TMI Tax Updates - e-Newsletter
March 19, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
Income Tax
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Valuation of property - stamp duty purposes - Whatever may be the problems suffered by an assessee, in reality, those reasons cannot be permitted to go beyond the scope of section 50C - AT
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Penalty u/s 271AAA of the Act Penalty proceedings and quantum proceedings are separate and distinct and the parameters which are applicable to the assessment proceedings may not apply to penalty proceedings - AT
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Reopening of assessment u/s 147 - Since the AO did not draw the correct inference or failed to draw inference, it does not mean that there was non-disclosure of all facts by the assessee - AT
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Income from business or Income from house property Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it - AT
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Method of accounting u/s 145 - construction activity - PCM followed by the assessee was the right method of accounting for determining the taxable income of the assessee - AT
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TPA - when parent company is able to raise foreign exchange borrowings at a certain rate, it is reasonable to assume that such rates can constitute valid comparable for similarly placed borrowings by the subsidiary as well - AT
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Dispute Resolution Panels, manned by very distinguished and senior Commissioners of eminence, will lose all their relevance, if, irrespective of their heavy work load and demanding schedules, these forums do not rise to the occasion and do not deal with the objections raised before them in a comprehensive and effective manner. - AT
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Genuineness of the Transaction - the evidence by way of bank account of the donor, collected by the AO and confronted to the assessee, directly proves the gift to be non-genuine - Additions confirmed - AT
Customs
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Re credit - Liveliness of DEPB scrip - whether such credit can be allowed on a live scrip or even though the scrip had expired credit can be allowed on that scrip - re-credit allowed - AT
Service Tax
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Business Auxiliary Service - bullet proofing of vehicle - two models - in first model car is purchased first - in second model bullet proofing is done without owning the car - stay granted towards first model of opeartion - AT
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Refund - Notification No. 17/2009-ST - While the bank realisation certificate does not mention the shipping bill number, it does mention the invoice number and date and the shipping bills filed by the appellant do mention the export invoice number. - refund allowed - AT
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Valuation - Advertisement Agency Service - applicant is paying service tax on the 15% of the commission retained by him. - Taxing the activity of the print media in the hands of the intermediary is not consistent with provisions of section 67 - stay granted - AT
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Cenvat Credit on GTA service - input services - delivery upto the place of customer - there is no requirement that each consignment would cover separate insurance policy - credit alalowed. - AT
Central Excise
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Default in payment of duty - restriction on utilizing cenvat credti under Rule 8(3A) - It is settled law that what is not allowed directly cannot be allowed/claimed indirectly. - AT
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Prayer of adjustment of excess paid duty with short payment - there was no provisional assessment - the excess amount of duty paid on higher assessable value would be refunded in accordance with Section 11B - adjustment not allowed - AT
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Recovery of arrears of excise duties - Attachment of property taken on lease - mere possession does not give the control of the property because of the control of property always rests with the legal owner and not with the possessor. - AT
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Denial of Cenvat credit of duty paid on the coal received on the ground that coal supplier should not have paid duty inasmuch as coal was unconditionally exempted - credit allowed - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (3) TMI 506
Valuation of property - Addition made on the basis of the value of the property adopted by the SR for stamp duty purposes Held that:- The factors cannot be acted upon by the authorities for the reason that section 50C is a deeming section - Any relief granted to the assessee must be on the basis of a reason - The reason must be within the four corners of the law - Whatever may be the problems suffered by an assessee, in reality, those reasons cannot be permitted to go beyond the scope of section 50C - When section 50C says that the sale consideration shall be the guidelines value, if the stated consideration is less than that, it means the law has already decided the course of action - Nothing can persuade the situation including the genuine and valid difficulties of an assessee. It is to alleviate the difficulties of an assessee that a provision for reference to DVO is given in the section - while considering the report of the DVO and other such factors to interfere in the valuation of the property, it is not permissible for the appellate authorities to consider personal and individual reasons - The relief granted by the appellate authority should be on the basis of apparent features of the property - The misfortunes happened to the assessee or the difficulties faced by the assessee or the matter of distress sale, etc. cannot be a ground to modify the valuation - If such extraneous factors are relied upon, the deeming provision of law stated in section 50C of the Act would be contravened the order of the CIT(A) set aside Decided in favour of Revenue.
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2014 (3) TMI 505
Penalty u/s 271AAA of the Act Failure to furnish accounts of clients - Held that:- Mere failure of assessee to furnish accounts of the clients in which modification was done due to necessity of business and as per norms of exchange of the institution, an act of concealment of income or furnishing of inaccurate particulars of income, particularly, when complete identity of the clients were given with whom business of brokerage was carried on - Thus, inability to file confirmations was because it was not in the control of the assessee cannot constitute a concealment of income. Whatever income was generated in the past has been disclosed in the return of income filed for A.Y. 2008-09 in the form of assets, particularly, when no such income was found for this year - CIT(A) has given specific direction to allow telescopy of the addition - when the A.O. has made addition on account of assets, he is bound to allow the same for A.Y. 2006-07 and 2007-08 - income earned/an asset acquired out of such income cannot be taxed twice the decision in CIT Vs. Aryamal Balchand [1986 (4) TMI 14 - RAJASTHAN High Court] followed - Penalty proceedings and quantum proceedings are separate and distinct and the parameters which are applicable to the assessment proceedings may not apply to penalty proceedings thus, no penalty is imposable in the case thus, the penalty imposed is set aside Decided in favour of Assessee.
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2014 (3) TMI 504
Condonation of delay Proper guidance not provided to the assessee - Held that:- The Assessees counsel while appearing before CIT(A) did not guide the assessee properly and only after when the assessee engaged the present counsel, he has advised him to file the CO - there is no evidence or supporting document to suggest that the earlier counsel has wrongly advised the assessee - There is no confirmation from the earlier counsel what he has advised the assessee - nothing has been brought on record by the assessee with regard to the fact that which counsel has advised the assessee as stated in the affidavit and there is no affidavit or letter from the concerned counsel, who has wrongly advised the assessee. The law assists those who are vigilant, not those who sleep over their rights - The delay cannot be condoned simply because the assessee's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief - The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions - as stated in the affidavit, the reasons advanced by the assessee are not supported by any cogent evidence thus, condonation of delay in filing the appeals of the assessee cannot be accepted on the ground that the assessee was not able to establish that it has prevented by a reasonable cause in filing these appeals belatedly Decided against Assessee. Disallowance u/s 40(a)(ia) of the Act Held that:- There was no merit in the appeal of the Revenue - the amount has been taxed in the hands of Kranthi Constructions only - There may be so many reasons for accounting this contract receipt in the hands of the assessee and it was pleaded before us that because of mistake in 26AS issued by the contractor, the entry was made in the books of account of the assessee - the amount was offered for taxation in the hands of Kranthi Constructions and it cannot be brought to tax in the hands of the assessee. Being so there is no question of deduction of TDS by the assessee on the payment received by the Kranthi Constructions. There is insertion of second proviso to section 40(a)(ia) by Finance Act, 2012 w.e.f. 1.4.2013 wherein stated that disallowance u/s. 40(a)(ia) of the Act need not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act it is retrospective in nature since it has been introduced to eliminate unintended consequences which may cause undue hardship to the tax payer Relying upon Antony D. Mundackal vs. ACIT 2013 (12) TMI 67 - ITAT COCHIN] thus, there cannot be any disallowance u/s. 40(a)(ia) of the Act the order of the CIT(A) upheld Decided against Revenue.
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2014 (3) TMI 503
Reopening of assessment u/s 147 of the Act - Allowability of exemption u/s 10B of the Act Hedl that:- There is no doubt from reading of the reasons recorded all the relevant factors were disclosed by the assessee during the original assessment as the original assessment was completed u/s. 143(3) of the Act vide order dated 28.11.2008 and the deduction claimed by the assessee u/s. 10B of the Act was granted - Notice for reopening of assessment was given on 17.2.2011 thus, there is no failure to truly and fully disclose all material facts for the purpose of assessment by the assessee - It is only a question of drawing inference from these facts - The inference from the available documents on record has to be drawn by the Assessing Officer - Since the AO did not draw the correct inference or failed to draw inference, it does not mean that there was non-disclosure of all facts by the assessee - the finding of the CIT(A) upheld and he has not committed an error in coming to the conclusion that the assessee has disclosed all material facts and they were before the AO at the time of completion of original assessment u/s. 143(3) of the Act - the Explanation to second proviso to section 147 of the Act has no application Decided against Revenue.
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2014 (3) TMI 502
Exercise of Jurisdiction u/s 263 of the Act - disallowance of expenditure debited to profit and loss account - Held that:- The assessment order does not reveal whether the Assessing Officer has made any enquiry either with regard to the expenditure claimed under various heads or in respect of purchase of film - The documents submitted also do not establish any enquiry to have been conducted by the Assessing Officer on the issue pointed out by the CIT - the Assessing Officer has completed the assessment in a mechanical and casual manner without proper application of mind or even a semblance enquiry - The assessee could not demonstrate or submit any material, except a letter which could show that enquiry in any manner was conducted by the Assessing Officer to find out the true intent of agreement with Adlabs Limited or verifying the allowability of the expenditure claimed by the assessee since the property was handed over to Adlabs Limited on lease during the financial year under dispute - Neither the assessment order, nor any other material on record show even a hint of enquiry by the Assessing Officer by issuing any questionnaire etc., to the assessee on the issues pointed out by the CIT thus, the assessment order passed is certainly erroneous since it causes prejudice to the interest of revenue thus, the exercise of jurisdiction u/s 263 of the Act by the CIT (A) to revise such an order is permissible in accordance with the provisions of the Act. The order of the CIT is modified to the extent by directing the Assessing Officer to redo the assessment after examining all aspects of the matter and after conducting necessary enquiry as may be deemed fit without being influenced by the observations of the CIT that the rent from machinery and plant should be treated as income from other sources - The Assessing Officer shall take an independent decision on the issue of taxability of conducting charges under an appropriate head Decided partly in favour of Assessee.
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2014 (3) TMI 501
Estimation of profits on sale of plots Held that:- It cannot be said that opportunity was not given to the Assessing Officer to verify the facts - all documents were all also produced before the CIT in course of revision proceedings - CIT was of the view that the assessee is the owner of 25% of the plotted land, hence profit to the extent of 25% from the sale consideration received for the assessment year is taxable at the hands of the assessee - From the computation of income filed along with return for the assessment year, it can be seen that the assessee himself had shown short term capital gains thus, the sale consideration considered by the Assessing Officer at the hands of the assessee also includes the amount admitted by the assessee in the return of income thus, profit to that extent has to be considered at the hands of the assessee for the assessment year - Whereas the CIT (A) has deleted the entire sale consideration which also includes the amount declared by the assessee in the return of income thus, the AO is directed to retain the income offered by the assessee from sale of plots in the return filed for the assessment year and to delete the rest of the addition Decided partly in favour of Assessee.
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2014 (3) TMI 500
Deduction u/s 24(a) of the Act Rental income - Income from business or Income from house property Held that:- There is no logic in treating the income from house property as income from business - nothing has been brought on record by the AO to show that the income from house property is actual income from business Relying upon CIT vs. Dalmia Promoters Developers (P) Ltd. [2006 (1) TMI 57 - DELHI High Court] - for rejecting the view taken in earlier assessment years, there must be material change in the fact, situation or in law - there is no change in the facts, situation or in law thus, the Revenue cannot be allowed to adopt a different stand - when in earlier asstt. years the revenue accepted the order of the Tribunal in favour of the assessee, then Revenue cannot be allowed to flip flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it thus, there is no infirmity in the order of the CIT(A) Decided against Revenue. Partial relief u/s 57(iii) of the Act Income from other sources Expenditure not proved - Held that:- On this claim CIT(A) has further disallowed 50% against which the Counsel of the assessee submitted that the assessee is not in appeal - The assessee has incurred expenditure in earning income from other sources - Assessee has himself disallowed u/s 14A and balance has been claimed by the assessee - CIT(A) has allowed 50% of the expenditure - the expenses have been found to be bogus or the concerned vouchers were lacking thus, there is no infirmity in the order of the CIT(A) in this regard Decided against revenue.
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2014 (3) TMI 499
Admissibility of Miscellaneous application Nature of Activity - Held that:- It is incorrect on the part of the Assessee to argue that the Tribunal has exceeded in commenting the nature of activity of the undertaking by holding that the undertaking had carried out an adventures in the nature of trading - The provisions of Section 11(4) were required to be discussed along with provisions of Section 2(15) of IT Act - Considering those sections, a final conclusion was made by the Tribunal that, quote "therefore, we are of the conscientious view that even if this undertaking may come within the purview of "business undertaking" but being no excess income was found utilized other than for the purposes of the object of the trust; hence, out of the ambits of the provision of section 11(4) of the IT Act - the final result of the appeal was not against the assessee thus, the Misc. Application appears to be not based upon a sound footing - the petition has been moved merely under an apprehension. Power of review Mistake apparent on record Held that:- The Tribunal has considered facts of the case at length as well as the applicable case law thus, there was no apparent mistake on record in COMMISSIONER OF INCOME-TAX Versus KAMAL BHAI ISMAILJI [2005 (4) TMI 6 - ALLAHABAD HIGH COURT] it has been held that the Tribunal has no power to review its order - the Misc. Application does not fall under any of the ambits of Section 254(2) of IT Act thus, the activity carried on by the assessee undertaking and that view was not a mistake at all, what to say an apparent mistake - Decided against Assessee.
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2014 (3) TMI 498
Deletion made on account of method of accounting u/s 145 of the Act Held that:- The assessee was following a particular method of accounting regularly in the earlier as well as subsequent assessment years - the Assessee is a builder and developer and in such a case PCM is an accepted method of accounting. AS-7 is applicable only in case of contractors, engaged in the civil construction business, it does not apply to builder & developer - It is established principle of taxation that PCM and percentage completion method are recognised methods to assess correct income of an assessee under the Act - the assessee can follow any methods, only condition is that the same method has to be followed consistently - It is not open to the AO to change the method of accounting only because he finds another method of accounting better than the one adopted regularly by the assessee. The assessee had constructed the complete building over a period of time and received the purchase consideration from time to time from the purchasers and handed over the possession of the building when the building was fully completed and occupancy certificate was received - It was only at that time that the proverbial risks and rewards were transferred to the purchaser thus, PCM followed by the assessee-AOP was in order and the action of the FAA to reject the stand taken by the AO was justified thus, the order of the FAA upheld - Decided against Revenue. Disallowance of deduction u/s 80IB(10) of the Act - No income has accrued for assessment year 2007-08 based on the project completion method Held that:- PCM followed by the assessee was the right method of accounting for determining the taxable income of the assessee, that project was completed in AY. 2009-10 thus, the issue of eligibility of 80IB deduction has been left open by the FAA when he held that the AO would be at liberty to make necessary inquiries - no prejudice has been caused to the interest of the Revenue thus, the order of the FAA upheld Decided against revenue.
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2014 (3) TMI 497
Confirmation of addition Proper documentary evidences not considered genuineness or bogus transaction - Held that:- All the documents furnished as additional evidences, were obtained by the assessee after the order of the FAA, that it had made inquiries under the RTI Act from the banks and obtained such documents that could affect the outcome of the appeal - Rule 29 of the ITAT Rules stipulates that if appellant can prove that it was prevented by sufficient cause for not producing some documents before the AO or the FAA, Tribunal may allow it to produce the same before it - the documents filed by the assessee are useful to decide the issues raised - hence same are being admitted as additional evidence u. r. 29 of the ITAT, Rules - As the AO/ FAA had no occasion to consider these documents thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (3) TMI 496
Amortization of expenses u/s 35ABB of the Act - Disallowance of variable license fees - Deduction u/s 37(1) of the Act Disallowance of interest paid on term loans Loans utilized only for business purpose Held that:- As already decided by the HC that the expenditure incurred towards licence fee is partly revenue and partly capital - Licence fee payable upto 31st July 1999 should be treated as capital expenditure, and licence fee on revenue sharing basis, after 1st August 1999, should be treated as revenue expenditure - Capital expenditure will qualify for deduction as per section 35 ABB of the Act - the licence fee is on revenue sharing basis and pertains to period post 1st August 1999 thus, the disallowance set aside and the entire amount of licence fees is allowable as revenue deduction The disallowances on interest paid is allowed as deduction - Decided in favour of assessee. Deduction u/s 37(1) of the Act employee compensation expenses Issuance of ESOPs Held that:- The decision in Biocon Limited v. DCIT 2013 (8) TMI 629 - ITAT BANGALORE] followed - The difference between the fair market value of the shares and the amount receivable from the employee at the time of issue/or exercise of the Employee Stock Option, debited to the profit and loss account is allowed partly in the year under consideration and partly in the earlier assessment year Decided in favour of Assessee. Disallowance of lease charges Held that:- The Assessing Officer has not given any adjudication on merits and nor has he dealt with the contentions of the assessee by way of a speaking order - The Assessing Officer and the DRP have simply followed the order of the earlier years, and the matter for that year stands restored to the file of the Assessing Officer - in such a situation, it will be inappropriate to deal with the matter on merits thus, the matter is remitted back to the AO for adjudication Decided in favour of Assessee. Article 11 of Indo-Sweden DTAA Obligation to deduct TDS - Held that:- ABN-S did not have any locality related attachment in Sweden which could lead to residence type taxation on global basis - ABN-S cannot be treated as tax resident of Indo Swedish tax treaty thus, the benefit of Article 11 (3) of Indo Swedish tax treaty cannot be applicable on the ground that the interest remittances are made to ABN-S - the mere fact that the interest has been remitted to ABN-S and that the benefit of Article 11(3) of Indo Swedish tax treaty or benefit of Article 11(3) of the Indo Dutch tax treaty are not available in respect of these remittances, does not imply that the amounts so paid are taxable in India. Even though such interest is remitted to ABN-S, since ABN -S has mainly acted as a conduit, it is to be treated as having been paid to the beneficial owners of such interest i.e. original lenders under the financing arrangement - though through the ABN-S - the assessee has filed elaborate documentation in support of their stand about tax residency status of beneficial owners of the interest paid by the assessee and has also addressed the arguments on merits, but, in the absence of this aspect of the matter having been examined is not inclined to deal with the matter on merits - the right course of action is to identify the factual aspects to be looked into, set out the legal principles the matter remitted back to the AO for fresh adjudication. Disallowance of interest u/s 40(a)(i) of the Act Held that:- Whether disallowance under section 40(a)(i) can be made in a situation in which even if the foreign remittance had tax withholding obligations under section 195 but the assessee had bonafide reasons to believe that there were no tax with withholding obligations - as the matter is remitted back to the AO file of the Assessing Officer for adjudication on the basic question as to whether there were tax withholding obligations, this aspect of the matter is academic at this stage Decided in favour of Assessee. Disallowance u/s 40(a)(ia) of the Act TDS to be deducted u/s 194H of the Act Held that:- The decision in CIT Vs Idea Cellular Limited [2010 (2) TMI 24 - DELHI HIGH COURT]followed - There is no element of agency, that talk time is traded and distributed, that it's a principal to principal relationship that the assessee has with his distributors, that flow of payment is in the reverse direction which is contrary to the concept of commission payment and that the assessee had a bonafide belief that section 40(a)(ia) will not come into play as the distributors have honoured their tax liability thus, the assessee was required to deduct tax at source from the commission so allowed by the assessee and failure to do so is to be visited with the consequence of disallowance under section 40(a)(ia) r.w.s. 194 H - The disallowance is thus confirmed Decided against Assessee. Deduction u/s 40(a)(ia) of the Act - Roaming and other telecom charges - Whether the amounts paid for roaming charges will attract tax deduction at source under section 194 J of the Act Held that:- The decision in CIT v. Bharti Cellular Limited [2010 (8) TMI 332 - Supreme Court of India] followed - the matter was remanded to the Assessing Officer (TDS) with certain directions for de novo adjudication - the authorities below have not examined the matter at any of the stages nor this specific argument was taken before them thus, the matter remitted back to the AO for fresh adjudication Decided in favour of Assessee. Non-refundable security added to tax Held that:- The non-refundable security deposit received from the landline subscribers is in respect of the services rendered by the assessee over the period in which the connection is in use, and, therefore, its being amortized over the estimated customer churn period is in consonance with generally accepted accounting principles inasmuch as it would indeed present a distorted picture of financial affairs when entire amount of non refundable security deposit is treated as income relatable to the year in which it is received - This is the practice that the assessee has consistently followed, and the revenue has also accepted the same in the other years Relying upon CIT v. Excel Industries Ltd. 2013 (10) TMI 324 - SUPREME COURT] - it would be inappropriate to allow reconsideration of an issue for a subsequent year when the same fundamental aspect permeates in the different assessment years thus, the AO is directed to set aside the additions made Decided in favour of Assessee. Transfer pricing adjustment Selection of comparables - Whether for the purposes of applying CUP method all the internal comparables are to be taken into account or whether only one of these comparables, namely sale to Maxis International (Malaysia), is to be taken into account Held that:- The international call provider carries the incoming call to Indian upto Indian shore and the assessee carries the international call from Indian shores to the end subscriber - The services being provided to the international telecommunication companies are with respect to the activity performed in India, and, irrespective of the area from which such international calls originate, the activity remains the same. The origin of the call does not make any difference to the activity performed by the assessee thus, there cannot be any difference in the market conditions in such a case merely because the international call originates a different countries - It is a business to business service, without direct involvement of the end customer in call originating location thus, even if there is a difference in retail telecom market in countries of origin of call, such a difference cannot have any impact so far as determination of price for Indian segment of such a call is concerned the determination of arm's length price by the assessee has been decided on the basis of CUP method thus, the ALP adjustment in respect of sale of carriage and termination of voice traffic is set aside Decided in favour of Assessee. ALP Adjustment Interest on corporate deposits with Associated Enterprises Held that:- While the TPO has adopted the rate as 4% over LIBOR rate, he has not set out the specific basis of this rate - There is no material for vague observations about weak financials of the subsidiaries which are not supported by any specific facts and proceed on sweeping generalizations and assumptions, to reject the comparables taken by the assessee - When a Transfer Pricing Officer rejects comparables taken by the assessee, he has to set out specific, cogent and legally sustainable reasons for doing so. The TPO overlooks the fact that such a transaction cost is relevant only to the domestic borrower who borrows in foreign currency from outside India - It has nothing to do with the arm's length interest rate for foreign currency borrowing by an overseas subsidiary - In any event, the interest rate is independent of incidental costs, and since TPO has taken lender as the tested party, the transaction cost to the borrower is wholly irrelevant - This adjustment is devoid of any legally sustainable basis. The TPO has taken the lender as the tested party, and yet made adjustments for higher risks on account of assumed lack of security and increased risk of single party dealing - The approach overlooks the fact that the assessee has advanced monies to its subsidiaries which are under its management and control- a factor which substantially reduces the risk rather than increasing it. The proposition that the credit rating of the parent company and subsidiary company will be the same is not of universal application but it is certainly a good indicator, in the absence of anything else to the contrary, of the credit rating of the subsidiary as well - when parent company is able to raise foreign exchange borrowings at a certain rate, it is reasonable to assume that such rates can constitute valid comparable for similarly placed borrowings by the subsidiary as well - more so when subsidiaries are under management and control of the lender parent company, and the business risk is thus much lower thus, the ALP adjustments to interest rate for loans to subsidiaries are not warranted Decided in favour of Assessee.
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2014 (3) TMI 495
Disallowance on transfer of telecom infrastructure - Whether the Assessing Officer could have made an addition for this amount to the income returned by the assessee Double additions - Held that:- The entries were absolutely profit neutral so far as the profit as per profit and loss account is concerned, and since it is this profit which is starting point for computation of business income, effectively no adjustments thereto were required - Even if no adjustment was carried out in the computation of income, the resultant income would have been the same, but the adjustments, if at all required for the sake of completeness and transparency, were required for both the entries, i.e. loss on transfer of assets as also amount withdrawn from business restructuring. - The contention of the assessee was that no such addition was justified because the assessee has, on his own, made appropriate adjustments in the computation of taxable income and an addition by the Assessing Officer will result in double disallowance of the said amount - the addition made is deleted Decided in favour of Assessee. Working of DRP - Held that:- The fact that even such purely factual issues are not adequately dealt with by the DRPs raises a big question mark on the efficacy of the very institution of Dispute Resolution Panel - One can perhaps understand, even if not condone, frivolous additions being made by the Assessing Officers, who are relatively younger officers with limited exposure and experience, but the Dispute Resolution Panels, manned by very distinguished and senior Commissioners of eminence, will lose all their relevance, if, irrespective of their heavy work load and demanding schedules, these forums do not rise to the occasion and do not deal with the objections raised before them in a comprehensive and effective manner. Disallowance of suo-motu commission to cover up corporate guarantee international transaction - Held that:- The onus is on the revenue authorities to demonstrate that the transaction is of such a nature as to have "bearing on profits, income, losses or assets" of the enterprise, and there was not even an effort to discharge this onus - Such an impact on profits, income, losses or assets has to be on real basis, even if in present or in future, and not on contingent or hypothetical basis, and there has to be some material on record to indicate, even if not to establish it to hilt, that an intra AE international transaction has some impact on profits, income, losses or assets - these conditions are not satisfied on the facts of this case - Even after the amendment in Section 92 B, by amending Explanation to Section 92 B, a corporate guarantee issued for the benefit of the AEs, which does not involve any costs to the assessee, does not have any bearing on profits, income, losses or assets of the enterprise thus, it is outside the ambit of ' international transaction' to which ALP adjustment can be made Decided in favour of Assessee. ALP Adjustment Interest on corporate deposits with Associated Enterprises Held that:- The TPO overlooks the fact that such a transaction cost is relevant only to the domestic borrower who borrows in foreign currency from outside India - It has nothing to do with the arm's length interest rate for foreign currency borrowing by an overseas subsidiary - the ALP adjustments to interest rate for loans to subsidiaries are not warranted Decided in favour of Assessee. Addition on account of notional interest Held that:- There is no provision in law enabling deeming fiction - What is before us is a transaction of capital subscription - Since the TPO has not brought on record anything to show that an unrelated share applicant was to be paid any interest for the period between making the share application payment and allotment of shares, the very foundation of ALP adjustment is devoid of legally sustainable merits. It is not open to the revenue authorities to recharacterize the transaction unless it is found to be a sham or bogus transaction - While there are no specific powers vested in the TPO to recharacterize the transaction, even under the judge made law, such re-chracterization can be done by the revenue authorities when the transactions are found to be substantially at variance with the stated form - there cannot even a suggestion to hold that this is a bogus transaction because admittedly the subscribed shares capital has indeed been allotted to the assessee - The transaction is accepted to be genuine in effect Decided in favour of Assessee. Disallowance of interest expenses u/s 40(a)(i) of the Act Held that:- ABN- S did not have any locality related attachment in Sweden which could lead to residence type taxation on global basis - ABN-S cannot be treated as tax resident of Indo Swedish tax treaty thus, the benefit of Article 11 (3) of Indo Swedish tax treaty cannot be applicable on the ground that the interest remittances are made to ABN-S - the authorities below were clearly in error in treating ABN Amro Bank as recipient and as beneficial owner of the entire interest paid by the assessee remitted to ABN-S - even though interest is remitted to ABN-S, since ABN -S has mainly acted as a conduit, it is to be treated as having been paid to the beneficial owners of such interest i.e. original lenders under the financing arrangement - though through the ABN-S the matter is remitted back to the AO for adjudication Decided in favour of Assessee. Amortization of expenses u/s 35ABB of the Act - Disallowance of variable license fees - Deduction u/s 37(1) of the Act - Disallowance of interest paid on term loans Loans utilized only for business purpose Held that:- As already decided by the HC that the expenditure incurred towards licence fee is partly revenue and partly capital - Licence fee payable upto 31st July 1999 should be treated as capital expenditure, and licence fee on revenue sharing basis, after 1st August 1999, should be treated as revenue expenditure - Capital expenditure will qualify for deduction as per section 35 ABB of the Act - the licence fee is on revenue sharing basis and pertains to period post 1st August 1999 thus, the disallowance set aside and the entire amount of licence fees is allowable as revenue deduction - The disallowances on interest paid is allowed as deduction - Decided in favour of assessee. Deduction u/s 37(1) of the Act employee compensation expenses Issuance of ESOPs Held that:- The decision in Biocon Limited v. DCIT 2013 (8) TMI 629 - ITAT BANGALORE] followed - The difference between the fair market value of the shares and the amount receivable from the employee at the time of issue/or exercise of the Employee Stock Option, debited to the profit and loss account is allowed partly in the year under consideration and partly in the earlier assessment year Decided in favour of Assessee. Disallowance of prepaid coupons u/s 40(a)(ia) of the Act - Free airtime given as discount/trade margin to the retail price Held that:- As decided in assessees own case, there is no element of agency, that talk time is traded and distributed, that it's a principal to principal relationship that the assessee has with his distributors, that flow of payment is in the reverse direction which is contrary to the concept of commission payment and that the assessee had a bonafide belief that section 40(a)(ia) will not come into play as the distributors have honoured their tax liability - the assessee was required to deduct tax at source from the commission so allowed by the assessee - failure to do so is to be visited with the consequence of disallowance under section 40(a)(ia) r.w.s. 194 H Decided against Assessee. Disallowance of lease charges Held that:- The Assessing Officer has not given any adjudication on merits and nor has he dealt with the contentions of the assessee by way of a speaking order - The Assessing Officer and the DRP have simply followed the order of the earlier years, and the matter for that year stands restored to the file of the Assessing Officer - in such a situation, it will be inappropriate to deal with the matter on merits thus, the matter is remitted back to the AO for adjudication Decided in favour of Assessee. Admission of additional ground - Deduction of liability u/s 201(1) of the Act Default in deduction of TDS on various expenses - Held that:- The additional ground of appeal is purely a legal issue as to whether or not the liability borne by the assessee, under section 201 and which is not recovered from the recipients of payments without deduction of tax at source, is deductible in computation of assessee's income - as it involves factual verifications the matter is remitted back to the AO for adjudication Decided partly in favour of Assessee.
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2014 (3) TMI 494
Denial of LTCG Difference in interest Held that:- The opinion that the additions made by the AO in the case of the appellant under the head Long Term Capital Gain by importing the Circle rate, do not stand the test of judicial scrutiny the decision in Navneet Kumar Thakkar. Versus Income-tax Officer, Ward 4 [2007 (3) TMI 317 - ITAT JODHPUR] followed - The issue has not been discussed by the AO - Revenue was required to address as to what was the basis of the adoption of the Circle rate of Rs.16,100/- per sq. mtr. by the AO - the assessment order is silent on this very vital relevant fact - revenue fairly conceded that in the absence of anything else she would merely rely upon the AO and was not in a position to add anything else in support of the departmental ground there is no reason to interfere in the order Decided against Revenue.
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2014 (3) TMI 493
Genuineness of the Transaction - Claim of gift was received through banking channels Held that:- Held that:- On considering the particulars of the bank account from which the gift was given it was disclosed that the amount had been transferred from Account No. 3401 of the very same branch on the very same date - the account was in the name of Usha Motor Company and from the account two cheques transferring the amount were transferred in the names of Shri Sunil Kumar Garg and Shri Om Prakash - On the basis of the cumulous facts it was concluded that no amount has been given as gift and in-fact Shri Sunil Kumar Garg and the other persons were engaged in the business of providing accommodation entries on commission basis to various persons - these facts have been confirmed by the ITAT in the quantum proceedings passed in the case of both the assessees Relying upon CIT vs Orissa Co-operation Ltd. [1986 (3) TMI 3 - SUPREME Court] - the bank account of the donor was operated only with the view to furnish accommodation entries has also been confirmed by the ITAT. The assessee is not required to prove the source of the source, but the primary onus of proving the gift to the genuine by adducing satisfactory evidence about three primary conditions lies on him, which remains undischarged - As a matter of fact, the evidence by way of bank account of the donor, collected by the AO and confronted to the assessee, directly proves the gift to be non-genuine thus, the addition of the amount to the total income of the assessee upheld. Penalty u/s 271(1)(c) of the Act Held that:- Whether penal action has rightly been invoked or not is a matter of fact - The principle of law laid down where the genuineness of the gift has been accepted is a distinguishable fact which is not present in the facts of the present case there is no reason to interfere in the findings arrived in the order Decided against Assessee.
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2014 (3) TMI 492
Addition made u/s 68 of the Act Held that:- The assessing authority had treated the account as a running account, adding only the incremental flow of funds for the year as unexplained - No verification of the sort required, of the amounts in question was however made in the set aside proceedings, so that the direction by the tribunal remains to be complied with - The primary onus lies on the assessee - Its claim that all the entries, debit or credit, comprising the sums to be duly vouched, as by bank advices, and reflected in the bank's statement, shall however be required to be exhibited thus, the matter is remitted back to the AO for adjudication. Penalty u/s 271(1)(c) of the Act Held that:- As the matter has been already remitted back to the AO for verification and fresh adjudication thus, the penalty levied cannot be survived the AO shall be at liberty at if deem fit, to initiate penalty proceedings. Addition made u/s 41(1) of the Act Held that:- The decision in Mahindra and Mahindra Ltd. vs. CIT [2003 (1) TMI 71 - BOMBAY High Court ] followed - the waiver of a loan, where deployed for the acquisition of a capital asset, would not amount to income u/s.41(1), is completely misplaced - The waiver, if at all, could only be by the assessee - there is in fact no waiver of any loan or liability - the debtor being rather required to pay the entire sum as outstanding in his books, which is inclusive of the three credits under reference, to the assessee - the credit to the assessee's account is itself an admission of the liability to the assessee - the debt to the assessee company being proved with reference to the decision by a court of law, the same stood confirmed as the assessee's income for the relevant year - the account not appearing in the assessee's books of account nor it furnishing any explanation, much less satisfactory, as to the nature and source of its relevant asset/s in the form of a debt/s due to it - Section 69/69A/69B would have application thus, there is no merit in the assessee's case and uphold the addition, modifying the order to the extent it adverts to or draws on section 41(1) of the Act Decided against Assessee. Addition made - Profits on security transaction Held that:- The reflection of the amounts in the loan account of Shri A. D. Narottam being in fact the very basis for the addition u/s.68 - the directions by the tribunal for the year are as apparent at variance with that for the earlier years - The Revenue is unable to show any infirmity in the order, being based on the factual findings in terms of the tribunal's order - the present proceedings arise out of the set aside proceedings, so that the directions by the tribunal, having since attained finality, shall obtain, and are binding on all authorities upto the tribunal thus, the order upheld Decided against Revenue.
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Customs
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2014 (3) TMI 491
Re credit - Allowance of CENVAT Credit - Liveliness of DEPB scrip - whether such credit can be allowed on a live scrip or even though the scrip had expired credit can be allowed on that scrip - Held that:- in cases where such re-credit has been allowed, parties have to file manual bills of entry according to Board would show that Board has taken this aspect into consideration. In the case of DEPB bills it may not be possible to allow to utilize the re-credit given by the DGFT in respect of DEPB scrips in respect of EDI Bills. Therefore this instruction appears to have been given. Therefore the only question that has arisen in this case as to whether the credit should be allowed on the live scrip or even on the expired scrip, credit can be allowed is answered by the Board itself though indirectly. Under these circumstances, the impugned order is set aside and the matter is remanded to original authority who shall allow re-credit on each of the scrip without looking into whether DEPB scrip has expired or not expired and thereafter it is left to the assessee/importer to go to the DGFT and get the credit and take further course of action as they deem fit - Decided in favour of assessee.
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2014 (3) TMI 490
Revocation of licence of CHA - Forfeiture of security deposit of ₹ 25,000/- under Regulation 20 (1) read with Regulation 22 of Customs House Agents Licensing Regulations, 2004. - right to cross examination - Held that:- One of the major issues involved in this case is failure to obtain authorization of the importer. It is seen that the importer had taken a different stand before the Honble Madras High Court by swearing an affidavit that he had given authorization to the appellant and before the Enquiry Officer in the present case, he stated that he had not given authorization to the appellant. The appellant requested for cross-examination of Shri Raja Ananthan, Managing Director of the importer company before the adjudicating authority. The Commissioner refused the cross-examination on the ground that no reliance on his statement has been made in arriving at the negligence or dereliction of the obligation cast on the CHA. It appears that the charge of revocation of licence was framed mainly on the basis of failure to obtain authorization of the importer amongst others. In our considered view, the statement of Shri Raja Ananthan of the importer company is relevant for deciding the issue and more particularly, when there is contrary statement available on record, the cross-examination of Shri Raja Ananthan, Director of the importer company is liable to be allowed. Matter remanded to the Commissioner of Customs (Seaport) to decide afresh after allowing cross examination - Decided in favor of appellant.
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Service Tax
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2014 (3) TMI 511
Business Auxiliary Service - bullet proofing of vehicle - Exemption Notification No. 12/2003-ST dated 01.07.2003 - element of distinct sale of goods - First model of operation - Held that:- Prima facie no basis for reading down the Section 65(19). Further, whether the service aspect of the transaction which in another aspect may also amount to a sale, is within the province of the federal legislature, is an issue that should appropriately be considered at the final hearing of the appeal. Suffice to it notice for the nonce that the transaction covered by the first model, prima-facie fall outside the scope of Section 65(19). We consider it to be so since in that model of operation the petitioner purchases the vehicle and therefore become the owner and the bullet proofing value addition on such vehicles would amount to a service to self. There is no activity of processing of goods on behalf of another since the vehicles belong to the petitioner and the value addition is done to its own vehicles. - Stay granted. Second model of operation - vehicles in issue are supplied by the customer and on such vehicles bullet proofing is done by the petitioner - held that:- this activity amounts production or procuring of goods on behalf of another. - It is also not clear from the order whether the petitioner furnished documentary proof in support of its claim for exclusion of the value of the goods transferred to the customer in the process of bullet proofing - stay denied for second model of operation.
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2014 (3) TMI 510
Classification of service - Manpower supply or Cargo Handling Services - Demand of service tax - Penalty u/s 76, 77 & 78 - Interest u/s 75A - Held that:- matter referred to larger bench with the following questions: (i) Whether the appellant has to be rejected on merits as held by learned Member (Technical) or the same is required to be remanded for reconsideration as held by Member (Judicial). (ii) Whether the invocation of longer period of limitation has to be upheld as observed by the learned Member (Technical) or the matter is required to be remanded for deciding the issue on merits afresh as held by Member (Judicial) (iii) Whether the penalty is to be imposed under section 78 has to be upheld to pay 25% of the same as held by the Learned Member (Technical) or the same is required to be decided afresh in the remand order. (iv) Whether the penalty is to be imposed under section 75A and 76 is to be set aside and penalty under section 77 is to be upheld as observed by the Learned Member (Technical) or penalty have to be re-adjudged by the adjudicating authority in the de novo proceedings.
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2014 (3) TMI 509
Denial of refund claim - Notification No. 17/2009-ST. - relationship between the port services and royalty charges - Bar of limitation - CHA Services - Held that:- The refund application had been filed on 26/6/12 but if the limitation period of one year is counted from the date of let export order, which is the relevant date in terms of Clause 2 (f) of the Notification, the refund claims for this amount has obviously been filed after the expiry of one year and, therefore, the rejection of the refund claim of Rs. 8,890/- is upheld. When the department has accepted service tax on these amounts under port services, at the time of considering refund of the service tax paid on port services to the service recipient, the Jurisdictional Central Excise authorities cannot seek to reopen the assessment of service tax at the end of the service provider. Therefore, the impugned order rejecting the refund claim of Rs. 1,33,351/- of service tax on the port services on the ground that there is no relationship between the port service and royalty charges, is not correct. Though the invoices of the storage and warehousing service provider do not mention the shipping bill number, the storage and warehousing charges has been charged by the CHA from the appellant and the CHA in the invoices issued by him to the appellant has given complete details of the shipping bill. Therefore, it is wrong to say that the invoices issued by the storage service provider cannot be linked to the shipping bills under which the goods had been exported. While the bank realisation certificate does not mention the shipping bill number, it does mention the invoice number and date and the shipping bills filed by the appellant do mention the export invoice number. Thus, the bank realisation certificate can be linked to the shipping bills under which the exports had been made. Therefore, rejection of refund claim of Rs. 92,125/- on the ground mention in the impugned order is not correct - Decided partly in favour of assessee.
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2014 (3) TMI 508
Valuation - Advertisement Agency Service - applicant is paying service tax on the 15% of the commission retained by him. The present dispute is about 85% of the amount paid to the print media and on which Revenue is demanding service tax. - Held that:- In the case of commission earned for selling advertisement space in print media, the Tribunal has already decided that service tax is payable only on the service rendered by the intermediary, which the applicant has already paid. Taxing the activity of the print media in the hands of the intermediary is not consistent with provisions of section 67 of the Finance Act 1994 and the charging section which does not provide for taxing services provided by print media - In the matter of materials prepared as per orders of the clients it is fairly clear that goods were sold for which, he has already paid VAT and in such case the applicant was not involved in conceptualizing and designing the advertisement. So it is not be proper to order any pre-deposit on this count at this stage. In the case of hoardings, the applicant explained as to how in some cases service tax was paid and in some cases service tax was not paid as it appears from the Bills. The situation appears to be that where only sale was involved service tax was not paid and where the applicant provided space, either space belonging him to him or taken on lease by him, for display, service tax was paid, though such details has not been furnished before the adjudicating authority - Stay granted.
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2014 (3) TMI 479
Cenvat Credit on GTA service - input services - delivery upto the place of customer - Held that:- place of delivery is the customer's works and the freight charges was also included. - freight was paid by the appellant - The adjudicating authority observed that the insurance policy has not mentioned in particular transportation to a buyer and which is only open and general in nature - There is no force on such finding - There is no requirement that each consignment would cover separate policy. In other words, it is required that insurance policy must be in the name of appellant to claim the benefit of policy in respect of transportation of goods. - the goods were delivered at the customer's premises. - there is no reason to deny the CENVAT credit on GTA service. - Decided in favor of assessee.
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Central Excise
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2014 (3) TMI 489
Valuation (Central Excise) - Freight and service charges - Held that:- Dispute in the present appeal is for the period January 2004 to July 2011 i.e. the period after 1.7.2000 when the new Section 4 came into existence. We find that in the case of applicant itself the Tribunal vide its order dated 27.11.2002 (2002 (11) TMI 240 - CEGAT, COURT NO. I, NEW DELHI) has decided the issue in the applicants favour holding that these charges are not to be included in the assessable value even for the period after 1.7.2000 - Stay granted.
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2014 (3) TMI 488
Default in payment of duty - restriction on utilizing cenvat credti under Rule 8(3A) - Violation of first proviso to sub-rule 4 of Rule 3 of Cenvat Credit Rules, 2004 - Assessee showed that duty was paid in cash through Account Current even though no such amount was paid by them. On 25.11.2010, they adjusted the said amount from the Credit of Inputs etc. - Non clearance of the consignments paying the excise duty for each consignment at the time of removal without utilizing Cenvat credit - Clearance of the goods without paying consignment-wise duty - Held that:- Rule 8(3A) is specifically prohibits utilization of cenvat credit during the period in which default continues, we are of the view that even when the said amount is required to be paid as arrears of revenue the same have to be paid in cash without utilization of the cenvat credit. Any other interpretation will make the restriction relating to utilization of credit meaningless. It is settled law that what is not allowed directly cannot be allowed/claimed indirectly. Board's circular dated 28 th March, 2012 will not be applicable in view of reasons stated earlier. We, therefore, hold that the appellants are required to pay an amount of ₹ 8,00,09,346 which is equivalent to the cenvat credit utilized during the period 6.12.2010 to 4.7.2011 in cash. They will, however, be free to take cenvat credit of equivalent amount and utilize it for future clearances. - Demand alongwith interest confirmed - Decided against the assessee.
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2014 (3) TMI 487
Penalty under section 11AC read with Rule 25 of the Central Excise Rules, 2002 - Held that:- As per the decision of Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA], the Apex Court has held that if the ingredients of Section 11AC of the Act have been attracted, then the mandatory penalty under section 11AC is imposable. Admittedly, there is no allegation of fraud, collusion, willful mis-statement, suppression of fact or contravention of provisions with intent to evade payment of duty against the respondent. Therefore, provisions of section 11AC is not attracted. In the absence of such an allegation, penalty is not imposable - Decided against Revenue.
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2014 (3) TMI 486
Waiver of pre-deposit - Penalties, under Rule 26 of the Central Excise Rules, 2002 - Held that:- if duty, interest and 25% of duty as penalty has been paid within 30 days of the issuance of show-cause notice, the proceedings against all the co-noticees comes to an end. Therefore, imposing penalties on the appellant are not warranted. Accordingly, the impugned order is set aside quo imposing penalties on both the appellants - Decided in favour of assessee.
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2014 (3) TMI 485
Availment of CENVAT Credit - Cenvat credit on CRGO Coils, under Rule 14 of the Cenvat Credit Rules, 2004 along with charging of interest under Rule 14 of the Cenvat Credit Rules, 2004 - Activity of slitting of these CRGO coils was done at their factory which according to the Revenue, does not amount to manufacture - Held that:- admissibility of Cenvat credit on slitting of CRGO coils cleared is no more res integra and has been decided by the Mumbai Bench of Tribunal in the case of Ajinkya Enterprises vs. Commissioner of Central Excise., Pune-III (2013 (6) TMI 610 - CESTAT MUMBAI) which has been upheld by the Hon'ble High Court of Mumbai. Secondly, it is also observed that the duty paid by the appellant has been accepted by the department and nothing has been brought to out notice that the appellant was asked by the Revenue at any stage for not paying Central Excise duty when process did not amount to manufacture. In this regard, appellant has correctly placed reliance on the judgment of the Tribunal in the case of Markwell Paper Plast Pvt. Ltd vs. Commissioner of Cus. & C.Ex., Noida (2012 (7) TMI 290 - CESTAT, NEW DELHI) - it is held that the Cenvat credit was correctly availed by the appellant - Decided in favour of assessee.
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2014 (3) TMI 484
Prayer of adjustment of excess paid duty with short payment - Revenue contended that manufacturer has not complied with Rule 9B as provisional assessment and therefore he should have filed Refund claim u/s 11B - revenue denied the adustment - Held that:- On perusal of the records and the impugned order, we find that the Assistant Commissioner, Tuticorin by letter dated 15.4.1999 ordered for provisional assessment and also directed to execute a bond as required under Rule 9B of the Central Excise Rules, 1944. The appellant had not executed the bond as required under the said Rule and therefore there was no provisional assessment. We agree with the finding of the Commissioner (Appeals) that the excess amount of duty paid on higher assessable value would be refunded in accordance with Section 11B of the said Act - Decided against assessee.
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2014 (3) TMI 483
Recovery of arrears of excise duties - Attachment of property - There was a lease agreement between M/s. Bhavya Apparels Pvt. Ltd. and the appellant herein for leasing out the property - Lease agreement was an unregistered document as there is no stamp duty paid nor it is registered with the authorities - M/s. Bhavya Apparels Pvt. Ltd. stopped then operation from March, 2000 and also that M/s. Bhavya Apparels Pvt. Ltd has not paid the lease rent from March, 2000 - Department has not relied upon this lease agreement as a sole basis for grant of EO permission or any other licences to M/s. Bhavya Apparels Pvt. Ltd. - appellant herein is in possession and control of the premises which is attached - Whether the provisions of Section 142(1)(c)(ii) of the Customs Act, 1962 stand rightly invoked by the authorities below for attaching property in question for recovering the duty confirmed against the tenant. Held that:- Provisions of Section 142 of Customs Act, 1962 provides for recovery of some dues to the Government from any person and the provisions of Section 142(1)(c)(ii) lays down that the proper officer of the Customs has power in accordance with the rules made in that behalf to destrain any movable or immovable property belonging to or under the control of such person for the recovery of amount payable by such person. Thus, it is very clear that any action under Section 142(1)(c)(ii) has to be in accordance with the rules and those rules are Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995. Rules themselves make it clear that the property to be attached should be of the defaulter and it is more clearer from Rule 3 of the said Rules talks about the property owned by the defaulter. Rules 4 and 5 provide for the issuance of the Notice to be served upon the defaulter and then retaining the defaulters property until the amount due is recovered. To my mind, it is clear that the attachment, restrainment, etc. of immovable property under Section 142(1)(c)(ii) read with rules, can only be in respect of the property owned by the defaulter. To my mind the wordings used in the Section 142(1)(c)(ii) also very clearly mandate that the immovable property to be attached should be owned by the defaulter and not under his possession. Under these circumstances, mere possession does not give the control of the property because of the control of property always rests with the legal owner and not with the possessor. In case of lease hold properties, the legal control of the property remains with the lessor, even though the possession may be with the lessee and it cannot be said that the lessee has control over the property. It is undoubted that in this case, the lessee has got only the possession of the property by virtue of his right under the lease deed and the same are limited to the extent lease deed indicates. Lease agreement was not the only sole document for granting licence and various permissions to run an EOU and I agree that there is nothing on record to show that the said lease deed was placed before the authorities for grant of permission to the EOU. In such a situation, the Revenue authorities cannot invoke a clause which is an agreement between the lessor and lessee, and was not the only clause which prompted the Department to issue the licence to M/s. Bhavya Apparels Pvt. Ltd. There is also nothing on record to indicate that M/s. Bhavya Apparels Pvt. Ltd. was in possession and control of the said premises, when the authorities initiated the proceedings on 2-2-2006 for attachment of the said property - Therefore, attaching property is not legal. The same is neither just nor fair even on the basis of principle of justice, equity and good conscious. The same is, accordingly, set aside - Decided in favour of appellant.
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2014 (3) TMI 482
Waiver of pre deposit - Denial of CENVAT Credit - Input services in respect of Employees Health Insurance - period prior to 1.4.2008 - Held that:- in view of decision in Commissioner vs. Stanzen Toyotetsu India (P) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT)] wherein Insurance Auxiliary Services were held to have a nexus with the business activities of the assessee - stay granted. Cenvat credit in respect of Residential Fire Policy - nexus with business activity - Held that:- Conflicting decisions of the High Court have been cited before me. Judicial discipline demands that the view taken by the jurisdictional High Court be followed. - following the decision in the case of ITC Ltd. vs. Commissioner of C. Ex., Hyderabad [2010 (17) S.T.R. 146 (Tri.-Bang.)] as affirmed by the HC in [2011 (11) TMI 516 - ANDHRA PRADESH HIGH COURT], stay granted.
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2014 (3) TMI 481
Denial of CENVAT credits - Waiver of pre deposit - Excess credit over what were admissible to the appellant in terms of the formula prescribed under Rule 3(7) of the CENVAT Credit Rules, 2004 - Held that:- Following earlier preceedents in similar issue - Assessee directed to pre-deposit 50% of the CENVAT credit - Conditional stay granted.
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2014 (3) TMI 480
Denial of Cenvat credit of duty paid on the coal received on the ground that coal supplier should not have paid duty inasmuch as coal was unconditionally exempted vide Notification No. 63/95-C.E., dated 16-3-1995 which was withdrawn with effect from 23-3-2011 - Held that:- after having issued the Notification No. 1/2011-C.E., Notification No. 63/95-C.E. which granted unconditional exemption to the coal supplier continued to operate in the field till 23-3-2011 and it was ultimately withdrawn only on the said date. Inasmuch as during the relevant period i.e. from 1-3-2011 to 23-3-2011, both the Notifications were in existence and no fault can be found with the coal supplier to avail Notification No. 1/2011-C.E. Undisputedly, the coal supplier has paid duty and the appellant has availed credit as the same paid by the coal supplier. Even otherwise it is settled that assessment cannot be challenged at the input receiver end - appellant has a good prima facie case in favour of the appellant so as to allow stay petition unconditionally - Stay granted.
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CST, VAT & Sales Tax
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2014 (3) TMI 513
Imposition of interest u/s 74(7) of Delhi VAT Act, 2004 Jurisdiction of Objection Hearing Authority Held that:- the power of the OHA to insist upon payment of interest is by way of incidental or supplementary one to enable enforcement of other provisions of the Act - two views are possible u/s 42(2) which requires dealers to pay interest in addition to the amount assessed, there can be a degree of relativity having regard to the circumstances in each case - to recover interest on the non-submission due to non-availability of forms amounts to pre-judging the issue Though the assessee was granted the benefit of concessional duty upon proper verification of the records as to the expenses or furnishing of the concerned forms - Later directions of the Tribunal set aside - Decided partly in favour of assesse.
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2014 (3) TMI 512
Exemption from export duty - Inter-State sales of Rectified and Denatured Spirit - Held that:- The decision in Commissioner of Sales Tax UP. Versus M/s. Upper Doab-Sugar Mills Ltd. [2014 (2) TMI 1003 - ALLAHABAD HIGH COURT] followed - United Provinces Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 is a 'sales tax law' within the meaning of Section 2(i) of Central Sales Tax Act, 1956 - The alcohol being taxable under the 1939 Act, payment of central sales tax on inter-State sale of alcohol not exempted as per provisions of Section 8 (2-A) of the 1956 Act even though there was general exemption under section 4 of the 1948 Act - The orders of the Tribunal in revisions set aside - Decided in favour of revenue. Inclusion of export pass fee in taxable turnover Held that:- Judgment in Commissioner of Income-Tax Versus Rampur Distillery And Chemicals Co. Limited[ 2005 (3) TMI 756 - ALLAHABAD HIGH COURT] followed - export pass fee is the liability of the exporter to pay while getting the export permit - there was no liability of payment of export pass fee on the dealer under the Excise Act - No question of treating the export pass fee as part of the turnover Decided against revenue.
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Indian Laws
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2014 (3) TMI 507
Denial of information under RTI Act seeking personal information relating to IAS officers. - whether the information sought by the petitioner would be covered under the exemption granted under Clauses (e) and (j) of Section 8(1) of the RTI Act? - Held that:- The information sought would clearly be in the nature of personal information in respect of the private respondents and not relatable to the discharge of their duties in official capacity. - The conflict between the right to personal privacy and the public interest in the disclosure of personal information stands recognized by the Legislature in terms of exempting purely personal information under Section 8(1)(j) of the RTI Act. Under such exemption clause, the disclosure may be refused if the request pertains to personal information, the disclosure of which has no relation to any public activity or interest or which would cause unwarranted invasion of the privacy of the individual. A Full Bench of Delhi High Court in the case of Secretary General, Supreme Court of India v. Subhash Chandra Agarwal - [2010 (1) TMI 1104 - DELHI HIGH COURT] while examining the scope and ambit of the exemption envisaged under Section 8(1)(j) of the RTI Act had held that personal information including tax returns/medical records, etc., are not liable to be disclosed. It has specifically been noticed in the impugned order dated 9-9-2010 that the petitioner held a personal grudge against some of the officials with regard to having been denied promotion while in service and in respect of other officers, he had a grievance that a land dispute pertaining to his family had not been handled properly. Accordingly, the Commission observed that the petitioner was seeking information with the clear object to denigrate the officers concerned. Such findings recorded by the respondent Commission do not carry any rebuttal by the petitioner in the instant petition. - Writ petition dismissed.
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