pronouncements, it is very mu....... + More

  11. 2018 (2) TMI 1632

    Bogus purchases - AO disallowed the 25% of total cost of purchases in absence of proof of delivery - disallowance of cost of purchases of steel - Held that - Respectfully following the decision of Hon ble Gujarat High Court in CIT Vs Simit P Seth 2013 (10) TMI 1028 - GUJARAT HIGH COURT and Hariram Bhambani (2015 (2) TMI 907 - BOMBAY HIGH COURT), the disallowance of cost of purchases of steel is restricted to 5% of the purchases. The assessing off....... + More

  12. 2018 (2) TMI 1633

    Penalty levied u/s. 271(1)(c) - addition u/s 14A - Held that - As far as levy of penalty on addition u/s. 14A is concerned, the same does not arise as the computation of income under normal provisions was less than the tax computed u/s. 115J. As per the Board Circular referred, the penalty is not warranted on this amount. Hence, to that extent, the action of AO cannot be accepted. BR BR Addition made under the provisions of Section 115JB, we are ....... + More

  13. 2018 (2) TMI 1631

    Addition u/s 145A on account of CENVAT credit - Held that - The assertions made on behalf of the assessee that assessee has consistently followed exclusive method of accounting with due certification by the tax auditor for recording the inventory which is subject matter of dispute in valuation. We also notice the plea of the assessee that adopting inclusive method of accounting will not alter the resultant profits and such change of accounting wi....... + More

  14. 2018 (2) TMI 1630

    Gain from the sale of Race Course plots - LTCG or busniss income - Held that - There is nothing more than the activity of dividing the plots in smaller sized units which has led the Assessing Officer to believe that the assessee was carrying on an adventure in the nature of trade. What he has overlooked is a whole bunch of factors which reasonably demonstrate that not only that the assessee was never engaged in the business of dividing the large ....... + More

  15. 2018 (2) TMI 1629

    Assessment framed u/s 153A - Disallowance made u/s 14A - quantum of disallowance - Held that - Once it is an unabated assessment, then the addition which can be made in the assessment framed u/s 153A would only be with regard to incriminating material or document found during the course of search. This principle is now well settled by catena of judgments including those of Hon ble Jurisdictional High Court in the case of Kabul Chawala (2015 (9) T....... + More

  16. 2018 (2) TMI 1628

    TDS u/s 195 - Disallowance of expenses u/s 40(a)(i) - reimbursement of expenses - Held that - There is no appearance from the side of the assessee despite notice. We are, therefore, proceeding to dispose of this appeal ex parte qua the assessee but on merits. Admitted position as emanating from the impugned order that the aforesaid payment made by the assessee represents its share in the expenses incurred by the group companies on cost to cost ba....... + More

  17. 2018 (2) TMI 1627

    Rejection u/s. 12AA(1)(b)(ii) - Held that - CIT(A)has not considered the findings of the AO narrated in the assessment order as well as broadly in the rejection order dated 28.03.2016 u/s 12AA(1)(b)(ii) of the CIT(E), Lucknow and he has not appreciated the fact mentioned in consequential factual finding of the CIT(E) order dated 28.03.2016 u/s 12AA(1)(b)(ii) that the claim of the applicant for registration u/s 12AA on basis-of form no 10A claimed....... + More

  18. 2018 (2) TMI 1626

    Levy of penalty u/s 271(1)(b) - assessment order has been passed u/s 143(3) and not under not u/s 144 - Held that - As such, the compliance by the assessee to the notices issued to him stands accepted. BR BR This compliance could not be made initially for reasons beyond the control of the assessee, as stated. The assessee is an ex-army personnel. During the year, he was working with the Security Services Organization and was also getting pension ....... + More

  19. 2018 (2) TMI 1625

    Revision u/s 263 - nature of expenditure incurred towards repairs and maintenance of the building - Held that - The nature of expenditure incurred towards repair and maintenance of the building, whether capital or revenue, requires thorough enquiry and investigation at the end of the Assessing Officer. Without being influenced by the observations of the PCIT, AO is directed to examine the claim of the assessee by calling for necessary and relevan....... + More

  20. 2018 (2) TMI 1624

    Disallowance made u/s 14A - Held that - The assessee had given workings under Rule 8D(2)(i) of the Rules at ₹ 1,57,976/- . We find that the CIT-A had given direction to the ld AO to make proportionate disallowance of direct expenses based on the turnover in trading and investment activity in shares and securities of the assessee. We do not find any infirmity in the said direction of the ld CITA. Hence there cannot be any grievance for the r....... + More

  21. 2018 (2) TMI 1622

    Release of detained goods - Section 129 of the Central Goods and Services Tax Act - Held that - identical issue decided in the case of The Commercial Tax Officer And The Intelligence Inspector Versus Madhu. M.B. 2017 (9) TMI 1044 - KERALA HIGH COURT , where Division Bench directed expeditious completion of the adjudication of the matter and permitting release of the goods detained pending adjudication, in terms of Rule 140(1) of the Kerala Goods ....... + More

  22. 2018 (2) TMI 1620

    Revocation of CHA license - time limitation of SCN - Held that - It is pertinent to record that the offence took place in a different place from that of the Licensing Authority who is in Delhi. Inasmuch as the offence report contained in the alleged violation of CBLR was received by the Commissioner of Custom, IGI Airport, New Delhi only on 15.12.2016, the SCN which was issued on 20.08.2017 within time and cannot be held to be time barred. BR BR ....... + More

  23. 2018 (2) TMI 1619

    Illegal exportation to Bangladesh - Cough Syrups - Bangladeshi Taka and Indian Currency Notes - Confiscation - Held that - export of Phensedyl Recodex Cough Syrup for illegal exportation to Bangladesh through a route other than the specified route under Section 7(1)( c) of the Act, 1962 is prohibited - the appellant had failed to give any satisfactory explanation in respect of storing of huge quantity of Cough Syrups and Bangladeshi Taka. BR BR I....... + More

  24. 2018 (2) TMI 1621

    Customs Broker - Prohibition imposed on petitioner M/s. Cargomar from operating within the jurisdiction of Bangalore Customs Division, with immediate effect - appeal to Appellate Tribunal - case of petitioner is that the same has been passed without giving any prior opportunity of hearing to the petitioner and it has virtually deprived the petitioner assessee of its source of livelihood by prohibiting it from operating in the jurisdiction of Resp....... + More

  25. 2018 (2) TMI 1618

    Execution of the Investigative Audit Report was rejected by the NCLT - Held that - It was necessary for NCLT to consider the report which was available and which was treated by the Auditor as its final report for whatever it was worth and record finding whether or not the said report could be maintained. Without rejecting the said report, giving directions for further Chartered Accountants to be suggested and appointment was not proper. When the ....... + More

  26. 2018 (2) TMI 1617

    Penalty - service tax is paid along with interest before issuance of SCN - applicability of Section 73(3) of the FA - Held that - the appellant had paid the service tax along with interest before issue of show cause notice and accordingly as per Section 73(3) of the Finance Act, 1994, show cause notice should not have been issued as the Revenue has failed to bring on record any material to show that there was intention to evade payment of service....... + More

  27. 2018 (2) TMI 1616

    Works contract - benefit of N/N. 1/2006-ST dt. 1.3.2006 - denial on the ground that the documents have not be produced - Held that - The appellant have produced all the documents in respect of all the parties before Tribunal. A perusal of the said documents shows that many of these are inclusive of the material and therefore are in the nature of works contract in many of the invoices produced VAT has been paid. In these circumstances, the claim o....... + More

  28. 2018 (2) TMI 1615

    Penalty u/s 77 and 78 - demand of Interest - The appellant was neither registered with the department nor paid service tax in respect of the services rendered by her - Held that - the appellants have paid the entire service tax along with interest - also, the appellants have not collected the service tax - Revenue has also not brought any evidence on record showing that the appellants have suppressed the material facts from the department with in....... + More

  29. 2018 (2) TMI 1614

    Business Auxiliary Services - Discounts - case of the department is that the said discount is nothing but a sales commission which is liable to service tax under the category of Business Auxiliary Service - Held that - the transaction between the manufacturer M/s. Gunaji and the appellant is clearly of sale. In the invoice the manufacturer has charged 20% VAT the transaction is clearly at arms length hence sale transaction on principle to princip....... + More

  30. 2018 (2) TMI 1613

    Maintainability of appeal - Monetary amount involved in the appeal - classification of taxable service - Section 35G of the CEA 1944 - Held that - the dispute as to the classification of services is not maintainable before this Court under Section 35G of the Act - Even otherwise, ordinarily, as per the Litigation Policy following the instructions in F.No.390/Misc./163/2010-JC dated 17.12.2015, the value of the service tax disputed being less than....... + More

  31. 2018 (2) TMI 1612

    Excisability - scrap generated in the factory - Revenue by entertaining a view that appellant is required to discharge duty in respect of such unfit/ damage components, raised duty demand for the period December 2011 to September, 2015 - Held that - the identical issue has come up in assessee own case before the Tribunal M/s Tafe Motors & Tractors Ltd. Versus Commissioner of Central Excise Bhopal 2017 (12) TMI 1296 - CESTAT NEW DELHI , where ....... + More

  32. 2018 (2) TMI 1610

    Valuation - paper and paper board in sheet form - it was revealed that the said goods were sold at a higher price in wholesale trade as compared to the value on which Central Excise duty was paid by the appellant - Held that - identical issue decided in appellant own case Ballarpur Industries Ltd. Versus Commissioner of Central Excise, Nagpur 2018 (1) TMI 162 - CESTAT MUMBAI , where it was held that Since, the price of paper reels at the depot at....... + More

  33. 2018 (2) TMI 1611

    Scope of SCN - CENVAT credit - Held that - there was no proposal in the show-cause notice for denial of CENVAT credit for the period of demand of duty, therefore it was not a case for the Department that whether the CENVAT credit claimed by the appellant is admissible or otherwise - the issue of CENVAT credit being independent is still open for Department to decide - appeal allowed by way of remand........ + More

  34. 2018 (2) TMI 1609

    SSI exemption - denial of benefit of Job work - denial on the ground that the appellant had not declared that they were doing job-work - Board Circular No.59/88 dated 28/10/88 and 323/39/97-CX dated 14/07/1997 - Held that - the Commissioner (Appeals) has relied on the circulars issued by the CBEC to grant benefit. It is seen that the said circulars have been issued with reference to the SSI units clearing goods to domestic tariff area and also ex....... + More

  35. 2018 (2) TMI 1606

    Benefit of N/N. 30/2004-CE dated 09.07.2004 - Canvass and Tarpaulin - Revenue is of the view that these are the parts and accessories of motor vehicle and appropriately classifiable under heading 8708 which does not have exemption under N/N. 30/2004-CE - Held that - identical issue came up before this Tribunal in the case of J.S. Fabrics v. Commissioner of Central Excise, Kanpur 2014 (12) TMI 232 - CESTAT NEW DELHI , wherein the Tribunal has held....... + More

  36. 2018 (2) TMI 1607

    CENVAT credit - inputs, input services and capital goods, which has been gone in manufacture of the de-natured Spirits - Held that - identical issue came up before this tribunal in the case of Bajaj Hindusthan Sugar Ltd. 2016 (8) TMI 386 - CESTAT ALLAHABAD , where it was held that ethyl alcohol and rectification spirit are one and the same. Hence,the rectified spirit which is not used for human consumption is nothing but ethyl alcohol and is find....... + More

  37. 2018 (2) TMI 1608

    CENVAT credit - steel items - welding electrodes - whether the assessee is entitled to steel items used in manufacturing of structures items which are embedded to earth? - Held that - in the case of Kisan Sahkari Chini Mills Ltd. v. CCE, Meerut-II 2017 (1) TMI 1479 - CESTAT ALLAHABAD , this Tribunal has allowed CENVAT credit on the steel items and welding electrodes used in the factory of production for manufacture of excisable goods as inputs as....... + More

  38. 2018 (2) TMI 1623

    Direction to supply certified copy of the SCN dated 17.10.2012 - case of respondent is that the petitioner in ordinary course ought to have already been served with SCN and the order in original dated 17.10.2012 and 06.01.2017, receptively and as such there is no occasion for the petitioner to have applied again for seeking certified copies of the said documents. BR BR Held that - Denial of certified copies of the documents cannot be justified sp....... + More

  39. 2018 (2) TMI 1605

    Penalty - the impugned order would contend that in terms of the invoice placed on record before the check-post officer, goods were moving from Pune to Bangalore. The details of the consignee, Greenline, Bangalore was not forthcoming in the invoice - Held that - Tax invoice or bill of sale is a necessary document to be carried, where the goods are carried as a result of sale. Tax invoice as defined under Section 2(32) of the KVAT Act, is a documen....... + More

  40. 2018 (2) TMI 1604

    Classification of goods - pre-painted galvanized corrugated roofing iron and steel sheets - whether taxable at 14.5% or otherwise? - Held that - From a bare perusal of the order passed by the Respondent-Commissioner of Commercial Taxes under Section 59(4) of the KVAT Act, 2003, it is clear that the said Commissioner has not considered the effect of Section 14(vi) of the CST Act, 1956 at all and therefore, whether the commodity dealt with by the p....... + More

  41. 2018 (2) TMI 1603

    Jurisdiction - power of AO to reopen the assessment- Held that - the petitioner need not have any apprehension to go before the Assessing Officer and submit their defense. This is so because the law mandates that the Assessing Officer being an independent authority has to exercise his statutory power uninfluenced by any observation or direction that my be issued by the superior officer. No Superior Officer can compel him to do the assessment in a....... + More

  42. 2018 (2) TMI 1602

    Exemption from payment of Sales Tax/Luxury Tax - hotel industry - KVAT Act - Held that - In the absence of any clear entitlement of exemption of the petitioner and any specific Exemption Certificate issued in favour of petitioner-assessee, the claim of the petitioner-assessee is at best, only debatable one. It would depend upon the facts to be established by the petitioner before the concerned authorities of the Department and the application of ....... + More

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