TMI Tax Updates - e-Newsletter
March 2, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Transfer pricing adjustment - international transaction relating to acquisition of intangible assets by assessee from its associated enterprise - All the additions directed to be deleted - AT
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Income Tax:
TDS u/s 195 - TDS liability - While examining taxability of income in the hands of the recipient, embedded in foreign remittance, all that is required to be seen is whether or not that particular income is taxable in India. - AT
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Income Tax:
Addition u/s 69C - the assessee had discharged the initial burden. It was duty of the AO to rebut the evidences produced by the assessee. But, he did not bring anything on record. - the FAA had rightly held that the provisions of section 69C cannot be invoked for bogus purchases - AT
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Income Tax:
The term “reimbursement” does not fall in the characteristics of income. No doubt the definition of ‘income’ is inclusive. This, of course, does not mean that an amount which can, by no stretch of imagination, be called income can be treated as income and taxed as such by parliament. It must have some characteristics of income as broadly understood - AT
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Income Tax:
Liability of directors of private company in liquidation - lifting the corporate veil - The overall situation if we analyze in its true perspective then only one conclusion which can be arrived at is that the corporate veil to be lifted and rightly so by the authority - HC
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Income Tax:
Cancelling the registration of the Trust - the issue of the trust not being genuine cannot be concluded by merely giving a finding in one year that income earned from activities of trade, business or commerce are in excess of the limit specified in the proviso to Section 2(15) - HC
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Income Tax:
Penalty u/s 271D for violating provision of section 269SS - In view of the bona fide belief of the assessee that the amount could have been received by her from her husband in cash, the penalty proceeding u/s 271D could not have been initiated against the assessee - HC
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Income Tax:
TDS u/s 194C or 194J - production of programmes for broadcasting or telecasting - the legislature had clearly brought ‘production of programmes for such broadcasting or telecasting’ within the sweep of Sec. 194C - AT
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Income Tax:
Reopening of assessment u/s 147 - deduction u/s 80GGB in respect of its donation to Electoral Trust instead of political parties - the contribution made to ‘Electoral Trust’ is covered by the word “indirectly” and qualified for the deduction u/s 80GGB of the Act for the year under consideration - AT
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Income Tax:
Where the AO initiates proceedings u/s. 271(1)(c) for concealment particulars of income but levies penalty for furnishing inaccurate particulars the penalty order could not be sustained - AT
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Customs:
Gold mountings and findings being items as jewellery are outside the purview of N/N. 62/2004-C.E. and, hence, the Board’s Circulars No. 40/2004-Cus. and 13/2006-Cus. clarifying that the gold and silver mountings and findings are covered by the N/N. 62/2004-Cus. are contrary to the provisions of law and, hence, have no validity - No exemption - AT
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Service Tax:
100% EOU - Refund of cenvat credit - there cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate - AT
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Service Tax:
Demand of service tax on amount paid under Joint development agreement (JDA / MOU) - sharing of revenue and expenses - The amount received from M/s. Vestas RRB in terms of the MOU was summarily considered as a consideration for taxable service without examination and pointing out the nature of service and its classification - No demand - AT
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Service Tax:
Benefit of N/N. 13/2010-ST - denial on the ground that the benefit not available to service recipient - exemption in relation to on-line information and database access or retrieval services and business auxiliary services provided by News Agency - Exemption cannot be denied - AT
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Service Tax:
Levy of Penalty - site formation and clearance, excavation services - matter was under confusion and was only clarified subsequently, the provisions of section 80 would be attracted, thus not calling for any penalty - AT
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Service Tax:
The ground on which cenvat credit was denied is totally wrong because the change of name does not make the appellant ineligible to claim cenvat credit and more so it has been informed to the Department well in time. - AT
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Central Excise:
CENVAT credit - denial on the ground that the machine was received in damaged condition and insurance was claimed - when the machines received, installed and used for manufacturing purpose, credit cannot be denied - AT
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Central Excise:
CENVAT credit - quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be challenged by revenue in charge of recipient unit - the assessment at the end of the appellants cannot be reopened and the cenvat credit availed by them has been correctly availed. - AT
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Central Excise:
Sugar Cess though levied as duty of Excise, the said Cess is not levied by Ministry of Finance and by relying upon the said Board of Circular dated 10.08.2004, Sugar Cess cannot be included for the purpose of computation of Education Cess - AT
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VAT:
Rejection of consignment sale - CST - The dealer did produce F-Forms containing prescribed particulars. However, on inquiry it was found by the Sales Tax Officer that F-Forms produced by the dealer were fake and forged one - Demand confirmed - HC
Articles
Notifications
News
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Union Minister of Finance Shri Arun Jaitley met Ms. Kristalina I. Georgieva, the Chief Executive Officer, World Bank Group
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The Minister of State for Commerce & Industry, Smt Nirmala Sitharaman, will inaugurate the National Conference on “Economics of Competition Law” tomorrow
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FinTechs and Virtual Currency
(Shri R. Gandhi, Deputy Governor – March 1, 2017 – at the “FinTech Conference 2017” organized by FICCI, IBA and NASSCOM at Hotel Trident, Nariman Point Mumbai)
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RBI Reference Rate for US $
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OECD Economic Survey of India 2017 : Indian economy is expanding at a fast pace, boosting living standards and reducing poverty nationwide; Hails India’s recent growth rate of more than 7 percent annually as the strongest among G-20 countries; Secretary, Department of Economic Affairs, Shri Shaktikanta Das and Secretary-General OECD, Mr. Angel Gurria jointly launched OECD Economic Survey of India in Delhi yesterday
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Advance Pricing Agreements Signed by Central Board of Direct Taxes Touch 140
Case Laws:
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Income Tax
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2017 (3) TMI 45
Liability of directors of private company in liquidation - lifting the corporate veil - Held that:- The overall situation if we analyze in its true perspective then only one conclusion which can be arrived at is that the corporate veil to be lifted and rightly so by the authority. - The authority has, however, considered the manner and method of other directors' conduct of not cooperating, manner and method of induction and resignation of petitioner as also considered other steps which have failed to recover huge crystallized revenue demand and also analyzed gradual decrease and evaporation of substratum of a company after the petitioner resigned from the company and then, has also considered the huge financial crunch upon which the entire substratum is evaporated under the steps of securitization
This is not a simple case of petitioner coming and going away from the company for which he is claiming to be non-responsible at all but, it requires detailed examination which has rightly been examined by the authority.
This Court sitting in a writ jurisdiction substantially in exercise of extraordinary equitable jurisdiction cannot ignore such kind of situation prevailing on record and see it helpless just because a defence is put up that company in question is a public limited company and therefore, no resort to Section 179 of the Act can be made. The case of Pravinbhai M. Khemi (2012 (12) TMI 494 - GUJARAT HIGH COURT ) is sufficient answer to hold that there is no illegality and/or irregularity of any nature which is committed by the authority while passing the order impugned in the petition.
Now in the light of above position if we look at self-imposed restrictions which are well recognized in exercise of extraordinary jurisdiction of this Court, it would become clear that the specific findings which are reflected on record cannot be given a go-bye simply because there appears to be one or the other reasons no so cogently assigned by the authority. - Writ petition dismissed.
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2017 (3) TMI 44
Penalty u/s 271D for violating provision of section 269SS - amount received by the wife in cash from the husband by bonafide believing that the said amount need not have routed to her vide a bank transaction - genuineness of the transaction - Held that:- It appears from the order of the Commissioner of Income Tax (Appeals) that money was withdrawn by the husband from his accounts and was handed over by him to the assessee in cash. The genuineness of the amount involved is not in dispute. There is no loss to the Revenue. The assessee has further claimed that she was under a bonafide belief that she could have accepted the amount of ₹ 1,50,000/from her husband in cash and it was not obligatory for her to route the transaction only by an account payee cheque or an account payee bank draft. The explanation of the assessee was accepted by the Commissioner of Income Tax and the tribunal without considering the claim of the assessee that the the assessee was under the bonafide belief that the transaction need not have been routed only through the Bank vide cheque or a draft, reversed the order of the Commissioner of Income Tax to uphold the order imposing the penalty. Penalty cannot be levied on the assessee under Section 271D of the Act if the transaction between the parties is bona fide and the assessee has not acted deliberately or in defiance. In the circumstances of the case, merely in view of the technical mistake, the penalty could not have been levied on the assessee under Section 271D of the Act.
In view of the bona fide belief of the assessee that the amount could have been received by her from her husband in cash, the penalty proceeding under Section 271D could not have been initiated against the assessee. - Decided in favour of assessee.
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2017 (3) TMI 43
Revision u/s 263 - addition u/s 68 - Held that:- It was necessary for the Commissioner and the Tribunal to have examined the issue in this light and to reach their conclusion based on the objections so raised and evidence led by the parties as to whether the amount of ₹ 50 lacs in respect of which additions had been made required to be made under Section 68 of the Act, had been found credited in the books of the account of the assessee in the previous year relevant to the assessment year 2008-09.
No such finding having been recorded either by the Commissioner or by the Tribunal, the matter requires to be reconsidered in the light of the objections raised and evidence on record and a clear finding is required to be recorded before a direction could be issued to make such an addition.
We, therefore, allow the appeal and remand the matter to the Tribunal to reconsider the matter. The matter on remand may be reconsidered within a period of three months from the date of production of a certified copy of the order before the authority concerned. A certified copy of the order may be placed before the authority concerned within next 15 days.
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2017 (3) TMI 46
Reopening of assessment - reasons to believe - Held that:- We are informed that the Assessing Officer has already passed the Assessment Order. In these circumstances, it would be open to the petitioner to file an appeal and challenge the Assessment Order. The petitioner will be permitted to raise all the pleas which are available to it and the Commissioner of Income Tax (Appeals) shall decide the appeal without being influenced by the observations made in the impugned order. [HC Ref case -2016 (7) TMI 328 - BOMBAY HIGH COURT]
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2017 (3) TMI 42
Scope of assessment u/s 153A - Held that:- Considering the decision of the Delhi High Court in the case of CIT Vs. Kabul Chawla reported in [2015 (9) TMI 80 - DELHI HIGH COURT ] it is held that the Assessing Officer while framing the assessment under Section 153A of the Act for the block period may make addition considering the incriminating material found for the year under consideration only which was collected during the search.
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2017 (3) TMI 41
Surplus earned from sale of shares - business income OR short term capital gain - Held that:- Considering the fact the major amount of capital gain is in respect of script in the name of Lok Housing and Construction Ltd. of which the assessee has sold 4,37,000 shares and has earned a capital gain of ₹ 2,03,86,894/- and that the assessee applied for acquiring fully convertible warrants of the said Company on 26/02/2006 and paid 10% i.e. ₹ 4.60 per warrant for 95,000 warrants at the time of application and thereafter on 10/05/2006 warrants were allotted to the assessee for an amount of ₹ 4,37,000/-, which duly appeared in the balance sheet as on 31.03.2007 under the investment in shares head and thereafter in the beginning of Financial Year 2007-08 assessee in order to get warrants converted into equity shares paid the balance amount i.e. 90% i.e. ₹ 39.33 lakhs and acquired the equity shares of the company and got it in demat form and all the aforesaid shares came to be sold in between 01/08/2007 and 05/02/2008, the learned tribunal noticed that the assessee paid the interest on borrowed funds for paying ₹ 39.33 lakhs towards balance amount of allotment money for converting warrants into shares and paid interest of ₹ 8,48,296/- to his relatives from whom fund was borrowed, however, did not claim the said interest expenditure against business income.
Considering above it cannot be said that the learned tribunal has committed any error in confirming the order passed by the learned CIT(A) deleting the addition made by the Assessing Officer of ₹ 2,04,87,755/-, which was made treating the same as income from business. We are in complete agreement with the view taken by the learned tribunal.
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2017 (3) TMI 40
Penalty u/s 271(1)(c) - claim of deduction on account of special Reserve under Section 36(1) (viii) of the Act including in its profits, dividend and interest income for providing long term finance for industrial / agricultural development / infrastructure facility in India - Held that:- The issue of dividend and interest income forming part of profits of business of long term finance is a debatable issue. For the aforesaid conclusion, the impugned order relied upon the decision of the Karnataka High Court in Commissioner of Income Tax Vs. Canfin Homes Ltd. [2011 (8) TMI 178 - KARNATAKA HIGH COURT] wherein on merits, the assessee's claim therein for deduction under Section 36(1)(viii) of the Act on account of dividend income and interest was allowed as being a part of profits earned in the business of providing long term finance for industrial / agricultural development / infrastructure facility in India. Moreover, the Tribunal also records a finding of fact that the respondent assessee had in its return of income claimed interest and dividend income as being available for deduction under Section 36(1)(viii) of the Act in its Return of Income and mere rejection of a claim for deduction will not amount to filing inaccurate particulars of income.
In the above circumstances, the impugned order holds that no penalty is imposable, notwithstanding the fact that in quantum proceedings, the respondent assessee had accepted the order of the CIT(A), adverse to it on the above issues. - Decided in favour of assessee
Penalty u/s 271(1)(c) - depreciation claim of sale and lease back transactions - Held that:- No substantial question of law arises at this stage as the entire issue is restored to the Assessing Officer for fresh consideration on the issue of penalty.
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2017 (3) TMI 39
Validity of assessment order - writ petition against the order of Transfer of case u/s 127 was pending - Jurisdiction - Held that:- In the present case the department has alleged that, the principal place of business of the petitioner is at Deoghar. The deciding authority has found substance in such allegation and has proceeded to transfer the account. No material has been placed before the Writ Court to demonstrate that, the findings arrived at by the deciding authority in the impugned order dated December 18, 2012 is perverse.
The writ petition was filed on April 22, 2013. It is pending since then. The petitioner did not accept the order of transfer and had allowed the assessing officer at Kolkata to proceed with the assessment year 2011-12. The order dated March 29, 2014 passed by the assessing officer at Kolkata does not negate the order of transfer carried under Section 127 of the Act of 1961. At best such order may be without jurisdiction. Thus no merit in the writ petition.
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2017 (3) TMI 38
Reopening of assessment - reason to believe - Held that:- It is a settled position that even where an assessment has been only processed under Section 143(1) of the Act, the reopening notice must satisfy the test of having reason to believe that the income chargeable to tax has escaped assessment (see Asst. CIT v/s. Rajesh Jhaveri Stock Brokers (P)Ltd. (2007 (5) TMI 197 - SUPREME Court). - Prima facie determination of income escaping assessment would indicate application of mind to arrive at the reason to believe that income chargeable to tax has escaped assessment.
This Court in Vodafone India Services Pvt. Ltd. v/s. CIT [2014 (10) TMI 278 - BOMBAY HIGH COURT] has taken a view that the share premium being on capital account cannot be subjected to tax as income.
HC granted stay on further proceedings till final disposal of the appeal.
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2017 (3) TMI 37
Cancelling the registration of the Trust - Exercise of jurisdiction under Section 12AA(3) by the Director of Income Tax (Exemption) - Held that:- Income is brought to tax to secure the Revenue's interest but it does not necessarily result in automatic cancellation of Registration. Therefore, the mere fact that in one particular year, the respondent assessee may have income receipts in excess of ₹ 10 lakhs or such other limit as provided in the proviso to Section 2(15) of the Act, that by itself would not warrant cancellation of the registration under Section 12AA(3) of the Act. A similar issue had arisen before us in Director of Income Tax (Exemption) Vs. Khar Gymkhana, [2016 (6) TMI 489 - BOMBAY HIGH COURT ] where rejected the Revenue's appeal as relied upon the CBDT Circular No.21 of 2016 dated 27th May, 2016 to conclude that the amendment to the definition of 'charitable purpose” by addition of the proviso w.e.f. 12th April, 2009 would not ipso facto give jurisdiction to the Commissioner of Income Tax to cancel the registration. The Circular No.21 of 2016 in terms directed the Authorities not to cancel the registration of the Charitable Institution only because the proviso to Section 2(15) of the Act comes into play as the receipts are in excess of the specified limits therein. It also refers to Section 13(8) of the Act to support the view of the non cancellation.
However, the issue of the trust not being genuine cannot be concluded by merely giving a finding in one year that income earned from activities of trade, business or commerce are in excess of the limit specified in the proviso to Section 2(15) of the Act. This is so held by us in Khar Gymkhana (supra). However, if this happens on continuous / regular basis, it could justify further probe / inquiry before concluding that the trust is not genuine. - Decided against revenue
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2017 (3) TMI 36
Assessment u/s 153A - addition u/s 14A - Held that:- In the present case, since the addition was made by the AO u/s 153A of the Act in the absence of incriminating material found during the course of search. Therefore, in view of the ratio laid down by the Hon’ble Jurisdictional High Court in the aforesaid case of CIT Vs Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] the assessment framed u/s 153A of the Act was not valid. Accordingly, additional grounds raised by the assessee are allowed in its favour
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2017 (3) TMI 35
Reopening of assessment u/s 147 - assessee was wrongly granted the deduction u/s 80GGB in respect of its donation to Electoral Trust - Held that:- On careful reading of the provision of section 293A, it made clear that assessee falls in the category as referred under sub-section 2 of section 293A. Sub-section (2) of section 293A permits contribution to any Political Parties by a Company either directly or indirectly. The ld. AR of the assessee throughout his submission argued that the contribution made to ‘Electoral Trust’ is covered by the word “indirectly” and qualified for the deduction u/s 80GGB of the Act for the year under consideration. We are in full agreement with the submission of ld AR of assessee that the case of the assessee is covered by the Explanation attached with section 80GGB. We have seen that the ld. CIT(A) correctly appreciated that the contribution to a Political Parties can be either directly or indirectly to qualify the deduction u/s 80GGB of the Act.
CIT(A) correctly appreciating the provisions of section 293 of Companies Act and the deduction in respect of contribution given by the Company to the Political Parties. The order of ld. CIT(A) is based on correct appreciation of the provisions and we do not find any infirmity or illegality for our interference. - Decided against revenue
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2017 (3) TMI 34
Levy of TDS on provision for payment to artistes - Held that:- Since the payees are not identifiable in this case at the time of making of the provision, therefore no statutory obligation was thus cast upon the assessee to deduct tax at source on the above amount. However, we find that the facts as averred by the Ld. A.R that the entire provision has been written back in the next year and the actual amounts paid/credited were subjected to TDS in the subsequent years as per the detailed statements filed before the authorities, are not borne from the records, but are merely supported by the hollow and unsubstantiated claim of the assessee, therefore we herein set aside the matter to the file of the ITO(TDS) for making necessary verifications as regards the said claim of the assessee, and if the same is found to be in order, then as observed by us hereinabove, no obligation would be fastened upon the assessee for deduction of any tax at source as regards the aforesaid amount of ₹ 20,00,000/- during the year under consideration, viz A.Y. 2008-09, and as such the order of the lower authorities treating the assessee as being in default u/s 201(1)/201(1A) shall stand vacated. The matter is thus restored to the file of the ITO(TDS), who however is directed to restrict himself to making of the verifications as directed by us hereinabove.
TDS u/s 194C or 194J - production of programmes for broadcasting or telecasting - short of deduction - Held that:- We are of the considered view that in the backdrop of the fact that though the legislature had vide the Finance Act, 1995, therein specifically earmarked a separate statutory provision in the form of Sec. 194J to regulate the obligation of an assessee to deduct tax at source in respect of fess for professional and technical services, however interestingly we find that the legislature in all its wisdom had simultaneously broadened the scope and gamut of Sec. 194C and had brought ‘production of programmes for such broadcasting or telecasting’ within the sweep of Sec. 194C. The aforesaid specific earmarking of the ‘production of programmes for such broadcasting or telecasting’ in the body of Sec. 194C, in light of the aforesaid legal juxtaposition can thus safely be concluded to have been carried out with a purposive intent of making the same as an exclusive subject matter of Sec. 194C. We are of the considered view that the very insertion of the ‘Explanation III’ to Sec. 194C by the Finance Act, 1995, alongwith a simultaneous insertion of Sec. 194J, can safely be held to be a conscious, purposive and intentional act on the part of the legislature, in order to avoid any doubt or debate as regards the statutory provision which would regulate the deduction of tax at source as regards the services contemplated therein. We are of the considered view that in light of the fact that the legislature had clearly brought ‘production of programmes for such broadcasting or telecasting’ within the sweep of Sec. 194C, therefore the deduction of tax at source as regards the services rendered therein would inescapably be a subject matter of Sec. 194C, and the same would not fall within the sweep and domain of the provisions of the newly inserted Sec. 194J.
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2017 (3) TMI 33
Permanent establishment in India - India-U.K tax treaty - Held that:- We find that though interestingly the fact that the assessee had offered its income for tax has been taken cognizance of by the lower authorities for supporting or rather arriving at adverse inferences in the hands of the assesseee, however most conveniently the fact that the assessee had categorically stated that it had no ‘PE’ in India for the period November, 2008 to March, 2009 as per Article 5(2)(k)(i), read in light of the reasons on the basis of which such a conclusion was arrived at, as well as the categorical averment of the assessee that the provisions of Article 5(2)(k)(ii) were not applicable in its case, all of which facts were clearly discernible from the ‘Statement of total income’ filed by the assessee alongwith its return of income, had most conveniently been ignored by the lower authorities in order to facilitate drawing of self suiting adverse inferences in the hands of the assessee.
Thus in the backdrop of the aforesaid facts we have given a thoughtful consideration to the facts of the case and in light of the very fact that the lower authorities had failed to address the exhaustive submissions raised by the assessee before them and pass a well reasoned and speaking order, thus are unable to persuade ourselves to subscribe to such non-speaking orders of the lower authorities. We therefore in all fairness and in the very interest of justice restore the matter to the file of A.O for fresh adjudication. The A.O shall during the course of the set aside proceedings therein adjudicate upon the issue as regards the existence of a ‘PE’ in India of the assessee during the period November, 2008 to March, 2009, after taking due cognizance of and dealing with the submissions which were raised by the assessee during the course of the original assessment proceedings, as well as during the course of the appellate proceedings.
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2017 (3) TMI 32
Cancelling /withdrawing the registration u/s 12AA - Held that:- When it is neither the case of the revenue that the assessee trust which for years had been acknowledged as a ‘Çharitable trust’ had during the year embarked on to any such new activities, which can safely be characterized as non-genuine activities, nor is it the claim of the revenue that the assessee trust is found to be carrying out activities which are not in accordance with its objects, therefore in the absence of satisfaction by the assessee of either of the aforesaid preconditions which forms the foundation for exercising the jurisdiction by him for cancelling the registration of the assessee trust under Sec. 12AA(3), it can safely be concluded that the DIT(Exemption) had wrongly cancelled the registration of the assessee trust vide his order passed u/s 12AA(3) of the ‘Act’. We thus in light of our aforesaid observations thus set aside the order passed by the DIT(Exemption) u/s 12AA(3) and therein restore the registration of the assessee trust.
The contention of the Ld. A.R that the DIT(Exemption) had exceeded his jurisdiction by cancelling the registration of the assessee trust u/s 12A, w.e.f A.Y. 2009-10, despite the fact that he was seized of such jurisdiction only w.e.f 01st June, 2010, is found to be misconceived and as such does not merit acceptance, is thus rejected.
We thus in light of our aforesaid observations therein set aside the order of the DIT(Exemption) cancelling the registration granted to the assessee trust u/s 12A of the ‘Act’. We may however clarify that as we have set aside the cancellation of the registration of the assessee trust by the DIT(Exemption) vide his order passed under Sec. 12AA(3), which was assailed before us by the assessee, therefore we refrain from adjudicating the issue as to whether the activities of the assessee trust, viz collection of ‘Auditorium fees’ would be hit by the provisions of Sec. 2(15), or not, which thus is left open, and the assessee shall remain at a liberty to raise and contest the same before the A.O. Thus the ‘Ground of appeal No. 2’ is disposed of by us in terms of our aforesaid observations, and as such is partly allowed.
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2017 (3) TMI 31
Addition with respect to written off of bad and doubtful debts reserve - Held that:- The ledger accounts of each individual account holder/company whose outstanding loan amount have been written off during the relevant period were filed before the Assessing Officer during the remand proceedings. The Assessing Officer in remand report instead of verifying the same has reiterated his objection that the Board Resolutions have not granted absolute mandate to write off the bad debts to the assessee, and has laid a condition that the bank has right to recover the amount in future, if possible. The Revenue has not brought on record any material to show that the assessee has in fact recovered any of the amounts written off in subsequent assessment years or the accounts declared as bad debts were actual live or being capable of being realized. As in the case of TRF Ltd. Vs. Commissioner of Income Tax (2010 (2) TMI 211 - SUPREME COURT ) has held that after amendment of section 36(1)(vii) w.e.f. April 1, 1989 for claiming deduction in relation to bad debts, it is not necessary for the assessee to establish that debt in fact has become irrecoverable. The deduction is allowable if bad debts are written off as irrecoverable in the account of the assessee.
One of the objection raised by the revenue against writing off of bad debts reserve is that the income of the assessee was exempt up to assessment year 2006-07 on account of deduction u/s. 80P of the Act. As is evident from the impugned order the assessee had suo-moto created a provision for bad and doubtful debts since 1985-86 on regular basis. While computing the income the assessee claimed entire amount as exempt u/s. 80P up to assessment year 2006-07. Merely because the assessee had claimed the benefit of deduction u/s. 80P it cannot be inferred that the benefit of section 36(1)(vii) is not available to the assessee in the subsequent years when the assessee is not eligible to claim deduction u/s. 80P of the Act. The Revenue has not placed on record any material to show that the provision created by the assessee on account of bad and doubtful debts during the period when the assessee was eligible to claim deduction u/s. 80P was in any manner appropriated.
Thus the Commissioner of Income Tax (Appeals) by giving a well reasoned and detailed findings has rightly deleted the addition with respect to written off of bad and doubtful debts reserve. - Decided in favour of assessee
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2017 (3) TMI 30
TDS u/s 195 - TDS liability - Held that:- Undisputedly made for acquiring certain equipments and appliances for the purpose of research. This aspect of the matter is beyond any dispute or controversy in the light of invoice dated 20.05.2010, a copy of which is placed before us at page no.16 of the paper Book. It is also not the case of the Revenue that this invoice is a sham invoice or that the description given in the invoice is incorrect. Yet, the stand of the Revenue authorities is that since the payment was made under an agreement which was aimed at carrying out research activities on behalf of the assessee, the payment must be treated as royalty. That argument does not appeal to us.
While examining taxability of income in the hands of the recipient, embedded in foreign remittance, all that is required to be seen is whether or not that particular income is taxable in India. In the present case, the payment is made for purchase of equipments and appliances and these equipments and appliances under the agreement belonged to the assessee and clearly, therefore, the income embedded in these payments is not exigible to tax in India in the absence of permanent establishment of the vender on such equipments and appliances. While it is true that the contract for the purpose of which these equipments and appliances were purchased, relates to a taxable activity i.e. royalty, it is equally correct that no such taxable event i.e. carrying out of research activity has taken place during the course of this transaction. In this view of the matter, in our considered view, authorities below were completely in error in holding that the income embedded in the remittance of NOK 7,50,000 which was beyond any dispute or controversy for the purpose of purchase of equipments and appliances for research, was not taxable in India. We, therefore, vacate the orders of the authorities below and hold that the assessee was not liable to deduct any tax from this payment. Since we have cancelled the impugned tax withholding liability itself, all other points such as grossing up or invocation of section 206AA or even interest liability under section 201(1A) are not more than academic. These grievances must be dismissed as infructuous.
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2017 (3) TMI 29
Transfer pricing adjustment - international transaction relating to acquisition of intangible assets by assessee from its associated enterprise - Held that:- The authoritative pronouncement by the Hon'ble High Court in Vodafone India Services Pvt. Ltd case [2014 (10) TMI 278 - BOMBAY HIGH COURT] clearly brings out that the mechanism of measurement of income by application of arm’s length principle prescribed in Chapter X of the Act can be invoked only “where income arises from international transaction”. Applying the aforesaid ratio to the instant facts, it is quite clear that the consideration paid for acquisition of Goodwill and Customer lists has not been considered while computing the taxable income and, therefore, the same cannot be subject to application of arm’s length principle contained in Chapter X of the Act. Therefore, so far as the stand of Revenue qua the adjustment made on account of cost of acquisition of Goodwill and Customer lists is concerned, the same is hereby directed to be deleted.
Adjustment made in the cost of acquisition of Trademark - the plea of assessee has been that the valuation has been carried out by an expert and the weightage has been assigned on the basis of variety of considerations, inter-alia, including the potential of generating business in future - Held that:- In our considered opinion, the assessee has explained the basis of arriving at the consideration and the basis is not alien to the theories of valuation. So however, in contrast, if we were to examine the stand of TPO, same is quite adhoc and unscientific, and is only a guesstimate. The TPO observed that “assessee has paid almost 25% extra” for the acquisition, which is devoid of any rationale or scientific methodology. Therefore, in our considered opinion, the TPO has not rejected the valuation of assessee on the basis of any objective reasoning. At the time of hearing, the learned representative also pointed out that the result of valuation carried out by TPO is minimal inasmuch as it would result in the reduction in claim of depreciation by a sum of ₹ 2,32,874/-, which is quite insignificant. Be that as it may, after having considered the entire conspectus of facts and circumstances of the case, we do not find any justification to approve the approach of TPO to compute the arm’s length price of the transaction of acquisition of Trademark as it is neither scientific and nor it is in the manner prescribed in the statute. Therefore, with respect to the adjustment made on account of cost of acquisition of Trademark, the Assessing Officer is directed to delete the addition.
Thus, transfer pricing adjustment made on account of international transaction relating to acquisition of intangible asset is hereby directed to be deleted and assessee accordingly succeeds.
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2017 (3) TMI 28
Revision u/s 263 - in order which is erroneous and prejudicial to revenue - depreciation on “Infrastructure usage facility” - Held that:- In case of CIT Vs. Nirma Chemicals Works (P.) Ltd. [2008 (2) TMI 373 - GUJARAT HIGH COURT] in context of the Commissioner’s power to revise the decision of the Assessing Officer under section 263 of the Act, has rejected the contention of the revenue that simply because the assessment order was silent on a particular claim made by the assessee, it would mean that such order does not reflect any application of mind.
In the case of Techno Shares & Stocks Ltd. Vs. CIT (2010 (9) TMI 6 - SUPREME COURT OF INDIA ), wherein the Apex Court has held that membership card is entitled to depreciation. Here it is noteworthy that even though floor of exchange was owned by the stock exchange on the basis of right to use the floor of exchange, the depreciation was granted to the member. It was held that right of membership was license or akin to license and had a commercial value. The court also clarified that even though there was a clause that in case of default, the right would vest with the exchange, the same would not make no difference, because till the time the member was not defaulting, he was entitled to use the floor of exchange under the license.
Recently the Bombay High Court in the case of Birla Global Assets Finance Co. Ltd. [2012 (10) TMI 1047 - HIGH COURT OF BOMBAY] held that business and commercial brand equity is an intangible assets and therefore, the depreciation claim on the same is allowable under section 32 of the I.T. Act, 1961.
The claim of the assessee, depreciation on “Infrastructure usage facility” has been made from the Assessment Year 2004-05 of the assessee’s existence and in our considered opinion same should not be distributed in view of the foregoing observation and respectfully following the decision of the Higher Courts, we allow the appeal of the assessee.
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2017 (3) TMI 27
Penalty u/s. 271(1)(c) - addition u/s 68 - Held that:- The issue of levying penalty-where penalty is initiated for concealing particulars of income/furnishing inaccurate particulars and penalty is not levied on account of same default-has been dealt by the Hon’ble Karnataka High Court and the Hon’ble Supreme Court in the cases of SSA’S emrald Meadows (2016 (8) TMI 1145 - SUPREME COURT), Manjunath Cotton and Ginning Factory (2013 (7) TMI 620 - KARNATAKA HIGH COURT ). The Hon’ble courts have held that where the AO initiates proceedings u/s. 271(1)(c) for concealment particulars of income but levies penalty for furnishing inaccurate particulars the penalty order could not be sustained. Respectfully following the above judgments of the Hon’ble courts, we decide the effective ground of appeal in favour of the assessee.
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2017 (3) TMI 26
Addition made u/s. 69C in respect of bogus purchases - Held that:- AO had not doubted sales (exports) made by the assessee, that he had accepted the book results shown by the assessee, that the payment made by the assessee through banking channels is not in doubt, that there is no evidence of making unexplained investment. Except issuing notice u/s. 133(6) to the suppliers of the goods, the AO has not made any further investigation. The assessee had produced before him the delivery challans, purchase bills and evidence of payment made through banking channels. Thus, the assessee had discharged the initial burden. It was duty of the AO to rebut the evidences produced by the assessee. But, he did not bring anything on record. In our opinion, the FAA had rightly held that the provisions of section 69C cannot be invoked for bogus purchases. In these circumstances, we are of the opinion that his order does not suffer from any legal or factual infirmity. The cases relied upon by him support the view taken by us. Confirming the order of the FAA, we decide the effective ground of appeal against the AO.
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2017 (3) TMI 25
Computation of capital gain - adoption of value of the land - Held that:- In this case as on 10.02.2007, the guideline value of the property was not more than ₹ 80,15,000/-, the price agreed between the parties. On 01.08.2007 the guideline value was revised to ₹ 1,20,00,000/-. Since the assessee agreed to sell the property for ₹ 80,15,000/- on 10.02.2007 which is much more than the guideline value which existed on 10.02.2007, this Tribunal is of considered opinion that the Assessing Officer has to accept the sale consideration of ₹ 80,15,000/- under Section 50C of the Act. In other words, the guideline value which exists on the date of agreement for sale, has to be taken in to consideration for the purpose of determining the fair market value under Section 50C of the Act. Therefore this Tribunal is unable to uphold the orders of the lower authorities.
Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to accept the sale consideration at ₹ 80,15,000/- as agreed between the parties in the agreement for sale dated 10.02.2007.
Claim of exemption under Section 54F - Held that:- The Parliament in their wisdom thought it fit to grant exemption in respect of the capital gain which was used for construction or purchase of property till the due date for filing of return of income under Section 139 (1) of the Act. The assessee could not use the sale consideration within the due date under Section 139 (1) of the Act, the same shall be deposited in any one of the capital gain account. The Apex court while considering the “due date” held that the due date means, the date prescribed under Section 139 (1) of the Act. The Apex Court in the case of Prakash Nath Khanna and Another v CIT (2004 (2) TMI 3 - SUPREME Court) has examined these issue and found that the due date means the date under Section 139 (1) of the Act and not the date under Section 139 (4) of the Act.
This Tribunal is of considered opinion that the Assessing Officer has rightly allowed the claim of the assessee with regard to the capital gain utilized for purchasing the flat till the due date for filing the return of income under Section 139 (1) of the Act. Therefore this Tribunal did not find any reason to interfere with the orders of the lower authorities. Accordingly, the same is confirmed.
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2017 (3) TMI 24
Income U/s 2(24) - Addition of medical insurance receipt - reimbursement of expenses incurred in relation to a surgery of gall bladder - Held that:- Section 2(24) of the I.T. Act defines the term “Income” in an inclusive way, but reimbursement of expenses cannot be income because the assessee is getting the money back, which he already spent. Assessee did not earn this money at all which he is getting as reimbursement. Reimbursement does not mean that the assessee is deriving any income from any sale of goods and services. There is no motive to earn income out of medical insurance.
After going through the definition of the income, as explained above, one can say easily that the “reimbursement” is not an income. The term “reimbursement” does not fall in the characteristics of income. No doubt the definition of ‘income’ is inclusive. This, of course, does not mean that an amount which can, by no stretch of imagination, be called income can be treated as income and taxed as such by parliament. It must have some characteristics of income as broadly understood. - Decided in favour of assessee
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2017 (3) TMI 23
Penalty u/s 271(1)(c) - validity of notice - Held that:- In the case under consideration, on perusal of the show cause notices issued by the Assessing Officer u/s 274 r.w.s. 271 of the IT Act, 1961, dated 31/12/2008 and 24/10/2011 it is seen that the Assessing Officer did not mention whether the notice is issued for concealment of income or for furnishing of inaccurate particulars of income. Therefore, as per the ratio laid down by the Hon’ble Supreme Court in the case of SSA’s Emerald Meadows [2016 (8) TMI 1145 - SUPREME COURT] the notice issued by the Assessing Officer is not valid and consequently, the order passed u/s 271(1)(c) is also not valid. Hence, we set aside the order of the CIT(A) and quash the order passed by the Assessing Officer u/s 271(1)(c) of the Act. Accordingly, the appeal of the assessee is allowed.
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2017 (3) TMI 22
Disallowance made u/s 40(a)(ia) - Annual Maintenance Charges - Held that:- We find that there is no clear finding recorded by the authorities below with regard to the nature of each and every payment made by the assessee to MSL in accordance with various clauses of the Joint Venture Agreement dated 15.7.2008 which is the basis on which various payments were made. There is no finding as to whether the said agreement is a mere revenue sharing arrangement or it is merely an agreement allowing the assessee to carry on the food vending business on hire together with some common facilities. We find that such a clear finding would determine the issue of applicability of tax deduction provisions as per Chapter XVIIB of the Act. Thus we deem it fit and appropriate, in the interest of justice and fairplay, to set aside this issue to the file of the ld AO to decide the same afresh.
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Customs
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2017 (3) TMI 5
Benefit of N/N. 62/2004-Cus dated 12.05.2004 - import of parts/ components as well as locks, springs, spring rings, beads etc. - whether the components are correctly described as "finding" and are classifiable under heading 7113 19 60 and 7113 11 90 respectively, when made of gold and silver? - Held that: - similar issue was decided in the case of CC, Jaipur vs. V.K. International [2012 (10) TMI 739 - CESTAT, NEW DELHI], where it was held that Gold mountings and findings being items as jewellery are outside the purview of N/N. 62/2004-C.E. and, hence, the Board’s Circulars No. 40/2004-Cus., dated 4-6-04 and 13/2006-Cus., dated 29-3-06 clarifying that the gold and silver mountings and findings are covered by the N/N. 62/2004-Cus. are contrary to the provisions of law and, hence, have no validity - appeal allowed - decided in favor of Revenue.
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Corporate Laws
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2017 (3) TMI 2
Violation of principles of natural justice - removal of director - Entitled to be continued as Director for life on the contention that the Company is quasi partnership firm - Held that:- The petitioner was aware of both the board meeting dated 11.3.2011 and shareholders ordinary general meeting dated 5.4.2011 and, he was also physically present in both the meetings. However, for the reasons best known to petitioner, he has submitted a letter dated 4/5th April, 2011, which was received by the company on 5.4.2011 at 11.40 am i.e. after the meeting removing him as Director was over. The letter is an afterthought and, it would not have bearing on the issue in question. We are convinced that he board meeting as well as ordinary general meeting were conducted strictly in accordance with law and, there is no violation of principles of natural justice. Moreover, admittedly, the company is a private limited company and, cannot be called a quasi-partnership firm as contended by the Petitioner. And, the Petitioner can be removed by adopting proper course of action in Accordance with articles of Association and relevant provisions of Companies Act, 1956. Hence, the removal of Petitioner as director is held to be in order.
The fifth Respondent issued a notice/complaint dated 08.03.2011 to remove the Petitioner as a Director. This issue of the removal of the Petitioner was discussed in the Board Meeting held on 11.03.2011 under the caption "any other Business". Further she also did not attend the EGM in person in which the Petitioner's removal was to be discussed. It is surprising that a person who made a complaint/notice to remove a Director, chose not to attend the EGM in person. Further, from the available records, it is also not clear as to when the 5th Respondent became shareholder of the 1st Respondent Company.
Whether the Petitioner has come to this Tribunal with clean hands in order to claim equitable relief under Section 397/398 of Companies Act, 1956 - Held that:- In this context, it is necessary to refer the legal notices dated 8th April, 2013 got issued by the petitioner through his Advocate Shri Govind Reddy Mandadi to D. Nitin Kumar Reddy and Ravikanth Gajula, who are purchasers of plots of the Company. The petitioner through the said notices has threatened them with legal consequences if they proceed with purchasing of the plots of the Company since a suit bearing OS No. 832 of 2010 and the present petition were pending.
As stated above, OS No. 832 of 2010 was filed before IInd Addl. District Judge, RR District by seeking a judgement and Decree against the Defendants (against the Company and its Directors) permitting his to participate in day to day affairs of Company and to direct the defendants not to take any decision without participation of plaintiff( the petitioner herein). He has also filed IA No. 90 of 2011 in OS No. 832 of 2010 by seeking to grant an ad-interim injunction restraining the respondents/defendants from alienating, creating any charge or any 3rd party interest in the suit schedule property pending disposal of the suit. However, the said IA was dismissed by the Court by an order dated 20th September, 2011, by holding that the petitioner failed to make out prima-facie case, balance of convenience and irreparable loss in his favour.
The above circumstances clearly show that the petitioner is bent upon to disturb the functioning of the Company by abusing the process of law by filing cases on baseless grounds for his selfish ends without any legal basis. We held that the petitioner has not come to the Tribunal with clean hands to claim any benefits as prayed for in the present petition and therefore he is not entitled for any relief as prayed for. We further held that the ratio as held in the judgements, relied upon by the respondents, as discussed supra is applicable to the present facts and circumstances of the case.
Petitioner has failed to make out any case so as to grant any relief as prayed for.
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Service Tax
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2017 (3) TMI 20
Maintainability of the appeal - Held that: - We note that as pointed out by the learned Counsel for the appellant partnership firm and partner are different for legal treatment - In the title of the appeal, the respondent name is mentioned as "M/s L.R. Sharma". The full title of M/s “L.R. Sharma” & Co. is not mentioned. On this ground alone, the respondent wants the appeal to be held as non-maintainable - The title of the appeal mentions "M/a L.R. Sharma". M/a is short form of Messers, i.e. plural of Mr (Mister). Normally it is used for addressing a firm, association of persons, a partnership. Viewed with these facts we find there is no reason to hold the appeal as non-maintainable on this ground.
We have heard the learned AR who agrees that the amount involved is substantial and the matter can be taken up for early disposal - We find merit in the prayer made by the applicant for early listing and hearing of the case - Appeal allowed.
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2017 (3) TMI 19
Levy of Penalty - site formation and clearance, excavation services - Held that: - I find that the Hon'ble High Court of Karnataka in the case of CST, Bangalore vs. Prasad Bidappa [2012 (8) TMI 749 - KARNATAKA HIGH COURT], has held that when the assessee deposits the entire duty, the proceedings cannot be started against him for imposition of penalties in terms of section 73 of the Act. I also find force in the plea that as the matter was under confusion and was only clarified subsequently, the provisions of section 80 would be attracted, thus not calling for any penalty - Appeal disposed of.
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2017 (3) TMI 21
100% EOU - Refund claim - Rule 5 of CCR, 2004 - export of services - denial on the ground that the services rendered do not qualify the term Export as well as on the ground that Some of the input services do not qualify the definition of input service - Held that: - the Business Auxiliary Services rendered by the appellant, to their principal in Hong Kong is to be considered as, service provided from India and used outside India - the decision in the case of Gap International Sourcing (India) Pvt. Limited vs. CST, Delhi [2014 (3) TMI 696 - CESTAT NEW DELHI], followed as the issue was similar where the the Tribunal has gone on to decide that the services rendered to principal in USA, who had paid for the services in foreign exchange, has to be considered as export of service.
Input services - Held that: - the Tribunal decision in the case of Convergys India Pvt. Limited [2009 (5) TMI 50 - CESTAT, NEW DELHI], relied in which identical issue had also been examined and was held that that there cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate - refund allowed.
The appellant will be entitled to refund under Rule 5 of Cenvat Credit Rules, 2004. However, for verification of receipt of foreign exchange and connected matters, the case is remanded to the Original Adjudicating Authority - appeal allowed by way of remand.
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2017 (3) TMI 18
Demand of service tax on amount paid under Joint development agreement (JDA / MOU) - sharing of revenue and expenses - Development of Windfarm and related activities - The respondent entered into an MOU with M/s. Vestas-RRB for sharing of work and responsibilities in operationalising the said wind farm - whether it is correct to hold that the respondents were providing various taxable services like erection, commissioning or installation services, Commercial or industrial construction services, scientific and technical consultancy services to M/s. Vestas RRB?
Held that: - There is no agreement to provide or receive service between the parties in the MOU. Both the parties are mutually interested in attracting the investors to invest in the wind farm and to operationalise 25 wind mills for mutual benefit - the nature of service taxable classification and consideration attributable to such individual services have not been indicated at all - The amount received from M/s. Vestas RRB in terms of the MOU was summarily considered as a consideration for taxable service without examination and pointing out the nature of service and its classification - appeal dismissed - decided against Revenue.
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2017 (3) TMI 17
Benefit of N/N. 13/2010-ST dated 27.02.2010 - denial on the ground that the benefit not available to service recipient - exemption in relation to on-line information and database access or retrieval services and business auxiliary services provided by News Agency - Held that: - the legal fiction cannot be restricted only to collection of tax without applying any concession of the notification applicable thereto when the conditions of the said Notifications are fulfilled by the recipient of such service.
Section 66A stipulates that taxable service shall be treated as if provided by the recipient of service in India and accordingly, all the provisions of Chapter V shall apply, here the tax liability is put on the appellant on such legal fiction. It is not legally tenable to hold that such legal fiction will have limited application only for payment of service tax and not with reference to any concession available to such service tax.
Appeal allowed - decided in favor of appellants.
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2017 (3) TMI 16
Refund - Cenvat Credit - Change in the name of assessee - Business Auxiliary Service and Business Support Services - Notification 5/2006 NT dated 14.04.2006 - Held that: - I am of the opinion that the impugned order is not sustainable in law as the appellant has given sufficient documentary evidence and the decisions of the Tribunal in support of his claim.
As far as first ground on which cenvat credit was denied is totally wrong because the change of name does not make the appellant ineligible to claim cenvat credit and more so it has been informed to the Department well in time. Secondly, with regard to Management, Maintenance or Repair Service, the lower authority has wrongly considered it as an export of service whereas it is import of service as evidenced by the Service Tax Returns - Appeal allowed by way of remand.
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2017 (3) TMI 15
Transportation charges - transportation of sugarcane from the ‘Cane Collection Center’ to the Sugar factory - Held that: - there being no suppression or contumacious conduct on the part of the appellant, the extended period of limitation is not invocable - on merits also, the appellant have only facilitated the farmer in transport of the sugarcane to their factory gate, which was otherwise the obligation of the farmer. Accordingly, no Service Tax was payable on the transport charges incurred by the appellant - appeal allowed - decided in favor of appellant.
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Central Excise
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2017 (3) TMI 13
SSI Exemption - use of brand name of others - appellant is engaged in the manufacture of stereo cassettes players/ recorders under their own brand name ‘Royal’ as also under the brand name of ‘York’ which belongs to another person, the ‘York’ brand goods is cleared on payment of duty - Held that: - admittedly the appellant's grievances about the non availability of AC's report, about non extension of small scale exemption notification and non discussion of the chart prepared by them and submitted to the original adjudicating authority is appreciable in as much as the same do not stand addressed by any of the authorities below - As such the matter remanded to the original adjudicating authority for fresh calculation of demands - appeal allowed by way of remand.
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2017 (3) TMI 12
CENVAT credit - whether the Central Excise authorities can review the assessment of duty paid by supplier at the end of the recipient? - Held that: - This question of law has already been settled by the Hon'ble Supreme Court in the case of Commissioner of Central Excise & Customs Vs. MDS Switchgear Ltd. [2008 (8) TMI 37 - SUPREME COURT], where it was held that quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be challenged by revenue in charge of recipient unit - the assessment at the end of the appellants cannot be reopened and the cenvat credit availed by them has been correctly availed.
Extended period of limitation - Held that: - Revenue is not justified in contending that the appellant had not taken reasonable steps to ensure that appropriate duty had been paid on the said goods or the credit was taken wrongly - there is no intent to suppress or deliberately avail excess credit. Hence, extended period is not applicable.
Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 11
CENVAT credit - denial on the ground that the machine was received in damaged condition and insurance was claimed - Held that: - The ownership is not the criteria for allowing the credit on capital goods. The only criteria is that the capital goods should be installed in the factory of the assessee and used in the manufacture of final product which is not in dispute in the present case - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 14
Classification on residual oil - classified under CETH 27109900 or under CETH 27101990? - Held that: - during the course of adjudication the appellant has produced the certificate issued by the Chartered Engineers and the same has not been considered by the adjudicating authority in true spirit - Further, the appellant has raised certain issues such as scope of SCN, whether the residual oil is manufactured by the appellant or not, whether the residual oil is to be classified as waste oil under CETH 27009900 or 27101990 and the issue of time bar which were not examined by the adjudicating authority, therefore, the matter needs examination at the end of the adjudicating authority - appeal allowed by way of remand.
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2017 (3) TMI 10
Application of rectification of mistake - Change in jurisdiction - Penalty - Time limitation - Held that: - there is no allegation of fraud, based on any facts leading to any active suppression or contumacious conduct on the part of the assessee. The only allegation is that the assessee herein misrepresented for obtaining the 'eligibility certificate' for exemption - in the case of EMI Transmission Ltd. Versus Commissioner of Central Excise & Customs reported at [2013 (10) TMI 49 - BOMBAY HIGH COURT], wherein under similar facts and circumstances and the financing bank - known as ‘Japan Bank of International Corporation', is also the same
It is not in dispute that on the date on which supplies were made, all the parties proceeded on the footing and that J PIC was an International Organization and that the assessee was entitled to the benefit of the said Notification No. 108/95-CE. It was only subsequently, the Transmission Corporation of Andhra Pradesh intimated to the assessee that JPIC was not a notified International Organization and, hence, benefit of Notification No. 108/95-CE is not available to the assessee - Decided in favor of the assessee.
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2017 (3) TMI 9
Whether Education and Secondary and Higher Education Cess is chargeable on Sugar Cess - CBEC Circular No. 345/2/2004-TRU(Pt.) dated 10.08.2004 - Held that: - eard the learned counsel for respondent-assessee. She has submitted that this Tribunal in the case of Sahakari Khand Udyog Mandli Ltd Vs CCE, Daman reported at [2008 (8) TMI 98 - CESTAT, AHMEDABAD ] has held that Sugar Cess though levied as duty of Excise, the said Cess is not levied by Ministry of Finance and by relying upon the said Board of Circular dated 10.08.2004, Sugar Cess cannot be included for the purpose of computation of Education Cess - Decided in favor of the assessee.
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2017 (3) TMI 8
CENVAT credit - whether the appellant is entitled to the credit of the amount paid by the supplier to the Government? - Held that: - the issue is squarely covered in favor of the appellant by the decisions in the case of Kerala State Electronic Corpn. Vs. CCE, Kochi [1996 (2) TMI 228 - CEGAT, MADRAS] wherein it has been held that the appellants under these circumstances is entitled to avail the CENVAT credit of the duty paid by him to the supplier who had further paid same to the Government - appeal allowed - decided in favor of appellants.
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2017 (3) TMI 7
Cenvat credit - 100% EOU - Held that: - I am of the view that the impugned order is not sustainable in law because the Commissioner (A) firstly has travelled beyond the scope of show-cause notice because in the show-cause notice, the proposal was to deny CENVAT credit on Sl. No. 3 and 4 of the table, whereas the Commissioner (A) has held that appellants are not entitled to credit availed at Sl. No.1,5 and 6 of the said table which is not the issue raised in the show-cause notice.
I also find that the Order-in-Original is liable to be upheld as the appeal filed by the department and the Order-in-Appeal have confirmed the findings of the Order-in-Original because in the impugned order, the Commissioner (A) has agreed that appellant is eligible for CVD and EC and SHE cess i.e. Sl. No. 3 & 4 in the table amounting to ₹ 3,01,788/- - Appeal allowed.
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2017 (3) TMI 6
Valuation - inclusion of Freight charges - duty not paid on transportation cost from the factory to depot - time limitation - Held that: - Plea of the appellant is that as investigation was completed on 13.11.2006. Thereafter the show cause notice was issued on 13.2.2009. Therefore, the demand is barred by limitation - We find that in the facts and circumstances of the case, it is not coming out whether the investigation was concluded on 13.11.2006 or not - extended period of limitation is invokable.
Levy of penalty - initially the appellant was known as M/s. Standard Electrical Ltd. which are taken over by M/s. Havells India Ltd. and the appellant has merged with M/s. Havells India Ltd. - whether the penalty on M/s. Havells India Ltd. can be imposed? - Held that: - as there are contrary decisions on the issue, it would be in the interest of justice to refer the matter before the Larger Bench of this Tribunal.
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CST, VAT & Sales Tax
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2017 (3) TMI 4
Natural justice - Whether the learned tribunal was right in law in rejecting the claim of consignment sales outside the State without considering the supporting proofs and evidences produced by the appellants? - Held that: - As per section 6A of the CST Act, the burden is upon the dealer to prove by producing evidence / prescribed particulars in the prescribed Form obtained from the appropriate authority (F Form), if the dealer claims that he is not liable to pay tax under CST Act.
The dealer did produce F-Forms containing prescribed particulars. However, on inquiry it was found by the Sales Tax Officer that F-Forms produced by the dealer were fake and forged one. Therefore, the dealer could not prove and/or substantiate that on the transactions in question the dealer is not liable to pay CST and/or could not prove that the transactions were not inter-State sale - it cannot be said that the authorities below have committed any error which calls for interference of this Court in excise of the appellate jurisdiction - appeal dismissed - decided against appellant.
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2017 (3) TMI 3
Condonation of delay - period of limitation - entitlement of interest on the amount of refund - Section 38 of the Gujarat Value Added Tax, 2003 (GVAT) - Held that: - As averred in the application, the proposal to file the Appeal was sent to the Finance Department on 09/08/2016. The period between 29/04/2016 to 09/08/2016 has not been explained at all. Even the period between 17/09/2016 to 30/01/2017 at the end of the Government Pleaders Office has not been sufficiently and properly explained. Under the circumstances, there is no proper and sufficient explanation explaining the huge delay of 218 days - present application deserves to be dismissed
Even otherwise, according to section 54(1) (aa) and also Section 38, the dealer is entitled to interest on the refund arising out of and/or pursuant to the order passed by the learned tribunal and/or on passing order of assessment (final assessment order) - it cannot be said that the learned tribunal has committed any error in holding that the dealer is entitled to interest - the delay has not been properly and sufficiently explained, even on merits also the Appeal deserves to be dismissed as the Appeal lacks merits - Decided against the revenue.
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2017 (3) TMI 47
Reversal on Input tax credit - denial on the ground that the information available on the Department's website did not match with the information supplied by the petitioner - Held that: - reversal of ITC, on the basis of a mere mismatch in information, could not have taken place - similar issue has been decided in the case of INFINITI WHOLESALE LIMITED VS. ASSISTANT COMMISSIONER (CT), KOYAMBEDU ASSESSMENT CIRCLE, KOYAMBEDU, CHENNAI [2015 (1) TMI 590 - MADRAS HIGH COURT] - petition allowed - decided in favor of petitioner.
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Indian Laws
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2017 (3) TMI 1
Enforcement of security interest - pre deposit - Held that:- Under Section 21 of the 1993 Debt Recovery Act, an appeal is not to be entertained by the Appellate Tribunal, unless the person preferring the appeal has deposited 75% of the amount of the debt due from him as determined by the Tribunal under Section 19. In terms of the proviso, the Appellate Tribunal may for reasons to be recorded in writing waive or reduce the amount to be deposited under the said section. Unlike Section 18 of the 1993 Debt Recovery Act, Section 18 of the SARFAESI Act does not permit full waiver.
In Narain Chandra Ghose Vs. UCO Bank and Ors. [2011 (3) TMI 1478 - SUPREME COURT OF INDIA] held that the condition of pre-deposit for entertainment of an appeal being mandatory under Section 18 of the SARFAESI Act, an appeal cannot be entertained, unless the condition precedent of deposit is fulfilled. The Court also held that the condition of pre-deposit being mandatory, complete waiver of pre-deposit is beyond the provisions of the Act.
DRAT has reduced the required pre-deposit of 25%, which is the minimum amount required to be deposited in view of the third proviso to Section 18 of the SARFAESI Act.In view of the verdict of the Supreme Court in Narain Chandra Ghose (supra) and the mandatory requirement of the third proviso to Section 18 of the SARFAESI Act, the writ petition cannot be entertained and the same is dismissed.
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