TMI Tax Updates - e-Newsletter
February 28, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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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
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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
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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. - AT
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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’ - AT
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Customs:
Refund of IGST on Export– Invoice mis-match Cases –Alternative Mechanism with Officer Interface
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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
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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
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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 - AT
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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.
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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 - AT
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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. - AT
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Central Excise:
Consideration of mega power policy benefits in proportion to the long term PPA tied up in case of provisional mega power projects
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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 - AT
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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. - AT
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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. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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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 and Services Tax Rules, 2017. The writ petition is disposed of directing the competent authority to complete the adjudication provided for under Section 129 of the statutes.
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Income Tax
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2018 (2) TMI 1654
Addition made of royalty paid for the use of the brand name ‘phoneytune.com' to one Tarun Mohan, a director of the assessee - whether Tribunal is not perverse in holding that the transaction was not a colorable devise to reduce the tax liability of the company in which the Managing Director was none other than the beneficiary Proprietor of royalty? - Held that:- Questions (i) and (ii) are answered in the assessee's favour in view of the judgment of this Court in the assessee's case Pt. Commissioner of Income Tax -2 Vs. M/s Mobisoft Tele Solutions P. Ltd. [2015 (8) TMI 426 - PUNJAB AND HARYANA HIGH COURT] as held that the AO and CIT (Appeals) erred in holding that Tarun Mohan had entered into an agreement with himself. The authorities ignored the fundamental concept that the assessee being a Company incorporated under the Companies Act, 1956 is a separate legal juristic entity. It was held that the assessee Company was entitled to use the trade mark as licensee thereof and that the payment of royalty for the same is nothing unusual. Applicability of the provisions of section 47 (xiv) read with section 47A (3) - Held that:- The issue raised has no foundation to stand. There are no findings of fact recorded that the provisions of section 47 were invoked for claiming exemption from capital gains while making transfers from the sole proprietary concern to the assessee company. The applicability of section 47A would arise only if it is established that section 47 was pressed into service. In absence thereof, the deeming provision of sub-section (3) of section 47A cannot be invoked. There is another angle. From the reading of Article 3 of the agreement, it is evident that Tarun Mohan received a consideration of ₹ 5,81,231/- and royalty for the use of the brand name. This itself shows that exemption of section 47 was not available, as proviso (c) to clause (xiv) of section 47 had not been complied with. The appellant has not contended or established that the assessee availed the benefit of Section 47. Copyright fee paid to M/s Phonographic Performance Ltd. - nature of expenditure - revenue expenditure or a capital expenditure - Held that:- ‘Copyrights' find mention in section 32. The depreciation of copyright etc. can be claimed subject to two conditions viz. it must be owned wholly or partly by the assessee and it must be used for the purpose of business or profession. The word “and” between the two conditions establishes that both the conditions must subsist for the applicability of Section 32. 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. Such a case would not be covered under section 32. The finding recorded by the Tribunal that only usage of the license was transferred is neither perverse nor irrational.
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2018 (2) TMI 1653
Rejection of books of accounts - N.P. determination - Held that:- Nothing comes from the revenue’s side to controvert the CIT(A)’s detailed findings extracted in preceding paragraph. We thus find no substance in revenue’s argument seeking to revive Assessing Officer’s action rejecting assessee’s books followed by estimation of net profits @ 25% in the impugned assessment year. Revenue’s two substantive grounds in the instant appeal are therefore declined.
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2018 (2) TMI 1652
Disallowance u/s 14A - grievance of the Revenue is that Rule 8D of the Rules ought to be applied in the facts of the present case - Held that:- We find that the issue as raised by the Revenue is concluded against it by the decision of this Court in CIT v/s. HDFC Bank Ltd.[2014 (8) TMI 119 - BOMBAY HIGH COURT] wherein it has been held that where the Assessee has its own funds, no occasion to disallow any part of interest payment made by the Assessee under Section 14A can arise. Further, we also note that the Assessing Officer has not recorded his non-satisfaction with the claim for disallowance made by the Respondent before proceeding to apply Rule 8D of the Rules. Further, we find that the disallowance of expenditure to the extent of 5% of the dividend income earned, is reasonable. No substantial question of law
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2018 (2) TMI 1651
Cancelling the order passed by the A.O. under Section 143(3) r.w.s. 263 by ITAT - Held that:- In the above facts, the Tribunal dismissed the appeal of the Revenue as the substratum of the order dated 9th December 2011 under Section 143(3) read with Section 263 of the Act passed by the Assessing Officer viz. the order dated 30th March 2009 of the Commissioner of Income Tax stood quashed. This case is covered by the legal maxim 'Sublato Fundamento Cadit Opus' i.e. when foundation is removed the superstructure falls. No substantial question of law.
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2018 (2) TMI 1650
Special Audit u/s 142(2A) - Inquiry before assessment - breach of principles of natural justice - Held that:- This Court cannot go into the sufficiency of reasons assigned by the Assessing Authority for directing such Special Audit. Only if there were no reasons assigned and objections of the petitioner assessee were not considered, perhaps, the breach of principles of natural justice, as required under Section 142(2A) of the Act and Proviso thereto could be so contended by the assessee, but 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. Thus, this Court cannot draw any inference of breach of principles of natural justice or arbitrariness in the impugned order passed by the respondent Authority. Accordingly, the requirement of Section 142(2A) of the said Act cannot be said to have been not complied by the respondent Authority. The same requires no interference under Article 226 of the Constitution of India. Therefore, the Writ Petition is liable to be dismissed
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2018 (2) TMI 1649
Addition towards STT and service tax - non deuction of tds - Held that:- As the Respondent was not claiming any expenditure in its Profit and Loss Accounts on account of STT and service tax, no occasion to disallow the same for nondeduction of tax at source under Section 40(a)(ia) of the Act can arise. - Decided against revenue Income from transaction of purchase of sale of shares - “Short Term Capital Gain” or "business income" - Appeal is admitted on the substantial question of law at Sr.No.2
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2018 (2) TMI 1648
Maintainability of appeal - monetary limit - Held that:- We do not think the result of this adjudication is going in favour of revenue. As such though this matter has been listed under the heading “To Be Mentioned”, we have heard it. Question no.2 in the reference is :- Whether, on the facts and in the circumstances of the case, the Hon’ble I.T.A.T. was justified in law in holding that no adjustment can be made under section 143(1)(a)in case of loss? However, in view of the aforesaid circumstances, as tax effect is below threshold, the application is rejected and Rule discharged.
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2018 (2) TMI 1647
Registration u/s 12AA denied - proof of charitable activities - genuine activities - Held that:- In the present case, undoubtedly the objects of the assessee are charitable in nature and the assessee is running a college for achievement of its objects as given in the bye-laws. Therefore, the registration cannot be denied by holding that the activities of the assessee were not genuine. In view of the above, CIT (Exemptions) is directed to grant registration to the assessee u/s 12AA of the Act. - Decided in favour of assessee.
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2018 (2) TMI 1646
Reopening of assessment - sale of scrap and miscellaneous income - mere change of opinion - change of opinion in a completed assessment u/s 143(3)- Held that:- Since in the instant case no new tangible material was available with the Assessing Officer and such re-assessment is based on the same materials as were available during the original proceedings since the issue of sale of scrap and miscellaneous income was considered by the AO in the body of the assessment order, therefore, the action of the Assessing Officer, in my opinion, is a mere change of opinion in a completed assessment u/s 143(3) and, therefore, find merit in the order of the ld. CIT(A) quashing such reassessment proceedings. The ld. DR also could not bring any material so as to take a contrary view than the view taken by the ld. CIT(A) nor could point out any in consistency in the order of ld. CIT(A). - Decided against revenue.
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2018 (2) TMI 1645
Unconfirmed credit balances of parties - Addition to the returned income in respect of parties whose credit balances could not be confirmed - Held that:- When all the purchases from named two parties have been made through bills and GR notes of the goods dispatched to Parwanoo have been duly verified by the Excise Department at the Himachal Pradesh border and trading results have not been disputed by the assessee and the entire payments have been made through banking channel, it is difficult to accept the order passed by the ld. CIT (A) so as to confirm the addition. So, the answer to the aforesaid question framed is answered in the affirmative. We are of the considered view that ld. CIT (A) has erred in sustaining the addition of ₹ 18,78,417/- claimed as deduction/s 80-IC of the Act by the assessee company, hence the same is ordered to be deleted. - Decided in favour of assessee.
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2018 (2) TMI 1644
Addition of capital gain by invoking the provisions of section 45(4) - determination of capital gain on the transfer of the Saidakadal property - adopting the fair market value at ₹ 1.30 lac and cost of acquisition as on 01.04.1981 - fair market value as on 01.04.1981 taken by the ld. CIT(A) at ₹ 24.40 lac as against ₹ 18 lac taken by the Assessing Officer - Held that:- The case of the assessee is that the fair market value of the building as on 1.4.1981 at ₹ 18 lac is exclusive of the fair market value of the land at ₹ 6.40 lac. As against this, we find the Assessing Officer has taken a consolidated fair market value of the land and building as on 1.4.1981 at ₹ 18 lac on the basis of some valuation report. AR could not draw our attention to the said report of the Registered valuer for ascertaining if ₹ 18 lac was only towards the building or for both the land & building. Under these circumstances, we remit the matter to the file of Assessing Officer for examining the Registered valuer’s report and other connected material for ascertaining if value of land is part of ₹ 18 lac or it is independent. In case it is found from such material that the value of building along with land as on 01.04.1981 is ₹ 18 lac, then, there is no need for increasing ₹ 6.40 lac towards the value of land as on 01.04.1981 and vice versa. Indexation of value of land and building - Held that:- There cannot be any dispute that once value as on 01.04.1981 is taken, such cost of acquisition needs to be indexed upwards for computing the amount of long-term capital gain. We, therefore, direct the Assessing Officer to firstly, consider the fair market value of the land and building as on 01.04.1981 and, thereafter, apply indexation for determining the total amount of capital gain from this property. Needless to say, the assessee will be given an opportunity of hearing in such proceedings. Valuation of Gulmarg land/hut - Held that:- The ends of justice would meet adequately if the Assessing Officer decides the question of computation of capital gain from the transfer of Gulmarg land/hut u/s 45(4) of the Act afresh, after allowing a reasonable opportunity of being heard to the assessee.
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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 the nature of trade and income has to be taxed under the head ‘profit and gains of business and profession’. Provisions of Section 45(2) provides that the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. Apparently these provisions of Act have not been taken into consideration by the ld. CIT(A), therefore, in the interest of justice and equity, the Bench find deem it fit to restore the issue back to the file of the ld. CIT(A) to give effect to the provisions of Section 45(2) - Decided partly in favour of assessee for statistical purposes only.
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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 of Smt. Chanchal Katyal vs. CIT [2006 (10) TMI 92 - ALLAHABAD HIGH COURT]. As regards the other disallowances, it is noticed that Assessing Officer had made ad hoc disallowance without pointing out any specific defect in the vouchers or pointing out any specific instance. Assessing Officer has merely acted on presumption.
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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. It thus turns out to be a case wherein learned Assessing Officer proceeded to reject assessee’s books of accounts without even dealing with all the specified parameters disclosed therein. We further find in page no.7 of the CIT(A)’s order that the assessee’s net profit rate is @ 2.82% as against 1.43% and 2.0% in assessment year 2007-08 and 2008-09; respectively. As held in CIT Vs. Vikram Plastic & Ors [1998 (8) TMI 43 - GUJARAT High Court] that section 145 is not to be invoked for rejecting an assessee’s books in absence of any material brought on record to establish that relevant purchases or expenses were inflated or sales suppressed or that the tax payer concerned had not followed the regular method of accounting. It has further come on record that the CIT(A) has still upheld the impugned addition on merits to a lump-sum figure of ₹ 5,00,000/- despite upholding assessee’s books of accounts. No reason to interfere with the learned CIT(A)’s above extracted findings granting part relief to the assessee.
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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. 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 Directorate of Income-tax (Inv.), hence the assessment in this case is not sustainable and is liable to be quashed. So, without going into the merits of the sustainability of the addition made by the AO, we hereby quash the assessment proceedings made by the AO and affirmed by the ld. CIT (A) and thereby allow the appeal filed by the assessee company.
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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 products, such as, textiles, machinery, information and communications related products, metals, products related to oil and other energy resources, general merchandise chemicals, provisions and food and the taxpayer is merely rendering business support services to these AEs in the form of facilitation services to source goods from India. So, the limited activities carried out by the taxpayer for its AEs in the nature of licensing and facilitation of business of its AEs separates the taxpayer from the Sogo Shosha traders. 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. Moreover when undisputedly the taxpayer has not developed any intangible or accorded locational savings to its AEs and has earned net operating profit margin on cost of 129.34% against the margin of comparable at 14.05%, it cannot be said that the taxpayer has not been adequately compensated. As has been held in Li & Fung India Pvt. Ltd. (2014 (1) TMI 501 - DELHI HIGH COURT) the determination of 2.58% margin over the FOB value of the AEs contract not sustainable in the eyes of law. Rather TPO has artificially enhanced the cost base of the taxpayer and proposed a mark up of the FOB value of goods sourced by AEs and as such this approach is not available in TNMM under Rule 10B(1)(e) of the Act. So, the TPO has wrongly recharacterized the business function of the taxpayer from a business support service provider to a trader. - Decided against revenue
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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 proceedings initiated by the AO by issue of notice under section 274 r.w.s 271(1)(c) without striking off the irrelevant portion of notice is a clear case of non application of mind by the AO, whether penalty has been initiated for concealment of particulars of income or furnishing of inaccurate particulars of income. AO has issued printed form of notice without striking off irrelevant portion and also in the penalty order he does not specify under which charge penalty has been initiated. Therefore, we are of the considered view that the penalty proceeding initiated by the AO is bad in law and liable to be quashed. - Decided in favour of assessee.
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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 preceding and the succeeding assessment years on same set of facts, the expenditure cannot be disallowed for the intervening period. A perusal of comparative analysis of export turnover in the past two assessment years show that after appointment of commission agent, the export turnover of the assessee in terms of volume and Revenue has substantially increased. Thus, the benefit of appointment of commission agent to the assessee is apparent from the records itself. It is prerogative of the assessee to decide, whether to appoint a commission agent or not and the manner in which business is to be conducted. It is a well settled law that the Assessing Officer cannot step into the shoes of assessee and decide business expediency of expenditure. - Decided in favour of assessee
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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 which have held that payment of ESI and PF before the due date of filing of return of income is an allowable deduction. CIT(A) also held that where Provident Fund and Employees State Insurance Contribution were paid by the assessee before filing of the return and proof of payment was submitted before the AO, the amounts were deductible as deduction. CIT(A) relied on the decision in the case of CIT Vs Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and CIT Vs Aimil Ltd. & ors. (2009 (12) TMI 38 - DELHI HIGH COURT) deleted the addition. - Decided against revenue. Disallowance of consultancy charges - CIT-A deleted the addition by considering the additional evidence without providing opportunity to the Assessing Officer - Held that:- Since the additional evidence has been entertained by the ld. CIT(A) without providing adequate and effective opportunity of being heard to AO, therefore, in the interest of justice and equity, we restore the issue back to the file of the Assessing Officer to be decided de novo.
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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 against the profit of the current year. The assessee reminded the AO in its reply to the notice u/s 154 that even after the adjustment of loss of ₹ 1.36 Crores allowable deduction would be more than ₹ 95.11 Crores allowed in the original assessment. AO without bringing the proceedings u/s 154 to a logical conclusion had initiated the proceedings u/s 147 on the basis of the same fact and material available on the assessment record. Thus, reopening on the basis of the material available on assessment record is nothing but based on change of opinion. The reopening is not sustainable when the proceedings u/s 154 were pending on the same issue. Accordingly, we set aside the initiation of proceeding u/s 147/148 and consequential reassessment order. As we have set aside the initiation of proceeding u/s 147/148 and consequential reassessment order, therefore, the other grounds raised on the merits becomes infructuous. Decided in favour of assessee
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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 much clear that if the property is purchased from borrowed funds then interest on borrowed fund has to be paid. The amount of interest paid by assessee constitutes actual cost to the assessee for that property. To exclude interest amount from the actual cost of the assets/property would lead to anomalous result. The interest amount should be definitely added to the actual cost of the property. We reverse the findings of CIT(A) and hold that the entire interest paid to bank for acquiring capital asset would be eligible as part of cost of acquisition. Disallowance of expenses incurred towards cost of improvement being woodwork, electrical and plumbing etc of the new flat - Held that:- In our considered opinion assessee is eligible to get the benefit as AO has not disputed the nature of expenses incurred. Assessee incurred the expenditure to make the house habitable and therefore the claim of assessee deserves to be allowed.
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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. Addition made under the provisions of Section 115JB, we are unable to examine whether the claim was deliberate or not? Assessee admitted that it made a conscious claim . Except stating the same and relying on various case law, no details are filed to examine. In these circumstances, we are unable to come to a conclusion whether it is a bonafide claim or deliberate claim to avoid payment of tax u/s. 115JB. The order of Ld.CIT(A) does not throw any light on these aspects. Devoid of facts, the case law cannot be applied. It is trite law that the case law will apply only based on facts in which it was rendered. In the absence of discussion or examination of facts, it is not possible to adjudicate only on principles of law. In view of that, we hereby set aside the order of AO and CIT(A) on this issue and restore the issue to the file of AO to consider the same afresh on the issues stated above and give clear findings.
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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 officer is directed accordingly. In the result the ground No.1 of the appeal is partly allowed. Disallowance/addition on account of commission - Held that:- The disallowance of commission is based on assumption and presumptions of assessing officer. The assessing officer has not brought any material on record to substantiate his action. Thus, the addition on account of 1% of total purchases added by AO is deleted. - Appeal of the assessee is partly allowed.
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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 will be a revenue neutral exercise over a period of time. We also notice that similar issue raised against the assessee in its own case for AY 2009-10 was also reversed by the CIT(A). Thus we concur with the view taken by the CIT(A). It is not gain saying that unutilized CENVAT credit only represents the availability of excise credit at the disposal of the assessee at the end of the year eligible to be set of against future liability Therefore, apparently the unutilized CENVAT credit cannot be adopted for the purposes of valuation of inventories in sphere of s.145A of the Act. - Decided in favour of assessee.
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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 plots of land into smaller end use units, but also that what was sold by the assessee was the land possessed by the assessee for a long period of time. Due to a fundamental change in the use of land in the areas concerned, over the long period during which the assessee held the land, the sellable standard unit size had indeed considerably come down, and, in order to get the market price for land, he had to essentially divide the land holding into plot size for which there is end user market While it may have been common to buy the land in the size that the assessee did in 60s as the use of land was agricultural at that point of time, with the passage of time, rapid urbanization and this land now being in the residential area, where smaller sized plots were required by the end users, the assessee had no choice but to sell the land plots in smaller size to get the market price. It was clearly a one off activity for the assessee as the assessee did not go beyond selling what he already held for the long years, and even the sale consideration was not ploughed back in land investments. We have also noticed that all along the gains on the sale of these plots was treated as capital gains, and, beyond any dispute or controversy, these lands were held as capital gains. CIT-A directing the Assessing Officer to reduce the income under the head “income from other sources” - Held that:- The relief granted by the CIT(A) is on account of duality of disallowance in the sense the disallowance deleted was unwarranted as the same was already accounted for the in the figure of income from other sources, which was taken by the Assessing Officer at ₹ 2,42,073 as against the actual figure of ₹ 2,26,583. The impugned disallowance was thus clearly a double disallowance. Learned Departmental Representative could not bring on record any material to dislodge these well reasoned findings of the CIT(A). We approve the conclusions arrived at by the learned CIT(A) on this point as well, and decline to interfere in the matter.
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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) TMI 80 - DELHI HIGH COURT) and Meeta Gutgutia (2017 (5) TMI 1224 - DELHI HIGH COURT). The AO has mainly resorted to make adhoc estimate of ₹ 5 lacs which admittedly is not based on any material or evidence found during the course of search but merely on the perusal of the records/ balance sheet already considered by the AO. Thus, the disallowance of ₹ 5 lacs made in the assessment year 2005-06 is directed to be deleted. For the assessment year 2011-12, it is an admitted fact that the assessee has earned dividend income of ₹ 14,028/- only and as against this the Ld. AO has proceeded to make the disallowance at ₹ 3,69,090/- after applying rule 8D mechanically disallowance of expenditure u/s 14A cannot exceed the exempt income. Accordingly, we direct the AO to delete the disallowance made over and above what has been offered by the assessee for the purpose of disallowance u/s 14A
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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 basis. No material has been brought on record by the ld. DR to demonstrate that it was not a reimbursement but a payment made with some mark-up having profit element. It is a settled legal position that when reimbursement of expenses is made which does not include any mark up or profit element, there can be no question of taxing such amount in the hands of the recipient. Once a particular amount is not chargeable to tax in the hands of the non-resident recipient, the question of applicability of section 195 does not arise. Recently, the Hon’ble Supreme Court in DIT(I.T.) VS. A.P. Moller Maersk A/S (2017 (2) TMI 993 - SUPREME COURT) has held that once payment is in the nature of reimbursement of expenses, that is, it is a cost sharing arrangement, it cannot be income chargeable to tax in the hands of recipient. Similar view was earlier taken in DIT VS. Wizcraft International Entertainment P. Ltd. (Bom) (2014 (5) TMI 149 - BOMBAY HIGH COURT) holding that payment by way of reimbursement of expenses is not taxable in India. In view of the fact that the amount paid by the assessee to non-residents is not chargeable to tax in their hands and, as such, the provisions of section 195 of the Act are not attracted, there can be no question of applying section 40(a)(i) for making disallowance in the hands of the assessee. - Decided against revenue.
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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 to have been filed before JCIT-1, Kanpur on 22.08.2008 has been found to be false and assessee was not granted registration u/s 12A. Assessee society should have moved separate appeal to appropriate authority against the rejection order dated 28.3.2016 u/s. 12AA(1)(b)(ii) of the CIT(E), Lucknow. After considering the facts and circumstances of the case, we are of the considered view that the impugned order is contrary to the law and facts on the file, hence, is not sustainable in the eyes of law. The impugned order is contrary to the law and facts on the file, hence, is not sustainable in the eyes of law. Therefore, in the interest of justice, we are setting aside the issue in dispute to the file of the Ld. CIT(A) to thoroughly consider the contention raised in the grounds of appeal raised by the Revenue - Appeal filed by the Revenue stands allowed for statistical purposes.
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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. 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 from the Army. The assessee’s daughter is an advocate. There was a matrimonial dispute. The assessee’s daughter was granted divorce by the Competent Court. In these circumstances, that the compliance to the notices could not initially be made. The assessee was, thus, prevented by reasonable and sufficient cause. In ‘Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT’(2007 (8) TMI 386 - ITAT DELHI-G) and ‘Parmeshwari Textiles vs. ITO [2004 (6) TMI 305 - ITAT JODHPUR] amongst other cases, under similar circumstances, penalties have been deleted. - Decided in favour of assessee.
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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 relevant details and making independent enquiry. He has to ascertain whether by incurring such expenditure any structural change to the building/factory premises has been made by the assessee which may result in an enduring benefit or the expenditure are of regular nature. As regards the payment of excise duty, the Assessing Officer after ascertaining the facts from the assessee and verifying the same must disallow the payment made towards penalty as it is not allowable under section.37(1). With the aforesaid observations, we uphold the order of the ld.PCIT to the extent indicated above.
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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 revenue in this regard. With regard to disallowance under Rule 8D(2)(iii), the ld CITA had rightly directed the AO to include only dividend bearing investments in tune with the decision of this tribunal supra. No infirmity in the said direction of the ld CITA. Accordingly, the Grounds 1 & 2 raised by the revenue are dismissed. Loss on account of commodity trading claimed - AO treated the loss as bogus loss and disallowed the same - Held that:- Admittedly, the assessee is not an interested party with either the Director or the broker company M/s Marigold Vanijya Pvt Ltd. In such a scenario, it is quite unusual that the said broker had carried out commodity trading transactions for and on behalf of the assessee without collecting any margin money. We find that the Director of broker company M/s Marigold Vanijya Pvt Ltd had filed a sworn affidavit before the ld AO which had been rejected without assigning any reasons in the assessment order. We find that the ld AO had not verified the transactions by summoning the broker u/s 131 of the Act or obtaining information from them. Hence the order of the ld AO suffers from various deficiencies. However, in the interest of justice, we deem it fit and appropriate, to remand this issue to the file of the ld AO, to decide this issue afresh in accordance with law.
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Customs
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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 Respondent Commissioner of Customs, Bangalore Division - mis-declaration of goods - maintainability of petition. Held that: - This Court dealing with a similar impugned order under Regulation 23 in the case of M/s. Capricorn Logistics Pvt. Ltd. [2017 (12) TMI 1040 - KARNATAKA HIGH COURT] had held that such orders under Regulation 23 of the ‘Regulations of 2013’ would be appealable before the Appellate Tribunal under Section 129-A of the Act. The contention raised by the learned counsel for the petitioner that Regulation 21 provides for an appeal to the Customs Broker only in the limited contingency of suspension and cancellation of licence and not under any other contingencies based on the reading of Section 146 (2)(g) of the Act is rather misconceived and does not deserve to be accepted. 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. Even the orders passed under Regulation 23 of ‘Regulations of 2013’ are appealable under Section 129- A of the Act read with Regulation 21 of the 2013 Regulations. 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 arising under the said ‘Regulations of 2013’ namely “prohibitions” under Regulation 23, suspension of licence under Regulation 19, cancellation of licence under Regulation 18 and imposition of penalty under Regulation 20. As far as exercise of jurisdiction under Article 226 of the Constitution is concerned, it is well settled that the Rule of alternative remedy is not a Rule of bar of jurisdiction of this Court under Article 226 of the Constitution of India, but a Rule of discretion invoked by the Court in its extra-ordinary jurisdiction and this Court would be slow in invoking the extra-ordinary jurisdiction under Article 226 of the Constitution of India, if the order impugned before it have not passed through the Forums of appellate remedies provided under the relevant statutes - the present writ petition is disposed of as not maintainable with a liberty to the petitioner assessee to avail the remedy by way of an appeal under Section 129-A of the Act read with Regulation 21 before the Tribunal, if so advised in accordance with law. Petition disposed off.
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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. 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 - the ends of justice will be met with the forfeiture of security deposit of ₹ 75,000/- and in addition imposition of penalty of ₹ 50,000/-. Appeal allowed in part.
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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. It is presumed by the Revenue that the said amount is related to the sale proceeds of smuggled goods. At the time of seizure of Indian currency, the appellant could not give any explanation. Subsequently, Late Gopal Chandra Shil took a plea that the recovered Indian Currency notes were the advance payment received from the intending purchaser against the sale of the land and submitted copy of Deeds and Agreements. The Adjudicating authority had not examined the documents as these were not produced at the time of recovery - the Adjudicating authority cannot brush aside these evidences for the reason that these were not produced at the time of recovery. The confiscation of Cough Syrup and Bangladeshi Taka is upheld - confiscation of Indian currency is set aside - matter is remanded to the adjudicating authority to decide afresh - decided partly against appellant and part matter on remand.
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Corporate Laws
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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 present report has not been set aside, taking fresh report if the same happens to be in conflict would create confusions. The present appeal is allowed. The impugned order is quashed and set aside. Consequently, subsequent actions taken on the basis of Impugned Order would not survive. Matter is remitted back to NCLT.
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Service Tax
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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 tax. Further, the appellant paid the service tax in spite of the fact that they have not collected the same from their customers - Moreover, the issue relating to construction of complex services has been subject of litigation before various courts and the appellant was justified in not paying the service tax till it was pointed out by the Revenue. Appeal allowed - decided in favor of appellant.
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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 of the appellant that the value of the material is included in the contract prices is correct. The impugned order which essentially confirms on demand on the ground that appellants have not failed to produce the evidence, is set aside - matter remanded to the original authority for fresh adjudication - appeal allowed by way of remand.
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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 intention to evade payment of service tax. Further, the appellants are women from a small village and not much educated and, therefore, were ignorant about the provisions of the Service Tax. Penalty set aside by invoking section 80 - appeal allowed - decided in favor of appellant.
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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 principle basis. From the invoice, it is also observed that a trade discount was passed on by the manufacturer to the appellant - As per this undisputed fact once, the transaction is of sale there is no relationship of service provider and service recipient between the manufacturer and the buyer (the present appellant). Accordingly, 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. A trading margin cannot be subject matter of levy of service tax. Appeal allowed - decided in favor of appellant.
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Central Excise
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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. Held that: - Denial of certified copies of the documents cannot be justified specially if the show cause notice and the order in original is in relation to the petitioner itself - the respondent no.2 is directed to supply the certified copies of the SCN dated 17.10.2012 and the order in original dated 06.01.2017 within a week from the date of production of a certified copy of this order before him - petition allowed.
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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 ₹ 10,00,000/-, no appeal is maintainable - appeal dismissed.
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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 it was held that 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 - appeal allowed - decided in favor of appellant.
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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.
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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 the time of removal was available and the duty had been paid only on that price, there is no short payment of duty - appeal allowed - decided in favor of appellant.
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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 exporting the goods. The said circular is not applicable to any unit, which is clearing to domestic tariff area only. Thus, the Commissioner (Appeals) has wrongly relied on the said circular. 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. The appellant had not declared that they were doing job work and availing benefit of Notification in the ER-1 returns. Thus, the charge of mis-declaration is clearly established - the matter is remanded to the original adjudicating authority for redetermination of demand - appeal allowed by way of remand.
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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 defined in section 2(g) of CCR 2002 - credit allowed. Welding electrodes - Held that: - the welding electrodes has been used for repairs and maintenance of plant and machinery which has been ultimately used for manufacturing of final product - credit allowed. Extended period of limitation - Held that: - there were contrary decisions during that impugned period for availment of Cenvat credit on items in question - extended period not invokable. Appeal allowed - decided in favor of appellant.
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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 finding place in tariff item no. 22072000. Cenvat credit cannot be denied to the appellant on inputs/input services used in manufacturing of sugar and molasses, wherein de-natured Spirits emerges - appeal allowed - decided in favor of appellant.
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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 that The canvas Tarpaulins, in question, are specially shaped for different model of lorries and though the Department’s contention is that the same are not flat, no evidence in this regard has been produced. In our view, therefore, these Tarpaulin would be correctly classifiable under heading 6306 and not as ‘parts or accessories of motor vehicles’ under heading 8708. The appellant are entitled for exemption under N/N. 30/2004-CE - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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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 document specified under Section 29, with the description of listing goods s old with price, quantity and other information as prescribed. Invoice should mandatorily contain the particulars as prescribed in Rule 29, which is lacking herein. Admittedly, tax invoice carried by the person in- charge of the goods vehicle in question as found at the time of interception was not in conformity with the provisions prescribed. The goods were moving from Pune to Bangalore without the required documents as contemplated under Section 53(2)(b) of the KVAT Act - Hence, the check post officer was justified in levying penalty. The contention of the learned counsel for the appellant that no reasons are assigned by the revisional authority while confirming the order of the check post officer setting aside the appellate order is wholly obnoxious and untenable. Appeal dismissed - decided against appellant.
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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 petitioner would fall under clause (vi) or not, was not an issue before the Respondent-Commissioner of Commercial Taxes. If the said order passed by the Respondent-Commissioner of Commercial Taxes is the cause for issuing reassement notice against the petitioner in the present case, it is open to the petitioner to seek requisite clarification from the Respondent-Commissioner of Commercial Taxes himself with regard to the effect of clause (vi) of section 14 of the CST Act, 1956 in the first instance. Petition disposed off.
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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 particular manner. This is why he has been termed as independent authority under the provisions of the Act. The writ petitions are disposed of by directing the petitioners to submit their objection to the impugned notices within a period of 15 days from the date of receipt of a copy of this order, after which, the second respondent shall fix a date for personal hearing and afford an opportunity to the petitioner - petition allowed by way of remand.
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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 the Notifications on such facts, in the present case. The petition is disposed of by relegating the petitioner/assessee to the alternative remedy available to the petitioner against the impugned order, and if, such an appeal is filed before the Joint Commissioner (Appeals) under Section 62 of the Act within a period of 4 weeks from today - petition disposed off.
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