TMI Tax Updates - e-Newsletter
May 12, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
GST - The activity undertaken by JEL amounts to manufacture of electricity from the coal as supplied by JSL and is squarely covered in the definition of manufacture' under the GST Act. It is, therefore, not covered by the scope of the definition of 'job work' under the GST Act as contended by the applicant - AAR
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GST:
Detention of goods with vehicle - interstate movement of goods - There is no doubt with regard to transaction in question as the Integrated Goods and Service Tax (IGST) has been charged by the petitioner in its invoice and when the IGST is required to be paid then there cannot be any intention to evade the payment tax namely SGST and CGST - the seizure order and the consequential notice issued u/s 129(3) of the Act set aside - HC
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GST:
Anti-Profiteering proceedings - Benefit of reduction in the rate of tax - India Gate Basmati Rice - there has been no net benefit of ITC available to the Respondent which could be passed on to the consumers - Application has no merit, hence the same is dismissed.
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GST:
Supply of goods & services to SEZ or not - intra-state supply - Place of Provision Rules - Whether the Hotel Accommodation & Restaurant services provided by them, within the premises of the Hotel, to the employees & guests of SEZ units, be treated as supply of goods & services to SEZ units in Karnataka or not? - Held No - AAR
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Income Tax:
Validity of scrutiny assessment notice u/s 143(2) - service of valid notice - change of address - Simply because the PAN is attached to ITO, Ward-1(1), Siliguri he cannot assume the jurisdiction over the assessee and issue the notice without having powers vested in him. - AT
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Income Tax:
Sale of agriculture land after converting into plots - once this was an adventure in nature of trade and income is to be taxed as per the provisions of Section 45(2) of the Act. The capital gain shall be worked out on the date of conversion of agricultural land to the ‘stock in trade’ and then only work out the profit and gain of business. - AT
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Income Tax:
Eligible assessee u/s 144C - Since the assessee is a non-resident partnership firm, it cannot be characterized as an Indian company - As the assessee is not an ‘eligible assessee’, the assessment should have been completed u/s 143(3) instead of adopting the path of passing the draft assessment order u/s 144C(1). - AT
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Customs:
Anti-dumping duty on Veneered Engineered Wooden Flooring - notification No.17/2018-Customs (ADD) dated 27.03.2018 amended.
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Customs:
Revocation of CHA license - forfeiture of security deposit - It was imperative for the Customs Broker to keep control and supervision over the conduct of their employees. The appellant cannot escape the vicarious liability for the action of their employees. - AT
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Customs:
Confiscation of goods - penalty - diversion of imported goods - violation of import conditions - Since they had themselves applied late for the extension, their argument that they could not re-export due to late permission appears fallacious. - AT
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DGFT:
Amendments in Standard Input Output Norms, Appendix-4B and Appendix 4J of Hand Book of Procedures 2015-20 - Public Notice
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Service Tax:
BAS - appellant arranges the borrowers, who need money and introduces them with the money lenders, who provide money on loan basis - the ingredients mentioned in the definition of business auxiliary service are absent in the case of the appellant - AT
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VAT:
When sugar is made into powder, it does not change the "substantial identity and character" or "essential nature" and it does not lose their natural form. Mere change into powdered form, does not change the "essential nature" of the commodity. - HC
Notifications
Customs-
25/2018 - dated
10-5-2018
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ADD
Seeks to amend notification No.17/2018-Customs (ADD) dated 27.03.2018.
GST - States-
003/2018-GST - dated
26-3-2018
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Assam SGST
Last date for filing of return in FORM GSTR-3B.
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F.3(67)/Fin.(Rev.-I)/2017-18/DS-VI/211 - dated
3-5-2018
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Delhi SGST
Appoint the following officers for discharging of statutory duties.
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13/2018-State Tax - dated
18-4-2018
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Delhi SGST
Rescinds the notification of the Government of Delhi in the Department of Finance, (Revenue-1) No. 6/2018–State Tax, dated the 23rd February, 2018.
Money Laundering-
G.S.R. 437(E) - dated
8-5-2018
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PMLA
Amendments in the Notification No. G.S.R. 381(E), dated the 27th June, 2006.
SEZ-
S.O. 1859(E) - dated
4-5-2018
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SEZ
Set up a sector specific Special Economic Zone for information technology and information technology enabled service at KPM Nagar, Rathinam Software Park, Village Kurichi, Eachanari, District Coimbatore in the State of Tamil Nadu.
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S.O. 1858(E) - dated
4-5-2018
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SEZ
Set up a sector specific Special Economic Zone for Information Technology and Information Technology enabled services at Sy. No. 1/1, Plot No. 6 IDA Uppal, Ranga Reddy District, in the State of Telangana;
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (5) TMI 763
Applicability of GST on supply of power - GST on Supply of coal or any other inputs on a job work basis by JSL to JEL - GST on Job work charges payable to JEL by JSL. - In terms of the proposed arrangement, JSL would supply coal or any other inputs (herein after collectively referred to as 'inputs') to the Applicant on a free-of-cost basis. On receipt of the same, JEL would undertake certain processes to convert the said inputs into power. In accordance with the Job Work Agreement, the title to the coal or any other inputs along with the power generated from the said inputs will vest with JSL. Held that: - the inputs provided by JSL to JEL are coal or any other inputs and after processing these, the output is electricity which is supplied to JSL. As an immediate observation, the goods sent for job work are coal and after the so claimed process of 'job work' by JEL, the new product 'electricity' comes into existence. It is very apparent that the goods which are received after job work are in no way identifiable with the goods which were sent for job work. Electricity is a totally new commodity which will be delivered to JSL. To ascertain whether conversion of coal into electricity would tantamount to being 'job work', we need to examine the relevant provisions under the GST. As can be seen the definition calls for application of a treatment or process to the goods. Treatment or process in this definition would mean some processes on the goods but would definitely not mean a complete transformation of the input goods into a new commodity. The definition of 'job work' in the GST Act uses the words 'treatment or process'. The impugned activity undertaken by the applicant to convert the coal into electricity would not be covered by the words 'treatment or process' as found in the definition of job work'. Here, the intent of the legislation is not to cover such treatment or process as would result into a distinct commodity. The activity, in fact, is a manufacture of electricity. In the instant case the end product i.e., electricity has a distinct name, character and use than the inputs i.e., coal . Thus, when the Legislature has provided for the definition of 'job work' as well as 'manufacture', the meaning as understood by the definition of 'manufacture' cannot be read into the words 'treatment or process' as found in the definition of 'job work'. 'Treatment', *Process' and 'Manufacture' are three different activities recognized by the Legislature. The intent of the Legislature is to restrict the scope of 'job work' to 'treatment' or 'process' and not to extend the same to 'manufacture'. The activity undertaken by JEL amounts to manufacture of electricity from the coal as supplied by JSL and is squarely covered in the definition of manufacture' under the GST Act. It is, therefore, not covered by the scope of the definition of 'job work' under the GST Act as contended by the applicant. Ruling:- the first question pertains to supply JSL and not JEL, the applicant. In view thereof, the same is not entertained - 2nd question is answered in the affirmative - as regards 3rd question, The transaction between JEL and JSL is a transaction of supply of goods and not a 'job work' and therefore, the question does not survive.
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2018 (5) TMI 762
Entitlement of the assessee to collect Entertainment tax event after implementation of GST to claim benefit of exemption - retention of tax so as to enable it to recover the cost of construction of the Multiplex - Section 174 of the U.P.G.S.T. Act - Held that: - respondent are directed to file counter affidavit within one month - Two weeks thereafter are allowed to the petitioner for filing rejoinder affidavit. List this petition for admission/final disposal in July, 2018.
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2018 (5) TMI 761
Detention of goods with vehicle - interstate movement of goods - the Transit Declaration Form has been presented in pursuance of the insistence by respondent no.3 - goods as well as vehicle seized on the ground that the goods were being transported from outside the state of U.P. without the Transit Declaration Form, which is in violation of provision of UPGST Act - relevant date. Held that: - E-way bill system has been prescribed only recently by a notification of the Government of India dated 7th March, 2018 whereby Rule 138 of the CGST Rules, 2017 has been amended and other Rules have been incorporated in this regard. These amendments are to come into force from a date to be specified by the Central Government which is specified w.e.f. 01.04.2018 - the fact of the matter is that on the date of incident i.e. 24.03.2018 neither there was any E-way Bill System nor any notification by the Central Government under Rule 138 of the CGST Rules, 2017 requiring the carrying of a TDF Form or any other such document in the course of inter-State supply/movement of goods, as such, the very basis for passing the impugned orders and taking action against the petitioner as impugned herein is apparently erroneous and illegal. In view of the above, it cannot be said that there was any intent to evade tax. There is no doubt with regard to transaction in question as the Integrated Goods and Service Tax (IGST) has been charged by the petitioner in its invoice and when the IGST is required to be paid then there cannot be any intention to evade the payment tax namely SGST and CGST - the impugned seizure order dated 28.03.2018 passed by the respondent no.3 and the consequential notice dated 28.03.2018 issued under Section 129(3) of the Act are hereby set aside. Goods alongwith vehicle is to be released - petition allowed.
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2018 (5) TMI 760
Benefit of reduction in the rate of tax - India Gate Basmati Rice - ITC benefit - Anti-Profiteering proceedings - Held that: - it is revealed that the “India Gate Basmati Rice” sold by the Respondent was not liable for tax before the implementation of the GST and after coming into force of the CGST Act, 2017 it was levied GST @ 5% w.e.f. 22.09.2017. The ITC claimed by the Respondent was not sufficient to meet his output tax liability and he had to pay the balance amount of tax in cash as is evident from the perusal of the table prepared by the DGSG. It is also apparent from the returns filed by the respondent for the months of September, 2017, October, 2017 and November, 2017 that the ITC available to him as a percentage of the total value of taxable supplies was between 2.69% to 3% whereas the GST on the outward supply of his product was 5% which was not sufficient to discharge his tax liability. Moreover in this case the rate of tax has been increased from 0% to 5% instead of reduction in the same. Therefore, there appears to be no reason for treating the price fixed by the Respondent as violation of the provisions of the Anti-Profiteering clause. Due to the imposition of the GST on the above product as well as the increase in the purchase price of the paddy there does not appear to be denial of benefit of ITC as has been alleged by the Applicant as there has been no net benefit of ITC available to the Respondent which could be passed on to the consumers. Application dismissed.
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2018 (5) TMI 759
Supply of goods & services to SEZ or not - intra-state supply - Place of Provision Rules - Whether the Hotel Accommodation & Restaurant services provided by them, within the premises of the Hotel, to the employees & guests of SEZ units, be treated as supply of goods & services to SEZ units in Karnataka or not? Held that: - On reading Section 16(1)(b) of IGST Act' 2017 & Rule 46 of CGST Rules 2017 together it is clearly evident that the supplies of goods or services or both towards the authorised operations only shall be treated as Supplies to SEZ Developer /SEZ Unit. Since place of provision of services in case of Hotel has been prescribed under the Act 'location of the Hotel' the rendition of services of restaurant, short term accommodation and Banqueting/conferencing cannot be said to have been 'imported or procured' into SEZ Unit/ Developer. Hence, by no stretch of imagination and therefore, in the instant case, the supply is intra state supply. Ruling:- The Hotel Accommodation & Restaurant services being provided by the Applicant, within the premises of the Hotel, to the employees & guests of SEZ units, can not be treated as supply of goods & services to SEZ units in Karnataka & hence the intra state supply and are taxable accordingly.
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Income Tax
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2018 (5) TMI 758
Depreciation in respect of foundation/civil work at the rates applicable to the windmills - Held that:- Tribunal in assessee’s own case and group companies [2011 (12) TMI 694 - ITAT MUMBAI] adjudicated this issue in favour of assessee by holding that the assessee would be entitled for depreciation on civil works(foundation) for wind mills at the same rate of depreciation as is applicable to wind mills and hence the appeal of the Revenue stood dismissed. - Decided in favour of assessee.
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2018 (5) TMI 757
Penalty proceedings u/s. 271(1)(c) - excess depreciation w.r.t. Building - Held that:- In view totality of the factual matrix of the case and without commenting on the merits of the claim for such excess depreciation in quantum, the assessee has in-fact furnished true and complete particulars of its income before the AO. It is another matter that the claim filed by the assessee towards excess depreciation which was based on the opinion of advocate of Supreme Court was later withdrawn by the assessee during the course of assessment proceedings taking conservative view to avoid litigation and buy peace. It is well established by catena of judgments that mere making of a claim which did not found favour with the Revenue will not automatically lead to levy of penalty u/s. 271(1)(c) for furnishing of inaccurate particulars of income or for concealment of income. - Decided in favour of assessee.
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2018 (5) TMI 756
Penalty u/s 271(1)(c) - booking bogus bills of unworthy supplies to inflate expenses - Held that:- In the instant case, the Revenue has established beyond any reasonable doubt that the assessee was indulged in booking bogus bills of unworthy supplies to inflate expenses. Tell-tale evidence of intermediary i.e. Shri Madanlal L. Shah and power of attorney holder of the assessee and confirmation thereof in cross-examination of intermediaries coupled with lack of proof towards delivery of purchases and clouded and suspicious bank transactions recorded to this effect leaves us in any manner of doubt that the assessee had deliberately and willfully subverted real source and character of the transactions. The assessee also prevented Revenue from knowing real source of supply and whereabouts of the supplier of the alleged goods purchased, if any. In the circumstances, appellate authorities were left with no option but to estimate a plausible overstatement of expenditure on purchases, and thereby understatement of profits. In these gross facts as recorded in the quantum proceedings, it is not a matter for consideration as to whether there was any concealment resorted by the assessee or not. Fact of under-statement of income is discernible. Only matter for consideration is extent of quantification of understatement of income. ITAT as a final fact finding authority has lent objectivity to such estimation. Thus, quarrel about quantum of estimated undisclosed income also does not survive any more. No rational ground for granting latitude to the assessee in the matter of relief pleaded. - Decided against assessee.
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2018 (5) TMI 755
Addition u/s 56(2)(viib) on account of issue of shares - sale without adequate consideration - as per revenue no documentary evidences filed to substantiate the claim of fair market value as on date of issue of the shares - Held that:- As assessee filed reply before A.O. supported by documentary evidences with certificate of the C.A. and the report of the registered valuer. Therefore, the findings of the authorities below are incorrect that no documentary evidences have been filed to substantiate the claim of fair market value as on date of issue of the shares. The Explanation to Section 56(2)(viib) have not been considered by the authorities below. The matter, therefore, requires reconsideration at the level of the A.O. Accordingly set aside the orders of the authorities below and restore the matter in issue to the file of A.O. with a direction to redecide this issue in the light of reply and material filed by the assessee on record in the light of Explanation to Section 56(2)(viib) of the I.T. Act. A.O. shall give reasonable and sufficient opportunity to the assessee and shall pass detailed order on merit - Decided in favour of assessee for statistical purposes.
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2018 (5) TMI 754
Addition on account of interest free advances to group companies - advanced free of interest /investments made by the assessee in its subsidiary companies - interest bearing funds have been used for making interest free advances / investments with group companies - Held that:- The advances/investments in subsidiary companies to the tune of ₹ 7.29 crores is a minor investment (less than 10%) vis-a-vis owned funds to the tune of ₹ 126.86 crores. Under these circumstances and factual matrix of the case as is detailed in extenso above, presumption shall apply that the assessee has invested its own interest free funds towards advancing money to its subsidiary company to the tune of ₹ 79 lacs as well for making investments in subsidiary companies to the tune of ₹ 6.50 crores and no disallowance of interest expenses are warranted. Revenue is not able to rebut the said presumption as no incriminating material is brought on record to evidence that interest bearing funds are used for making such advances/investments in subsidiary companies. There shall be presumption that the assessee invested its own funds for making interest free advances to the tune of ₹ 79 lacs in its subsidiary company and for making investments to the tune of ₹ 6.50 crores in its subsidiary companies to acquire controlling interest. See CIT v. Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) and HDFC Bank [2014 (8) TMI 119 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2018 (5) TMI 753
Undisclosed income under section 68 - unexplained loan - Held that:- As per the settled law, if the identity of the shareholders and genuineness of transactions had been established by the assessee, the addition could have been made in the hands of shareholder(s). We are of the considered view that assessee has duly explained the source of money received and the assessee is not answerable for the source of money in the hands of investors, who had already died. As decided in case of Lovely exports [2008 (1) TMI 575 - SUPREME COURT OF INDIA] if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. - Decided in favour of assessee.
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2018 (5) TMI 752
Income from house property - proportionate disallowance of depreciation of building consisting of existing structure which was let-out - Held that:- We could not correlate the identification of property let out with identification of property called by the assessee as an existing structure out of which this area of 701 square meter was claimed to be carved out and let-out. These are findings of fact which require proper co-relation and merely filing of documents are not sufficient. Thus, we are principally in agreement with the assessee’s proposition that the depreciation in proportion of let out constructed area to the total constructed area of the building called as an existing building is to be disallowed but we are remitting the matter back to the file of the AO for limited purposes of verification and correlation by identification of the property consisting of an area of 701 Sq mtrs of area being let-out by the assessee with the land identification of the building and total constructed area of the said building. This ground is allowed for statistical purposes Disallowance u/s 14A - suo moto disallowance by assessee - Held that:- Referring to Article 265 of the Constitution of India which clearly mandate that the taxes are not to be imposed save by authority of law and no taxes shall be levied or collected except by authority of law. Thus keeping in view mandate of article 265 of the Constitution of India read with factual matrix of the case and the case laws as discussed by us in our conclusions, we hold that disallowance u/s. 14A in the instant case before us cannot exceed a sum of ₹ 2,800/- and hence we restrict disallowance u/s. 14A to ₹ 2,800/- not withstanding that the assessee voluntarily suo-motu disallowed a sum of ₹ 3,94,886/- u/s 14A r.w.r. 8D in its return of income filed with the Revenue. We allow additional ground of appeal raised by the assessee. The assessee succeeds in this additional ground.
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2018 (5) TMI 751
Addition u/s 50C - addition on Short Term Capital Gain - Held that:- We find that the property has been sold for ₹ 10.11 Lacs as against stamp duty value of ₹ 11.14 Lacs and differential of the two do not exceed even 10% of the stamp duty valuation. There is nothing on record to suggest that the assessee has received any amount over and above the agreed consideration. Therefore, keeping valuation being subjective matter, the impugned additions were not justified and therefore, stand deleted. Ground No.1 stand allowed. Adhoc disallowance against certain expenditure claimed by the assessee - Held that:- We find that the assessee has claimed aggregate expenditure of ₹ 15.75 Lacs under these head and the disallowance percentage comes to only 6.35%. The same, in our opinion, is quite reasonable keeping in view the fact that the personal element in the same could not be ruled out. Ground No. 2 stand dismissed. TDS credit - Credit for tax deducted at source for the purposes of section 199 - relevant AY - Held that:- The credit of tax deducted at source was to be given for the AY for which such income was assessable. We find that there are two lines of thoughts on the issue – one which favors grant of full TDS credit in the year of deduction itself and the other which, following strict interpretation, allows TDS credit in AY in which the income has actually been assessed/offered to tax.
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2018 (5) TMI 750
Penalty u/s 271(1)(c) - addition on account of unexplained cash credit u/s. 68 - factory of the assessee near Vadodra was lying closed and was taken over by GIIC u/s 29 of the SFC Act, 1951 since 2004 - Held that:- The assessee on being asked by the Bench after taking instructions from the assessee’s Managing Director who was also present in the Court Room stated that since the documents were seized by GIIC along with taking over of factory premises in the year 2004, hence the same could not be produced before the AO during assessment as well penalty proceedings, such as bank statements of the Directors, Income-tax Return of the Directors and now the assessee is in a position to produce all these relevant documents to prove identity and creditworthiness of Directors in advancing these money for meeting expenses of the assessee company and genuineness of these loan transactions. Thus we set aside to the file of the AO for fresh adjudication on merits wherein all the necessary evidences and documents for satisfying the ingredients of Section 68 will be submitted by the assessee . - Decided in favour of assessee for statistical purposes.
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2018 (5) TMI 749
Issue of notice u/s 143(2) - service of valid notice - jurisdiction of ITO issuing notice - PAN of assessee attached to ITO, Ward-1(1), Siliguri - validity of assessment - period of limitation - Held that:- In instant case, the revenue has not brought on record to show that notification u/s 127 passed by the Commissioner of Income Tax conferring the jurisdiction over the assessee with ITO-Ward1(1), Silguri. It is the responsibility of the Income Tax department to migrate PAN to the correct AO, if there is a mismatch. Simply because the PAN is attached to ITO, Ward-1(1), Siliguri he cannot assume the jurisdiction over the assessee and issue the notice without having powers vested in him. Therefore, the notice issued by the ITO, Ward-1(1), Siliguri is invalid, hence the same should be treated as non-est. The first notice was issued by the ITO, Ward-1(1), Siliguri who is having no jurisdiction, hence it is invalid. The second notice issued by the ITO, Ward-1(1), Guntur was barred by limitation as in this case, the return was furnished on 07.09.2013 and the time limit allowed to serve notice u/s 143(2) gets barred by 30.09.2014. Hence, the notice issued u/s 143(2) by the AO, Guntur on 14.11.2014. The prerequisite for making the assessment u/s 143(2) is service of valid notice. Non service of valid notice makes the assessment illegal and void-ab-initio. Hon’ble Supreme Court in the case of Bluemoon Hotels [2010 (2) TMI 1 - SUPREME COURT OF INDIA] held that the service of valid notice is prerequisite for making the assessment u/s 143(3). Since the notice issued u/s 143(2) in this case by the jurisdictional ITO held to be barred by limitation and the notice issued by ITO, Ward-1(1), Siliguri is without jurisdiction, we hold that the assessment made u/s 143(3) consequent to the notice issued u/s 143(2) by ITO, Ward-1(1) dated 14.11.2014 required to be squashed. - Decided in favour of assessee.
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2018 (5) TMI 748
Rejection of claim of the assessee for set off unabsorbed depreciation relating to A.Y. 1998-99 & 1999-2000 - allowed to be carried forward and set off after a period of eight years OR governed by Section 32 as amended by Finance Act 2001? - Held that:- This issue has been decided in favour of the assessee in the case of General Motors India (P) Ltd. Vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT] any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever - Decided in favour of assessee.
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2018 (5) TMI 747
Disallowance under the head cash rebate - admission of addition evidence - denial of natural justice - Held that:- Additional evidences were not sent by the ld. CIT(A) for examination by the Assessing Officer, therefore, we are of the view that it is a violation of Rule 46A of the I.T. Rules, as without giving an opportunity to the Assessing Officer to examine these additional evidences, the ld. CIT(A) confirmed the addition in respect of cash rebate. Therefore, considering the principle of natural justice and fair play, we think it appropriate that the said issue should be remitted back to the file of the Assessing Officer to examine the additional evidences - Decided in favour of assessee for statistical purposes.
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2018 (5) TMI 746
Entitlement to claim deduction u/s. 80IE - AO taking into consideration the assessment order for A.Y 2010-11 being initial Assessment Year held no substantial expansion has been taken as per section 80IE - Held that:- We find that the A.Y 2010-11 [2018 (2) TMI 1143 - ITAT KOLKATA] is held to be initial assessment year and the Co-ordinate Bench of this Tribunal held that the assessee is entitled to get deduction at 100% u/s. 80IE of the Act - Decided against revenue
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2018 (5) TMI 745
Disallowance u/s 14A r.w.r. 8D - disallowance in relation to its exempt income (s) without establishing the relevant nexus between the corresponding income and expenditure - Held that:- CIT(A) has already granted relief to the assessee in former two assessment years 2010-11 and 2011-12 deleting proportionate interest expenditure disallowance under Rule 8D(2)(ii) of Income Tax Rules. It further transpires that the assessee had suo moto disallowed the relevant direct and administrative expenditure in the two assessment years. Learned counsel fails to dispute the same during the course of hearing. We therefore see that there can hardly be any grievance on assessee’s part so far as these two remaining components of the impugned disallowance are concerned. The assessee had not challenged the said two disallowance (s) during the lower appellate proceedings as well. The assessee’s grievance is not maintainable therefore. Denying section 80IE deduction in respect of its unit/garden situated in north-east - Held that:- As referring to assessee's own case [2018 (4) TMI 1511 - ITAT KOLKATA] we adopt judicial consistency in all these three assessment years to remit the instant issue as well back to the Assessing Officer for the purpose of limited verification on quantum of investment in plant and machinery the concerned. The assessee’s latter grievance is accepted for statistical purposes accordingly.
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2018 (5) TMI 744
Agricultural land or not - nature of land - land sold being situated far beyond 8 K.M. from local limits of any municipality - Held that:- In the instant case, the land which was sold is situated at Mouza - Gurap, J.L. No. 126 with the territorial limits of Gurap Police Station, Gram: Gurap under Additional District Sub Registrar, Dhaniyakhali, about 36K.M. from the nearest municipality situated at Chinsura, Hooghly i.e. far beyond 8 K.M from the local limits of any municipality and the fact was also confirmed by the Ld. Assessing Officer from Gram Pancha at Gurap. The assessee has filed a certificate from Gurap Panchayat dated 07.11.2014 certifying the distance and the agricultural purpose for which the lands were put into use, copy of which along with a translated version are annexed hereto and marked as Annexure: 'I' Thus as per the above definition, the land sold being situated far beyond 8 K.M. from local limits of any municipality situated at Chinsura, Hooghly is an agricultural land and outside the ambit of the definition of capital asset We hold that the land in question is an agricultural land and we uphold the order passed by the CIT(A) on the basis of the observation made herein above. - Decided against revenue.
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2018 (5) TMI 743
Disallowance being interest claimed u/s 36(1)(iii) - AO was of the view that the loan taken from Allahabad Bank was diverted for making investment by way of share application money and as such investment is not related in any way to the business activity of the assessee company - Held that:- The assessee has acquired these shares to gain controlling interest in a competitor company. It is of the considered opinion that the disallowance made is bad in law. Accordingly delete the disallowance made by the Assessing Officer as affirmed by the ld. CIT(A) and direct the Assessing Officer to allow the claim of the assessee u/s 36(1)(iii) of the Act. See Caldern Pharmaceuticals Ltd. vs. CIT [2003 (9) TMI 53 - CALCUTTA High Court]. - Decided in favour of assessee.
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2018 (5) TMI 742
Penalty u/s. 271(1)(c) - Non specification of charge - Held that:- In the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained - Decided in favour of assessee
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2018 (5) TMI 741
Penalty u/s 271(1)(c) - non specification of charge - Held that:- Notice issued by the AO u/s. 271(1)© read with Section 274 of the Act is bad in law as it does not specify which limb of section 271(1)© of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars. Therefore, the penalty in dispute is not sustainable in the eyes of law. SEE CIT & Anr. Vs. M/s SSA’s Emerald Meadows – 2016 (8) TMI 1145 – Supreme Court. - Decided in favour of assessee.
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2018 (5) TMI 740
Framing of assessment against a non-existing entity/person - procedural irregularity and a jurisdictional defect - assessee company already amalgamated with other - validity of assessment - issue of notice u/s 14(2) - Held that:- As assessment has been framed on a non-existing entity and, therefore, the assessment order has to be quashed. We order accordingly and set aside the findings of the CIT(A) by quashing the assessment order. - Decided in favour of assessee.
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2018 (5) TMI 739
Deduction u/s 54B - Agricultural land sold by the assessee as covered U/s 2(14) - Held that:- It is a fact that the assessee was having agricultural land. Two pieces of the agricultural land situated at village Chakna Sarahbad were sold in the immediate preceding year. The assessee himself has considered this sale of the agricultural land as a sale of capital asset as per Income Tax Act and claimed deduction U/s 54B for investing in agricultural land. The assessee had also offered the sale of land in this year as sale of capital asset and claimed deduction U/s 54B. Thus, the issue of the agricultural land held by the assessee at village Chakna Sarahbad, Tehsil- Khairthal, district- Alwra is settled being the ‘capital asset’. Therefore, the issue raised in the ground No.1 of the assessee’s appeal has no merit and the same stands dismissed. Capital gain - Held that:- The assessee has sold ‘residential plot’ on his agricultural land. The same has been treated by the ld. CIT(A) as ‘adventure in nature of trade’ and taxed the receipt in the hands of the assessee under the head ‘profit and gain’ in business and profession. We hold that the assessee has sold small residential plots to various persons. The sale of these residential plots at his agricultural land was definitely an act of business and an adventure in the nature of trade. The ‘annexure’ to the sale deed placed in the paper book clearly establishes that the assessee has sold the residential plots of land after developing roads etc. thus, this establishes sale of the plots on this land and it was an act of adventure in nature of trade. However, we agree with the pleadings of the ld. AR that once this was an adventure in nature of trade and income is to be taxed as per the provisions of Section 45(2) of the Act. The capital gain shall be worked out on the date of conversion of agricultural land to the ‘stock in trade’ and then only work out the profit and gain of business. Therefore, the issue is restored back to the file of the Assessing Officer. The Assessing Officer will invoke the provisions of Section 45(2) of the Act and decide as per law
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2018 (5) TMI 738
Validity of re-opening of assessment - information received through AIR - Transaction with Standard Chartered Bank, Payment for purchase of bonds issued by RBI and Purchase of immovable property - non independent application of mind - Held that:- AO has reopened the assessment to verify the three transactions mentioned above. As rightly pointed out by learned AR, the Assessing Officer has received information about the transactions and he did not refer to any material from which he drew the belief that there was escapement of income. The question as to whether or not there was escapement of income could have been answered by the AO only after making fishing enquiries. Hence there is merit in the contentions of the Ld A.R that the information received by the AO merely gave reason to suspect that there was escapement of income. The reopening of assessment on the basis of suspicion is not valid as held by Hon'ble Gujarat High Court in the case of Bakulbhai Ramanlal Patel Vs. ITO (2011 (3) TMI 1576 - GUJARAT HIGH COURT). Admittedly, Assessing Officer did not make any additions in respect of above said three issues meaning thereby, the Assessing Officer was satisfied during the course of reassessment proceedings that the above said three transactions does not warrant any additions. Since no addition was made in respect of issues from which the Assessing Officer drew belief that there was escapement of income, it is not open for him to make any other addition - Decided in favour of assessee
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2018 (5) TMI 737
Eligible assessee within the meaning of section 144C(15)(b) - whether AO erred in passing invalid draft order and thereafter issuing an order which was barred by limitation? - Held that:- The forwarding of a draft order as stipulated in subsection (1) of section 144C(1) of the Act is required only in the case of an ‘eligible assessee’. Going by the definition of the eligible assessee it is clear that such assessee must either be a foreign company or any person in whose case variation is made in the income or loss returned as a consequence of the order passed by the TPO u/s 92CA(3) of the Act. As referring to present case we find that the Assessing Officer has himself recorded that the assessee is a Non-resident (Foreign partnership firm). Since the assessee is a non-resident partnership firm, it cannot be characterized as an Indian company and, hence, sheds the character of a ‘domestic company’ and, consequently, a ‘foreign company’ as well. Thus, it is clear that the second condition to qualify for ‘eligible assessee’ in terms of section 144C (15)(b) is not fulfilled. Referring to the first condition, being, ‘any person’ though the assessee is ‘any person’, but admittedly, the TPO has not proposed any variation in the income arising from the international transactions. Thus, it becomes manifest that the assessee has not fulfilled any of the conditions to become ‘eligible assessee’ in terms of section 144C(15)(b). Assessing Officer passed draft assessment order u/s 144C(1) on receipt of the order from the TPO. Final assessment order was passed after routing the matter through the DRP. As the assessee is not an ‘eligible assessee’, the assessment should have been completed u/s 143(3) instead of adopting the path of passing the draft assessment order u/s 144C(1). The facts and circumstances for the assessment year under consideration are identical to those considered and decided by the Hon'ble High Court in writ petition for the assessment year 2010-11 [2016 (4) TMI 45 - DELHI HIGH COURT]. Respectfully following the binding precedent, we set aside the final assessment order. The additional ground is, therefore, allowed to this extent.
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Customs
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2018 (5) TMI 732
Confiscation of goods - penalty - diversion of imported goods - violation of import conditions - plea of the appellant is that the re-export could not take place because the permission to re-export the goods was given late on 10.03.2012 and there has been no illegality committed by the appellant - Held that: - the appellant had imported the impugned goods and had signed a re-export bond to reexport the goods within six months but the same was not done. After nine months, they applied for extension of the period of export for more six months, which was granted to them on 10.03.2011. Since they had themselves applied late for the extension, their argument that they could not re-export due to late permission appears fallacious. It is clear that there was a deliberate intent to take wrongful advantage of N/N. 158/95-Customs dt. 14.11.1995. Therefore, the conclusion that follows is that the appellant never intended to re-export the goods and just wanted to divert the goods, which is not the purpose for which the Notification has granted exemption. Therefore, it is evident that the appellant mis-utilized the provisions of the said Notification - confiscation upheld. The imposition of redemption fine in lieu of confiscation and imposition of personal penalty are justified - having regard to the totality of facts and circumstances of the case, the redemption fine and penalty are excessive - the quantum of redemption fine and penalty reduced. Appeal allowed in part.
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2018 (5) TMI 731
Revocation of CHA license - forfeiture of security deposit - it was alleged that the appellant misdeclared goods in terms of description as well as undervaluation - Held that: - During the interrogation of Shri Rajendra, alias Raju, it stands admitted in the statements that he had carried out forgery of the import invoices using his computer and using such forged invoices, misdeclared the import goods in the bills of entry filed in terms of both valuation as well as description. For monetary benefits, Shri Rajendra has acted to secure clearance of the goods without scrutiny by customs by resorting to preparation forged copies of the invoices, thereby declaring lesser value and changing the description of the goods to Paper-Rolls . This clearly establish the contravention of various Regulations under CBLR, 2013. It was imperative for the Customs Broker to keep control and supervision over the conduct of their employees. The appellant cannot escape the vicarious liability for the action of their employees. Impugned order upheld - appeal dismissed - decided against appellant.
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Corporate Laws
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2018 (5) TMI 734
Oppression and mismanagement - Whether the prime property of the company was sold to R6 and R7 for lesser value than the original value for which it was purchased? - Held that:- As per the sale deed dated 14.07.2000, the sale consideration was ₹ 9.85,400/- which is the registered value and subsequently the same property was purchased by the R6 and R7 for ₹ 21,22,500/- which is more than the registered value. The learned Counsel for R1, R2 and R4 rightly contended that the registered value of consideration alone has to be taken into consideration and hold that P1 being the Director of the Company failed to attend her duties in this regard. Answer the issue No 1 in negative. Whether the property situated at Pudukkudi South Village, Thanjavur district has been sold by undervaluing the same comparing with the similarly situated land? - Held that:- Learned Counsel for R1, R2 and R4 has brought to the notice that the survey No’s of the land of the Pudukudi South village and the other compared property are totally different. Therefore, considering the location of the lands, I hold that petitioners have not substantiated that the said land was sold for a lesser value and therefore, answer the issue No. 2 is also in negative. Whether the R2 to R4 are disqualified under section 274(1)(g) of the Companies Act, 1956? - Held that:- It is on record that the Company has filed the balance sheets as at 31.03.2001 and 31.03.2002 and due to the present litigation could not conduct any AGM except the AGM conducted as per the orders of the CLB. If it is taken that the provisions of section 274(l)(g) is applicable, it is equally applicable to the P1 who is still continuing as director of the Company. In view of the legal provisions I am inclined to answer this issue in negative. Whether the R2’s appointment as director is valid and whether she is empowered to sell the property of the Company? - Held that:- R2 is empowered to sell the property particularly when the company itself in the business of real estate and for every genuine sale transaction she need not obtain the permission of the shareholders. In view of my above observations this issue is answered in affirmative. It is the duty of the Tribunal to see the paramount interest of the Company and the disputes between the parties should not affect the functioning of the Company. The case laws referred by the learned Counsel for R1, R2 and R4 squarely apply to the present case in hand whereas the case laws referred by the learned Counsel for the petitioners are not supporting, for the reasons that the facts and circumstances of the present case are otherwise. Since the petitioners have failed to make out any case of oppression and mismanagement in the affairs of the R1 Company, the petition is liable to be dismissed and accordingly the petition is dismissed
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2018 (5) TMI 733
Professional misconduct in relation to Company Secretaries in Practice - quantum of punishment - Held that:- Disciplinary Committee has taken a different view in this case though the nature of professional misconduct relates to certification of Forms. After perusing all, we are of the considered view that punishment awarded to the Appellant in the present matter is certainly on the higher side, enormous and harsh in comparison with the punishment awarded to the errant members of the Institute by the Disciplinary Committee for the violation of same professional misconduct in other cases. The interest of justice will be met out by reducing the punishment awarded to the Appellant. Therefore, in exercise of the powers conferred on this Authority under clause (b) of sub- section (2) of Section 22E of the Company Secretaries Act, 1980, we hereby reduce the punishment awarded and the fine imposed on the Appellant by the Disciplinary Committee of the Institute and passes the following order in this regard. Reprimand and fine of ₹ 50000/- payable within sixty days from the date of issue of this Order and in case of failure of the Appellant to pay the fine of ₹ 50000/- within the stipulated time, his name shall be removed from the Register of Members of the Institute for a period of one month, after sixty days from the date of issue of this order.
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Insolvency & Bankruptcy
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2018 (5) TMI 736
Limitation Act, 1963 applicability for initiation of ‘corporate resolution process’ - whether 'I & B Code' is a 'self-contained Code' or not? - provision of computing the period of limitation prescribed for any suit? - Held that:- In view of the decision in “M/s. Speculum Plast Pvt. Ltd. (2017 (12) TMI 454 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI), we hold that the Adjudicating Authority was wrong in holding that the application was barred by limitation. Limitation Act, 1963 is not applicable for initiation of 'Corporate Insolvency Resolution Process'. If an application under Section 433 is transferred, it is to be seen whether within the time prescribed the applicant provided all information other than relevant information(s) as per the I & B Code and as required to be furnished in requisite form prescribe under Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. - Also for treating the application as an application under Section 9, it is to be seen as to whether the applicant had issued notice under Section 8(1) and received a reply under Section 8(2) of the I &B Code. If notice has been issued and reply has been received, then only it can be seen whether there is an ‘existence of dispute’. All these issues are required to be noticed from the records and, therefore, we are not going to deliberate on such issues at this stage. For the reasons aforesaid, we remit the case to the Adjudicating Authority (National Company law Tribunal), Chennai passed and will reconsider the issue after notice to the parties.
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2018 (5) TMI 735
Corporate insolvency process - Interim Resolution Professional appointment - Held that:- This petition filed by the ‘Operational-Creditor’ under Section 9 of the Insolvency and Bankruptcy Code, 2016(‘the Code’) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (‘the Rules’) for initiating the insolvency resolution process was admitted on 28.02.2018. The matter was fixed for today for passing of the formal order of appointment of Interim Resolution Professional, Ms. Mandeep Gujral, who has furnished communication in Form No.2, which was found to be in order as observed in the order dated 28.02.2018. The proposed Interim Resolution Professional is also present in person.
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FEMA
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2018 (5) TMI 730
Proof of goods purchased by remitting the foreign exchange brought into India - offence under FEMA - Held that:- The two consignments have been auctioned by the Customs/CWC as the appellant failed to clear the goods within the bond period and the authorities have recovered the customs duty and other charges payable on the two consignments. In these circumstances, it cannot be said that the appellant has failed to prove that the goods purchased by remitting the foreign exchange have been brought into India. The photocopy of the Bill of Entry provided by the appellant carries the signature and endorsement of the relevant customs officer, clearly evidencing that the relevant import has taken place. It is well settled in the case of Hindustan Steel Ltd v State of Orissa (1969 (8) TMI 31 - SUPREME Court) that a penalty will not be imposed for a mere technical breach or even because it is lawful to do so unless the party on whom the penalty is imposed, acts in deliberate defiance or the law or is guilty of contumacious or dishonest conduct or acts in conscious disregard of the law, none of which are present in the present case. On the contrary there is no violation of section 10(6) or any other provisions of FEMA or regulations thereunder and the current management of the appellant (which has taken over the affairs of the appellant 12 years after the alleged contravention in 2000), has all along acted in a bona fide manner and is not guilty of any contravention or any dishonest conduct. By Order dated 02.02.2018, the interim application of the appellant was allowed and thereafter the present appeal was heard. For the above such facts and reasons, the order passed by the Adjudicating Authority is not sustainable in law.
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2018 (5) TMI 729
Offence under FERA - Whether appellant had any knowledge or role in distribution of foreign exchange? - Held that:- There is no allegation in the Show Cause Notice or the Adjudicating Order that Appellant either made any payment of any such foreign exchange or was aware about any such payment. In any case, a person who had done the whole transaction has been let off and the same Adjudicating Order against him has been quashed, the order against the Appellant can be sustained even on parity.
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PMLA
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2018 (5) TMI 728
Offence under PMLA - bail application - Held that:- FIR No.205/2016 the Crime Branch did not even think it fit to arrest the petitioners and filed a charge-sheet without arrest. The evidence in the present case is primarily documentary in nature and statements of accused which are admissible in evidence have already been recorded under Section 50 of PMLA. Further corroborative evidence in the form of CCTV footage and call detail records is also documentary in nature. Moreover as per the requirement of Section 44 of PMLA trials in FIR No.205/2016 for the scheduled offence as well as Section 4 PMLA in ECIR No.18/DLZOII/2016 are required to be held together. Hence the trial is likely to take some time. Thus, this Court deems it fit to grant bail to the petitioners. Therefore, directed that the petitioners be released on bail on their furnishing a personal bond in the sum of ₹5 lakhs each with two sureties of the like amount each subject to the satisfaction of the learned Trial Court, further subject to the condition that the petitioners will not leave the country without prior permission of the Trial Court and in case of change of residential address the same will be intimated by way of an affidavit to the Court concerned.
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2018 (5) TMI 727
Offence under PMLA - appeal filed by minor - provisional attachment order - property gifted by grandfather - Held that:- The said property was gifted by the grandfather in favour of the appellant vide Registered Gift Deed dated 15.12.2008, which was originally purchased by the great grandmother of the appellant in the year 1968. The property was acquired by the appellant of one floor i.e. 1st floor, bearing municipal no. 15-1-469 situated at Feel Khana, Hyderabad. At the time of purchasing the property by the appellant, the question of money involved does not arise. This aspect has not been considered by the respondent as well as the adjudicating authority while passing the orders. No reason to believe in this regard has been given. It is settled law that if something wrong is done by the father or in relation, his son cannot be punished, Therefore, the attachment order against the appellant in relation to the 1st floor of the house property bearing municipal no. 15-1-469 situated at Feel Khana, Hyderabad is not sustainable on facts and law. Under these circumstances, the impugned order dated 26.12.2016 with regard to the attachment of the appellant property is set aside by allowing the appeal. The appeal is accordingly allowed.
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Service Tax
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2018 (5) TMI 723
Business Auxiliary Service - appellant has facilitated various banks and Non Banking Financial Institutions, in the activity of sanctioning bank loans to the customers who would like to purchase vehicle of M/s Tata Motors - Held that: - the liability to BAS will need to be carefully re-examined in the light of the Larger Bench decision of the Tribunal in the case of Pagariya Auto Center [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)] and the nature of activities rendered by the appellant will need to be examined by considering the various contracts examined by the appellant with Banks and NBFCs - matter remanded to the original authority for re-examination - appeal allowed by way of remand.
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2018 (5) TMI 722
Business auxiliary service - appellant arranges the borrowers, who need money and introduces them with the money lenders, who provide money on loan basis - Held that: - the issue arising in the present case stand settled by this Tribunal in the case of Amarnath Associates [2017 (7) TMI 95 - CESTAT NEW DELHI], where the Tribunal has held that the ingredients mentioned in the definition of business auxiliary service are absent in the case of the appellant, and thus, the service tax demand cannot be fastened against the appellant - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 721
Classification of services - appellant has provided the construction service as well as supply of goods for execution of such service - whether commercial or industrial construction service or works contract service? - Held that: - as per the judgment of Hon’ble Supreme Court in the case of Commissioner of Central Excise, Kerala vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], composite contract should be considered as works contract and to be taxed only with effect from 01.06.2007 - the CICS involving the composite contract, should be taxed under the works contract service. Non-payment of service tax - services provided to SEZ - Held that: - the issue is no more res-integra, in view of the decision of this Tribunal in the case of Reliance Ports and Terminals Ltd. vs. Commissioner of CE & ST, Rajkot [2013 (10) TMI 339 - CESTAT AHMEDABAD], wherein by interpreting the provisions contained in Section 26 (1) (e) and Section 51 of the SEZ Act, 2005, this Tribunal has held that services provided to SEZ Unit/developer should not be subjected to any Service Tax in respect of the services provided to them. Appeal dismissed - decided against Revenue.
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2018 (5) TMI 720
Export of services - certain services carried out for their foreign principals in India - Held that: - it is seen from the record that the consideration for such services were received from the foreign principal in foreign exchange - the activities are to be considered as export of services and hence no service tax is liable to be charged for such activities - appeal allowed. Demand of about ₹ 31 lakhs which stand confirmed against the appellant - principles of natural justice - Held that: - after the issue of such corrigendum an opportunity stands extended to the appellant to file their further reply. One more personal hearing was also been extended on 11.9.2012 in which the appellant was given full opportunity to rebut the charges - the principles of natural justice stand fully complied with and the technical objections raised by the appellant are rejected. Demand of service tax - commercial training service - real estate agent service - management, maintenance or repair service - Held that: - the appellant does not seriously contest on merit the demand - demand upheld. Demand of service tax - Internet telecommunication service - Held that: - there is nothing on record from which it can be inferred that the service relating to the audio conferencing was availed through internet. The only document available on record is copy of the invoice dated 7.6.2010 of M/s Verizon Conferencing, Hong Kong. From this it cannot be inferred that the service was rendered through internet - the service cannot be categorised under this head - demand set aside. Penalty set aside. Appeal allowed in part.
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2018 (5) TMI 716
Levy of service tax - cost of spare parts used while rendering the warranty as well as extended warranty service - Held that: - the spare parts have in fact been sold on payment of VAT. Consequently, the cost of spare parts cannot be included for purposes of levy of service tax. Such demand of service tax is not justified and hence are set aside. Amounts recovered by way of extended warranty premium - Held that: - The extended warranty premium amounts are liable to payment of service tax under the appropriate category of service - it stands submitted that the service tax demand thereon has been paid by the manufacturers of motor vehicles to whom such premium has been transferred - demand do not sustain. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (5) TMI 719
CENVAT credit - input PVC resin - inputs have not been received in the factory of the appellant - denial on the ground that the transporters whose vehicle numbers have been entered in the invoices found non- existence or having made statement that they have not transported the goods - demand based on the transporter's statement - Held that: - apart from the statement of transporter, no corroborative evidence has been produced by the Revenue. The said statement has not been examined in chief, therefore, in view of the decision of the Hon'ble Punjab and Haryana High Court in the case of Ambika International, [2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT] the statement of the transporter cannot be relied without examination in chief of the same by the appellants - credit cannot be denied. Clandestine removal - principles of natural justice - it is also alleged against the appellants that they have received the goods from M/s. Roongta Textile without cover of invoices and the same has been used in the manufacture of final products which have been cleared without payment of duty - difference of opinion - Held that: - As there are difference of opinion between the Members, therefore, the matter is referred to the the Hon'ble President to appoint third Member to resolve the issue:- Whether the Member (Technical) is correct in holding that the matter is required to remanded back to the adjudicating by following the provisions of Section 9D and thereafter pass appropriate orders - matter referred to Third Member.
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CST, VAT & Sales Tax
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2018 (5) TMI 718
Levy of turnover tax - penalty u/s 12(3)(b) of TNGST Act - Held that: - There is no suppression in the books of accounts. Reliance placed in the case of Appollo Saline Pharmaceuticals (P) Ltd., Vs. Commercial Tax Officer (FAC) and Others [2001 (10) TMI 1100 - MADRAS HIGH COURT], where it was held that on and after April 1, 1996 an explanation has been added below Section 12 (3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12 (3). Petition dismissed - decided against petitioner-Revenue.
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2018 (5) TMI 717
Release of detained goods - sale of sugar - levy of penalty - rate of tax - respondent-dealer filed an appeal before the Appellate Assistant Commissioner (CT), on the ground that the consignment contained only sugar powder and therefore, it is an exempted commodity, falling under Entry 5 of the Third Schedule to the TNGST Act, 1959. Held that: - Sugar is defined in Item No.8 of the First Schedule to the Central Excises and Salt Act, 1944 (Act 1 of 1944), which means any form of sugar containing more than 90 per cent of sucrose. Test report states that the sample sugar contained 96.3% of sucrose. Section states any form, which includes powder form also. When sugar is made into powder, it does not change the "substantial identity and character" or "essential nature" and it does not lose their natural form. Mere change into powdered form, does not change the "essential nature" of the commodity. In Rasoi Products v. Commercial Tax Officer [1980 (8) TMI 191 - CALCUTTA HIGH COURT], the Calcutta High Court held that when pepper, black pepper, white pepper and turmeric are powdered, there is no substantial change in the commodities and that the powders are not again liable to sales tax. Revision dismissed - decided against Revenue.
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Indian Laws
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2018 (5) TMI 726
Restructuring of Tribunal System - Separation of powers and independence of judiciary. Held that: - We broadly approve the concept of having an effective and autonomous oversight body for all the Tribunals with such exceptions as may be inevitable. Such body should be responsible for recruitments and oversight of functioning of members of the Tribunals. Regular cadre for Tribunals may be necessary. Learned amicus suggests setting up of all India Tribunal service on the pattern of U.K. The members can be drawn either from the serving officers in Higher Judicial Service or directly recruited with appropriate qualifications by national competition. Their performance and functioning must be reviewed by an independent body in the same was as superintendence by the High Court under Article 235 of the Constitution. Direct appeals must be checked. Members of the Tribunals should not only be eligible for appointment to the High Courts but a mechanism should be considered whereby due consideration is given to them on the same pattern on which it is given to the members of Higher Judicial Service. The issues may require urgent setting up of a committee, preferably of three members, one of whom must be retired judge of this Court who may be served in a Tribunal. Such Committee can have inter action with all stakeholders and suggest a mechanism consistent with the constitutional scheme as interpreted by this Court in several decisions referred to above and also in the light of recommendations of expert bodies. To consider the matter for further, list on Thursday i.e. 10th May, 2018 as prayed by learned Attorney General.
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2018 (5) TMI 725
Payment within statutory time - dishonor of cheque - Examination of respondent - Section 313 Cr.P.C. - admissibility of evidence - the documents filed by the respondent for return of jewellery were photocopies. Held that: - In the present case, all original documents were produced by the accused and shown to the appellant and returned before exhibiting the photocopies. Thus the documents Ex.CW1/D1 to Ex.CW1/D5 were proved in accordance with law. Even otherwise an objection as to mode of proof can be taken at the stage of trial only as held by the Supreme Court in the decision in R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple [2003 (10) TMI 639 - SUPREME COURT]. One of the contentions of the Learned Counsel for the appellant was since the statement of the respondent was not recorded under Section 313 Cr.P.C., trial was conducted in an arbitrary manner. This contention deserves to be rejected in view of the decision of Supreme Court in Basavaraj R. Patil v. State of Karnataka [2000 (10) TMI 953 - SUPREME COURT] wherein it was observed that Section 313 Cr.P.C. is only for the benefit of the accused and prejudice, if any, can only be caused to the accused for his non-examination under Section 313 Cr.P.C. and not the complainant. The provision is mainly intended to benefit the accused and as its corollary to benefit the court in reaching the final conclusion - It is now well settled that a circumstance about which the accused was not asked to explain cannot be used against him. Appeal dismissed.
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2018 (5) TMI 724
Maintainability of revision petition - Prayer for sending the cheque for examination to a handwriting expert - Section 138 of the Negotiable Instrument Act, 1881. Held that: - the Criminal Revision No. 37/15 was not maintainable has essentially to be set aside and is thus set aside with observations to the effect that the said CRL. REV. 37/15 which dealt with the impugned order dated 05.03.2015 of the learned Trial Court in CC NO. 6478/14, dealt with matters of moment in relation to the prayer made by the petitioner seeking that the document Ex. CW1/A be sent to the hand writing expert for examination as to who had written the same, inasmuch as the impugned order dated 05.03.2015 by the learned Trial Court itself observed to the effect that the core issue was in relation to the agreement pertaining to sale of the property on one hand and the issuance of the cheque in question as security in relation to sale consideration to the complainant, qua which Ex. CW1/A was allegedly issued by the petitioner herein. The CRL.M.C.193/16 is thus allowed to the extent that the impugned order dated 03.10.2015 of the learned ASJ Dwarka Courts, New Delhi holding that the CRL.REV.NO.37/15 was not maintainable, is thus set aside - petition disposed off.
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