TMI Tax Updates - e-Newsletter
May 21, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws FEMA PMLA Service Tax Central Excise Indian Laws

Articles

1. Limited Liability Partnership (LLP) - Need for the New Corporate Form – LLP

   By: Santosh Kumar

2. APPROPRIATE GOVERNMENT CANNOT ADJUDICATE THE DISPUTE AND CANNOT ASSUME THE POWER OF LABOUR COURT.

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Financial Education in Rural Areas.

2. Cross Holding Among Profitable PSUs.

3. Task Force on Farmers Loan.

4. Cash Handling Charges.

5. New Pension Schemes.

6. Private Insurance Services.

7. Allocation to States.

8. Bank Accounts with Zero Balance.

9. Functioning of RRBs.

10. Agricultural Credit.

Circulars / Instructions / Orders

DGFT

1. 65 (RE-2010)/2009-14 - dated 18-5-2012

Treatment of Capital Goods sourced from SEZ and import of spares for such Capital Goods under EPCG Scheme – Para 5.2A of FTP– reg.

Companies Law

2. OFFICE MEMORANDUM [No. 1(7)/E. Coord./2012], - dated 11-5-2012

Listing of Government Companies in the Stock Exchange

Central Excise

3. 966/09/ 2012-CX - dated 18-5-2012

Clarification regarding classification of Structural Components of Boiler and Admissibility of CENVAT Credit on these Structural Components, reg-

Highlights / Catch Notes

Income Tax

• High Court Grants Tax Deduction for Inland Container Depots as Infrastructure Facilities u/s 80IA of Income Tax Act.

  Case-Laws - HC : Deduction u/s 80IA - ICD - Inland port - infrastructure facilities - deduction allowed - HC
  Visit to Get Source

  ---

• Discrepancies Between Sale Agreement and Deed May Reveal Unexplained Income in Tax Assessments.

  Case-Laws - AT : Unexplained income - Difference in amount between sale agreement and sale deed - It is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it my be higher and sometimes it may be lower. Sometimes, intentionally a lesser value may be shown in the sale deed.
  Visit to Get Source

  ---

• E-tendering qualifies for tax deductions u/s 80IA(4)(ii), equated with internet services under Income Tax Act.

  Case-Laws - AT : Deduction u/s.80IA - E-Tendering is equivalent to providing Internet service eligible for deduction u/s.80IA(4)(ii)
  Visit to Get Source

  ---

• Jurisdiction Under Income Tax Act Sections 147 & 148 Is Mandatory; Section 292BB Cannot Rectify Non-compliance.

  Case-Laws - AT : Reassessment u/s 147 / 148 - question is of acquisition of jurisdiction which is a mandatory requirement of the Act. - action can not be rectified u/s 292BB - AT
  Visit to Get Source

  ---

• Loan to Sister Concern Not a Trading Advance; Not Qualifying as Bad Debt or Business Loss.

  Case-Laws - AT : Assessee advanced the sum to its sister-concern only and that too in the nature of loan and not as a trading advance. - Amount not recovered - neither bed debt nor business loss - AT
  Visit to Get Source

  ---

• Education Trust's Contributions Misclassified as Taxable Income by AO; Decision Deemed Unjustified.

  Case-Laws - AT : Education trust - corpus fund - AO was not justified in holding contributions towards different corpus funds as current income liable to tax. - AT
  Visit to Get Source

  ---

• Assessee Wins Case on Cash Payment Disallowance u/s 40A(3) of Income Tax Act; 20% Cash Expenditure Involved.

  Case-Laws - AT : Disallowance u/s 40A(3) - 20% of the expenditure made in cash - payment made towards advance - decided in favor of assessee - AT
  Visit to Get Source

  ---

• TDS Non-Deduction: Are Reimbursements to C & F Agents for Services Subject to Tax Deduction u/s 40(a)(ia)?

  Case-Laws - AT : Disallowance u/s 40(a)(ia) - TDS u/s 194C - C & F agents services - reimbursement of expenses - services procured from others to fulfil his own contract
  Visit to Get Source

  ---

Customs

• Customs Exemption Not Applicable for Re-Imported Goods Assembled or Fitted with Others per Notification No. 94/96-Cus.

  Case-Laws - AT : Exemption on Re import - notification no. 94/96-Cus dated 16.12.1996 - Benefit of said notification would not be available in a case where any goods exported are re-imported after fitment to and assemblage with other goods
  Visit to Get Source

  ---

DGFT

• Capital Goods from SEZ and Spares Import Under EPCG Scheme: Key Rules in FTP Paragraph 5.2A Explained.

  Circulars : Treatment of Capital Goods sourced from SEZ and import of spares for such Capital Goods under EPCG Scheme – Para 5.2A of FTP– reg. - Circular
  Visit to Get Source

  ---

Corporate Law

• Court Finds No Justifiable Grounds for Company's Winding Up; Revival Possible if Counter-Claim Allowed.

  Case-Laws - HC : Voluntary winding up - In the event, the counter-claim of the petitioner-company is allowed, the possibility of revival of petitioner-company cannot be denied. - no justifiable ground for winding up is made out. - HC
  Visit to Get Source

  ---

Indian Laws

• Supreme Court mandates full stamp duty for General Power of Attorney on immovable property given to non-relatives.

  Case-Laws - SC : Power of attorney (GPA) to non relatives in respect of immovable property - payment of full stamp duty in case of GPA - Indian Stamp Act, 1899 - Decided in favor of revenue - SC
  Visit to Get Source

  ---

• Property Attachment in Money Laundering Cases: Valid Even if Owner Not Charged, Per Indian Law Provisions.

  Case-Laws - HC : Money laundering - attachment of property owned by or in possession of a person, other than a person charged of having committed a scheduled offence - expressions - person; proceeds of crime; property and transfer - Constitutional validity upheld
  Visit to Get Source

  ---

Service Tax

• Court Clarifies Rules on Adjusting Excess Service Tax Payments for Future Periods, Defines "Subsequent Period" Interpretation.

  Case-Laws - AT : Adjustment of excess amount of service tax paid - Scope of the term subsequent period
  Visit to Get Source

  ---

Central Excise

• Playing Cards as Free Gifts Excluded from Cenvat Credit Value in Marketing Strategy Case.

  Case-Laws - AT : Free gifts - Cenvat Credit - inclusion in value of excisable goods - Supply of playings cards as free gift - a market gimmick - prima facie credit not allowed
  Visit to Get Source

  ---

• Blending Motor Spirit with Additives isn't Manufacturing New Product under Central Excise Law, even if Branded 'Speed'.

  Case-Laws - AT : Manufacture - blending of MS with MFA does not result into the manufacture of a new product, even if the emerged product is branded as 'speed' and marketed accordingly after some value addition.
  Visit to Get Source

  ---

• Manufacturers Denied SSI Exemption for Pumps with Embossed 'K' Logo; Appeal Rejected by Authorities.

  Case-Laws - AT : SSI exemption - emboss a logo of the alphabet ‘K’ on the pumps manufactured by the appellants – exemption not allowed.
  Visit to Get Source

  ---

• Section 11D Excise Act Demand for 8% or 10% on Exempted Goods Unsustainable Under Cenvat Credit System.

  Case-Laws - AT : Cenvat Credit - Collection of amount @8% or 10% on exempted goods - Demand under Section 11D of the Central Excise Act not sustainable.
  Visit to Get Source

  ---

• Clarification on Boiler Component Classification for CENVAT Credit Eligibility Under Central Excise Regulations to Ensure Uniform Tax Compliance.

  Circulars : Clarification regarding classification of Structural Components of Boiler and Admissibility of CENVAT Credit on these Structural Components, reg- - Circular
  Visit to Get Source

  ---

Case Laws:

• Income Tax

• 2012 (5) TMI 261
  Non deduction of TDS architectural work - Deduction of interest paid on loads whereas interest free loans granted to sister concerns - commercial expediency - Article 14 of DTAA with China - held that:- The situs or the place of residence of the recipient who renders and performs professional services determines the place/country where the said income is taxable. In the present case, M/s. HOK International (Beijing) Limited was a China based company and had rendered “professional services” from there. No amount therefore will be taxable in India. The assessee was not liable to deduct tax at source on the said services and the tribunal has rightly held that Section 40(a)(ia) is not attracted. - Decided in favor of assessee. Deduction of interest - commercial expediency - held that:- matter remitted to the tribunal for deeper scrutiny and examination. The tribunal will re-examine the issue and record factual finding and apply the legal ratio explained in S.A. Builders Ltd. (2006 (12) TMI 82 (SC)).

  ---

• 2012 (5) TMI 260
  Deduction u/s 80IA - ICD - Inland port - infrastructure facilities - effect of amendment to section 80IA - held that:- In these circumstances, the real question was not whether the CBDT notified the ICD as an Inland Port but whether the ICD can be considered to be an Inland Port. - having regard to the provisions of the Customs Act, the communications issued by the CBEC as well as the Ministry of Commerce and Industry, the object of including "inland port" as an infrastructure facility and also having regard to the fact that customs clearance also takes place in the ICD, the assessee's claim that the ICDs are Inland Ports under Explanation (d) of Section 80IA(4) requires to be upheld. - Decided in favor of assessee.

  ---

• 2012 (5) TMI 259
  Reassessment - notice u/s 148 - payment of commission on export - power and authority for reopening a case - held that:- the condition precedent for exercising power of reopening the assessment as provided in Section 147 of the Act is absent and the Assessing Officer acted illegally in issuing notice of reassessment by forming a second opinion on the selfsame materials without having any “tangible material” to exercise jurisdiction. - Decided in favor of assessee.

  ---

• 2012 (5) TMI 258
  Ex-parte order of the tribunal - Revenue defended the order of the Tribunal and submitted that Counsel for assessee was avoiding the hearing and a last opportunity was granted to him, but again he sent an application for adjournment of the case, therefore, the Tribunal rejected the application and heard the Counsel for the Revenue and rightly decided the appeal. - held that:- Tribunal committed an illegality in rejecting the application for adjournment and in deciding the appeal, exparte, without hearing the learned counsel for assessee, in the facts and circumstances of the present case and order of the Tribunal deserves to be set-aside on this ground alone. However cost of Rs. 21,000 imposed on the assessee - If the amount of cost is deposited in the Department within a period of four weeks and receipt thereof is furnished in the Tribunal, then the Tribunal will decide the matter afresh on merits, after hearing both the parties, otherwise this appeal will be deemed to have been dismissed and no further opportunity will be granted to the assessee.

  ---

• 2012 (5) TMI 257
  Deemed income u/s 41(1) - remission nor cessation or liability - transfer of shares - redemption of preferential shares - sham transaction - held that:- The Tribunal has come to the conclusion that there was an error on the part of the Assessing Officer and the CIT(A) in making an addition under Section 41(1) as there was no remission or cessation of liability in question during Assessment Year 2002-03. The order of the Tribunal is evidently correct. There was no remission or cessation of liability during Assessment Year 2002-03. - Decided in favor of assessee. Redemption of shares - sham transaction - held that:- transaction was not questioned by the Revenue for over ten years - The Revenue did not bring any material on record whatsoever to substantiate the contention that the transaction was sham. - Decided in favor of assessee. Transfer u/s 2(47) - held that:- the judgment of the Supreme Court in Anarkali Sarabhai (1997 (1) TMI 5 (SC)) concludes the issue that a redemption of preference shares by a Company squarely comes within the ambit of Section 2(47) of the Income Tax Act, 1961. Cost indexation - capital gains - held that:- Section 48 denies the benefit of indexation to bonds and debentures other than capital indexed bonds issued by the Government. The four percent non-cumulative redeemable preference shares were not bonds or debentures within the meaning of that expression in Section 48 of the Income Tax Act, 1961. In these circumstances, the Tribunal was correct in its decision to that effect. - Decided in favor of assessee.

  ---

• 2012 (5) TMI 256
  Unexplained income - Difference in amount between sale agreement and sale deed - Sections 91 and 92 of the Indian Evidence Act, 1872 - held that:- In the present case, the AO as well as the CIT(A), proceeded to draw inferences against the assessee, on the basis of invalid statement of Shri Subhash Sharma, which was recorded on 3.9.2004, ignoring the retraction made by him in the cross-examination, conducted on 7.11.2006. It is, further consequent to highlight that both the AO and CIT(A), completely disregarded the sale deed, executed by the parties voluntarily, which contains Rs. 9 lacs as sale consideration. As discussed above, oral evidences cannot displace the direct documentary evidence, in the shape of sale deed containing specific sale consideration of Rs. 9 lacs. This view is duly supported by the decision of the Hon'ble jurisdictional High Court in the case of Paramjit Singh [2010 (2) TMI 262 (HC)] The question in the present appeal is squarely covered by the decision of the Hon'ble Kerala High Court in the case of CIT v. Smt. K.C. Agnes & Others (2003 (1) TMI 48 (HC)), wherein the Hon'ble High Court held that when a document shows fixed price, there will be a presumption that, that is correct price agreed upon by the parties. It is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it my be higher and sometimes it may be lower. Sometimes, intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for sale, the court cannot come to the conclusion that the price mentioned in the sale deed is not correct. - Decided in favor of assessee.

  ---

• 2012 (5) TMI 255
  Recalling of ex parte order of the HC - held that:- when power is exercised under Section 142A, exercise of such power cannot be held to be incompetent on the basis of the Law laid down by the Hon’ble Supreme Court in Amiya Bala Paul (2003 (7) TMI 4 (SC)). In the circumstances, the first contention of the applicant to the effect that the order of this court holding that the order of the Tribunal is incorrect, in view of Amiya Bala Paul, is not sustainable. There is no dispute that the original assessments were made on or before 30th September 2004. There is also no dispute that the matter reached the Tribunal on or before 30th September 2004. At the same time, the judgment of the Tribunal was also rendered before 30th September 2004. However, the fact remains, within the period of limitation, an appeal against the judgment of the Tribunal was preferred before this court. The question in such circumstances is, whether, could it be said that the assessment was made before 30th September 2004. - held that:- it could not be said that the assessment was made before 30th September 2004. It can only be said that the assessments was made on the date when the appeal was decided. Ordered recalled - matter remitted back to the Tribunal.

  ---

• 2012 (5) TMI 254
  Deduction u/s.80IA - AO observed that majority of the receipt was from E-Tendering services which is not eligible for deduction as it is not a receipt from providing Infrastructure services - In fact, the assessee company was using the Internet Infrastructure of MTNL by paying rent of Rs.20.88 lakhs per annum - the contention of the AO that the assesee has not made any investment in the infrastructure is not relevant as this section nowhere requires that certain investments need to be made for this purpose - Held that:- the assessee at this stage has filed new evidence which was not before the AO and ld. CIT(A) to show that providing E-Tendering is equivalent to providing Internet service eligible for deduction u/s.80IA(4)(ii) of the Act and the Revenue authorities without examining the issue as to whether E-Tendering is eligible for deduction u/s.80IA(4)(ii), denied the deduction claimed by the assessee - Decided in favor of the assessee by way of remand to AO

  ---

• 2012 (5) TMI 253
  Depreciation on vehicles - Addition u/s 40(a)(ia) - held that: - It is an undisputed fact that the assessee firm has purchased the vehicles for its business purpose and details like RC books, purchase bills, diesel bills of the said vehicles were produced before the AO but he disallowed the depreciation claimed on purchase of vehicles amounting to Rs.21,20,283/- @ 30% which comes to Rs.6,36,084 - AO has not brought anything on record to hold that vehicles were not used by the assessee - Decided in favor of the assessee. Cash Credit - Section 68 - new capital introduced by the partners - held that:- the two partners had introduced capital from sale of cash crop while the third partner had received amount and made the payment to the assessee by cheque. - The partners were identified. - If there was any doubt in the introduction of capital by the partners, the AO could have initiated action against the individual partners which was not done. - Addition made u/s 68 deleted - Decided in favor of assessee. Regarding addition u/s 40(a)(ia) - TDS u/s 194C - AThe stand of the assessee before AO was that it had made payment to only procure the vehicle on rent, without the services of the drivers, which had been provided by the assessee. The AO's view was that it was not a payment of rent for the naked vehicles but amounted to a contract for running of the vehicles covered u/s 194C for which the TDS should have been deducted. - held that:- Since this is not a payment of rent, it amounted to be contract amount paid to the owners of vehicle in pursuant to contract, which attract provision of section 194C - Decided against the assessee.

  ---

• 2012 (5) TMI 252
  Charitable Purpose - Section 2(15) Registration granted earlier u/s 12A has been cancelled - The appellant is a company formed and registered on 14th January, 1999 under section 25 of the companies Act, 1956 - On examination of accounts of the assessee, the ld. DIT(E) had taken a view that the assessee has been doing professional activities specially in accounting areas - held that:- the DIT, without examining the concept of business, has wrongly held that the institute was carrying on business as coaching and programmes were held by them and a fee was being charged for the same - assessee foundation is established for charitable purposes having regard to the objects of the foundation and its importance throughout India or throughout any State or States - Decided in favor of the assessee

  ---

• 2012 (5) TMI 239
  Deemed Divided - Assessment order u/s. 144 r.w.s. 147 - Notice u/s 148 - held that:- in reopening of a completed assessment there is nothing arbitrary about any of these provisions and that rigorous checks and controls have been provided on the exercise of power by the AO to initiate an action for re-assessment. In the forefront of these checks and controls is the requirement of the section 148 of the Act to issue proper notice. Application of section 292BB - held that:- On plain reading of section of 292BB we find that the said section is in respect of certain procedural lapses in respect service of notice, but in the case under consideration the question is of acquisition of jurisdiction which is a mandatory requirement of the Act. The CIT(A) discussed this aspect of the matter of "irregularity" and "nullity" in detail. No consent can confer jurisdiction upon a Court if the Courts has no jurisdiction, and if we take the view that the AO can have jurisdiction only provided he complies with the conditions laid down in sections 147 and 148 of the Act. Since the order of the AO is without jurisdiction we therefore find that the CIT(A) has rightly quashed the order of the AO. - Decided against the revenue.

  ---

• 2012 (5) TMI 238
  Reassessment u/s 147 - jurisdictional pre-conditions - full and true disclosure - held that:- The assessment orders for the assessment years 1990-91 and 1991-92 clearly indicate that the Assessing Officer was aware of the nature and character of income, which was received by the respondent, i.e., pay- ment was made by the Department of Science and Technology towards maintenance and service charges. The assessee is required to disclose full and true material facts and need not explain or interpret the law. Legal inference has to be drawn by the Assessing Officer from the facts disclosed by the assessee. This is different and cannot be regarded as an omission or failure on the part of the assessee to disclose material facts. Decided in favor of assessee.

  ---

• 2012 (5) TMI 237
  Bad debts or business loss - advances to sister concern - Except the sum of Rs.23.70 lakh which the assessee wrote off in the instant year, the remaining amount was collected. - held that:- Obviously this amount cannot be considered as bad debt deductible u/s 36(1)(vii) in view of the fact that the condition laid down u/s 36(2) being the recognition of income from such debt in the same or an earlier year, is not satisfied. - As this debt did not arise out of any sale made by the assessee, cannot also be claimed as bad debt. The assessee advanced the said sum to its sister-concern only and that too in the nature of loan and not as a trading advance. If a part of the same is not recovered, that does not become business loss. - Decided against the assessee. Reassessment u/s 147 - fresh claim of depreciation u/s 32 - held that:- The claim for deductions, if any, can be entertained in the reassessment proceedings only in respect of those items of income which are the subject matter of addition in the assessment u/s 147. Adverting to the facts of the instant case it is observed that the claim for depreciation u/s 32 is independent of and unconnected with the items of income added by the A.O. in assessment u/s 143(3) r.w.s. 147. As such this deduction cannot be allowed. - Decided against the assessee. However relief granted to assessee, that if the depreciation allowance is not to be actually allowed then the written down of the assets, which was reduced by claiming depreciation should be accordingly increased, subject to verification by AO. Deduction u/s 80IA - Exemption u/s 10(23G) in respect of any income by way of dividend, interest or long term capital gains of an infrastructure capital fund or an infrastructure capital company or investment made by way of shares or long term finance in any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility, which fulfils the conditions specified in sub-section (4A) of section 80-IA. - shares purchased prior to the introduction of this provision are ineligible for the benefit. - held that:- there is no logic in denying the exemption u/s 10(23G) in respect of the shares which were purchased on 31.01.1996. We have noticed above that the exemption under this provision is available on income resulting from the transfer of shares and not from the purchase of shares. If the eligible shares as sold in the relevant period, exemption cannot be denied simply on the ground that such shares were purchased in 1996. - Decided in favor of assessee. Inter corporate deposits - dis allowance of interest - held that:- if there are interest free funds available with the assessee sufficient to meet its investment and at the same time loan has been raised it can be presumed that the investments were from interest free funds and resultantly no disallowance of interest can be made.

  ---

• 2012 (5) TMI 236
  Education trust - corpus fund - amount charged from students against various funds directed credited to balance sheet - AO denied the exemption and held as current income - held that:- AO has failed to appreciate that the appellant trust has not made any appropriations from the corpus donations after having received the same. It appears that AO has mixed up the facts of Educational Research Fund with the other funds such as building fund, library fund, staff welfare fund, student welfare fund etc. The distinctions between the same are that the former is mainly appropriation at 50% out of tuition fees whereas the later is specifically donated by the parents/students but the bifurcation of the aggregate amount is made as per the decision of board of trustees such as 30% towards building fund and educational Research Fund etc. - AO was not justified in holding contributions towards different corpus funds totalling to Rs. 1,90,01,319/- as current income liable to tax. - Decided in favor of assessee. Allegation of payment on behalf of trustee - held that:- There evidences to attribute that the said transaction took place only to benefit the managing trustee or his relatives except that the funds of the trust were routed through the trustees to the vendor which merely exhibits the expediency which prevailed at that relevant time. Cancellation of registration - charitable purpose - section 2(15) - held that:- it makes it crystal clear that the amended provision of s.2(15) of the Act will come into fore only that the advancement of any other object of general public utility shall not be a charitable purpose, 'if it involves the carrying on of any activity in the nature of trade, commerce or business…'. In the case under consideration, the assessee trust did not in anyway involve itself in indulging in carrying on of any activity in the nature to any trade, commerce or business. Therefore, the question of bringing the assessee trust's case under the ambit of the amended provisions of s. 2(15) of the Act doesn't arise. - Decided in favor of assessee. - DIT(E) was not justified in resorting to cancel the registration granted to the assessee trust earlier - Decided in favor of assessee.

  ---

• 2012 (5) TMI 235
  Application for advance rulings before AAR after filing of return u/s 139(1) - held that:- the date of the filing of the application before the Authority should be the crucial date for determining the question of the applicability of clause (i) of the proviso to section 245R(2) of the Act and not the date when the application comes up for hearing either under section 245R(2) or under section 245R(4) of the Act. Once we come to the conclusion that the date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2) of the Act, and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. - Application rejected.

  ---

• 2012 (5) TMI 234
  Disallowance of bad debts - It was submitted by the Ld. A.R. that now, this issue is squarely covered in favour of the assessee by the judgement of Hon'ble Apex Court rendered in the case of TRF Ltd. (2010 -TMI - 76626 - SUPREME COURT). Ld. D.R. supported the order of austerities below - there is no dispute regarding the compliance of the provisions of Section 36(2) of the act and the only objection of the A.O. was that the assessee has not established that the debts had become bad - Decided in favor of the assessee Regarding disallowance of car rent U/S 40A(2)(b) - it is noted by the A.O. in para 5.1 o the assessment order that the assessee was asked to prove reasonableness of payment made on account of vehicle rent but the assessee failed to offer any satisfactory explanation or any comparison of other person in this regard - Decided in favor of the assessee by way of remand to AO

  ---

• 2012 (5) TMI 233
  Disallowance u/s 40A(3) - 20% of the expenditure made in cash - AO alleged that since the assessee was engaged in the business of purchase and sale of land, the payment made towards advance should be treated as payment made towards purchase of land - Held that:- The disallowance under s. 40A(3) can be made where the assessee Incurs any expenditure. In the instant case, the assessee has not claimed the expenditure in respect of purchase of land. The Revenue has not collected any material to suggest that what is apparent is not real. The assessee has filed the copy of the cancellation of the sale agreement by the assessee - Decided in favor of the assessee Interest free advances / loans - held htat:- The assessee is having sufficient capital. If there are mixed funds then non-interest-bearing funds are to be considered as utilized for non-interest-bearing advances. It is the assessee who has to take a business decision. Fees is generally received at the beginning and surpluses are used for making fixed deposits as receipts are in advances while expenses are spread out throughout the year. Since interest-free advances are less than the capital and the AO has not brought on record any nexus of interest-bearing loans used the AO could not have disallowed the interest. - There is no onus on the assessee to establish that interest-free advances are out of interest-bearing advances if non-interest-bearing funds are more. - Decided in favor of the assessee

  ---

• 2012 (5) TMI 232
  Disallowance u/s 40(a)(ia) - TDS u/s 194C - C & F agents services - reimbursement of expenses - services procured from others to fulfil his own contract - It was submitted that many of the payments made by C and F agents are even not liable to TDS at all which include certain Government payments and on foreign companies directly on which no TDS is deductible - Held that: learned CIT(A) was justified in holding that on certain payments the provisions of ss. 194C and 195 were not applicable and, therefore, assessee was not liable to deduct TDS - Decided in favor of the assessee

  ---

• 2012 (5) TMI 231
  Disallowances/additions on account of interest - AO observed debit interest entry against the business income and Royalty income - unsecured loan and interest paid thereon – Held that:- as per the clauses of the Addendum agreement with the company and in order to fulfillment of the condition, the assessee through its partners has deposited Rs.2 crores after taking unsecured loans from the various parties and in lieu thereof the assessee has received the interest free deposits of Rs.1.50 crores and Royalty - the amount advanced to the company by the assessee firm through its partners is a measure of commercial expediency and the AO has erred in holding that the investment cannot be said for business consideration. Payment of interest without deducting TDS – disallowance u/s 40(a)(ia) - Held that:- the assessee has submitted Form No.15H in respect of two parties for not deducting TDS no default on the part of the assessee. Disallowance of unexplained cash credit – assessee not filed the copy of bank statements and copy of returns of loan creditors to prove the genuineness and creditworthiness of the creditors - summons u/s 131 issued - 11 summons returned back by the postal authority as un-served and 23 loan creditors have not filed any submission in response to summons issued to them - assessee during hearing submits that these loans are 'Hundi' loans taken through the brokers by cheques with TDS on interest – Held that:- In the absence of any material to show that apart from issuing notice u/s 133(1) as to how the AO pursued the matter further with the said parties and keeping in view that the assessee is ready to file confirmation letter along with the PAN, we are of the view that in the interests of justice, the matter should go back to the file of the AO.

  ---

• 2012 (5) TMI 230
  Reopening - the assessee filed return of income declaring total loss of Rs.75,239/- and the assessment under section 143(3) was completed on 31.03.2003 determining the total income at Rs.39,49,962/- which was subject matter of appeal on the issues of depreciation on BSE Membership card, SEBI turnover fees and computer software charges - assessee has not placed on record any evidence that this issue was examined in the original assessment so as to come to a conclusion that the Assessing Officer formed an opinion on the issue - Since proviso to Section 147 does not apply as the reopening was done within 4 years, we are of the opinion that the Assessing Officer has correctly invoked the provisions of section 147 Explanation 2(c) and therefore this ground of the assessee is rejected - Appeal is rejected Regrading treatment of loss claimed by the assessee to the extent of Rs.49,45,786 - Assessing Officer considered the Explanation to Section 73 and held that the assessee company deemed to be carrying on speculation business to the extent to which business consisted of purchase and sale of such shares - It is contended by the learned counsel that the loss from the purchase and sale of the shares is to be separately considered and loss on account of valuation of closing stock of the shares is to be separately considered - Consequent to the rejection of the above, the assessee's contention about expenditure attributable to the speculation activities to the extent of Rs.6.00 lakhs is also be dismissed as the assessee is not contesting the quantification of the expenditure but only on the principle that the business loss so claimed cannot be held to be covered by Explanation to section 73 - Appeals are rejected

  ---

• Customs

• 2012 (5) TMI 229
  Exemption on Re import - notification no. 94/96-Cus dated 16.12.1996 - held that:- at the time of importation as presented were fully built buses containing fitments such as Air Conditioner, T.V., video, Coffee maker, music system and refrigerator. The goods which were exported were (as declared by the appellant) chassis fitted with engine. Notification 94/96 stipulates that for availing the benefit thereunder , the goods should be the same which were exported. Benefit of said notification would not be available in a case where any goods exported are re-imported after fitment to and assemblage with other goods, abroad cannot be considered to be satisfying the condition under notification 94/96. - Decided against the assessee.

  ---

• 2012 (5) TMI 228
  Confiscation - imposing penalties - importer had not included in the Bill of Entry certain other goods viz, Metal Straps, Button Cells, Bazels with Straps and complete wristwatches which were found in 124 cartons - 11041 pieces of wristwatches were not specifically disclosed in the Bill of Entry, 8,64,000 pieces of "AAA-  Pencil Cell, this item was declared in the Bill of Entry but its value was misdeclared – Held that:- import of this item was in breach of the relevant provisions of the Exim Policy on account of the fact that these goods did not conform to BIS Standards, confiscation ordered by the Commissioner in respect of the Pencil Cells under Section 111 (d) and (m) of the Customs Act cannot be interfered with. The Commissioner allowed option to re-export this item against payment of fine of Rs 25,000/- Considering the value of the Pencil Cells, reduce the quantum of fine , assessee's appeal is disposed of

  ---

• Corporate Laws

• 2012 (5) TMI 250
  Voluntary winding up - Revival - petitioner-company has not done any business since 2001-02 and thus, it has not earned any income for the last ten years. He states there is no hope or prospect of the petitioner-company doing any further business as stated in its Memorandum of Association. He submits that keeping in view the long duration in which the petitioner-company had not done any business, it would be just and equitable to wind up the petitioner-company - shareholders of petitioner-company have passed a special resolution in an extraordinary general meeting held on 9-10-2006 resolving to wind up the petitioner-company by the Court -Court finds that the petitioner-company has filed counter-claim of Rs. 11,21,63,605 against Prasar Bharti in arbitration proceedings which is still pending adjudication. In the event, the counter-claim of the petitioner-company is allowed, the possibility of revival of petitioner-company cannot be denied. - no justifiable ground for winding up is made out. - petition and application are dismissed

  ---

• 2012 (5) TMI 227
  Application for impleading - application was dismissed without issuing any notice – Held that:- CLB was not justified in disposing of the application without notifying the proposed respondent. Having regard to the fact that application is maintainable and averments make out a ease for issue of notice to the proposed respondent before consideration on merits, from the perusal of the order passed by the CLB which is impugned in this appeal, it is clear that application is not disposed of on the ground that it is not maintainable and order is passed on merits. Wherefore, for the reasons aforesaid the impugned order is liable to be set aside. Appeal is disposed of accordingly

  ---

• FEMA

• 2012 (5) TMI 251
  FEMA - complaint filed by respondent No. 2/Enforcement Directorate under section 56 of the Foreign Exchange Regulation Act, 1973 (‘the FERA’) and sub-sections (3) and (4) of section 49 of the Foreign Exchange Management Act 1999 (‘the FEMA’), a disclosure was made by the then captain of South African Cricket Team, Mr. Hansie Cronje, to the effect that the one day international cricket matches played in India during the Seasons (1996-1997) between South Africa and India were heavily influenced through illegal betting, etc – Simultaneously, adjudication proceedings before the Enforcement Directorate were initiated against the petitioner under the said Acts. In the adjudication proceedings, an order dated 11-12-2003 was passed by the Special Director, Enforcement Directorate, imposing a penalty of Rs. 2 crores on the petitioner for acquisition of foreign exchange from the persons other than the authorized dealer and for making payment to persons residing outside India, without any previous general or special permission of the Reserve Bank of India, in contravention of sections 8(1) and (9)(1)(a) of the FERA – Held that:- it would be unjust for the departmental authority to continue with the criminal complaint, when in the course of adjudication, categorical and unambiguous findings have been returned that there is no contravention of the provisions of the Act, and when the concerned person has been exonerated, no useful purpose shall be served by proceeding further with the criminal complaint in the instant case and the respondent agency cannot be permitted to prosecute the petitioner, having failed to establish the foundational facts to justify his prosecution.

  ---

• PMLA

• 2012 (5) TMI 240
  Money laundering - attachment of property - Constitutional validity - expressions - "person" ; "proceeds of crime" ; "property" and "transfer" - property owned by or in possession of a person, other than a person charged of having committed a scheduled offence - held that:- the provisions of the Act which clearly and unambiguously enable initiation of proceedings for attachment and eventual confiscation of property in possession of a person not accused of having committed an offence under section 3 as well, do not violate the provisions of the Constitution including articles 14, 21 and 300A and are operative proprio vigore. The object of the Act is to prevent money-laundering and connected activities and confiscation of "proceeds of crime" and preventing legitimising of the money earned through illegal and criminal activities by investments in movable and immovable properties often involving layering of the money generated through illegal activities, i.e., by inducting and integrating the money with legitimate money and its species like movable and immovable property. Therefore, it is that the Act defines the expression "proceeds of crime" expansively to sub-serve the broad objectives of the Act. We thus do not find any infirmity in the provisions of the Act. The huge quanta of illegally acquired wealth ; acquired from crime and economic and corporate malfeasance corrodes the vitals of rule of law ; the fragile patina of integrity of some of our public officials and State actors ; and consequently threatens the sovereignty and integrity of the Nation. Parliament has the authority to legislate and provide for forfeiture of proceeds of crime which is a produce of specified criminality acquired prior to the enactment of the Act as well. It has also the authority to recognise the degrees of harm an identified pejorative conduct has on the fabric of our society and to determine the appropriate remedy for the pathology. The vagueness challenge - held that:- In view of the clear and unambiguous provisions of section 8 (analysed above), considered in the context of the other provisions of the Act, we discern no vagueness in the trajectory of the provisions of section 8. It is clear that the stage of confirmation of an order of provisional attachment or retention of the property or record seized is an intermediary stage, anterior to confiscation. Challenge : Incoherence as to the onus and standards of proof - held that:- it is clear that the Legislature considered it appropriate to inhere different shades of presumptions and thus corollary burdens, on persons in the ownership, control or possession of property believed to be proceeds of crime, depending on whether the person is accused of a scheduled offence or not, necessitating such person to dislodge the presumption by probative evidence or material. The inherence of such presumptions is a matter of legal policy and no case is made out to hold, nor is it contended that the inherence of the burden by the enactment of presumptions is ultra vires the legislative power for being in transgression of any limitations on such legislative power in the Constitution of India. Dispossession from immovable property is prescribed under section 8(4) to prevent wastage or spoilage of the property and thus dissipation of its value so as to preserve the integrity and value of the property till the stage of confiscation. Thus construed the provisions of section 8(4) are neither arbitrary nor disproportionate to the object sought to be achieved by the provisions of the Act. The provisions of section 8(4) are reasonable and unimpeachable. The challenge to section 8 of the Act must therefore fail. Since section 23 enjoins a rule of evidence and a rebuttable presumption considered essential and integral to effectuation of the purposes of the Act in the legislative wisdom ; a rebuttable and not an irrebuttable presumption, we are not persuaded to conclude that the provision is unduly harsh, oppressive or arbitrary. After all a legislative remedy must correspond to the social pathology it professes to regulate. A person other than one accused of having committed the offence under section 3 is not imposed the burden of proof enjoined by section 24. On a person accused of an offence under section 3 however, the burden applies, also for attachment and confiscation proceedings.

  ---

• Service Tax

• 2012 (5) TMI 267
  Recovery of Service Tax on royalty on Consulting Engineer services received from foreign service provider - Held that :-CBE&C vide its circular F.No.276/ 8/2009-CX8A, dt.26.09.2011, has clarified that no Service Tax is liable to be paid in respect of services received from service providers abroad having no offices in India prior to 18.04.2006 - no merit in the appeal filed by the Revenue as the period involved in this case is prior to 18.04.2006 - against revenue.

  ---

• 2012 (5) TMI 266
  Waiver of pre-deposit - Information Technology Software – Held that:- service tax on the output service provided by the applicant was effective from 16.05.2008 and that the rules specifically permitted registration within 30 days from the date of introduction of service tax on the said services. Once service tax is leviable from 16.05.2008, prima facie it is not correct to deny the benefit of credit on input services utilized from the said date. Further, the original authority has sanctioned the refund. pre-deposit waived

  ---

• 2012 (5) TMI 265
  CENVAT credits - GTA service availed by them for outward transportation – Held that:- period of dispute in this case is prior to 01/04/2008, the date on which Rule 2(l) of the CENVAT Credit Rules, 2004 was amended by way of substitution of the word 'upto' in place of the word 'from' in clause (ii). till such amendment of the definition of 'input service' given under Rule 2(l), transportation charges incurred by the manufacturer for clearance of the final products from the place of removal stood included in the said definition notwithstanding the clarification issued by the Central Government through Circular dt. 23/8/2007. Accordingly, the appellants are eligible for the credits. appeals are allowed

  ---

• 2012 (5) TMI 264
  Stay - refund - unutilized CENVAT Credit - export of 'output services – Held that:- Commissioner of Service Tax (Appeals) is not empowered to make an order of remand under subsection (5) of 85 of the Finance Act, 1994 as held by the Tribunal in the case of Orient Crafts Ltd. (2010 - TMI - 203514 - CESTAT, DELHI - Service Tax). orders of the Commissioner (Appeals) set aside, reason found by the Commissioner (Appeals) for directing the lower authority to reexamine the issue of nexus between the output services and the services claimed to be 'input services' cannot be faulted. Matter remanded to original authority for fresh decision and, depending on such decision, re-quantification of refund. stay applications also stand disposed of

  ---

• 2012 (5) TMI 263
  Waiver of pre-deposit – Construction of Complex Services” and “Commercial or Industrial Construction Services - applicant has received amounts as advance towards the services rendered and that they have failed to pay Service Tax on the said advance amounts - applicant has received “free supply materials” from their clients and the value of the said materials have not been included in the gross amount for the purpose of arriving at the Service Tax payable – Held that:- Commissioner has not given any findings relating to the specific claim of duplication of demand in respect of Rs.81 lakhs which have been paid subsequent to audit objection raised by the department. applicant has not made out a case in respect of the other parties from whom they have claimed that they have received "free supply materials". We do not find justification in not including the value of "free supply materials" in respect of selected parties. The plea of wrong invokation of extension of limitation is not prima facie acceptable inasmuch as the applicant has not shown that they have made available details about receipt of such "free supply materials" and their non-inclusion of the same in the gross amount. Applicant directed to deposit in part.

  ---

• 2012 (5) TMI 244
  Adjustment of excess amount of service tax paid - Scope of the term subsequent period - Decision in the matter of Narnolia Securities Pvt. Ltd. Vs. Commissioner of Service Tax, Ranchi ( 2008 (3) TMI 70 - CESTAT KOLKATA). - Rule 6(3) of the Service Tax Rules, 1994. - held that:- The said Rule had no stipulation that the adjustment should be made in the succeeding month or quarter. The expression used there under states that the adjustment can be made for service tax liability for the subsequent period. No doubt, the said sub-rule (3) had conditions regarding refund of value of taxable service not provided etc. but these conditions would apply to a service provider. The appellants in this case were not the service providers but were service recipients. - while the main clause of Rule 6(3) permits the appellants to make adjustment of excess payments made earlier in the subsequent period, the conditions peculiar to the service providers cannot be made applicable in their case. - there is no scope for issuing a second show cause notice dated 18.12.07 by the department. - Decided in favor of assessee.

  ---

• 2012 (5) TMI 243
  Waiver of predeposit – Held that:- waiver of predeposit and stay of recovery should be granted in respect of the balance amount inasmuch as a major part of the Service Tax amount admittedly stands deposited and sizeable part of the balance amount is claimed to have been paid by way of debit in CENVAT account. payment from CENVAT account claimed by the party, was not considered by the learned Commissioner. waiver of pre-deposit allowed

  ---

• 2012 (5) TMI 242
  Stay - refund of unutilised CENVAT Credit taken on input services availed in relation to export of output services – claim was rejected in toto by the original authority and that of the other respondent was partly allowed - original authority held that no nexus was established between the input services and the output services - ground raised by the Department against the orders of the Commissioner (Appeals) is that the latter did not have the power of remand for sending the case back to the original authority – Held that:- definite reason was found for remand of the case by the ld. Commissioner (Appeals). He was apparently of the view that proper nexus between input services and output services was not established by the parties before the lower authority and that Chartered Accountant's certificates (as per the Board's Circular) would go a long way to establish such nexus. Appeals allowed by way of remand with a direction to the original authority to pass fresh orders in accordance with law. Stay applications also stand disposed of

  ---

• 2012 (5) TMI 241
  Port services - service of providing crane service has been permitted to be rendered by 3 rd parties and in that connection, agreements have been entered into between the Port Trust and the said parties and amounts have been collected as licence fee. Perusal of the agreement do not indicate any clause authorizing the said parties to represent the Port Trust in the dealing with their clients. in the case of Tuticorin Port Trust (2008 - TMI - 31436 - CESTAT, CHENNAI - Service Tax), prima-facie, supports the case of the applicant. Stay allowed. pre-deposit waived

  ---

• Central Excise

• 2012 (5) TMI 249
  Free gifts - Cenvat Credit - inclusion in value of excisable goods - Supply of playings cards as free gift - a market gimmick - manufacturers of spray gun and spares - held that:- by no stretch of imagination, playing cards can be construed as an input for the manufacture of spray guns; playing cards cannot be construed as ‘input service' as they are goods. Thus it is seen that the playing cards are neither inputs nor input service for the purpose of CENVAT Credit Rules, 2004. - assessee directed to make pre deposit.

  ---

• 2012 (5) TMI 248
  Blending of petrol and Multi-Functional Additive - MS denoting the same as 'Speed'. - Manufacture - held that:- blending of MS with MFA does not result into the manufacture of a new product, even if the emerged product is branded as 'speed' and marketed accordingly after some value addition. - following the decision in the case of Hindusthan Petroleum Corporation Ltd. vs. CCE, Delhi & Rohtak (2008 (9) TMI 154 - CESTAT, NEW DELHI), decision in favor of assessee.

  ---

• 2012 (5) TMI 247
  Refund - unjust enrichment - entry by debit note / credit note – Held that:- merely because the buyers of the respondent had issued the debit notes and had made reference to debit notes in their ledger books that itself cannot be sufficient to say that the respondent had discharged their burden in that regard. The appellants, therefore, are justified in contending that consequent on the failure on the part of the respondent to establish the duty incident has not been passed over to the customers, the authorities below erred in dropping the proceedings. - Decided against the assessee.

  ---

• 2012 (5) TMI 246
  MRP based valuation - declaration of different retail sale prices for different areas - Held that:- contention of the Department will have to be rejected as the appellant declares only one retail sale price on the packages sold in one region or State and therefore that alone will be the retail sale price for purpose of Section 4A in regard to such goods sold in such region. The question of applying retail sale price that is declared in some other area or region will not arise - Decided in favor of assessee.

  ---

• 2012 (5) TMI 245
  SSI exemption - use of brand name / logo of others - emboss a logo of the alphabet ‘K’ on the pumps manufactured by the appellants – Held that:- appellants are using the brandname of M/s. VKPIPL in the form of logo/monogram ‘K’ on their products and hence they are not entitled to the benefit of small scale exemption on such products, appeal dismissed

  ---

• 2012 (5) TMI 226
  Demand - extended period of limitation - confiscation and penalty - respondent filed a declaration for claiming exemption under Notification No.64/95 dated 16/03/95 on the furniture items cleared at Nil rate of duty claiming these furniture to be stores for consumption on board vessel of Indian Navy where as these furniture items were used for manufacture of ships – Held that:- goods are to be used for supply as stores for consumption on board a vessel of Indian Navy, allegation of suppression is not sustainable when the respondent has availed the exemption on the basis of certificate issued by the Indian Navy, extended period of limitation is not invocable, order upheld and the appeals filed by the Revenue are dismissed

  ---

• 2012 (5) TMI 225
  Refund - Period of limitation - annual capacity of production was finally determined by the Commissioner vide order passed in February 2001, which was accepted by the appellant and the duty assessment was also finalized in accordance with the said order. Once the assessments have been finalized, which was not challenged, the question of filing a refund claim thereafter will not sustain as per the apex Court's decision in the Flock India case ( 2000 (8) TMI 88 - SUPREME COURT OF INDIA - Central Excise) , refund claim is clearly time-barred as has been rightly held by the lower adjudicating and appellate authorities, appeal dismissed

  ---

• 2012 (5) TMI 224
  Cenvat Credit - Collection of amount @8% or 10% on exempted goods - Demand under Section 11D of the Central Excise Act, the amounts so recovered are liable to be deposited to the credit of the Central Government – Held that:- assessee has paid 8% / 10% of the value of the exempted goods by reversing the Cenvat credit account, demand for the recovery of interest under Section 11DD of the said Act, has also no legal basis and is accordingly set aside, penalty under Rule 27 of CER, 2002 is also not legally sustainable

  ---

• 2012 (5) TMI 223
  Duty evasion - Appellant has submitted that the Tribunal while holding that the requirements of Section 11AC of the Central Excise Act, 1944 had been met, merely observed that the allegation of the Department that the assessee had contravened various provision of the Rules with an intent to evade the payment of duty was not successfully contested by the assessee – Held that:- Tribunal has not addressed itself to the question as to whether the fundamental requirement of an intent to evade the payment of duty was duly established so as to attract the extended period of limitation, defence of the assessee was that there was no intent to evade the payment of duty, matter remanded to Tribunal

  ---

• 2012 (5) TMI 222
  Refund – refund claim rejected on the ground that appellants were unable to establish that they had not passed over the burden of duty to the customers - Consequent to the finalisation of the provisional assessment, the appellants had filed refund claims which were sought to be denied by the department – Held that:- mere issuing credit notes to the buyers, it does not lead to presumption that the duty element was not passed over to the buyers, credit notes were issued to square up the balance amount which remained unpaid out of the invoice amount already partially paid, assessments were provisional and subsequently finalised. The issue as to whether burden of duty has been passed on to the customers or not is not relevant at the time of finalisation of assessment. The said issue essentially arises at the time of claim of refund. Question of refund can arise only after finalising the assessment, appeals fail and are hereby dismissed

  ---

• Indian Laws

• 2012 (5) TMI 262
  Power of attorney (GPA) to non relatives in respect of immovable property - payment of full stamp duty in case of GPA - Indian Stamp Act, 1899 - Article 45 of Schedule 1-A - Section 3 of the Indian Stamp (Madhya Pradesh Amendment) Act, 1997 - Constitutional validity - whether ultra vires provision. While dealing with constitutional validity of a taxation law enacted by Parliament or State Legislature, the court must have regard to the following principles: (i), there is always presumption in favour of constitutionality of a law made by Parliament or a State Legislature (ii), no enactment can be struck down by just saying that it is arbitrary or unreasonable or irrational but some constitutional infirmity has to be found (iii), the court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as the Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence (iv), hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute or economic law and (v), in the field of taxation, the Legislature enjoys greater latitude for classification. Had the High Court kept in view the above well-known and important principles in law, it would not have declared Clause (d), Article 45 of Schedule 1-A as violative of Article 14 of the Constitution being arbitrary, unreasonable and irrational while holding that the provision may pass test of classification. By creating two categories, namely, an agent who is a blood relation, i.e. father, mother, wife or husband, son or daughter, brother or sister and an agent other than the kith and kin, without consideration, the Legislature has sought to curb inappropriate mode of transfer of immovable properties. Ordinarily, where executant himself is unable, for any reason, to execute the document, he would appoint his kith and kin as his power of attorney to complete the transaction on his behalf. If one does not have any kith or kin who he can appoint as power of attorney, he may execute the conveyance himself. The legislative idea behind Clause (d), Article 45 of Schedule 1-A is to curb tendency of transferring immovable properties through power of attorney and inappropriate documentation. By making a provision like this, the State Government has sought to collect stamp duty on such indirect and inappropriate mode of transfer by providing that power of attorney given to a person other than kith or kin, without consideration, authorizing such person to sell immovable property situated in Madhya Pradesh will attract stamp duty at two per cent on the market value of the property which is subject matter of power of attorney. In effect, by bringing in this law, the Madhya Pradesh State Legislature has sought to levy stamp duty on such ostensible document, the real intention of which is the transfer of immovable property. The classification, thus, cannot be said to be without any rationale. It has a direct nexus to the object of the 1899 Act. The conclusion of the High Court, therefore, that the impugned provision is arbitrary, unreasonable and irrational is unsustainable.

  ---