TMI Tax Updates - e-Newsletter
March 12, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Articles
By: AMIT BAJAJ ADVOCATE
Summary: The Punjab & Haryana High Court ruled that a writ petition is valid even when an alternative remedy exists if the issue involves a jurisdictional error based on admitted facts. In a case under the Punjab VAT Act, 2005, a penalty was imposed at an ICC barrier, claiming intra-state sales, while the petitioner argued it was inter-state. The court found the matter beyond the ICC's jurisdiction, allowing the writ petition despite the option to appeal. The decision emphasized that the plea of alternative remedy is not applicable when jurisdictional errors are evident.
By: DEVKUMAR KOTHARI
Summary: The article discusses the inefficiencies in the appeal process managed by the Commissioner of Income Tax (Appeals) and suggests improvements for expedited justice and tax recovery. It highlights the lack of strict timelines for appeal disposal, leading to delays and non-compliance with Board instructions. The author proposes amendments to allow part disposal of appeals to address routine issues quickly, while more complex matters can be resolved later. The article references a Supreme Court case where intervention was necessary due to delays caused by officer transfers. The author suggests a structured approach to streamline the appeal process and ensure timely resolutions.
By: Dr. Sanjiv Agarwal
Summary: Banks and non-banking financial companies (NBFCs) often sell loan portfolios at a discount, recognizing gains as income. These entities pay service tax on various fees but not on the sale of loan portfolios, which is considered a profit on asset sale. NBFCs assign loans to banks, acting as collection agents for a fee. Securitization involves transforming financial assets into securities, with guidelines provided by the Reserve Bank of India. The distinction between service tax and sales tax is crucial, with service tax applying to activities rather than sales. NBFCs' services are not classified under business auxiliary services.
News
Summary: Indirect tax revenue collections in India from April 2011 to February 2012 increased by 14.6% compared to the previous year, reaching Rs. 3,48,702 crore. In February 2012 alone, collections rose to Rs. 31,469 crore, marking a 9.6% increase from the same month last year. Customs revenue grew by 5.9% in February and 12.0% over the fiscal period. Central Excise revenue increased by 1.3% in February and 6.2% cumulatively. Service Tax showed significant growth, with a 37.3% rise in February and a 36.9% increase over the fiscal period. The department achieved 88.7% of its budget estimate by February 2012.
Summary: The Government of India, the Asian Development Bank (ADB), and the Government of Assam signed an $81 million loan agreement for the first tranche of the Assam Urban Infrastructure Investment Program. This initiative aims to provide clean, piped water to approximately 350,000 residents in Guwahati and enhance wastewater treatment and urban transport. In Dibrugarh, improvements will focus on solid waste management and drainage infrastructure. The project includes a 10-kilometer rapid transit corridor in Guwahati, expected to serve over 40,000 people daily, and aims to improve public health by reducing water-borne diseases through better sewage and solid waste management.
Summary: The Standing Committee on Finance's report on the Direct Taxes Code Bill, 2010, recommends increasing the personal income tax exemption limit from Rs. 2 Lakhs to Rs. 3 Lakhs and adjusting it with the Consumer Price Index. Revised tax slabs are suggested, with wealth tax exemptions raised from Rs. 1 crore to Rs. 5 crores. The onus of proving tax avoidance under GAAR should lie with the Department. The report proposes an independent body to review GAAR orders and recommends disciplinary action for unreasonable tax demands. It suggests tax consolidation for group entities and criticizes extensive rule-making powers in the Code. The committee also recommends special courts for fast-tracking litigation and various modifications to clauses concerning non-resident taxation, deductions, and tax-exempt policies.
Summary: The international crude oil price for the Indian Basket rose to $125.15 per barrel on March 8, 2012, as reported by the Petroleum Planning and Analysis Cell under India's Ministry of Petroleum and Natural Gas. This marks an increase from $122.95 per barrel on March 7, 2012. In rupee terms, the price also increased to Rs 6,328.54 per barrel, up from Rs 6,151.19, influenced by both the rise in crude prices and the depreciation of the rupee, with the exchange rate moving from Rs 50.03 to Rs 50.57 per US dollar.
Summary: The Ministry of Corporate Affairs in India has extended the deadline for filing form DIN-4 for Director Identification Number (DIN) holders to furnish and update their Permanent Account Number (PAN) details. The new deadline is set for April 30, 2012. This extension applies to all existing DIN holders who did not provide their PAN when initially obtaining their DIN under the Companies Act, 1956. Failure to comply by the new deadline may result in penal action. This is a further extension following a previous deadline adjustment made on December 15, 2011.
Summary: The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper on the auction of spectrum, inviting comments from stakeholders by March 21, 2012, and counter-comments by March 28, 2012. This follows a pre-consultation paper addressing the allocation of 2G spectrum in 22 service areas, in compliance with a Supreme Court directive. The paper discusses issues such as the amount of spectrum to be auctioned, liberalization, reframing of spectrum bands, auction structure, eligibility, reserve price, rollout obligations, usage charges, and trading. The consultation document is available on the TRAI website.
Summary: India's exports from April 2011 to February 2012 increased by 21.4%, reaching $267.4 billion, while imports grew by 29.4% to $434.2 billion, resulting in a trade deficit of $166.8 billion. In February 2012, exports were $24.6 billion, and imports were $39.8 billion, leading to a $15.2 billion trade deficit. Key export sectors included engineering, petroleum products, gems and jewelry, pharmaceuticals, leather, cotton yarn, electronics, and garments. Major import growth was seen in petroleum, gold and silver, machinery, electronics, and coal. These figures are preliminary and may be revised.
Summary: The Ministry of Corporate Affairs in India has instructed banks and financial institutions to implement a role-check process for digital signatures used by their authorized signatories as part of the MCA21 e-Governance project. This initiative aims to enhance service efficiency and ensure secure document filing with the Registrar of Companies. The process involves verifying the authenticity of digital signatures from authorized bank and financial institution representatives, crucial for charge-related services. This measure aligns with the Information Technology Act, 2000, and follows similar role-check protocols for company directors and professionals.
Notifications
Income Tax
1.
13/2012 - dated
6-3-2012
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IT
Section 10(15), item (h) of sub-clause (iv) of the Income-tax Act, 1961 - Exemptions - Interest on bonds/debentures - Notified bonds/debentures of Public Sector Companies
Summary: The Central Government has amended a notification concerning exemptions on interest from bonds or debentures of public sector companies under Section 10(15), item (h) of sub-clause (iv) of the Income-tax Act, 1961. The amendment changes the name "Rural Electrification Corporation" to "Rural Electrification Corporation Limited." Additionally, it defines "Qualified Institutional Buyers" as per SEBI regulations and categorizes individual investors as retail if investing up to five lakh rupees, and as High Networth Individuals if investing more than five lakh rupees.
SEZ
2.
S.O.354(E), - dated
29-2-2012
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SEZ
U/S. 4 of the SEZ Act, 2005 - Set up a sector specific Special Economic Zone for Gems and Jewellery at Village Bhamboriya, Tehsil Sanganer, District Jaipur in the State of Rajasthan; - Mahindra World City (Jaipur) Ltd.
Summary: Under Section 4 of the Special Economic Zones Act, 2005, Mahindra World City (Jaipur) Ltd. proposed to establish a sector-specific Special Economic Zone (SEZ) for Gems and Jewellery in Village Bhamboriya, Tehsil Sanganer, District Jaipur, Rajasthan. Initially notified with an area of 10.1360 hectares, the Central Government approved an additional 0.944 hectares, bringing the total SEZ area to 11.08 hectares. This expansion was confirmed by the Ministry of Commerce and Industry through Notification No. S.O.354(E) dated 29-2-2012, detailing the specific survey numbers and areas included in the extension.
Circulars / Instructions / Orders
DGFT
1.
58 (RE-2010)/2009-14 - dated
9-3-2012
Notification No.102, dated 05.03.2012 not applicable for cotton consignment for which Let Export Order(LEO) has been issued up to 2400 hrs. on 04.03.2012.
Summary: Notification No. 102, dated 05.03.2012, which prohibits the export of cotton under Tariff Codes 5201 and 5203, is not applicable to consignments for which Let Export Orders (LEOs) were issued by 2400 hours on 04.03.2012. The notification also states that transitional arrangements under para 1.5 of the Foreign Trade Policy and exports against already issued registration certificates are not permitted. The Central Board of Excise and Customs (CBEC) reports export data to the Directorate General of Commercial Intelligence and Statistics (DGCIS) based on daily trade reports, which include LEOs. This circular is approved by the Commerce Secretary.
2.
57 /2009-14 (RE 2011) - dated
6-3-2012
DFIA: applicability of provisions contained in paragraph 4.32.2 of HBP v1 regarding declaration of technical characteristics, quality and specifications at the time of exports.
Summary: The circular from the Directorate General of Foreign Trade addresses the applicability of provisions in paragraph 4.32.2 of the Handbook of Procedures regarding the declaration of technical characteristics, quality, and specifications for exports under the Duty-Free Import Authorization (DFIA) scheme. Exporters must declare these details in their applications and shipping bills. Regional Authorities (RAs) must ensure these details are consistent at the time of DFIA issuance and redemption. If discrepancies occur, adjustments must be made, or duties paid if imports have already occurred. Any issues with implementation should be reported to the Directorate.
Customs
3.
07/2012 - dated
9-3-2012
Clarification on imposition of Ban on export of Cotton with immediate effect by DGFT
Summary: The circular from the Central Board of Excise & Customs clarifies the ban on the export of cotton under tariff codes 5201 and 5203, as per a notification from the Directorate General of Foreign Trade (DGFT) dated March 5, 2012. It specifies that cotton consignments with 'Let Export Orders' issued by customs authorities by midnight on March 4, 2012, are exempt from this ban. The Board instructs field formations to permit the export of these consignments.
Companies Law
4.
4/2012 - dated
9-3-2012
Allotment of Director’s Identification Number (DIN) under Companies Act, 1956
Summary: The Ministry of Corporate Affairs has extended the deadline for DIN holders to file form DIN-4 to update their PAN details until April 30, 2012. This extension follows previous circulars issued in 2011. All existing DIN holders who have not yet provided their PAN are urged to comply to avoid penalties. The circular requests professional bodies and chambers of commerce to publicize this extension among their members. Additionally, the DIN Cell will notify DIN holders via email and SMS to ensure compliance with the updated requirements.
5.
3/2012 - dated
7-3-2012
Constitution of a Committee to formulate a Policy Document on Corporate Governance.
Summary: A committee has been established by the Ministry of Corporate Affairs to create a formal policy document on corporate governance, reflecting the growing significance of corporate governance in global economies. The committee will synthesize various existing guidelines, including international trends and best practices, to ensure standardized norms in corporate governance while respecting corporate autonomy. The Institute of Company Secretaries of India has prepared a concept paper to facilitate public discussion. The committee, comprising industry leaders and experts, will gather stakeholder opinions, conduct consultations, and suggest a comprehensive policy framework, reporting to the Ministry within six months.
6.
HQ/104/2007 - dated
17-2-2012
Role-check for the Digital Signatures (DSCs) belonging to authorized signatories of Banks/FIs
Summary: The Ministry of Corporate Affairs (MCA) has implemented a role-check mechanism for Digital Signature Certificates (DSCs) used by authorized signatories of banks and financial institutions. This initiative is part of the MCA21 e-Governance Project, which aims to enhance service efficiency and ensure document security through electronic filing. The role-check ensures that DSCs are correctly applied by authorized individuals, particularly in charge-related services where banks create charges on company assets. Banks must identify a nodal officer to manage DSCs and ensure compliance with the new system. The process involves creating a registry of authorized officials and validating DSCs during form submissions.
Highlights / Catch Notes
Income Tax
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High Court Confirms Tax Demand Validity Despite Numerical Error in Section 226(3) Notice.
Case-Laws - HC : Recovery of Tax - notice u/s 226(3) - An error in the figure, in a notice of demand does not vitiate the demand. - HC
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Tribunal: Single Appeal Allowed Against Common Judgment, Court Fees Required for Each Under Court Fees Act.
Case-Laws - HC : Consolidated appeal before tribunal against common order - One appeal, according to us, is maintainable against a common judgment, but, how-ever, the appellant would be required to pay court fees as is payable in accordance with the provisions of the applicable Court Fees Act in respect of each appeal, which stands consolidated by the common judgment against which an appeal has been preferred - HC
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Section 40A(3) Exemption: Cash Payments by Commission Agent to Truck Owners Not Subject to Disallowance.
Case-Laws - AT : Applicability of 40A(3)(cash payment exceeding of 20,000) - It acts as a commission agent facilitating payment to the truck owners, who are its members. Therefore, the payments were not business expenses of the assessee, therefore no disallowances. - AT
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Depreciation on NABARD-Funded Assets Allowed Without Restriction Under Income Tax Laws.
Case-Laws - AT : There is no restriction on account of allowability of depreciation on the assets purchased out of withdrawal from NABARD. - AT
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Denial of Section 10(23C)(iiiae) exemption doesn't bar claiming benefits u/ss 11-13 of the Income Tax Act.
Case-Laws - AT : Exemption u/s 11 -if the assessee is not entitled to exemption u/s 10(23C)(iiiae) then it will not be a bar in not claiming benefit u/s 11 to 13 of I.T. Act - AT
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Interest on Certain Public Sector Bonds Exempt from Income Tax u/s 10(15), Income-tax Act 1961.
Notifications : Section 10(15), item (h) of sub-clause (iv) of the Income-tax Act, 1961 - Exemptions - Interest on bonds/debentures - Notified bonds/debentures of Public Sector Companies - Ntf. No. 13/2012 Dated: March 6, 2012
Customs
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Customs must stop duty drawback recovery if RBI confirms export proceeds write-off without surrender requirement.
Case-Laws - HC : Proof of realization of export proceeds - duty drawback - once the RBI after examining the matter issued the letter dated 25-5-2004 indicating in clear words that the shipment bills of the petitioner were written off without surrender of duty drawback, the proper course available to the Customs Department was to drop the recovery proceedings. - HC
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High Court Rules Duty Demand on Unutilized DEEC Scheme Imports Unjustified; Export Obligations Fully Met Under Notification 30/97-Cus.
Case-Laws - HC : Import of goods under DEEC scheme - demand of on unutilized items - notification no. 30/97-Cus., dated 1-4-1997 - assessee has fulfilled the export obligation completely - The excess material in fact had not been utilized completely because of efficient utilization of the raw material. - Demand of duty is not justified - HC
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DGFT Imposes Immediate Ban on Cotton Exports Effective March 9, 2012, as per Circular No. 07/2012.
Circulars : Clarification on imposition of Ban on export of Cotton with immediate effect by DGFT - Cir. No. 07/2012 Dated: March 9, 2012
DGFT
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Cotton Exemption: Notification No.102 doesn't apply to consignments with Let Export Order by March 4, 2012.
Circulars : Notification No.102, dated 05.03.2012 not applicable for cotton consignment for which Let Export Order(LEO) has been issued up to 2400 hrs. on 04.03.2012. - Cir. No. 58 (RE-2010)/2009-14 Dated: March 9, 2012
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DGFT Clarifies Exporter Compliance for Technical Declarations under HBP Volume 1, Paragraph 4.32.2 for DFIA Scheme.
Circulars : DFIA: applicability of provisions contained in paragraph 4.32.2 of HBP v1 regarding declaration of technical characteristics, quality and specifications at the time of exports. - Cir. No. 57 /2009-14 (RE 2011) Dated: March 6, 2012
SEZ
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Gems & Jewellery SEZ Established in Jaipur u/s 4 of SEZ Act 2005, Managed by Mahindra World City.
Notifications : U/S. 4 of the SEZ Act, 2005 - Set up a sector specific Special Economic Zone for Gems and Jewellery at Village Bhamboriya, Tehsil Sanganer, District Jaipur in the State of Rajasthan; - Mahindra World City (Jaipur) Ltd. - Ntf. No. S.O.354(E), Dated: February 29, 2012
Corporate Law
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New Guidelines for Director's Identification Number (DIN) Allotment Under Companies Act, 1956 Enhance Transparency in Corporate Governance.
Circulars : Allotment of Director’s Identification Number (DIN) under Companies Act, 1956 - Cir. No. 4/2012 Dated: March 9, 2012
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Banks Must Verify Digital Signatures of Authorized Signatories for Secure Transactions, Says 2012 Circular.
Circulars : Role-check for the Digital Signatures (DSCs) belonging to authorized signatories of Banks/FIs - Cir. No. HQ/104/2007 Dated: February 17, 2012
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Committee Formed to Draft Corporate Governance Policy Document as per Circular No. 3/2012, Enhancing Transparency and Accountability.
Circulars : Constitution of a Committee to formulate a Policy Document on Corporate Governance. - Cir. No. 3/2012 Dated: March 7, 2012
Indian Laws
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Finance Committee Report Proposes Simplified Income Tax Code with Changes to Rates, Exemptions, and Compliance Measures.
News : Income Tax : Highlights of Report of Standing Committee on Finance on Direct Taxes Code Bill, 2010 presented to Speaker on 9-3-2012
Service Tax
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Indian Business Services Meet Rule 3(iii) Criteria; Import Duty Deemed Payable by Recipient.
Case-Laws - AT : Import of servcies - Rule 3(iii) - The said services were received by a recipient located in India for use in relation to business or commerce and thus satisfy criteria of Rule 3(iii) - prima facie the duty demanded from the applicant is payable. - AT
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High Court Affirms Tribunal Decision: Building Development Agreement Not Taxable as No Service Provider/Recipient Involved.
Case-Laws - HC : Building Development agreement - In the absence of there being any service provider and service recipient in relation to the transaction in question, the Tribunal was justified in holding that the transaction in this case cannot be considered as taxable - HC
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CENVAT Credit Not Applicable for Courier Services Received Post-Clearance of Goods from Factory Gate.
Case-Laws - AT : CENVAT credit on courier services - courier service is received after the clearance of goods from the factory gate therefore, the service relates to post clearance of the samples and nothing to do with the manufacture of samples - AT
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Practitioners of ESI, PF, and industrial laws not classified as 'Management Consultants' for service tax purposes.
Case-Laws - AT : Demand - Management Consultancy Service - the services rendered by ESI, PF, and other industrial law practitioners - do not get covered by scope of the term ‘Management Consultant’ - AT
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Determining Service Tax: Cargo Handling vs. Airport Services; Holding Cargo Not Classified as Storage/Warehousing.
Case-Laws - AT : Cargo Handling Service versus Airport Services - classification - If there is holding of cargo for a few hours or a few days for proper handling of cargo and loading on to proper aircraft, the activity cannot be considered as storage and warehousing service notwithstanding the fact that they charge to the clients in the name of “storage charges” - AT
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High Court questions automatic penalty for service tax defaults by courier services u/s 80. Legal interpretation debated.
Case-Laws - HC : Penalty - courier service -The contention that once there is a default, the payment of penalty is automatically unsustainable in view of the language employed in Section 80 of the Act - HC
Central Excise
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Interest u/s 11AB Applies to Short-Paid Duty; Confirmed Interest is Leviable and Creditable to Recipient Unit.
Case-Laws - AT : Interest 11AB - even where the duty is short paid by an assessee, is available as credit to the recipient unit of the same assessee, interest in terms of provisions of Section 11AB is required to be confirmed and interest is leviable. - AT
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Barcoding and MRP Labeling on Imports Classified as "Deemed Manufacture" u/s 2(f)(iii) of Central Excise Act.
Case-Laws - AT : Affixing of bar code and MRP or imported goods - deemed manufacture - held that:- the provisions of Section 2(f)(iii) of the Central Excise Act are attracted. - AT
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Rebate Claims u/r 18 of Central Excise Rules: Roles of Deputy, Assistant, and Maritime Commissioners Discussed.
Case-Laws - CGOVT : Revision application - rebate sanctioning authority - rebate claims under the provisions of Rule 18 of the Central Excise Rules, 2002 - Deputy Commissioner/Assistant Commissioner of Central Excise having jurisdiction over factory of production of export goods or the warehouse, or the Maritime Commissioner is empowered to sanction the rebate claim - CGOVT
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Refund Claims for Duty Paid Under Protest Must Prove No Unjust Enrichment per Section 11B of the Act.
Case-Laws - HC : Refund - the duty paid under protest falls under section 11B of the Act and as such, would attract the principles of unjust enrichment. - HC
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Court Rules Against Assessee on Six Deductions in Central Excise Goods Valuation Case.
Case-Laws - AT : Valuation of goods under central excise - deduction from price - No justification for the Commissioner to decide the claim regarding six deductions by answering the same in favour of the assessee. - AT
Case Laws:
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Income Tax
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2012 (3) TMI 144
Shoguns received on marriage taxable as gift - Marriage of assessee's daughter - Held That:- Shoguns were given to assesse and not too daughter, logically cheque should be in bride name - No details provided which showed that amount has been transferred to bride's account. Decided against assesee. Foreign Travel Expenditure disallowed on account of personal element - Held That:- Revenue could not bring any material on record to show that such expenditure are personal. Decided in favour of assessee.
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2012 (3) TMI 143
Rectification of mistake - Time Period - order not passed within the period of three month from the date of hearing - Held That:- when the assessee has not brought on record anything to establish prima facie that any material fact or contention was left without considering by the Tribunal while passing the impugned order. Accordingly, we do not agree with the contentions of the learned counsel for the assessee on this point. Order Signed by different member and Pronounced by different member - Held That:- the order was signed by both the Members who have heard the appeal in question. Since one of the Members was already transferred was not available at Mumbai, therefore, another Accountant Member Shri R.S.Syal was nominated to substitute D.K.Shrivastava, AM who was transferred, therefore, there is no illegality or defect in the process of pronouncement of the impugned order. Rectification of order of Tribunal - granted tenancy to the clients even though the same is termed as ‘cabin space’ - Held That:- Tribunal has duly considered al l the contentions and the decision relied upon by the ld. Sr.Counsel for the assessee. Therefore, once the findings given on merits, after considering the relevant records as well as facts then even if the said findings of this Tribunal is not sustainable would not bring the case under the scope of section 254(2) of the Income Tax Act, 1961.
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2012 (3) TMI 142
Whether surrender made on account of discrepancies found in the books/cash and also considering that entire sales/purchases be treated as income under 69A - Held That:- In view of Fakir Mohamed Haji Hasan (2000 - TMI - 14629 - GUJARAT High Court), additional income offered is deemed income assessable u/s 69A of the Act and no deduction is allowable against such deemed income assessed u/s 69A of the Act in the hands of the assessee. Set of Business loss against undisclosed Income - Held That:- In view of Fakir Mohamed Haji Hasan (2000 - TMI - 14629 - GUJARAT High Court), appeal dismissed. Additions on account of difference in Stock - Held That:- Addition of Rs.53,379/- on account of unexplained investment in the stock is fully covered by the amount surrendered by the assessee as unexplained investments. The impugned addition is, therefore, deleted. Rejection of books of account - Held That:- Assessee has surrendered a sum of Rs.25 lakhs on account of unexplained transactions also shows that the books of account maintained by the assessee are neither complete nor correct nor reliable. In this view of the matter, the order passed by the CIT(A) rejecting the books of account is confirmed. Additions on account of low GP rate - AO has applied the previous year GP as declared by the appellant which is held to be just and fair. The addition of Rs. 3,26,556/- made by the AO is upheld.
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2012 (3) TMI 141
Penalty Proceedings - Assessee marketing machine tools - AO: calculation of income @5% of turnover under 44AF is erroneous - Held That:- In assessee own case it has been decided that invoking of provision of 44AF are bonafide - For adjusting Commission and brokerage receipts: merely non furnishing of certain paper which are not in assessee possession will not attract penalty proceedings. When claim disallowed on adhocc basis and no valid information in possession of revenue. Penalty un-justified.
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2012 (3) TMI 140
Rejection of Books of Account on low GP ratio, payment to sister concerns section 40A(2), un-justified job work expenses - Held That:- Assessee furnished detailed explanation. Assessee had explained the decrease in sale price as also its reasons. AO admitted purchase price of the raw materials have risen during the year under consideration. Similarly non reporting of transaction can be best attributed to auditor and cannot be ground to reject books. Job work - previously was carried from outside and now from sister concern at same amount with no un-reasonable expenditure. - Decided in favour of assessee.
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2012 (3) TMI 139
Calculation of Profit - 4.5% of Net Profit - Assesee contended net profit in transportation business ranges 2 to 3 percent even as per 44AE maximum income per truck is 3500 per month - Held That:- The above NP ratio were applied by assessee in earlier two years thus AO is directed to compute the income of the assessee at NP rate of 4.25%. Calculation of Profit - Asseesee argued Net profit @1.75% not justified - Business doubled - Held That:- Having regard to the entirety of the facts and circumstances of the case and submissions made by the ld. ‘AR’ regarding the hike in expenditure and turnover of molasses, as also to meet the ends of natural justice, the AO is directed to apply net profit rate at 1.50% . Thus, the assessee gets partial relief.
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2012 (3) TMI 138
Waiver of interest under 234A,B,C and interest under 220(2) - Held That:- Default has occurred for reasons due to unavoidable circumstances, no details thereof have been furnished and this factual issue was not established before, denial of the request for waiver of interest cannot be said to be against the provisions of the notification. For waiver under 220 - apart from pleading that nonpayment of tax was due to reasons beyond the control of the assessee, the assessee has not established this factual question. Reliance placed on GTN Textile Ltd (1993 -TMI - 18908 - KERALA High Court). - Decided against the assessee.
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2012 (3) TMI 137
Re-opening of assessment under 147 - reason supplied after the expiry of six years from the end of relevant A/Y - Held That:- since the reasons for the reopening of the completed assessment were supplied to him beyond the period of six years from the end of the assessment year under consideration, the reopening is invalid - In view of Haryana Acrylic Manufacturing Co. vs. CIT (2008 - TMI - 31355 - DELHI HIGH COURT), assessment declared void ab initio.
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2012 (3) TMI 133
Genuineness of Gifts - Grandfather owner of 34 bighas of land cultivating wheat, paddy - Cash gifts on account of Natural love - Held That:- No evidence to show agriculture land is well irrigated. There is an element of overstating 34 bighas of land. Other relatives of assessee also at village, entire saving from agriculture without produce at no doubt. AO should have summoned the above facts from donour, no such effort made, it would bu suffice to sustain addition of Rs 307562 after giving relief of Rs 4,00,000. Cash Credit - Confirmation letters of creditor were filed - AO: identity not sufficient creditworthiness to be proved - Held That:- creditors are relatives of the assessee and have mentioned their relationship with the assessee in the confirmation letters filed before the AO, the absence of any material to doubt the genuineness of the transaction assessee has discharged its initial onus. Addition of Rs.77,800/- is deleted.
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2012 (3) TMI 132
Transfer Price - International transaction - Additional Evidences - Documents could not be produced before lower authorities - Held That:- In view of Anaikar Trade and Estates (1990 - TMI - 23190 - MADRAS High Court), tribunal can consider additional evidences. Once additional evidence are taken up they have to be considered to decide the matter therefore we remand case back to AO for fresh adjudication in accordance with law, after providing due and reasonable opportunity of being heard to the assessee.
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2012 (3) TMI 131
Validity of Re-assessments Proceedings - Computation of MAT u/s 115JB - Book profit wrongly set-off against brought forward loss - Held That:- AO: himself prepared computation it cannot be said there was no application of mind. In view of Kelvinator of India (2010 - TMI - 35201 - SUPREME COURT OF INDIA), CIT(Appeals) was correct in holding that reopening done was invalid.
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2012 (3) TMI 130
Sale/Purchase of Shares - "Capital Gain" OR "Business Income" - Held That:- When purchases were from assessee own fund merly because it has entered into huge investments in limited number of shares of Indian Companies, does not merit the stand of the authorities in treating the same as income from business. Decided in favour of assessee.
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2012 (3) TMI 129
Registration as Trust - Land leased from Trustee CIT rejected registration - Held That:- Assessee running school with 900 student no finding could be brought to show leased land is for benefit of Trustee. Order of CIT quashed and assessee eligible for registration.
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2012 (3) TMI 128
Maintainability of Appeals - Taxes due on returned income were not paid - Held That:- Taxes due were actually paid by the assessee before the hearing of the appeals by the Commissioner of Income-tax (Appeals) and that, therefore, the same be considered as sufficient compliance with the provisions of section 249(4) of the Act.
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2012 (3) TMI 127
Conditions for Invoking order by Commissioner under Sec 263 - AO enquired for allowability of deduction u/s 80HHF in respect of interest income treated as business income and non-exclusion of expenses incurred in foreign currency under Explanation (c) and (j) below to Section 80HHF - Assessee gave detailed Explanation by writing letter - Held That:- AO on being satisfied allowed claim of assesee. The order of the AO could not be considered to be “erroneous” simply because two views are possible and the AO has taken as one view with which the ld. CIT does not agree, which cannot be treated as erroneous and prejudicial to the interests of the Revenue unless the view taken by the AO is found to be unsustainable in law.
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2012 (3) TMI 126
Review of Order passed by Tribunal - Application for rectification - Period of limitation - The appeals of the assessee were dismissed by the Tribunal vide impugned order as barred by limitation because the Tribunal was of the view that the assessee has failed to explain the reasonable cause for filing the appeals late by 670 days and thereby did not inclined to condone the delay. - Held That:- Order under 254(2) can be rectified only in case of mistake apparent from record,Tribunal has no power to review its order passed on merit which amounts to reversal of the order passed after discussing all the facts and statutory provisions in detail. - Miscellaneous Application filed by the assessee dismissed.
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Customs
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2012 (3) TMI 125
Contract of Construction of Roads in India- Notification 21/2002-Cus dated 01.03.2002- availing the exemption the importer should have a contract awarded or as a sub contractor for the construction of roads in India either by the Central Government or the State Government or other agencies mentioned in the notification - Appellant had such a contract at the time of importation- the usage of the equipment in the performance of the contract is mandatory - held that:- Exemption cannot be granted as the Appellant has utilized the equipment for construction of roads elsewhere not as a contractor but as a sub-contractor. But even in those cases, they were not named as a sub-contractor - appellant to make a pre-deposit of 50% of the customs duty within eight weeks
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