TMI Tax Updates - e-Newsletter
March 23, 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:
TDS u/s 194J OR 194C - running x-ray and sonography services in all four MCH centre - the activity clearly falls within the definition of ‘work’ as stated in section 194C - AT
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Income Tax:
Addition as Professional fee - accrual of benefit / perquisites - AO has not been able to establish as to what benefit has been obtained by assessee within the meaning of Sec. 2(24)(iv) of the Act in the instant year as nothing is shown to have been received by the assessee - AT
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Income Tax:
Allowable deduction u/s 37(1) - expenditure incurred by the assessee by way of payment to Knight Riders Sports Pvt. Ltd. for obtaining sponsorship rights in favour of Star India Pvt. Ltd. - Business nexus established - deduction allowed - AT
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Income Tax:
Disallowance of interest - assessee has given interest free advances to two family members with whom the assessee did not have any business connection - Additions confirmed - AT
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Income Tax:
Onus lies on the AO to prove that the assessee had actually earned any undisclosed higher price on sale of these shares than the rate as disclosed by assessee. The AO's conclusion of manipulation of share price and thereby earning, undisclosed receipts on sate of shares is highly presumptuous - AT
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Income Tax:
Tds u/s 194A - interest for late payment - interest was not actually in the nature of interest which was paid on the loan taken but actually it is of nature of purchase cost of asphalt (bitumen) as the impugned amount has been paid in the course of making purchases - No TDS liability - AT
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Income Tax:
Claim of depreciation - Ownership - scope of explanation to Section 32(1) - Cost of the Hospital building constructed by the partnership firm reimbursed by the Assessee Company - ownership of the land had to remain with the firm, it was also agreed that the land would be given on lease by the firm to the company - depreciation cannot be allowed - SC
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Customs:
Import of Pressed Distillate oil (FDO), Heavy Alckeys (RPO), calcium base grease and slack Wax - Once it is established that the impugned goods are in the nature of hazardous waste they become prohibited goods and hence have been rightly confiscated absolutely - AT
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Customs:
Valuation - accessories and batteries for mobile phones/ laptop - NIBD data is for unbranded goods and that too for imports many months back from the date of present import or after many months of the said import - matter remanded back for fresh consideration - AT
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Customs:
Denial of Benefit of concessional rate of CVD on the ground that the certificate submitted by assessee-Respondents, has been issued by the Superintendent of Customs and Central Excise and not by the jurisdictional Deputy/Assistant Commissioner, as required - nowhere it is alleged that the certificate was forged or not based on the imports - exemption allowed - AT
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Customs:
Mis-declaration of goods - goods declared as 'starch' whereas goods imported was synthetic diamond powder (greenish in colour) and white colour powder, which was found to be ‘other than starch’ - redemption fine and penalty upheld - AT
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Customs:
Classification of imported goods - if Revenue had a dispute on the said CTH, they could have changed the same when the said Bills of Entry were filed for assessment by the Proper Officer. As there was no change in classification as claim by appellant, now revenue cannot say there was intention to evade CVD by way of mis-declaration- AT
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Indian Laws:
W.e.f. 1.7.2017 it is mandatory to Quote Aadhaar Number in the ITR and update the PAN withe the Aadhaar Number - New Section 139AA
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Indian Laws:
Requirement of 1% TCS on cash sale of jewellery u/s 206C removed - Loksabha Passed the Finance Bill, 2017 today i.e. 22-3-2017
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Indian Laws:
100% penalty on cash transaction over ₹ 2 lakh (originally it was proposed as 3 lakh) from April 1, 2017 - Loksabha Passed the Finance Bill, 2017 today i.e. 22-3-2017
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Service Tax:
Refund claim - payment of tax under protest - rejection of refund on the ground of taxability of activity - By not issuing a show cause notice and a consequential order, the assessee was denied the opportunity to challenge the contention of Revenue on taxability - order rejecting the refund claim on ground of taxability is not sustainable - AT
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Service Tax:
Refund claim - Rule 5 of the CCR, 2004 - Service provided from outside the taxable territory to a person located outside the taxable territory are not services for the purpose of these rules. In view of above, the services provided onsite to the clients located abroad cannot be considered as part of export turnover or part of total turnover - AT
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Service Tax:
The aircraft lease service cannot be subjected to service tax under the category of Management, Maintenance and Repair. - AT
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Service Tax:
Classification of service - business of moving personal effects/household goods from one place to another place - GTA service or Cargo handling service? - Held as GTA service only - demand set aside - AT
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Service Tax:
Business auxiliary service - They are by using these GDS/CRS for booking tickets, receiving incentives from the said companies for every segment booked by them - service provided by the assessee has rightly been covered under BAS - demand confirmed - AT
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Service Tax:
Aircraft lease charges - lease charges were to include maintenance charges and AIL was under obligation to maintain and repair the aircrafts as part of the lease agreement - Thus this maintenance agreement cannot be considered as an independent and separate agreement - AT
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Central Excise:
Benefit of N/N. 50/2003 - area based exemption - the area in which the appellants unit is situated has been deleted from the relevant notification, the appellant will ceaze to enjoy the benefit of the notification from the date of such amendment - benefit rightly denied - AT
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Central Excise:
Benefit of N/N. 6/2006 - International Competitive Bidding (ICB) - If we take a view that the goods cleared by sub-contractors are not entitled for exemption on the ground they are not the bidders, the very purpose of the Notification would be defeated because the main contractor will be having hundreds of sub-contractors in Mega Projects - AT
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Central Excise:
Manufacture - The laminated HPDE fabrics that comes into existence due to the process of lamination cannot be held as a manufactured product attracting Central Excise duty - AT
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Central Excise:
Valuation - royalt - The value of design, drawing and technical know-how, provided free of charge, should form part of the assessable value of power units manufactured and cleared by AVTEC to FIPL - AT
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Central Excise:
SCN is the foundation in the matter of levy and recovery of duty and penalty and interest; if there is no invocation of relevant Rules it would not be open to the adjudicating authority to invoke the said Rules - AT
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Central Excise:
Valuation - fabric - The fabric so supplied shrinks during processing and demand was raised on such shrinkage as having not been subject to duty - inclusion of shrinkage in assessable value - shrinkage upto a limit is not subject to duty - demand set aside - AT
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Central Excise:
Undoubtedly, interpretation of exemption notifications cannot be left to the hands of authorities that are not created by or acknowledged in the relevant taxing statutes. However, the nature of the project to which the exemption is extended, if certified by the authority specified in the notification, cannot also be questioned by taxing authorities that are not conversant with such projects - AT
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Central Excise:
Clandestine removal - Contradictory claims have been made by both sides before us, as to whether spit tobacco can be made using Hookah tobacco. The entire demand hinges on this fact - matter remanded back - AT
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VAT:
Input tax credit - if, material was available with respondent to come to the conclusion that the transaction were bogus, adequate opportunity had to be given to the petitioner to meet the charge - HC
Articles
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (3) TMI 975
Non granting registration under section 12A(a) - non follow of proper procedure - Held that:- Competent authority i.e. Principal Commissioner or Commissioner would call for the documents or information from the trust or institution in order to satisfy himself about the genuineness of activities of trust or institution. If he is satisfied about objects of trust or institution and genuineness of its activities, then he will pass an order in writing granting registration to such trust. A perusal of the letter dated 24.3.2014 vide which the ITO (Tech)-HQ has communicated the assessee about non-grant of registration to the assessee would indicate that no such procedure has been followed. It is highly deprecating that the competent authority has not passed any order and only an information is being sent to the assessee by an ITO. It is pertinent to observe that order for grant of registration or refusal is to be passed under the signature of ld.Commissioner or Pr.Commissioner. This procedure cannot be left to be conducted at the end of an ITO. He can only work for communication of the order or the notice. We have been informed that no other order has been passed.
We assume that contents of this letter is an order passed by the competent authority, then also it is not discernible which objects of the trust deed has been analysed by the competent authority. At the stage of granting registration, there would not have been any expenditure incurred by an assessee, but objects contemplated under the trust deed are to be analysised. No such step has been taken by the competent authority in the present case. Therefore, the impugned order is not sustainable. We quash the letter dated 24.3.2014 written by the ITO (Tech.)-II, Surat on behalf of the Commissioner, and remand this issue to the file of the ld.Commissioner for re-adjudication of the controversy after providing due opportunity of hearing. - Decided in favour of assessee for statistical purpose.
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2017 (3) TMI 974
Penalty u/s 271(1)(c) - addition as agriculture income - Held that:- It is pertinent to keep in mind that a person has been claiming agriculture income in the past and in subsequent years and having agriculture land, then the addition to his income for not showing exact details of agriculture income can be justified, but it cannot be said that claim made was false. It could be appreciated that a particular quantity of land can generate an income from agriculture activity. Such income could be estimated if land holding is there. The AO failed to bring any evidence on record which can exhibit that this claim was false and the assessee has furnished inaccurate particulars with regard to this claim.
Addition on difference of date mentioned in the vouchers and entered into computer a negative cash balance has occurred. This was result of a wrong date mentioned at the time of entry in the software. Otherwise, this addition itself should not have been made in the income of the assessee. The AO again did not prove that a false assertion was made by the assessee.
Assessee has purchased capital assets in which he has made certain improvement. Cost of this improvement was not allowed to the assessee while computing the capital gain. The AO has alleged that the assessee has furnished inaccurate particulars for visiting the assessee with penalty. But he failed to demonstrate which particular was inaccurate. It is a claim made by the assessee, which cannot be substantiated with documentary evidence, therefore, it was disallowed. But how the claim was inaccurate, is not discernible. Thus, no penalty is imposable on this count also.
Salary income addition - as per the assessee, he has disclosed the income as per Form no.16. The assessee was of the opinion that the expenditure i.e. constituency allowance, office expenditure are exempt being Member of Parliament. He harboured a belief that his salary income is also exempt - Held that:- To our mind the assessee failed to give any plausible explanation for non-inclusion of his salary as Member of Parliament. There cannot be any reason to habour such a belief, more so, it was not brought our notice that this was the first year of receipt of salary as an Member of Parliament. Therefore, the ld.AO was justified in visiting the assessee with penalty qua the addition of salary income amount - Appeal decided partly in favour of assessee
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2017 (3) TMI 973
TDS u/s 194C - disallowance u/s 40(a)(ia) - non deduction of tds - Held that:- The assessing officer has assumed that these labourers were supplied by alabour contractors whereas stand of the assessee was that it itself employed all the labourer. It has handed over the labour payments to one or two person on the site who will disburse among the labourer. The assessee has not availed services of any labour contractors therefore, it was not required to deduct TDS. We could have appreciated the case of revenue, if assessing officer has inspected the site or record statement of labourers for establishing the facts that they worked at the site of assessee through some contractors but no such step was taken by the assessing officer,inspite of direction given by theCIT(A). Under these circumstance,the Ld.CIT(A) has deleted the addition and we do not see any reasons to interfere in the order of the CIT(A). - Decided in favour of assessee
Addition u/s 68 - Held that:- The assessing officer disbelieved existence of contractor/sub-contractor relationship between it and M/s. Hemani Enterprises. However, he has not assigned any reasons why he has disbelieved it. The assessee supplied complete addresses, bank details, PAN and mobile no. of Shri Manoj Bhai Gohil who is the proprietor of M/s. Hemani Enterprises. The Ld. first appellant authority has observed, if assessing officer has any doubt he should have disbelieved the total contract payment made to him, why the outstanding only. The assessee was awarded contract by Canal Division of R&B department under the tender. It has executed the contract through M/s.Hemani Enterprises, if the line of action adopted by the assessing officer is being upheld, than the profit in this contract would be very abnormal because in a contract of having value of ₹ 2,17,02,016/- a some of ₹ 72,88,879/- is being treated as a profit than the ratio of profit would quite high in a Civil Construction work.AO ought to have considered that a contract given by a Govt. agency was completed and payment was made by Canal Division of Govt. department. In such situation the activities cannot be held as bogus. - Decided in favour of assessee
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2017 (3) TMI 972
Unexplained cash deposit in banks - Held that:- Assessing Officer has failed to appreciate that when two parties had confirmed the transactions with the assessee, the same could not be rejected for petty reasons like unsigned return of income, PAN card etc which could have been got signed from them by issuing notice or making cross verification with their concerned ITO. Form the record, it is clear that the Assessing Officer had neither issued deficiency notice to them/the assessee nor issued any show cause on this ground. Thus, no opportunity was allowed to the assessee to substantiate his claim. As for the rest of the parties the assessee had already submitted reply mentioning his inability to produce them. The Assessing Officer has also not disputed the sales declared by the assessee, so the corresponding purchases should have been accepted. In the alternative, the assessee submitted that, if the Assessing Officer had held the assessee as entry provider, the entire cash deposits in said Bank a/c could not belong to the assessee. It is contradiction in terms to treat entry provider and owner of the cash deposits made in bank account. After hearing both the parties and the rival submissions, in the interest of justice, we set aside the appeal and remit the issue back to the file of the Assessing Officer to check entries - Appeal of the assessee allowed for statistical purposes.
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2017 (3) TMI 971
Additional depreciation - Held that:- First one is assessee’s agreement with the Gujarat Mineral Development Corporation. Page 2 specifically states that assessee’s scope of work includes mining of lignite and loading of consumer trucks there with after employing hydrolic excavator and other equipments. It is further supposed to remove over burden arising from the said activity. The assessee admittedly is reimbursed on tonnage basis. The fact however remains that this payment structure is not relevant s we are dealing with nature of assessee’s activity. This former agreement makes it clear that the assessee itself is engaged in mining activity so as to be called a producer of the ore in question. It is further revealed from assessee’s latter agreement with the Rajasthan Mines & Minerals that the situation is no different since the assessee has to excavate lignite ore after deploying all of its machinery. We therefore take into account all these contractual terms to observe that the assessee is itself engaged in mining activity rather than to be a labour contractor or a mere machines provider.
Assessee is itself engaged in mining activity. We thus accept assessee’s former substantive ground to delete the impugned disallowance of additional depreciation claim. - Decided in favour of assessee
Adhoc allocation of expenses between windmill and mining business - Held that:- We proceed in this backdrop to notice that the assessee has been maintaining separate books of its two businesses throughout as duly audited as per this statutory provisions. It has further entered into annual maintenance contract with the windmill installment companies so far as its former business is concerned. There is no evidence in the case file indicating that the assessee has either way diverted expenditure of one business towards the other one i.e. from windmill to mining and vice versa. The Assessing Officer rather appears to have adopted prorate turnover figures to arrive at the impugned allocation. We notice that such a course of action already stands reversed by various tribunal’s decisions. For instance, ACIT vs. P I Industries [2011 (12) TMI 604 - ITAT JODHPUR ] deleting similar allocation / apportionment of expenses made by the Assessing Officer in case of an entity having two businesses and one of them eligible for Section 80IA deduction. We adopt the same reasoning herein as well to reverse the impugned allocation in absence of any specific material.
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2017 (3) TMI 970
Reopening of assessment - addition u/s 68 - Held that:- Reassessment proceedings u/s 147 of the Act needs to be quashed as there was no material with the Department on the basis of which it could justify its action. Further even on merits also assessee has proved genuineness of the transaction by providing necessary details and documents in the form of contract note, demat a/c, bank statement and NSE details and proved that the impugned transaction was not entered through accommodation entry provider namely Mahasagar Securities Pvt. ltd. and others. See Shri Pratik Suryakant Shah & others [2017 (2) TMI 463 - ITAT AHMEDABAD ] - Decided in favour of assessee
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2017 (3) TMI 969
Reopening of assessment - long term capital gain from sale of shares treated as undisclosed income of the assessee thereby denying exemption u/s 10(38) - Held that:- Considering the facts in totality including the claim of assessee of the long term capital gain from sale of shares disregarding the direct evidences on record, relating to sale/purchase transactions in shares supported by brokers contract notes, confirmation of receipt of sale proceeds through regular banking channels and demant account, we quash the re-assessment proceedings u/s 147 of the Act and direct the Assessing Officer to treat the surplus as long term capital gain from sale of shares and allow exemption u/s 10(38) of the Act. See case of Pratik Suryakant Shah & others [2017 (2) TMI 463 - ITAT AHMEDABAD] - Decided in favour of assessee
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2017 (3) TMI 968
Disallowance of discount charged on the ground of alleged transfer of profits to associate concerns - Held that:- From the perusal of the average rates calculated from the two charts wherein one relates to job rate work charged to sister concerns and the other to the outside parties we observe that the average rates in both the cases is ₹ 71 per carat. In order to examine the reasonableness of the rate of job work charges charged to the sister concerns the same can be compared with the other comparables in the form of job work rate charged to outside parties and we find that the average rates charged to the sister concern are at par with the average rate charged to outside parties. We also find that with the total diamond processed for the associated concern is 217024 carats for which the assessee has realized ₹ 16029035/- and if we calculate the average rate per carat charged to associate concerns it comes out to ₹ 73.86 per carat which is higher than the average rate of ₹ 71 calculated above.
We are, therefore, of the view that in the given facts and circumstances of the discussion made above, net job work rates (after providing discount) charged by the assessee to its associate/sister concerns are reasonable with regard to the fair market value of the services. We, therefore, delete the impugned disallowance sustained by ld. Commissioner of Income Tax(A). - Decided in favour of assessee
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2017 (3) TMI 967
Disallowance on account of difference in the closing balance of the party shown by the assessee and the balance shown by such party - Held that:- On making reference to the records, we find that no such request for cross examination was made by the assessee at the time of assessment stage. We also find that sufficient opportunities were given at the time of the remand stage but the assessee has not made such request for the cross examination. Therefore, we are of the view that the principles of natural Justice have not been violated. However we are in agreement with the argument placed by ld AR before us that the ld CIT(A) has passed the order without referring to remand report. In such a situation we are inclined to limit the disallowances as suggested by the AO in the remand report. Thus, this ground of appeal of assessee is partly allowed.
Disallowanceon account of expenses no connection with the business - Held that:- In the present case, the disallowance has been made without complying the provisions of section 40A(2)(b) of the Act. The lower authorities have not brought any details of the specified person as required under the provisions of law. In view of above we reverse the order of lower authorities and thus the ground of appeal of the assessee is allowed.
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2017 (3) TMI 966
Disallowance of foreign exchange loss due to fluctuation - Held that:- The facts in the instant case are undisputed that that the instant loss is arising in respect to the forward contracts which had not expired on the last day of the accounting year. It is also not disputed that the assessee is following mercantile system of accounting which requires to account for all the expenses in the profit and loss account on accrual basis. Accordingly, the assessee has claimed the losses on the basis of mercantile system of accounting. Thus, in our considered view the assessee is very much eligible for the deduction of the impugned loss. See CIT Vs. Woodward Governor India (P) Ltd [2009 (4) TMI 4 - SUPREME COURT]
Thus the losses which are arising due to the foreign exchange fluctuation should be accounted for in the books of accounts and accordingly the assessee is eligible to claim the deduction of such losses. - Decided in favour of assessee
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2017 (3) TMI 965
Addition u/s 68 - advances shown by the assessee which were held as unexplained cash credit by the lower authorities - Held that:- on perusal of the details submitted by the assessee we find that all the parties from whom the advances was claimed to have received have been billed in the subsequent years. The assessee has furnished the copies of the ledgers in respect of all the parties which are placed on record. Once the assessee is able to show the source against the advances received in the earlier years then the same cannot be treated as unexplained. In the case on hand the assessee has discharged his burden by giving necessary details of the parties from whom the advances was received and sales made to those parties. The ld. DR has not brought anything contrary to the submissions made by the ld. AR. In view of the above we are of the view that the additions made by the lower authorities are not sustainable as the assessee has furnished the necessary details in support of the advances and the subsequent sales. - Decided in favour of assessee
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2017 (3) TMI 964
Disallowance of interest claimed u/s.57(iii) - Held that:- We find that the issue of availability of fund and advancing of funds from the account of Ashok Mittal to the assessee have not been verified properly. We have admitted additional evidences that were not available to the lower authorities, but they throw light on the dispute before us. From the bank statement it is clear that at least ₹ 3 crores were advanced on behalf of Ashok Mittal. It is also a fact that Dena Bank had extended loan facility in favour of six entities. In our opinion, the AO/FAA had not deliberated upon the said issue as the assessee had not furnished the necessary details before them. Therefore,we are of the opinion that in the interest of justice, matter should be restored back to the file of the AO for fresh adjudication, who would decide the issue afresh after affording a reasonable opportunity of hearing to the assessee. Effective Ground of appeal decided in favour of the assessee, in part.
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2017 (3) TMI 963
TDS u/s 194J OR 194C - nature of payment - Held that:- In the case of payment to Mangak Anand Healthcare, Mumbai, work order was issued by the assessee dated 09-01-2004 wherein contract was awarded to the said person by the assessee for running x-ray and sonography services in all four MCH centre for a period of 5 years from the date of signing of the agreement. Thus, the said party was to provide aforesaid services of xray and sonography, etc. at the hospitals run by the assessee. The rates were fixed by the assessee in the work order on per patient basis. It is noted from perusal of para 12 of the said contract that the said party would employ skilled, semi-skilled and unskilled personnel in sufficient numbers to carry out its services at the required rate of progress and of quality to ensure workmanship of the degree specified in the contract for timely fulfilling the obligations of the said party under the contract. Various other clauses of this agreement clearly suggest that there was obligation of carrying out work by the said person in return of a pre-decided rates payable by the assesssee. The overall terms and conditions of the contract and other facts brought before us indicate that it would fall within the nature of ‘work’ as stipulated in section 194C.
Similarly, with respect to the other parties also, viz. Gharpure Engineering & Construction (P) Ltd and Ramky Infrastructure Ltd also, perusal of their bills, work orders and agreements clearly indicate that assessee assigned them contract work on turnkey basis for carrying out variety of jobs of civil construction, etc. None of the jobs carried out by these persons would fall in the scope of section 194J. The activities performed by these parties would clearly fall within the definition of ‘work’ as stated in section 194C. - Decided in favour of assessee
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2017 (3) TMI 962
Cancelling the registration certificate granted u/s 12A - assessee was involved in providing the bogus donation to the various trust and societies - Held that:- CIT(Exemption) before granting the registration certificate shall conduct necessary enquiries as he thinks fit in order to satisfy himself about the genuineness of activities of the trust. Once the ld CIT(Exemption) is satisfied with the genuineness of the activities then he will grant the registration certificate. In the instant case before us, we find that the activities of the trust have not been doubted except the donation given by the assessee to BERT. Thus in our view at the most the exemption u/s 11 of the Act will be denied to such donation. Thus, in such circumstances the registration u/s 12A of the Act cannot be cancelled.
We find that the activities of the trust in relation to its education activities have not been doubted and on the basis of same activities various registrations u/s 12A, 80G and 10(23C) were awarded to the assessee. Simply the assessee has given donation to a trust which is involved in the bogus transactions cannot be the basis for the denial of the registration certificates as discussed above.
It is also important to note that the assessee has been giving donation in every year which has been duly accepted by the Revenue as evidenced from the details submitted which is placed on pages 23 of the paper book. The amount of donation given by the assessee trust over the several years to the other trust is very much charitable activities. In this connection the CBDT has issued instruction No. 1132 date 05.01.1978 wherein it was clarified that the payment of a sum by one Charitable Trust to another for utilization by the donee-trust towards its charitable objects is proper application of income for a charitable purpose.
We also find that the notice for the cancellation of the registration certificate was issued u/s 12AA(3). However, Ld. CIT(Exemption) has also invoked the provisions of section 12AA(4) of the Act for cancelling the registration certificate which in our considered view against the principal of natural justice. The ld. CIT(E) before invoking the provisions of Section 12AA(4) should have issued the show cause notice. Therefore, we find that the proper opportunity to the assessee has not been furnished. - Decided in favour of assessee
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2017 (3) TMI 961
Disallowance of interest paid to bank in cash credit account - Held that:- On examination of the records, it was found that the account which the lower authorities treated as cash credit account is in fact the current account of the assessee. Therefore, the observations made by the ld. Counsel in their respective years are baseless. The ld. AR before us has submitted the bank statement from where the fund was invested in the capital work-in-progress. On perusal of the bank statement, we find that this is the current account of the assessee and not the cash credit account as held by the lower authorities. Therefore, we are in agreement with the submissions of the ld. AR. AR in support of his claim has submitted the bank book of the assessee. The ld. AR also submitted that the current account of the assessee was classified under the head “current assets” in the audited financial statement. However, on perusal of the records we find that the bank statement was not submitted by the assessee before the lower authorities. Now the assessee before us has submitted copies of the bank statement which is additional document and needs to be verified by the AO. Therefore, we are inclined to restore this issue to the file of the AO for fresh adjudication - Decided in favour of assessee for statistical purposes.
TDS u/s 194J - non deduction of tds on expenditure under the nomenclature of Quality Care Expenses - as per AO such expenses is in the nature of fees for professional and technical services - Held that:- Respectfully following the decision in the case of Ansal Land Mark Township (P) Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT ) we deem it fit and appropriate in the interest of natural justice and fair play to set aside this issue to the file of AO to decide the issue afresh in the light of the aforesaid judgment. Accordingly, we direct the AO to verify whether the payees have included the subject-mentioned receipts in their respective returns and paid taxes thereon or not. If that is so, then the assessee should not be treated as assessee in default u/s. 201(1) of the Act. We also find from the submission of Ld. AR that there were certain transactions for the purchase of the goods and the same has been disallowed for non deduction of TDS. In our considered view, such transactions of purchases are outside the purview of TDS. Therefore, the AO also directed to check whether the transactions represents the purchase of the goods or not and adjudicated the matter in terms of above direction. Accordingly, assessee’s ground is allowed for statistical purposes.
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2017 (3) TMI 960
Unexplained cash deposits - Held that:- In view of gross and unsupported peculiar explanation of cash deposits arising due to non-payment towards purchases while purported cash received against the sales made over a period have been deposited in bank, we find that the assessee has failed to discharge any onus which cast upon it for which the Assessing Officer cannot be faulted. We also find that the assessee has wrongly attempted to shift the onus on the Assessing Officer for cross-examination. Similarly, we also note that the assessment order in the present case has been passed at the fag end of the limitation period after giving sufficient opportunity to the assessee and therefore, the claim of the assessee that no reasonable time was granted is devoid of merit. Resultantly, we do not find any merit whatsoever in the explanation offered by the assessee towards cash deposits. - Decided against assessee.
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2017 (3) TMI 959
Difference in the income as reflected in AIR information data base vide 26AS and income as reflected in books of accounts - Held that:- Until the assessee comes out with satisfactory and plausible explanation, this onus will not stood discharged. The assessee in the instant case has stated that there are large number of transactions exceeding 900 and hence it is not possible to reconcile the difference of ₹ 2,28,424/- is not a satisfactory explanation to discharge onus cast on the assessee. In our considered view keeping in view facts and circumstances of the case as well magnitude of transactions , we are of the considered view that one more opportunity need to be granted to the assessee to reconcile the difference in the income as reflected in AIR information data base vide 26AS and income as reflected in books of accounts wherein the assessee can also resort to calling account statements from the said parties wherein the amounts were not reconciled , to reconcile the difference wherever the said difference exceeded ₹ 10,000/-. We are inclined to accept difference of ₹ 10,000/- and less between the income as reported in books of accounts and income as reported in form no 26AS keeping in view smallness of difference and difficulties faced in reconciling the same.
Disallowance of expenditure towards interest incurred in relation to earning of exempt income u/s 14A - Held that:- The figure of investments in shares which are capable of yielding exempt income was undisputedly adopted by the AO as ₹ 3,35,337 as at beginning of year and ₹ 3,53,838/- as at year end while computing disallowance u/r 8D(2)(ii) of 1962 Rules r.w.s. 14A of 1961 Act. There is no averment/finding on record brought by authorities below that interest bearing funds were specifically invested in assets being shares capable of yielding exempt income and in the absence thereof , the presumption shall apply that the assessee has used its own interest free capital which undisputedly was of ₹ 32,68,881/- and the same was utilized for making investments of ₹ 3,53,838/- in shares which were capable of yielding exempt income. - Decided in favour of assessee.
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2017 (3) TMI 958
Unexplained jewellery - Jewellery valuation - Held that:- The perusal of the computation of wealth as on 31-03- 2010 which is placed at page/11 of paper book clearly reflects vide note no 1- 4 that there is no change in the items of jewellery as on 31-03-2010 vis-ŕ-vis items as on 31-03-2009. Further, it also reflect that gold jewellery which was valued at ₹ 12,750/- per 10 gms as at 31-03-2009 was valued at ₹ 13,870/- per 10 gms as at 31-03-2010 for the purposes of filing wealth tax return. The approved valuer while issuing valuation report dated 29-08-2009 has adopted rate of gold as on 31-03-2009 of ₹ 12,750/- per 10 gms which is clearly reflected in said valuation report. Similarly, the assessee valued silver at 24,530/- per kg as on 31-03-2010 for filing wealth tax return for assessment year 2010-11 as against rate of ₹ 20,000/ per kg adopted as at 31-03-2009 while filing wealth tax return. The government valuer adopted rate of ₹ 20,000/- per kg while valuing silver in his valuation report dated 29-08-2009 for valuing silver as at 31-03-2009. Thus, the difference which arose in valuation between the valuer report dated 29-08-2009 and the value declared by assessee in wealth tax return for assessment year 2010-11 is merely on account of higher rate of gold and silver adopted as prevailing as on 31-03-2010 vis-ŕ-vis rate of gold and silver adopted by approved valuer in his valuation report dated 29-08-2009 which report is based on market rate of gold and silver as at 31-03-2009 We do not find any merit in the contention of the Revenue and in our view no addition u/s 69A to the tune of ₹ 2,47,845/- on account of unexplained jewellery cannot be sustained and is hereby ordered to be deleted.
With respect to jewellery valuation charges disallowed by the AO and as sustained by learned CIT(A) on the grounds that these are personal expenses and cannot be allowed as business expenses to be reduced from business income as jewellery was held to be personal asset of the assessee assessee is contending that the same was debited to capital account of the assessee and no such claim has been made by the assessee as deduction as business expenses from business income of the assessee, but no capital account has been filed in the paper book filed before the tribunal. The said contention of the assessee need verification and the matter is restored to the file of the AO for verifications of the contention of the assessee that the said sum was debited to capital account of the assessee and not to the Profit and Loss Account of Business of the assessee and hence , no prejudice is caused to Revenue. after giving proper and adequate opportunity of being heard to the assessee. We order accordingly.
Addition on account of car and accessories - Held that:- The invoice and complete loan account details are produced by the assesee in the paper book filed with the tribunal which is on record. The ledger extract of the said car loan from Kotak Mahindra Prime Limited is also filed in the paper book . The assessee has also explained that the value of the car adopted for wealth tax purposes was depreciated value of car as adopted by insurance company which was further reduced with the outstanding loan form Kotak Mahindra Prime Limited for which chart for three years are placed on record in paper book filed with the tribunal along with insurance cover for all these years. The loan account ledger extract with respect to loan availed by the assessee for purchase of car , from Kotak Mahindra Prime Limited is also filed for all these years. The explanation offered by the assessee , in our considered view, is satisfactory as is emerging from the records produced before us. Thus no addition is called for as the assessee with respect to Toyota Innova Car which has been satisfactorily explained by the assessee by producing the relevant details / evidences
Disallowance u/s 14A - Held that:- Once the assessee discharges its primary burden/onus as mandated u/s 14A of the Act of 1961 r.w.s. 106 of the Act of 1872 wherein the assessee comes forward with complete details and nature of expenses incurred in relation to the earning of exempt income having regards to the accounts of the assessee, then only the primary onus / burden cast on the assessee shall stood discharged which in the instant case has not been discharged as no explanation has been submitted except that a bald statement without reference to accounts that no expenses have been incurred in relation to earning of exempt income. The AO in the absence of any explanation of the assessee recorded satisfaction that claim of the assessee is incorrect and proceeded to make disallowance of expenses incurred in relation to earning of exempt income by invoking Section 14A of 1961 Act r.w.r. 8D of 1962 Rules which is one of the method prescribed for making disallowance u/s 14A of 1961 Act, as the assessee withheld information having regards to the accounts of the assessee . The assessee did earn exempt income as detailed above during the relevant previous year from trust. We do not find any merit in the submissions of the assessee, thus, we uphold the additions made by the A.O. u/s 14A of 1961 Act by invoking Rule 8D(2)(iii) of 1962 Rules. We order accordingly.
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2017 (3) TMI 957
Allowable deduction u/s 37(1) - expenditure incurred by the assessee by way of payment to Knight Riders Sports Pvt. Ltd. for obtaining sponsorship rights in favour of Star India Pvt. Ltd - Held that:- The assessee entered into an arrangement with Star India Pvt. Ltd. on a mutually agreed basis whereby the loss suffered by Star India Pvt. Ltd. was sought to be recouped with the earnings from the sponsorship of Kolkata Knight Riders Cricket Team for which assessee incurred ₹ 10 crores on behalf of Star India Pvt. Ltd. In our considered opinion, it is not the legal necessity to spent the expenditure which is determinative of its allowability; rather, it is the existence or otherwise of commercial expediency which guides the allowability of expenditure under Section 37(1) of the Act. From the point of view of commercial expediency, it is abundantly clearly that assessee had a long-standing professional relationship with Star India Pvt. Ltd. and there is a nexus between the impugned expenditure and the purpose of business. The commercial expediency canvassed by the assessee in the instant case clearly establishes that the impugned expenditure falls within the scope of the expression “wholly and exclusively for the purpose of business or profession” within the meaning of section 37(1) of the Act. - Decided in favour of assessee
Addition as Professional fee - accrual of benefit / perquisites u/s 2(24)(iv) - Held that:- Proposition made out by Revenue is entirely mis-conceived inasmuch as no such appearances and promotions have indeed been carried out. Further, as per the Revenue because of such an arrangement, assessee has earned a benefit within the meaning of Sec. 2(24)(iv) of the Act. On this aspect also, in our view, the action of lower authorities is completely misdirected and is devoid of any factual support. The Assessing Officer has not been able to establish as to what benefit has been obtained by assessee within the meaning of Sec. 2(24)(iv) of the Act in the instant year as nothing is shown to have been received by the assessee. Therefore, in a nutshell, in our opinion, the addition of ₹ 7 crores made by Assessing Officer is purely on conjectures and surmises and is untenable in law and also on facts. Therefore, on this aspect also, assessee succeeds.
Bringing to tax annual value of the Dubai Villa - Held that:- Income from the Dubai Villa is liable to be taxed in India inasmuch as the same is includible in the return of income and whatever taxes that may have been levied in the other contracting State, the credit thereof is required to be allowed as per law. Therefore, in view thereof we hold the issue against the assessee and direct the Assessing Officer to rework the final tax liability in accordance with aforesaid direction. Thus, on this aspect assessee fails on its Ground.
Interest under section 234B & 234C which is consequential in nature, and therefore this ground of appeal is dismissed.
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2017 (3) TMI 956
Rejection of books of accounts - trading addition - Held that:- Effectively, the price at which the goods have been sold during the year has been accepted by the Revenue and the same cannot, therefore, be a basis for upholding the rejection of books of accounts. Secondly, regarding the under valuation of the sub-standard stock, the assessee has submitted that the same has been valued at a realizable value at which such stock has been sold in the subsequent F.Y. 2011-12 as demonstrated through actual sales invoices and the results of the subsequent financial year have been accepted by the Revenue. Further, it is noted that the assessee is in the same line of business over the years and is following the same method of accounting in respect of valuation of its stock as well as accounting for purchase and sales and its books of accounts have all along been accepted by the Revenue for the previous and the subsequent years. In light of above, we do not see a justifiable reason for rejection of books of accounts as maintained by the assessee. Hence, the action of the Ld. Assessing Officer in rejecting the books of accounts cannot be sustained. In light of above, the trading addition of ₹ 13,09,166/- as upheld by the Ld. CIT(A) on account of rejection of books of accounts is hereby deleted. In the result, ground no.1 of the assessee is allowed.
Addition u/s 40(a)(ia) - Held that:- We hereby delete the disallowance under section 40(a)(ia) as no amount remained payable as on 31st March. In the result, the ground no. 2 of assessee is allowed.
Interest free advances to two family members with whom the assessee did not have any business connection - Held that:- We have gone through the order of Ld. CIT(A) who has held that the assessee has given interest free advances to two family members with whom the assessee did not have any business connection. The assessee has not been able to controvert the said findings of the ld CIT(A). In light of above, the test of commercial expediency having not been satisfied, we confirm the order of Ld. CIT(A). In the result, ground taken by the assessee is dismissed.
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2017 (3) TMI 955
TDS u/s 194C - addition u/section 40(a)(ia) - Held that:- CIT(A) has adjudicated on the issue of section 194C and the provisions relating to section 40(a)(ia) of the Act relying on various case laws as well as relying on various decisions of Tribunal. We have noticed that CIT(A) has not gone into the facts of the case and not verified the financial data and its relevance to TDS provisions and also as to who has executed the work. In our considered view, information filed by the assessee needs to be verified along with the books of account. Therefore, we deem it fit and proper to remit this matter back to the file of AO with a direction to verify the information submitted by the assessee along with the legal issues relating to payments made u/s 194C of the Act. Assessee may be given proper opportunity of being heard. Accordingly, grounds raised by the revenue are allowed for statistical purposes.
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2017 (3) TMI 954
Reversal of provision for gratuity and leave encashment - Held that:- CIT(A) has taken into consideration that the assessee had a balance of ₹ 19,67,294/- in the gratuity account as on 01.04.09. The assessee had to get the actuarial valuation done as on 31.03.10 therefore, the assessee had to make a provision for gratuity of ₹ 24,05,938 resulting in additional provision of ₹ 4,38,641/- to be made during the year to arrive at a total provision of ₹ 24,05,938/-. The Ld. CIT(A) has also considered that the assessee had the balance of ₹ 6,81,416/- in respect of provision for leave encashment as on 01.04.09 and in this way, during the year, the total provision as worked out towards leave encashment as on 31.03.10 was ₹ 3,81,466/- thereby resulting in excess provision of ₹ 2,99,950/-. The Ld. CIT(A) after considering the facts of the case had correctly find that the excess provision has been rightly added back by the assessee company to the total income in the computation of income, therefore the additions made by AO were deleted - Decided against revenue
Difference between the foreman commission receivable and the foreman commission actually received - Held that:- CIT(A) has taken into consideration that the assessee earned commission of 5% on the total chit fund collection. The said commission is spread over the total period of scheme and in this way the assessee earns commission on a month to month basis on the monthly collection made and on the successful biding by the subscribers. As per the facts, the agents are paid a commission of 1% of the total chit fund value in respect of each subscriber enlisted by him provided such subscribers pays at least 4 months installment, immediately on receipt of 4 such installments and in this way there is no definite co-relation between the foremen commission earned and the agency commission paid. After appreciating the facts, the Ld. CIT(A) had rightly decided that the addition made by the AO in computing the income of the assessee by applying five times of the payment of the commission to the agents is not based on any objective yardsticks, therefore deleted the said additions.- Decided against revenue
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2017 (3) TMI 953
Estimation of income u/s 144 by invoking provisions of section 44AD and 44AF - books of accounts were rejected - Power of CIT(A) to delelete the additions - Held that:- We find that A.O. has mentioned several factors including non-compliances by the assessee. He has issued letters to 12 parties. Out of that only four have responded, wherein a lot of discrepancies have been noted. No where in the assessment order the A.O. has mentioned the provisions of section 44AD or section 44AF. In these circumstances in our considered opinion Ld. CIT-A’s is order reflects a lack of applications of mind on the issue involved. He has proceeded to mention that A.O. had invoked provisions of section 44AD and section 44AF which is a totally wrong fact. The Ld. CIT-A has observed that assessee has not been granted opportunity to rebut the confirmations received from the parties. This also Ld. CIT-A has found to be a reason to set aside the order’s of the A.O. We find that the powers of the Ld. CIT-A are coterminous with that of the A.O. further, more as held in the case of Kapoorchand Shrimal [1981 (8) TMI 2 - SUPREME Court ] it is the duty of the appellate authority to correct the errors in the order’s of the authorities below and remit the matter to them if needed with necessary directions. Hence Ld. CIT-A’s action in this regard is not correct.
The issues raised in this appeal need to be remitted to the file for the Ld. CIT-A. Ld. CIT-A is directed to consider the issue afresh after properly appreciating the facts and pass a speaking order after giving the assessee adequate opportunity of being heard. Appeal of revenue allowed for statistical purposes.
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2017 (3) TMI 952
Estimation of seed capital - undisclosed income - Held that:- Seed capital mainly relates to capital required for initial start of the business. In the given case assessee has not started any new business during the year but is engaged in the business activities of manufacturing jari since last many years and apparently it seems that assessee has not disclosed the alleged sales in the regular books of account which further gets support with the admission of ld. Authorised Representative to the gross profit addition on the undisclosed cash/credit. But certainly no matter it is not an initial start of business but there is certainly a hidden element of capital which the assessee had invested for making unaccounted sales. We are, therefore, of the view that in the totality of facts it would be justified to estimate the seed capital at ₹ 2,00,000/- which the assessee might have invested from its undisclosed income to effect undisclosed sales. In the result, we sustain the addition of ₹ 3,68,605/- as against ₹ 5,85,530/- sustained by ld. Commissioner of Income Tax(A) out of which ₹ 1,68,605/- is on account of gross profit addition @ 10.11% of ₹ 16,69,457/- and an approx. amount of ₹ 2,00,000/- as seed capital invested by the assessee to effect the rotation of the alleged undisclosed sales. Accordingly, the appeal of assessee is partly allowed.
Penalty u/s 271(1)(c) - Held that:- At the given facts and circumstances of the case that as the assessee has furnished inaccurate particulars of income and has also concealed particulars of income, penalty u/s 271(1)(c) of the Act has rightly been imposed. However, we direct the ld. Assessing Officer to recomputed the penalty u/s 271(1)(c) of the Act vis-ŕ-vis our decision given in adjudicating quantum appeal of assessee wherein we have sustained addition of ₹ 3,68,605/-. Accordingly the ground raised by assessee is partly allowed.
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2017 (3) TMI 951
Deduction u/s 80IC computation - amount of interest subsidy received by assessee during the year, in pursuance to scheme of the Government - Held that:- Hon'ble Supreme Court in the case of Meghalaya Steels Ltd [2016 (3) TMI 375 - SUPREME COURT] held that if, cash assistance received or receivable against export schemes are included as being income under the head ‘Profit & Gains of business or profession’, it is obvious that subsidies which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head ‘profit & gains of business or profession’, and not under the head of income from other sources.
The facts of the case before us are that the impugned amount was received back by the assessee from banks under the scheme of Ministry of Textile in respect of reimbursement out of the actual interest first paid to the assessee to the banks. These facts have not been disputed by the Ld. DR before us. Under these circumstances, we find that judgment of Hon'ble Supreme Court in the case of Meghalaya Steels Ltd. (supra) squarely covers the issues involved. Thus, we find no need for making interference in the order passed by Ld. CIT(A) wherein claim made by the assessee was allowed by Ld. CIT(A) - Decided against revenue
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2017 (3) TMI 950
Addition on loan received - Held that:- Addition was beyond jurisdiction in absence of any seized material. Further, it has been found by the Ld. CIT(A) that on merits also, addition was wrongly made since assessee had discharged onus u/s 68 and substantiated the loans received by Shri Suresh Gaggar and M/s. Garnet International Ltd. Nothing wrong has been pointed out in the well reasoned findings of Ld. CIT(A). Thus, viewed from any angle, no interference is called for in the order of Ld. CIT(A) n deleting addition - Decided against revenue
Addition on account of unexplained receipt on sale of shares - Held that:- There is no evidence on record suggesting that the assessee had received more sale consideration and had understated the sate consideration in respect of this transaction. It may be a sale of shares at undervalue, but not a case of understatement of sale consideration Even if the market price of share is higher than the actual sate price, there cannot be a presumption that there is, understatement of sale consideration to the extent of difference of market price and sale price. If the AO alleges any on-money transaction in respect of this sale of shares, then the onus lies on the AO to prove that the assessee had actually earned any undisclosed higher price on sale of these shares than the rate as disclosed by assessee. The AO's conclusion of manipulation of share price and thereby earning, undisclosed receipts on sate of shares is highly presumptuous - Decided against revenue
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2017 (3) TMI 949
Tds u/s 194A - interest for late payment to IOCL on which tax was not deducted at source - disallowance u/s 40(a)(ia) - Held that:- As decided in the case of CIT vs. Krishak Bharati Co-op. Ltd.(2012 (10) TMI 655 - GUJARAT HIGH COURT ) that “the transportation charges for transporting the gas by the seller to its buyer was inter alia in furtherance of contract of sale of goods and such transportation charges cannot be covered u/s 194C of the Act. It was further held that transportation charges do not depend on the consumption of quantity of gas but a fixed monthly charges to be borne by the assessee as part of the agreement between the parties and, therefore, the application of section 194C does not arise.”
Analyzing the facts in the light of above judgment of Hon. Jurisdictional High Court we find substance in the case relied on by the ld. counsel that such interest was not actually in the nature of interest which was paid on the loan taken but actually it is of nature of purchase cost of asphalt (bitumen) as the impugned amount has been paid in the course of making purchases. Therefore, the issue is raised in this appeal of not charging tax deducted at source u/s 194A of the Act on the interest amount of ₹ 9,00,832/- is squarely covered by the judgment of Hon. High Court in the case of CIT vs. Krishak Bharati Co-op Ltd. (supra). - Decided in favour of assessee
Disallowance u/s 40A(3) - cash payment towards purchase of stamp papers - Held that:- under rule 6DD(b) refers to such circumstances where the payment is made to the Government and under the rules framed by it, such payment is required to be made in legal tender. It is an admitted fact that stamp papers are issued by State Government only and they are sold through various agents appointed by the Government. We are of the confirm view that such payments for purchase of Govt. Stamp Papers is covered under the exception provided under rule 6DD(b) of the IT Rules and, therefore, no disallowance is called for u/s 40A(3) of the Act and, we therefore, allow this ground of assessee.
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2017 (3) TMI 948
Bogus purchases - Held that:- Purchases to the tune of ₹ 73,84,489/- have been treated as bogus, however the sales contract receipts have not been disputed. The disallowance has resulted in a gross profit margin of 56%, which is unrealistic and not supported by the industry average or the past performance of the assessee. Further more it is also settled law that when sales are not doubted the entire corresponding purchases cannot be treated as bogus or having been not incurred.
In these circumstances there is considerable cogency in the assessee counsel submission that total disallowance of impugned purchases is not justified as it will result in impossible gross margin. However, we find that at the same time it is also necessary for the assessee to maintain proper supporting documents to satisfy the assessing officer regarding the veracity of the purchases. In these circumstances in our considered opinion a 15% disallowance out of the impugned purchases would serve the interest of justice. The Ld. Counsel of the assessee fairly agreed to this proposition. Accordingly, we direct the Assessing Officer to disallow of 15% out of the purchase of ₹ 73,84,489/-
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2017 (3) TMI 947
Disallowance of depreciation - Held that:- It is a fact that assessee has not furnished either details of the assets or the values of individual assets or any invoices in order to support the acquisition of computers for the purpose of business. As seen from the Balance Sheet of Laser Dot Ltd., the WDV as per the books of account as on 31-03-2010 was only ₹ 23,46,947/-. There are no additions to the fixed assets during the year as far as the statement of accounts of Laser Dot Ltd., was concerned. This indicates that the acquisition of assets was in the hands of merged company and have been claimed as part of new company in the revised accounts.
As seen from the record, assessee not only failed to provide the details of the assets but also failed to provide the basic details of cost, nature of asset and how the amounts were paid from the books of account. As seen from the submissions before the CIT(A), it was the assessee’s contention that highly sophisticated recording and monitoring systems were supposed to have been acquired from second-hand market and from other places and got them assembled into ‘broadcasting and monitoring system’.
At least assessee could have furnished the copy of the returns filed before the AO of erstwhile company in due time, as the assets were not acquired by Laser Dot Ltd., but seems to be part of merged company, Esha News Monitoring Services Private Limited. Since nothing was placed on record to substantiate the claim, we are unable to appreciate assessee’s contention that the machinery should have been inspected by the AO and depreciation allowed. It is for assessee to substantiate the acquisition of assets, atleast prima-facie, by furnishing necessary vouchers, invoices, values and make etc., so that there is some basis for verification. In the absence of the same, the burden cannot be shifted. In view of that, we uphold the order of the AO/ CIT(A) - Decided against assessee.
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2017 (3) TMI 946
Exemption claimed u/s 54F - assessee has sought relief under Section 54F in place of Section 54 originally claimed in respect of two residential properties - Held that:- Assessing Officer has granted relief under Section 54F in respect of one residential property. We find the residential properties are situated at different places and the Assessing Officer has demonstrated that the residential houses are completely separate and unconnected and not adjoining each other. Therefore, in terms of Section 54F of the Act, the assessee cannot be said to be holding these two residential units as one residential property. Therefore, we find that the Assessing Officer has rightly determined the issue and restricted the relief as per law. We do not see any reason to interfere with the order of the CIT(A) sustaining the action of the Assessing Officer. - Decided against assessee
Determination of ALV on vacant commercial premises qua the other commercial premises situated in the same building and adjoining to each other which are equipped with some amenities - Held that:- We find from the building plan that all the commercial spaces are situated adjoining to each other and therefore, there is sound basis for estimation of ALV of the vacant premises. The assessee has not shown before us as to what amenities have been provided and what value thereof has been determined with reference to any rent agreement. In absence of any document that show that the amenities were part of the commercial premises rented out and the rent was determined factoring such special amenities, we are not in a position to ascertain the fact. In the absence of any corroboration from the assessee to show differential rent owing to purported equipments, we do not consider it expedient to interfere with the order of the CIT(A) sustaining the action of the Assessing Officer. - Decided against assessee
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2017 (3) TMI 985
Deduction of excess stock found on the date of survey - Karta of HUF liability - Held that:- CIT(A) as well as the Tribunal have rendered a concurrent finding of fact that the stock found on the date of survey to the extent of the value of ₹ 79.91 lakhs did not belong to the respondent assessee but to its karta in his individual capacity. Thus, to the above extent, it could not be added to its closing stock. This concurrent finding of fact has not been shown to be perverse in any manner.Thus, the proposed questions do not give rise to any substantial question of law. Thus, not entertained.
Non accepting the sale price of furniture - Value of closing stock at lower than the tag price - Held that:- On the basis of the above facts, we find that the value of closing stock at lower than the tag price of the furniture by 50% so held by the Tribunal is a possible view. No substantial question of law.
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2017 (3) TMI 984
Deduction u/s 80IB(10) - Does the respondent assessee satisfy the condition (b) of Section 80IB(10) of the Act which requires the project claiming the deduction to be on size of a plot of land which has a minimum area of one acre? - Held that:- The issues raised herein namely non-satisfaction of condition (b) of Section provided in Section 80IB(10)(b) of the Act stood satisfied and concluded against the Revenue by the decision of this Court in Commissioner of Income Tax Vs. Bramha Associates [2011 (2) TMI 373 - BOMBAY HIGH COURT]
Does respondent assessee satisfy condition (c) of Section 80IB of the Act which requires the project claiming deduction must have residential units in it, not in excess of minimum builtup area of 1000 sq.ft.? - Held that:- Both the CIT(A) as well as the Tribunal have on facts concluded the issue in favour of the respondent assessee. This concurrent finding of fact is duly supported by the remand report of the Assessing Officer accepting the fact that even when flats are joined, the combined area is less than 1000 sq.ft.. The Revenue has not shown the concurrent finding of fact leading to satisfaction of clause (c) of Section 80IB(10) of the Act to be perverse in any manner. No substantial question of law
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2017 (3) TMI 983
Vladity of search proceedings under Section 132 - Scheme of 2016 applicability - Held that:- The perusal of Clause (e) Scheme of 2016 reveals that it would not apply in relation to any undisclosed income chargeable to tax under the Income Tax Act for any previous year relevant to an assessment year prior to 1st day of April, 2017 where search/proceedings under Section 132 and 132A of the Act of 1961 have been undertaken. It would not apply even on a notice under Section 153A apart from many other provisions. In the instant case, search proceedings were conducted on 30th June, 2016 and it was during the currency of the Scheme of 2016. Till search was conducted under Section 132 of the Act of 1961, the petitioner did not make disclosure/declaration under the Scheme of 2016. It is subsequent to the search proceedings under Section 132 of the Act of 1961. As per para quoted above, the petitioner is not entitled to seek benefit of the Scheme of 2016. The position would have been different if declaration under the Scheme of 2016 would have been made earlier to proceedings under Section 132 of the Act of 1961. It is not that relevant provisions of the Income Tax Act were kept in abeyance during currency of the Scheme of 2016, rather, there exists no provision under the scheme and otherwise scheme cannot override provisions of law so as to keep it in abeyance.
Taking into consideration the aforesaid, no ground to cause interference in the search and subsequent proceedings
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2017 (3) TMI 982
Reopening of assessment - whether the audit objection may be treated as an escapement or the suppression of the material fact being the ingredients engrafted under section 147? - Held that:- Admittedly the assessing officer simply act on the instruction of the CIT despite signifying his opinion that the audit objection is unacceptable and proceeding should not be initiated simply on the basis thereof. This court, therefore, finds that preliminary objection raised by the assessee petitioner has been wrongly decided by the Assessing Officer in upholding its jurisdiction on both the counts as indicated hereinabove.
The order impugned is, thus, set aside. The preliminary objection filed by petitioner succeeds. The notice under section 148 is hereby quashed and set aside. - Decided n favour of assessee
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2017 (3) TMI 981
Indexed cost of acquisition calculated by adopting the fair market value of the land and building as on 01.04.1981 - whether the Assessing Officer could substitute the guideline value provided to him, by the Sub-Registrar, as the market value? - Held that:- Pertinently, the fact that both the subject property, which is located in T.Nagar, and the, one, which is located in Cathedral Road were in an area, where commercial activity was and is being carried out is not disputed before us. In our opinion, one can take judicial notice of the fact that, ordinarily, the per ground price of a property, which has a smaller area, would be greater, in comparison to that, which has larger area. Therefore, the argument of Mr.Ravi Kumar, that, since, the Cathedral Road property had a larger area as against that of the subject property and hence, ought not to be used as a measure, has no weight.
Furthermore, as noticed above, the assessee himself has discounted the per ground rate of the Cathedral property which was calculated at ₹ 6,83,333/- per ground to ₹ 5,00,000/- per ground. In addition to this fact, as has been noted by us in the course of narration of events, the value of the building as obtaining in 1983 was also pared down to ₹ 6,87,500/- (i.e. 46% of ₹ 15,00,000/- which was arrived at based on the construction contract dated 23.02.1983).
Therefore, given the circumstances that concurrent finding of facts have been returned by both the CIT (A) and the Tribunal, we are not inclined to interfere with the impugned judgment.In our view, there can be no doubt that the Assessing Officer could not have substituted the guideline value for the fair market value, as has been rightly observed by the Tribunal in the impugned judgment. The guideline value is only, one of the indicators to arrive at the fair market value of a given property. The Assessing Officer, in our opinion, asked the wrong question by calling upon the Sub-Registrar, T.Nagar, to supply him the guideline value of the subject area as on 1.4.1981. What the Assessing Officer ought to have done was to ask for, perhaps, the sale deeds of property transactions carried out in the subject area in respect of similarly circumstanced properties.
As against this, the Assessee, on her part, discharged the onus and therefore, no fault can be found with her conduct in proceeding with the matter.
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2017 (3) TMI 944
Claim of depreciation - Ownership - scope of explanation to Section 32(1) - Cost of the Hospital building constructed by the partnership firm reimbursed by the Assessee Company - ownership of the land had to remain with the firm, it was also agreed that the land would be given on lease by the firm to the company - Held that:- it is only when the assessee holds a lease right or other right of occupancy and any capital expenditure is incurred by the assesee on the construction of any structure or doing of any work in or in relation to and by way of renovation or extension of or improvement to the building and the expenditure on construction is incurred by the assessee, that assessee would be entitled to depreciation to the extent of any such expenditure incurred.
The construction was made by the firm. It is a different thing that the assessee had reimbursed the amount. The construction was not carried out by the assessee himself. Therefore, the explanation also would not come to the aid of the assessee - Claim of depreciation not allowed.
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2017 (3) TMI 980
Addition u/s 40A - ITAT restoring the disallowance of 50% - Held that:- This Court is of the opinion that the ITAT in the present case overlooked the materials that were to be taken into account, i.e. reasonableness of the expenditure having regard to the prudent business practice from a fair and reasonable point of view. The AO’s order nowhere seeks to benchmark the expertise of Mr. Preetpal Singh with any other consultant and proceeds on an assumption that he could not have performed multiple tasks for more than one concern.
In this Court’s opinion, such a stereotyped notion can hardly be justified in today’s business world where consultants perform different tasks, not only for one concern but for several business entities. A common example would be that of an accountant or a legal professional, who necessarily has to multi task and are recipients or retainers of payments from many concerns having regard to their special expertise. Likewise in other fields i.e. journalism, the medical profession etc. more than one entity may engage or retain a single professional on the basis of his experience, learning and expertise, unless there is a deeper scrutiny that involves comparable analysis of like situations (a highly difficult task), additions made under Section 40A(2) would be suspect.- Decided in favour of assessee.
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2017 (3) TMI 979
Benefit of Sections 11 and 12 denied - the activities of the assessee is in the field of providing medical relief to the animals - charitable activity - Held that:- Considering Section 2 [15] of the Act, there cannot be any distinction between medical relief to the human and medical relief to the animals. As observed hereinabove, as per Section 2 [15] of the Act, any activity of the relief to the poor, eduction, medical relief, preservation of environment [including watersheds, forests and wildlife] can be said to be for “charitable purpose”. It does not say activities of the medical relief to the human being only which can be said to be for “charitable purpose”. Therefore, the language of Section 2 [15] of the Act is very clear. As per the settled proposition of law, any provision under the Statute; more particularly, the benevolent provision of the Statute, is required to be read as it is. Neither there can be any addition nor there can be any deletion, while interpreting a particular statute; more particularly, the benevolent provision. The expression “medical relief ” is required to be given widest meaning so as to achieve the object and purpose of granting exemption to an assessee, whose activities are for “charitable purpose”. It is not in dispute that the assessee's activities includes providing maternity, animal nursery, fertility, vaccination to milch animals belonging to the milk producers. Thus, the assessee's activities are to ensure that milching animals are free from diseases, their breed improvement and overall well-being. Thus, we are of the opinion that activities of the medical relief, even to the animals, will fall under former specific category of “medical relief ” and not covered under the last limb of Section 2 [15] of the Act ie., “advancement of any other object of general public utility”. - Decided in favour of assessee
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2017 (3) TMI 978
Block assessment - finding was recorded by CIT-A that notice u/s 143(2) was not issued, and that the judgment in Asst. CIT v. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA] is per incuriam in view of the judgment reported in Govt. of A. P. v. J. B. Educational Society [2005 (2) TMI 824 - Supreme Court Of India ] and State of Punjab v. Shamlal Murari [1975 (10) TMI 105 - SUPREME COURT] - Held that:- In Hotel Blue Moon (supra), it is categorically held that the block assessment cannot be framed until notice under section 143(2) has been served upon the assessee. Since the Commissioner of Income-tax (Appeals) has recorded a finding that notice was not served, therefore, in view of the judgment in Hotel Blue Moon's case (supra), an order of assessment could not have been passed.
The reasoning given by the learned Commissioner that the judgment is per incuriam is based upon two Supreme Court judgments. The said finding is not tenable. Neither of the judgments refers/deals with the case of block assessment and of not serving a notice under section 143(2) which issue was raised and decided in Hotel Blue Moon's case (supra).
In view of the judgment in Hotel Blue Moon's case (supra), the learned Commissioner, Income-tax (Appeals) has committed grave illegality in holding that such judgment is per incuriam. The order passed by the learned Commissioner of Income-tax (Appeals) is set aside.
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2017 (3) TMI 977
Allowable business expenditure - Held that:- Bringing into existence a new asset or an enduring benefit for the assessee amounts to capital expenditure. We have already explained why replacement, in this case, amounts to bringing into existence a new asset and also an enduring benefit for the asses see. It is clear then that expenditure of the assessee here is not of a revenue nature and thus, cannot be claimed as a deduction under section 37 of the Act. - Decided against assessee.
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2017 (3) TMI 945
Stay of demand - Validity of interim order passed by the HC to re-deposit the amounts received by them from APBCL on the sale of the stocks (Beer, Foreign Liquor and Indian Made Foreign Liquor) attached by the Income-tax Department. - Held that:- it is not necessary for this court, at this stage, to go into the various disputed contentions raised by the parties on the merits since the writ petitions are pending before the High Court. We find that the deposit is to be made mainly by the State of Andhra Pradesh. - Decided against the petitioners.
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2017 (3) TMI 976
Unexplained cash deposits - Held that:- The agreement in this case was also not on judicial paper. Despite the agreement with Shri Subhash Kumar was cancelled but entire advance money was not refunded immediately to Shri Subhash Kumar. It is not explained as to what happened with regard to the amount refunded on cancellation of agreement to Shri Sanjay Kumar and Shri Harbilas. It is highly unbelievable that the persons who have given advance to the assessee namely Shri Sanjay Kumar and Shri Harbilas, have disappeared and never asked for refund of their amount on cancellation of the agreement in question. Thus, assessee failed to prove credit worthiness and genuineness of the transaction for receipt of advance of ₹ 23 lacs from above persons and even in the case of Shri Sanjay Kumar and Shri Harbilas, assessee failed to prove their identity.
In case of deposit of ₹ 50,000/- in the bank account of the assessee, assessee failed to produce any evidence of past savings and even this issue was not at all addressed before ld. CIT (Appeals) and no evidence have been furnished in this regard. Same is the position before us as the assessee has failed to produce any evidence of deposit of ₹ 50,000/- out of any known sources - Decided against assessee
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Customs
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2017 (3) TMI 1018
Prohibited goods - import of Pressed Distillate oil (FDO), Heavy Alckeys (RPO), calcium base grease and slack Wax - whether the imported goods are waste products or not so as to qualify as prohibited goods? - absolute confiscation - Held that: - Commissioner (A) has elaborately discussed the evidence unearthed by DRI as well as nature of the goods and the relevant test report from CRCL. He categorically concluded by giving detailed reasons that the goods in question are of hazardous nature and is in the form of waste - Once it is established that the impugned goods are in the nature of hazardous waste they become prohibited goods and hence have been rightly confiscated absolutely - penalty also upheld - appeal dismissed - decided in favor of Revenue.
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2017 (3) TMI 1017
Condonation of delay in filing appeal - delay on the ground that appellant were not aware of the impugned order till recovery proceedings were initiated by the Department - Held that: - the applicant attitude of mis-declaring the address is intended for non-bonafide reason - It is an accepted principle that any person approaching the court should come with clean hands and without any hidden taint of malafide - such judicial discretion for condoning the delays are to be exercised only with reference to bonafide and equitable reasons. As already noted in the present case, the Revenue has taken adequate action to serve the impugned order. The order initially sent through post was returned with the remark “no such firm”. The said order was displayed in the notice board. Hence, it is not correct to accept that the order was not served in terms of Section 153 of CA, 1962 - in view of non-bonafide action of the appellant, appeal dismissed as non-maintainable - decided against appellant.
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2017 (3) TMI 1016
Valuation of imported goods - correctness in enhancement of value - “PVC Resin Formolon Off Grade (Paste Grade)” - Held that: - Rule 12 of the Customs Valuation Rules, 2007 provides for the rejection of declared value by the importer or his agent on valid grounds - the assessing authority has not provided the reasons/provisions of the Customs Act to the assessee-Respondent under which the transaction value declared by them was rejected - enhancement of value not correct - appeal dismissed - decided against Revenue.
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2017 (3) TMI 1015
Valuation - accessories and batteries for mobile phones/ laptop - The Revenue entertained a view that two of the items (battery bank and car charger) were with brand name „ROMOS‟ which was not declared and the classification and valuation of imported items were to be re-determined - appellant's case is that the imported goods were reassessed twice which is against the provisions of law - Held that: - No discussion was found regarding the comparability of NIBD data both in quality, and quantity, level of transaction of comparable goods. It simply records that when there is evidence of higher contemporaneous import value of similar goods, it is difficult to accept the declared value - if the assessing officer is attributing reason that the brand goods will have additional value then the comparison should be with similar branded goods. We note that the NIBD data is for unbranded goods and that too for imports many months back from the date of present import or after many months of the said import. The contemporaneous value should be comparable in quality, volume, country of origin and many other parameters so that appropriate transaction value can be arrived at. We find no analyses of these issues either in the original order or in the first appellate order.
Matter remitted for decision afresh - appeal allowed by way of remand.
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2017 (3) TMI 1014
Certificate/registration details - Benefit of N/N. 21/2012-Customs dated 17.03.2012 and N/N. 12/2012-CE dated 17.03.2012 - concessional rate of CVD - denial on the ground that the certificate submitted by assessee-Respondents, has been issued by the Superintendent of Customs and Central Excise and not by the jurisdictional Deputy/Assistant Commissioner, as required - Held that: - the Department nowhere mentioned that the said imported goods were not intended for the use and that the said goods were not actually used in the manufacture of the goods mentioned in Sl. No. 321 of the N/N. 12/2012-CE dated 17.03.2012, namely, LED lights or fixtures including LED lamps falling under Chapter 85 or 94. This implies that the fulfilment of the substantive condition of the said Notification has nowhere been otherwise questioned - when the claim of the assessee-Respondent is sustainable, then merely on technical ground the same cannot be denied - The issuance of the certificate by the Superintendent is a procedural aspect, but nowhere it is alleged that the certificate was forged or not based on the imports - appeal dismissed - decided against Revenue.
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2017 (3) TMI 1013
Mis-declaration of goods - goods declared as 'starch' whereas goods imported was synthetic diamond powder (greenish in colour) and white colour powder, which was found to be ‘other than starch’ - penalty - redemption fine - Held that: - there is right conclusion that the appellant importer mis-declared the goods so imported with an intent to evade customs duty - there are no reliable evidence to prove that the supplier made the supply of goods inadvertently without there being any order being placed by the importer for the said goods. There are enough consistent evidences to indicate that the contention of inadvertent supply by the foreign supplier is not based on the facts and circumstances available on record - redemption fine and penalty upheld - appeal dismissed - decided against Appellant.
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2017 (3) TMI 1012
Conversion of shipping bills - drawback shipping bills into DFIA shipping bills - export of biscuits and assorted confectionary products - Held that: - In the case in hand duty draw back benefit of shipping bill has not been granted till to-day, accordingly, the appellant has sought conversion of shipping bills. It is to be noted that para 3 of the Board's Circular 36/2010-Cus dated 23.09.2010 permit the Commissioner of Customs to allow the conversion of shipping bill from export promotion scheme to another schemes on case to case basis depending on the merits of the case - It is not the case of the department that duty draw back or DFIA is not export promotion scheme.
The export has been made during the period 07.10.2014 to 26.06.2015 and the goods which are sought to be exported were examined in accordance with law for sanctioning of duty drawback, as any other export promotion scheme - the situation in the case in hand is covered straightly by the Board's Circular dated 23.09.2010 - the impugned order is unsustainable and liable to be set aside - lower authorities are directed to convert the drawback shipping bills to DFIA shipping bills.
Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 1011
Classification of imported goods - Tylosin Phosphate Powder (Poultry feed) - classified under CTH 23099010 or under CTH 29419090? - whether appellant had mis-declared the imported goods Tylosin Phosphate Powder (Poultry feed) during the period i.e. 21.06.2000 to 05.07.2005 or otherwise? - time limitation - Held that: - the imported goods would merit classification under CTH 2309 as the decision of the Tribunal in the case of Venky's India Ltd. [2000 (11) TMI 967 - CEGAT, MUMBAI] it was held that the product Tylosin Phosphate Powder (Poultry feed) would fall under CTH 2309.
Extended period of limitation - Held that: - no malafide intention can be attributed to such a view as to classification of goods - appellant had only declared the description of item declared as Tylosin Phosphate Powder on the Bill of Entry as per the documents received by them from the supplier and classified the Heading as understood by them, if Revenue had a dispute on the said CTH, they could have changed the same when the said Bills of Entry were filed for assessment by the Proper Officer. As there was no change in classification as claim by appellant, now revenue cannot say there was intention to evade CVD by way of mis-declaration - extended period of limitation not invocable.
Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2017 (3) TMI 1008
Direction to Official Liquidator to release the mortgaged property - Held that:- Considering the valuation report prepared by the Official Liquidator, and the valuation report prepared under the supervision of the applicant, the Official Liquidator and the applicant are directed to fix a reserve price for the sale of the property in question. The Official Liquidator is further directed to issue an advertisement, for placing the property in question, on auction block. However, it is hereby clarified that the date for auction shall be intimated to the applicant, and the applicant shall be present on the date of auction. Before, the finalization of the auction can be done, the bid offered by the bidders shall be brought to the notice of this court as required under the Act, and the Company Court Rules. An endeavour shall be made by both the parties to ensure that the auction is carried out efficiently.
The applicant is permitted to appoint a Valuer within a period of one week from the date of receipt of certified copy of this order. The Valuer so appointed is directed to assess the valuation of the property in dispute within a period of fifteen days from the date of visiting the property. The Official Liquidator is directed to permit the Valuer, along with the applicant, for having assess to the property in question, on the date and the time fixed by the applicant.
Once the valuation report is prepared by the Valuer appointed by the applicant, the applicant and the Official Liquidator shall declare "the reserve price" of the assets within fifteen days thereafter. The Official Liquidator is directed to issue an advertisement within a period of fifteen days from the date the reserve price is agreed upon by the parties. The auction shall be held after a period of thirty days from the date of advertisement; the report with regard to the bids offered shall be submitted before this Court within two weeks from the date of holding of the auction.
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2017 (3) TMI 1007
Siphoning of funds by commercial transaction/agreements with related parties - misdeeds committed by Directors - Held that:- There appears financial irregularities in the company which is prejudicial to the interest of the company. However, all the loss to the company on account of financial irregularities can be ascertained by an appointment of an Independent auditor who may conduct the audit of the company from the financial year 2008-09 and onwards to find out the exact loss caused to the company on account of siphoning, related party transactions and other misdeeds, committed by Directors of the Company. As it is expert job we have not entered in details of allegations except few samples to conclude that there is prima facie case of financial mismanagement. Auditor shall enquire into the loss, if any, caused to the company and such loss, to be recovered from the party whoever is found responsible, from his/their personal resources and the amount so recovered will be paid to the Company. Respondent Nos. 3 to 7, Directors of Respondent No. 1 company are directed to provide inspection of accounts and records of Respondent No. 1 company to the Auditor and also to the Petitioners who are shareholders of Respondent No. l company. The auditor shall give opportunity of hearing to both the parties. Respondent Nos. 3 to 7 directors of Respondent No. 1 company are directed to assist the auditor and furnish relevant documents as and when asked for. The auditors shall fix their remuneration in consultation with the Respondent No. 1 Company, to be paid by Respondent No. 1 Company. In case of any difficulty in implementation of the directions, liberty is given to file appropriate application before this Tribunal.
In the light of aforesaid discussions M/s. Price Water Cooper is appointed as an independent auditor, who shall comply the aforesaid directions and submit its report within three months.
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Service Tax
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2017 (3) TMI 1027
Liability of tax - consideration received from participants for imparting training classified under commercial training or coaching services - exemption under N/N. 24/2004-ST - Held that: - the ability to seek employment after the completion of a training course in terms of the explanation provided in the said Notification itself is sufficient for claiming the exemption - In the present case, we find that the courses offered by the appellant - assessee are covered by the scope of N/N. 24/04-ST and the exemption provided therein cannot be denied.
Franchisee service - payment made to Edexcel, U.K., on whose name a certificate of Diploma is issued - Held that: - Basically, Edexcel provides for an international recognition of the courses offered by the appellant-assessee, for which certain standards are to be met. On completion of the training course, the Diploma Certificate is issued to the participant by Edexcel. The appellant assessee is paying certain consideration for the recognition of their institute and for award of Diploma Certificate by Edexcel. There is no representational right in the scheme of things, as laid down in the agreement - demand set aside.
Valuation - inclusion of various reimbursable expenses in the tax value under the category of franchisee services - Held that: - the agreement entered into by the appellant-assessee with various franchisees clearly provides for re-imbursement of various expenses, on actual basis, by the franchisee to the appellant assessee. A perusal of the contract reveals such arrangement - demand set aside.
Appeal allowed - decided in favor of appellsnt-assessee.
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2017 (3) TMI 1026
Refund claim - payment of tax under protest - rejection of refund on the ground of taxability of activity - Held that: - A refund claim may be rejected only for a limited number of reasons: at the threshold for being beyond the jurisdiction or on account of bar of limitation and at the sanction stage for being deficient in material relevant to sanction. It is rarely that a refund is claimed on grounds of non-taxability and, when it is, the competent authority is required to adduce reasons for rejection if that be the intent. All of these must, necessarily, be preceded by issue of notice specifying the ground for rejection - the notice relies upon the taxability of the activity as the ground for rejection. No other independent ground has been invoked.
Just as a claim for refund on ground of non-taxability should be accompanied by a decision in appeal upholding that contention, a rejection of claim that tax not due was paid incorrectly would have to be backed by an order of assessment.
The appellant is justified in claiming that the demand u/s 73(1) is mandated to complete the proceedings and would necessarily have to be followed by an adjudication order that can be legally challenged. By not issuing a notice and a consequential order, the assessee was also denied the opportunity to challenge the contention of Revenue on taxability.
The impugned order rejecting the refund claim on ground of taxability is not sustainable as taxability has not been asserted by appropriate process and is set aside - matter is restored to the original authority to reconsider the refund claim - appeal allowed by way of remand.
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2017 (3) TMI 1025
Refund claim - Rule 5 of the CCR, 2004 - whether the services provided onsite to the clients located abroad can be considered as export of services or not? - Held that: - Service provided from outside the taxable territory to a person located outside the taxable territory are not services for the purpose of these rules. In view of above, the services provided onsite to the clients located abroad cannot be considered as part of export turnover or part of total turnover - reliance was placed in the case of Nihilent Technologies Pvt Ltd. Versus The Commissioner of Service Tax, Pune [2016 (9) TMI 324 - CESTAT MUMBAI], where it has been held that onsite services are to be excluded from both Export turnover and total turnover - appeal dismissed - decided against Revenue.
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2017 (3) TMI 1024
Business Auxiliary services - activities namely Ground Traffic, other support service and Handling agreement performed by AIL (Air India Limited) - Held that: - In terms of this agreement, AASL was required to pay AIL certain consideration amounting to approx. 4%. In terms of this agreement AIL was to execute the entire function of running operations on behalf of AASL. The activities included ticketing, IT Support, Billing and Accounting, Administration of Foreign Exchange Transactions, Revenue collection, Reservation support etc. In return, AASL was to pay AIL equivalent to 4% of the revenue generated by AASL. Even though AIL has been raising bills against the services provided by them to AASL, they were also providing financial help to AASL by way of bearing its loss and further providing financial aid to keep AASL afloat. AIL’s ground for non-payment of service tax is that they have not received this consideration in terms of 4% of the revenue earned.
This factum can be settled through a certificate from an independent Chartered Accountant, who may be asked to look into the books of AASL and AIL for the relevant period and may be asked to certify whether such consideration has been received AIL by book transfer or otherwise, as per the terms of the agreement entered into between two companies. If the consideration has been received by AIL, then we are of the view that service tax is liable to be paid by AIL on such receipts - matter remanded for this purpose.
Time limitation - Held that: - the argument taken by appellants that service tax was not paid on the basis of bonafide belief that service tax was not payable, is not convincing - Consequently, Revenue is entitled to invoke the extended period of limitation in this case.
Aircraft lease charges - demand - Held that: - These clauses clearly show that lease charges were to include maintenance charges and AIL was under obligation to maintain and repair the aircrafts as part of the lease agreement. Thus this maintenance agreement cannot be considered as an independent and separate agreement. Accordingly, in the impugned order, it has been rightly concluded that the aircraft lease service cannot be subjected to service tax under the category of Management, Maintenance and Repair.
Appeal allowed by way of remand.
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2017 (3) TMI 1023
Condonation of delay - delay in filing appeal - non-service of notice in terms of Section 37C of the CEA, 1944 - Held that: - Tribunal has, on more than one occasion, directed the Revenue to file an affidavit specifically regarding compliance of the provision of Section 37C(1)(a) in the present case and also indicating the proof of delivery of the original order to the appellant. Unfortunately, despite of repeated instructions, such affidavits has not been filed. It is not incorrect to draw adverse inference from such non-submission of affidavit - Evidence of service is lacking in the present case. Accordingly, in the interest of justice, it is not fair to dismiss the appeal as time barred as done by the impugned order - The appeal is to be considered as filed in time - appeal allowed by way of remand.
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2017 (3) TMI 1022
Refund claim - Rule 5 of the CCR read with N/N. 05/2006 CE (N T) dated 14th March - Held that: - The present appeal arises out of Order in Appeal No.2/2014 which emanates from Order-in-Original No 255/2013. As the said order has already been set aside by the Tribunal and the Tribunal having observed that the Order in Appeals passed by the Commissioner (Appeals) is irrelevant and incompetent proceedings, I accept the discussions and the judgement rendered in CESTAT Final Order No.20258/20157 dt 5.2.2015 and thereby set aside the Order in Appeal 2/2014 - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 1021
Classification of service - business of moving personal effects/household goods from one place to another place - GTA service or Cargo handling service? - Dispute is about the period prior to 01.01.2005 - Held that: - The impugned services are appropriately taxable under GTA Service with effect from 01.01.2005 and no tax can be demanded for the period prior to 01.01.2005 under any other entry - There is no doubt that the activity of the appellants during the impugned period has been clarified by CBEC in Circular No. 104/7/2008-ST dated 06.08.2008, as GTA service only - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 1020
Valuation - whether gross value including the TDS for the purpose of service tax is to be considered or otherwise? - Held that: - Section 67(i) very clear mandates for discharging the Service Tax liability amount which is charged by the service provider is the amount - the assessee has not produced any documentary evidence which proves that such amounts paid to M/s. Snamprogett of Italy and M/s. KBR of USA have been received back by the appellant - ld. Counsel assured that the documents are available and the same can be again produced before the lower authorities. When it is so, then we set-aside the impugned order for reconsideration - appeal allowed by way of remand.
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2017 (3) TMI 1019
Business auxiliary service - the assessee-Appellants used Computer Reservation System (CRS) of M/s Galileo India, Amadeus India and Calleo Distribution to encourage their business, for which they have been paying the incentives against the segment booked by the assessee-Appellants - whether the said service is classified under tour operator service or otherwise? - Regarding the commission/incentive received from GDS/CRS, it may be stated that the said GDS/CRS companies are providing adequate free of cost computers with essential accessories and software to the travel agents at their premises. These computers are connected worldwide to the GDS/CRS, which linked to ticket sales offices of various airlines, hotels and car rental agencies spread across the world. They are by using these GDS/CRS for booking tickets, receiving incentives from the said companies for every segment booked by them. Hence, the service provided by the assessee-Appellants has rightly been covered under the heading “Business Auxiliary Service” as defined u/s 65(19) of the FA, 1994 - appeal dismissed - decided against Appellant.
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Central Excise
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2017 (3) TMI 1005
Condonation of delay - time limitation - Refund of accumulated CENVAT credit - Held that: - when the matter is remanded for reconsideration, the question of limitation may also be required to be considered. But in any event, remand is by exercise of discretion, no point of law would arise at this stage as sought to be canvassed - the appeals on merits cannot be accepted since the question is neither decided by the Tribunal nor would arise for consideration in the present appeals and the appeal deserve to be dismissed - appeal dismissed - decided against appellant.
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2017 (3) TMI 1004
CENVAT credit - rule 16 - CVD - whether the Appellants are eligible for CENVAT Credit of CVD paid on the manufactured goods cleared initially without payment of duty under bond for export? - Held that: - as per rule 16, the goods which were cleared and brought back to the factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall be eligible to take credit as if the such goods are received as input under CCR 2004 - The SCN proposed to deny the credit on the ground that it is their finished goods and CENVAT Credit Rules 2004 does not permit credit on the finished goods - there is no substance in the said allegation and confirmation by the authorities below inasmuch as in the Rule itself it is made clear that the goods which were initially cleared on payment of duty on its receipt be considered as ‘input’ and accordingly the CENVAT Credit would be admissible as if it is an ‘input’ under CCR, 2004 - appellant is eligible for credit on CVD - appeal allowed - decided in favor of appellant-assessee.
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2017 (3) TMI 1003
Benefit of N/N. 50/2003 dated 10.06.2003 - area based exemption - The claim of the appellant is under the latter N/N. 50/2003-CE was amended vide No/N. 27/2005 dated 19.05.2005 to the effect that Khasra no. 164H in Mohebwala Industrial Region was deleted from Annexure II. Since, the appellant’s unit is situated within the said Khasra; Revenue has taken the view that the appellant will not be eligible for the benefit of the area based exemption - Held that: - It is clear on fact that the area where the appellant’s unit is located is no more covered under the relevant notification - The area based exemption benefit is extended to units situated in designated backward areas listed out in the relevant notification but the area in which the appellants unit is situated has been deleted from the relevant notification, the appellant will ceaze to enjoy the benefit of the notification from the date of such amendment - benefit rightly denied - appeal dismissed - decided against Appellant.
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2017 (3) TMI 1002
Benefit of N/N. 6/2006-CE dated 1.3.2006 - denial on the ground that the appellant had not participated in ICB and that he had imported the raw material - whether appellant is eligible to avail the benefit of N/N.91/2004-Cus and 6/2006-CE in respect of the goods supplied to Power Project implemented by bidding through an International Competitive Bidding (ICB)? - Held that: - similar issue was before the Bench in respect of the Notification precursors the N/N. 6/2006-CE and 91/2004-Cus in the case of CST Ltd [2007 (6) TMI 369 - CESTAT, BANGALORE], where it was held that There is always a system of sub-contractors. If we take a view that the goods cleared by sub-contractors are not entitled for exemption on the ground they are not the bidders, the very purpose of the Notification would be defeated because the main contractor will be having hundreds of sub-contractors in Mega Projects - the appellant cannot be denied the benefit of N/N. 6/2006-CE and 91/2004-Cus for the goods supplied to the Project Implementing authority for the said project - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 1001
Valuation - IC Engines and parts thereof - goods cleared to sister units - whether the commissioner was justified in issuing SCN without resorting to review of final assessment order - Held that: - the said final assessment orders were not subjected to review and further appeal, in terms of Section 35E - the Commissioner justified the issue of SCN without resorting to review of the final assessment order. His reliance on the sub-Section (5) of Section 35E is found to be misplaced. The said sub-section, though was introduced in 1988 was never notified for implementation. The said sub-section was repealed in 2004 without actually brought into force. It is clear that the learned Commissioner relied on a non-existing legal provision to justify the proceedings against the appellant, in the absence of a review of the assessment order in terms of Section 35E.
The learned Commissioner justified the demand on the ground, that the suppression of fact/mis-declaration on the part of the appellant was detected by the Department resulting in the fresh demand proceedings.
The impugned order relied on para 5.9 of CAS-4 to hold that the cost of goods should be determined on actual capacity basis. In this connection, we note the CBEC vide Circular dated 13/02/2003 advised that the cost of production of goods cleared for captive consumption has been determined in accordance with CAS-4. Para 5.9 of CAS-4 details with absorption of overheads. It stipulates that the basis should be normal capacity or actual capacity utilization of the plant, whichever is higher - the appellants had furnished complete details required for determining normal capacity in terms of the applicable cost accounting standards. We find that the details submitted by the appellants have not been examined and commented upon by the lower authorities - matter remanded for re-examination.
Appeal allowed by way of remand.
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2017 (3) TMI 1000
Manufacture - process of manufacturing of laminated HDPE fabrics - whether the process of lamination of HDPE woven fabrics by LDPE amounts to manufacture and whether laminated HDPE woven fabrics is a new distinct product or otherwise? - Held that: - Since the basic material I.A. HDPE fabrics is coated by LDPE, the description of the final product does not change is admitted fact i.e., laminated HDPE fabrics - In the case in hand there is no process which has been undertaken by the appellant which is incidental or ancillary to the completion of manufactured product as the HDP fabrics coated with LDPE remains laminated woven HDPE fabrics.
The laminated HPDE fabrics that comes into existence due to the process of lamination cannot be held as a manufactured product attracting Central Excise duty - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 999
Clandestine removal - exceeding the limit of SSI exemption benefit under N/N. 8/2000 dated 01/2000 - demand - penalty - Held that: - the appellant M/s A.S. Overseas admitted that they were not carrying out any manufacturing activity in their factory. There is a Panchnama drawn to this effect on 09.11.2000 - demand upheld.
CENVAT/ MODVAT credit - credit availed without receiving corresponding inputs - Held that: - the appellant admitted that were not carrying out any manufacturing activity in their factory - Shri Sandeep Mittal in his statement also accepts that there has not been any other employee, other than partner, Shri Rajesh Goyal in the firm namely M/s A.S. Overseas, Delhi. When there is no employee working for the firm M/s A.S. Overseas, how can there could be any activity of manufacturing conducted by the said firm - demand upheld.
Evasion of duty - wrong availment of CENVAT/MODVAT credit - Held that: - the appellant admitted that were not carrying out any manufacturing activity in their factory - he knowingly and deliberately indulged in facilitation of evasion of duty and wrong availment of Modvat/Cenvat credit by the appellants, namely, Mittal Overseas and A.S. Overseas. - the penalty imposed by the impugned order on the appellant Shri Sandeep Mittal of ₹ 10, 00,000/- (Rs. Ten lakh) is reduced to ₹ 1,00,000/- (Rs. One lakh only), when the appellant namely M/s Mittal Overseas, New Delhi and M/s A.S. Overseas, where Shri Sandeep Mittal is proprietor and active partner, have been imposed equivalent penalties.
Appeal allowed - decided partly in favor of one of the appellant by reducing penalty.
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2017 (3) TMI 998
Waste - coated film waste - Transaction value of Waste - valuation of waste for the purpose of payment of duty - Held that: - The value of ₹ 15 per kg, of waste x-ray films was taken from the sage invoice no, 21/23.09.1994, therefore if the value of the identical goods is available the same is acceptable as value under Section 4(1)(a) of the CEA, 1944- Therefore we do not find any reason why the value of ₹ 15 per kg. should not be accepted as a transaction value of the waste x-ray films - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 997
Clandestine removal - demand on the ground that the production of Sponge Iron was 1600 MTs per month. It was alleged that the Appellant company during this period has shown production of 1892.620 MT. only and thus, there is short recording of production of 4507.380 MT of Sponge Iron - Held that: - the duty demand of ₹ 79,44,528/- has been confirmed merely on basis of statement of contractor with no iota of corroborative evidence. Except his statement of having done production, no other records or any corroborative evidence has been brought on record to prove clandestine removal of goods. Even the contractor could not produce his own records. No evidence in the form of procurement of excess raw material, production record, statement of any employee or owner, clearance of goods or receipt of any consideration towards such suppressed production has been relied upon - on the basis of contractors statement and especially in case, when even his own record is not produced, the demand cannot be sustained.
Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 996
Valuation - royalty - whether royalty charges towards supply of design, drawing and technical know how by FIPL to AVTEC in the manufacture of power units by AVTEC is to be included in assessable value or not? - Held that: - Power unit is one of crucial and important main components of the motor vehicles. The same has to be made as per the exact design, specification and technical requirement suitable for use in the motor vehicles - In terms of the agreement dated 1.8.2006 between AVTEC and FIPL, it is very clear that the power units are to be made in accordance with the specifications, engineering drawings and other technical information provided by FIPL to AVTEC. It is clearly mentioned that FIPL shall provide free of charge of necessary drawings, design, process sheets, equality check sheets and other technical support required for manufacturing and supplying power units by AVTEC. The value of such design, drawing and technical know-how, should form part of the assessable value of power units manufactured and cleared by AVTEC to FIPL - However, the quantification has to be done on factual and rational basis.
Extended period of limitation - Held that: - AVTEC are not in the picture with reference to royalty payment for the whole vehicle by FIPL to FORD, USA in terms of the agreement between these two parties. In such situation, it is not correct to allege that AVTEC intentionally suppressed or mis- represented any facts relating to additional considerations to be added in the value of power units - extended period not invocable - penalties also set aside.
Appeal disposed off - decided partly in favor of appellant-assessee.
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2017 (3) TMI 995
Clandestine removal - Gutkha - assessee claims that the goods are being sold to unknown buyers on cash basis - Held that: - the goods seized at Raipur were infact manufactured and cleared by the appellant-assessee clandestinely without payment of duty - the claim of the appellant-assessee that the goods are covered by the 22 invoices submitted by them has been made only with the view to escape from the clutches of the law. While the onus is on the Revenue to establish clandestine removal, they are not required to prove the case with mathematical precision as such a case involves deliberate and well thought out modus operandi to evade duty - appeal dismissed - decided against appellant.
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2017 (3) TMI 994
CENVAT credit - service tax paid on commission paid for supply of electrical energy meters to their buyers, which are mainly State Electricity Boards - Rule 7 of CCR 2004 - Held that: - Hon’ble Supreme Court in the case of Commissioner of C. Ex” Nagpur Vs. Ballarpur Industries Ltd. [2007 (8) TMI 10 - SUPREME COURT OF INDIA ] holds that the SCN is the foundation in the matter of levy and recovery of duty and penalty and interest; if there is no invocation of relevant Rules it would not be open to the adjudicating authority to invoke the said Rules. Therefore, the demand of Cenvat Credit of ₹ 37,27,241/- confirmed along with interest and corresponding equivalent penalty imposed for this demand cannot be sustained and are hereby set aside.
The Cenvat credit on inputs, capital goods and input services which are used for manufacture of goods or for provision of services is available in a common pool and can be used for payment of excise duty and/or service tax.
Commission agent is available as credit to assessee, who is engaged in the manufacture of goods as well as who renders certain services - cenvat credit taken on the said commission agent’s services which enabled the appellant assessee procurement of Purchase Order No. 273 dated 04.01.2007, is not admissible to them as per the provisions of Rule 6 of CCR, 2004.
Appeal disposed off - decided partly in favor of appellant.
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2017 (3) TMI 993
Denial of benefit of N/N. 6/2006-CE - International Competitive Bidding - whether for the clearances made during the period April, 2006 to November, 2006, as the appellant had wrongly claimed exemption under N/N. 108/95-CE and later on, on realizing his mistake he prayed before the authority that his claim of exemption be read in terms of N/N. 6/2006-CE, Whether the denial of claim is sustainable? - Held that: - the SCN is misconceived. No case of any retrospective claim is made out from the SCN. It is evident on the face of record that the appellant had only rectified his claim which was earlier made under N/N. 108/95 to the correct Notification being N/N. 6/2006-CE. Thus, there is no case of any retrospective claim - Secondly, N/N. 6/2006 is of dated 01/03/2006 and the clearance were made thereafter and on this count also there is no question of any retrospective applicability of the said Notification - SCN unsustainable - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 992
Valuation - fabric - The fabric so supplied shrinks during processing and demand was raised on such shrinkage as having not been subject to duty - inclusion of shrinkage in assessable value - Held that: - reliance placed in the case of Ujagar Textile Industries Ltd. v. Commissioner of Central Excise, Mumbai-II [2004 (2) TMI 106 - CESTAT, MUMBAI] which acknowledges that shrinkage upto a limit is not subject to duty - demand set aside - appeal allowed - decided in favor of assessee.
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2017 (3) TMI 991
Valuation - clearance to sister unit - CENVAT credit - demand of duty was on the ground that the differential customs duty paid by the MUL to the Customs constituted additional consideration in the hands of appellants - Held that: - The assessment at the material time was done in terms of Rule 8 of the Central Excise Valuation Rules, 2000 and in terms of Rule 8 the appellant had included the cost of the said machine in the form of leased rentals in the assessable value. In terms of Rule 8, the cost of the machine of the appellant did not change as a result of the payment of differential duty by MUL to the Customs. The cost for the appellant remained the lease rental originally fixed. In view of the above, it cannot be said that there was any flow of additional consideration to the appellant or there was an enhanced cost of the appellant - it was the liability of MUL to fulfill the export obligation under EPCG scheme, the expenses on account of non fulfillment of the export obligation were not the liability of the appellant.
CENVAT credit - denial on the ground that the invoices issued by MUL is neither a supplementary invoices nor a original invoice for the capital goods and therefore is not a valid document - Held that: - it is not in challenge that the said capital goods were installed and used by the appellant in their factory. That being the case, non-filing of declaration and not accounting the same in RG-23 Part-I register is only the procedural defect for which credit cannot be denied. The ground that MUL was never in possession of capital goods and hence should not have been issued the invoices is without merit and not legal practice and, therefore, is discarded. The ground that the credit under Rule 3 of the Cenvat Credit Rules can be taken only in respect of the goods received in the factory on or after 1.3.2002 is misplaced in so far as in the instant case, the credit has been taken on supplementary invoices, which is a valid document in terms of Rule 7(1)(b) of the Cenvat Credit Rules, 2002.
Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 990
Benefit of N/N. 3/2004-CE dated 8th January 2004 - denial on the ground that the four projects were not in conformity with the criteria contained in the said notification including the later rescinding of the certificates - whether the exemption from excise duty is linked solely, and exclusively, with the furnishing of the prescribed certificates or whether, as proposed by Revenue, the actual usage of the pipes clinches the eligibility for exemption?
Held that: - It is for the very reason that such projects undertaken in public interest prescribes certification by responsible public authorities. Undoubtedly, interpretation of exemption notifications cannot be left to the hands of authorities that are not created by or acknowledged in the relevant taxing statutes. However, the nature of the project to which the exemption is extended, if certified by the authority specified in the notification, cannot also be questioned by taxing authorities that are not conversant with such projects. Thus, where certificates are the qualification for exemption, it is not open to the central excise authority to overrule that certification - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 989
Classification of C-4 raffinate (return stream) - whether the return stream product was not an input or partially processed input but a product that is classifiable under heading 2711.12 of the First Schedule to the Central Excise Tariff Act, 1985? - Held that: - The appeal itself is without any challenge to the legality and propriety of the impugned order - the adjudicating authority, conscious of the specific terms of the remand on the occasion of the former hearing in this very matter, did consider the final decision in the classification and complied thus with our earlier order - appeal dismissed - decided against appellant.
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2017 (3) TMI 988
Classification of sugar - The appellant had cleared sugar at ‘levy’ rate which was sought to be denied by central excise authorities - Held that: - the distinction between the rival entries is the invoking of the Essential Commodities Act, 1955 compelling manufacturer to comply with direction of the Central Government. The impugned order admits that appellant had no choice but to supply sugar, that was otherwise to be sold as ‘free sale’, as ‘levy sugar.’ In such circumstances, the sale by the appellant cannot but be under ‘levy’ category. The arguments advanced in impugned order would not be relevant in this context - reliance was placed in the case of Commissioner of Central Excise, Pune - II v. Daulat SSK Ltd & others [2015 (11) TMI 364 - CESTAT MUMBAI], where it was held that Clearance of free sale sugar by the respondent sugar factories are as per the direction and order of the State or the Central Government, which is covered under the tariff heading number 1701.31 and the Central Excise duty is payable as per the tariff entry.
Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 987
Clandestine removal - The allegation against the main appellant, M/s. Praveen Tobacco Company Ltd. is that 74988 kgs. of unmanufactured hookah tobacco and 725 kgs. of leaves tobacco (Orchha) was found short in the premises of M/s. Praveen Tobacco and 66,045 kgs. of unmanufactured hookah tobacco found short in the premises of Mittal Trading - total shortage being 1,41,758 kgs., has been used in the manufacture of 6 gm. pouches of Praveen Chhap spit, whose MRP is ₹ 1.8 per pouch and that these spit tobacco pouches have been cleared clandestinely without payment of duty - the stand of the appellant in course of proceedings before the Commissioner has been that unmanufactured hookah tobacco consists of dust, leaf, stems, nus, rawa, etc. and the same is fit only for making hookah tobacco and cannot be used for making chewing tobacco and that for making chewing tobacco, the leaf of tobacco (Orcha) is required and accordingly, the appellant’s contention is that no duty demand can be made on the basis of the shortage of 141033 kgs. of unmanufactured hookah tobacco and the duty demand based on the shortage of 725 kgs. of Orcha tobacco would be only about around ₹ 15,000/-.
Held that: - We find that the demand for excise duty stands confirmed on the basis of allegation that the shortage of unmanufactured Hookah Tobacco has been diverted for manufacture of spit tobacco. Contradictory claims have been made by both sides before us, as to whether spit tobacco can be made using Hookah tobacco. The entire demand hinges on this fact. On going through the impugned order, we find that the ld. Adjudicating Authority have not dealt with this plea made by the appellant in detail. We are of the view that unless this fact is settled either by means of documentary evidence or by means of expert or by technical literature opinion, the demand becomes questionable.
During the course of search on 8/6/2009 at the premises of M/s Mittal Trading company and godown of M/s Praveen Tobacco at Sonipat on 12.06.2009, samples of unmanufactured Hookah Tobacco were drawn for testing. The relevant test reports have not been made available to the appellant. We are of the view if such test reports are available, the same may throw light on the question, whether such unmanufactured Hookah Tobacco can be used for making spit Tobacco.
The impugned order has not discussed, some of the serious arguments raised by the appellant, even though these were made before the adjudicating authority. We also note that these arguments are central to the demand of Central Excise duty raised in the SCN.
The case is remanded to the Original Authority for denovo decision, after giving specific findings on the above points raised by the appellant - appeal allowed by way of remand.
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2017 (3) TMI 986
100% EOU - restoration of CENVAT credit debited earlier - whether the appellant is eligible to take re-credit of the CENVAT credit of ₹ 10,25,541/- debited earlier in the month of March 2008 for clearance of the imported raw material as such, after the equivalent amount was paid later through cash on 02.04.2009? - Held that: - the duty amount which was paid earlier by reversing the CENVAT Credit Account, on found to be irregular, when paid subsequently through cash, it is an adjustment of book entry and accordingly, the appellant are eligible to take credit of the amount of ₹ 10,25,541/- in their CENVAT Credit Account paid/reversed earlier - refund allowed - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2017 (3) TMI 1010
Input tax credit - whether the Appellant Assessees are entitled to input tax credit on purchase of duty entitlement pass book scrips - DEPB Credit - the decision inn the case of 2015 (10) TMI 291 - DELHI HIGH COURT [2015 (10) TMI 291 - DELHI HIGH COURT] contested - Held that: - the leave is granted.
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2017 (3) TMI 1009
Input tax credit - penalty - demand on the ground that end dealers i.e., the sellers, have not reported the sales transactions entered into between them and the petitioner - Held that: - The respondent i.e., Assessing Officer, could have only come to a conclusion that the subject transactions were bogus, based on substantive material, and not that because objections were not filed by the petitioner, the assertions made in the pre-assessment notice would have to be deemed to be correct. Furthermore, if, material was available with respondent to come to the conclusion that the transaction were bogus, adequate opportunity had to be given to the petitioner to meet the charge. The impugned order shows that there is no discussion on this aspect of the matter - impugned order set aside - petition allowed - decided in favor of petitioner.
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Indian Laws
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2017 (3) TMI 1006
Offence punishable under Section 138 Negotiable Instruments Act - Held that:- In the present case neither was there any endorsement on the cheque nor a document annexed thereto. Letter dated 21st March, 2016 was given separately and thus the change of character of the document was not capable of being intimated to the third party who may have been a holder in due course. Hence the letter dated 21st March, 2016 did not change the character of the cheque in question to a non-negotiable instrument.
Since the present petition is under Section 482 Cr.P.C. and the parties are yet to lead their evidence it is not open for this Court to draw any conclusion on the issue between the two parties as to whether the signatures of Ankur Gupta on the letter in question were only in acceptance of the letter or it would be deemed that he had accepted the contents of the letter in question as well. This is an issue to be determined during trial. Thus the argument of the learned counsel for the Strategic that the letter in question has to be read as it is and no oral evidence can be led to give a meaning to it also deserves to be rejected.
Since a presumption arises under Section 139 of the NI Act with regard to the liability once a cheque has been issued which presumption has to be rebutted during the course of trial at this stage it is not for this Court to come to a conclusion in exercise of its jurisdiction under Section 482 Cr.P.C. that since no reply was given to the letter in question by Religare its contents are deemed to be admitted. In view of the discussion aforesaid this Court finds no reason to quash the complaint or set aside the order summoning the petitioners.
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