TMI Tax Updates - e-Newsletter
May 13, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Demand of advertisement tax imposed by the Nagar Nigam, Kanpur on displaying advertisement through hording within its jurisdiction - after 12.9.2016 or from 1.7.2017 the Nagar Nigam, Kanpur ceased to have any jurisdiction to impose and realize tax on advertisement.
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Income Tax:
Revision u/s 263 - AO actually carried out an enquiry after the reopening of the proceedings and that once there was an application of mind, on the part of the AO, it was not open to the Commissioner to invoke the jurisdiction u/s 263 - CIT by invoking Section 263 only attempted to re-appreciate the facts which is not permissible
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Income Tax:
Power of CIT(A) to entertain appeal - violation of provisions of section 249(4)- if an assessee filed return of income, admitted taxes under self-assessment, then unless these taxes are paid, his appeal will be hit by section 249(4)(a) and it cannot be entertained by the CIT(A)
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Income Tax:
Writ against order of AO - the allegation of non-compliance with the directions issued by the ITAT, is not patently made out so as to enable the petitioner to bypass the alternative remedy of appeal - no violation of principles of natural justice - If the refusal of the AO is wrong, it is a matter to be canvassed in the regular appeal
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Income Tax:
Reopening of assessment u/s 147 - service of notice - no notice u/s 148 have been issued at the correct address of the assessee - Revenue has failed to prove that notice u/s 148 have been served open the assessee which is mandatory in nature - reassessment quashed
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Income Tax:
Demand u/s 206C(1)/206C(7) - TCS - 206C(1A) mandates person responsible for TCS to not collect taxes if he obtains a declaration from the buyer that he is purchasing the goods for re-use in manufacturing process or producing article or things - not necessary to collect taxes at sources when sales were made - since assessee has submitted declaration before the AO in requisite forms - demand canceled
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Income Tax:
Validity of assessment - notice u/s 143(2) have not been issued to the assessee at the correct address within the period of limitation - not served upon the assessee within the period of limitation - entire assessment order is vitiated and is liable to be set aside and quashed
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Income Tax:
Assessment u/s 153A - benefit of carry forward of losses - assessee has claimed the business loss and carried forward the loss in the return of income filed u/s 139(1) and 153A - due to inadvertent technical error the claim was not properly appearing in the acknowledgment of return generated - assessee should not be penalized for genuine error - loss allowable
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Income Tax:
Unexplained investments u/s 69 - details & proof filed before CIT(A) - the alleged purchase of flat have been recorded in the regular books of accounts along with housing loan taken for financing the purchase of the flat - addition deleted
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Income Tax:
Revision u/s 263 - the eligibility of deduction u/s 54B in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act - claim of deduction accepted by the AO is erroneous - Such error on the part of the AO has caused definite prejudice to the interest of the Revenue - revision justified
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Income Tax:
Penalty u/s 271(1)(c) - loan from friends and relatives for financing his son’s USA visa - when the evidences and explanation furnished in support of cash credits are not acceptable by the department, then addition u/s 68 can be made, but penalty u/s 271(1)(c) is not automatic - explanation of the assessee was not found to be false but it could not be accepted in absence of solid evidences - not a fit case for penalty
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Income Tax:
Revision u/s 263 - order passed u/s 143(3) r.w.s. 147 wherein the assessment were re-opened on specific reasons recorded for re-opening and addition made - CIT is precluded from exercise of jurisdiction u/s 263 on a ground which is not covered by the reasons during the reopening of the assessment since the time for completing the assessment u/s 143(3) had expired
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Customs:
Levy of Penalty - Amendment in IGM - On going through the section 30(1) read with Clause (iii), it is found that the penalty can be imposed only if there is delay in delivery in submission of IGM to the proper officer, however in the present case, there is no delay of submission in IGM.
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Customs:
Imposition of penalty in terms of regulation 12(8) of HCCAR 2009 - custodian allowed the removal of goods without payment of IGST - The appellant though violated the Regulation but it was not intentional, particularly when the levy of IGST came into effect on the same day i.e. 01.07.2017 - quantum of penalty reduced
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Customs:
Refund of SAD - period of limitation to be computed from date of payment of custom duty or date of sale of goods - N/N. 102/2007-Cus - considering the overall notification harmoniously, one year should be reckoned from the date of sale of the goods.
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Customs:
Duty Drawback - re-export of goods - duty was not paid at time of import - the net effect of duty payable by him would be 2% i.e. difference between the duty payable and drawback amount u/s 74 - appellants are allowed to re-export the impugned imported goods on payment of 2% differential duty
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SEZ:
Uniform list of Services to be followed in Special Economic Zones - Such services would be limited to the extent of such value of services availed of/consumed by the SEZ entity only.
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Corporate Law:
Oppression and mismanagement - Theft of documents - use of (such) documents in judicial proceedings is to substantiate their case namely, “oppression and mismanagement” of the administration of appellant-Company and their plea in other pending proceedings and such use of the documents in the litigations pending between the parties would not amount to theft. No “dishonest intention” or “wrongful gain” could be attributed to the respondents and there is no “wrongful loss” to the appellant so as to attract the ingredients of Sections 378 and 380 IPC. - SC
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Corporate Law:
Offence of theft of documents - “document” as defined in Section 29 IPC is a “moveable property” - replication of the documents or use of information and the contents thereon are corporeal property and the contents thereon have physical presence and the same can be the subject matter of theft.
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Indian Laws:
Smuggling - poppy straw - psychotropic substance or not - The conclusion of the Trial Court regarding the guilt of the Appellant under Section 8 read with Section 15 of the NDPS Act does not call for any interference.
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Service Tax:
Refund - principles of unjust enrichment - the unjust enrichment is not applicable even when the refund amount is claimed as expenses in the Profit and Loss Account.
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Central Excise:
Extended period of limitation - there are no basis for the argument of the learned counsel for the appellant that the demand must be raised within one year from the date on which the department comes to know of the alleged clandestine removal.
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Central Excise:
CENVAT Credit - input services - service of renting of motor vehicle - service of General Insurance service - credit allowed.
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Central Excise:
Levy of penalty - failure to produce proof of export within 45 days of export as prescribed under the said Notification - it is a procedural lapse only - appellant has paid the duty along with interest to the extent of not submitting the proof of export - No penalty.
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Central Excise:
Clandestine removal - the Revenue’s entire case is solely based upon the scribbling made in the recovered loose papers, without there being any evidence of actual manufacture and removal of the final products, there are no reasons to uphold the findings of the clandestine removal.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (5) TMI 729
Extension of time period for filing of GST Tran-2 - input tax credit - transition to GST Regime - HELD THAT:- The respondents are directed to reopen the portal within one month from today. In the event they do not do so, they will entertain the GST TRAN-2 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. List this matter on 3.7.2019.
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2019 (5) TMI 728
Demand of advertisement tax imposed by the Nagar Nigam, Kanpur on displaying advertisement through hording within its jurisdiction - transition to GST regime - HELD THAT:- The power to levy advertisement tax was contained in Section 172 (2) (h) of the Municipal Corporation Act, 1916 which stood deleted w.e.f. 1.7.2017 by virtue of Section 173 of U.P. GST Act - In addition to the above, even the power of the State Government to legislate regarding advertisement tax as provided under Entry 55 of List II of the VII Schedule of the Constitution of India also stood deleted w.e.f. 12.9.2016 by the Constitution (101 Amendment) Act, 2016. Article 265 of the Constitution of India mandates that no tax shall be levied or collected except by the authority of law. Therefore, the authority to levy any tax much less the advertisement tax must be derived from the Statutes. Since the provision of Section 2 (h) of Section 172 of the Municipal Corporation Act was omitted vide Section 173 of the U.P. GST Act w.e.f. 1.7.2017 and even the power of the State legislature to legislate with regard to advertisement tax stood deleted w.e.f. 12.9.2016, there is neither any power left with the State Government or the Municipal Corporation to legislate about the imposition of tax on advertisement - after 12.9.2016 or from 1.7.2017 the Nagar Nigam, Kanpur ceased to have any jurisdiction to impose and realize tax on advertisement. Accordingly, the demand of tax on advertisement from the petitioners after 1.7.2017 is held to be illegal and without jurisdiction. The Nagar Nigam, Kanpur shall not realize any tax on advertisement after 1.7.2017 - petition allowed.
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Income Tax
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2019 (5) TMI 749
Assessment u/s 153A - benefit of carry forward of losses against additional income offered in its return filed pursuant to search u/s 153A - loss also claimed in returns filed u/s 139(1) - HELD THAT:- We also observe that the claim of the assessee for earlier years loss, which is inclusive of the loss of the preceding AY has been duly allowed by the AO and the same has not been disputed by Ld. CIT(A). This further strengthens our conclusion that the current years losses were not shown in the acknowledgement generated for returns filed u/s 153A were due to some inadvertent technical error, and in no manner ought to have been considered as additional income declared by the assessee pursuant to the search operations carried out in the group. Assessee had attended the proceedings under the bonafide belief that the losses as claimed (which was same in both returns filed u/s 139(1) and 153(A) were duly being assessed by the AO, and this intention of the AO to treat the current year loss of the assessee as its additional income was never intimated during the assessment proceeding. Rather it was noticed only when the assessment order was received, thus no opportunity was ever granted to explain the issue during the course of assessment proceedings before AO. In the instant case, assessee has claimed the business loss and carried forward the loss in the original return of income filed u/s 139(1) and again in the return filed in response to notice issued u/s 153A, however due to some error the claim was not properly appearing in the acknowledgment of return generated and for such genuine error the assessee should not be penalized. No merits in the orders so passed by the lower authorities regarding declaration of additional income by the assessee, accordingly, we direct the A.O. to allow the benefit of carry forward of losses as claimed in all the assessment years involved.- Decided in favour of assessee.
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2019 (5) TMI 748
Addition of cash balance - search u/s 132 - claim of assessee in respect of the opening balance of ₹ 53,000/- - saving some amount as assessee is a government employee and has been drawing his salary - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. After considering totality of the facts, there is likelihood of saving some amount, therefore, looking to the smallness of the amount, we direct the A.O. to delete this addition. Addition towards unexplained household expense - assessee has been residing with his brother and the expenses were made jointly - HELD THAT:- The contention of the assessee is that he has been residing with his brother and the expenditure was incurred for household expenses jointly. This fact is not verified by the authorities below. Further, the addition has been made on adhoc estimate basis. Considering all we restrict the addition to the extent of 50%. Ground of the assessee is partly allowed.
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2019 (5) TMI 747
Service of notice u/s 143(2) - validity of assessment - no notice served upon the assessee company within the prescribed time at the correct address - address in PAN data VS address in returns - HELD THAT:- Assessee has been consistently disclosing the address to the Revenue Department for the purpose of service and communication at 3, Tansen Marg, Bengali Market, New Delhi and this fact is also admitted by the A.O. Therefore, merely notice u/s 143(2) for this year have been issued as per PAN data would not be relevant. A.O, therefore, deliberately did not issue notice u/s 143(2) at the address available to the Revenue Department on their record at 3, Tansen Marg, Bengali Market, New Delhi. Therefore, there is no question of service of the notice at Gurudwara Road, New Delhi. We are of the view that notice u/s 143(2) have not been issued to the assessee at the correct address within the period of limitation. No notice u/s 143(2) have been served upon the assessee within the period of limitation. Therefore, entire assessment order is vitiated and is liable to be set aside and quashed - Decided in favour of assessee.
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2019 (5) TMI 746
Addition u/s 68 - creditworthiness of the investors and genuineness of the transaction - HELD THAT:- It is difficult to believe that the assessee company being a loss making company, any investor would make investment in them, particularly, when Shri Surendra Singh Yadav has no source to make any investment in assessee company and that M/s. Wianxx Impex P. Ltd., (Investor Company) itself was running into losses, therefore, there is no question of proving creditworthiness of both the investors and genuineness of the transaction in the matter. We, therefore, do not find any merit in these grounds of appeal of assessee and the same are accordingly dismissed. Addition on account of repair of plant and machinery - assets leased-out to its sister concern - HELD THAT:- A.O. has specifically noted in the assessment order that during the assessment year under appeal, assessee did not make any sales and purchases and no business activities or commercial activities were carried out. The assessee did not establish as to how repairs to plant and machinery and expenses claimed were genuine. Even the loss income declared by the assessee was not accepted by the A.O. and it was treated as NIL income. CIT(A) specifically noted that when plant and machinery were leased-out to the sister concern and assessee did not carry out any manufacturing activity, how the amount was spent on repair of machines. In the absence of any evidence on record to rebut the finding of fact recorded by the authorities below, no interference is required in the matter. Ground of the appeal are dismissed.
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2019 (5) TMI 745
Penalty u/s 271(1)(c) - capital gain addition - Transfer of land through JDA - reopening of assessment - HELD THAT:- Reopening was done on the basis of information on particular issue of transfer of land through JDA, it was incumbent upon the assessee to come with clean hands and disclose the entire transaction in the return of income and voluntarily offer the capital gain tax on the amount actually received by the assessee as consideration for the sale of part of the land through registered deed. As rightly observed by the CIT(A) that in this case bonafide credentials of the assessee have not been established. Even after reopening of the assessment, assessee did not choose to declare the income actually received by the assessee on the amount of ₹ 15,00,000/- received as sale consideration. Hence, the penalty in respect of concealment of income on the capital gains earned by the assessee on the amount of ₹ 15,00,000/- received as sale consideration is liable to be confirmed. However, the penalty in respect of the remaining amount levied by the Assessing Officer by way of computing the capital gain on accrual basis is liable to be deleted - Appeal of the assessee is partly allowed.
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2019 (5) TMI 727
Waiver of a principal amount of loan - Taxability of income as a perquisite - waiver of loan by creditor - deemed income u/s 41(1) - whether this constitutes a trading liability whether waiver of loan by the creditor is taxable as a perquisite under Section 28 (iv) or taxable as a remission of liability under Section 41(1)? - HELD THAT:- In the light of the order passed by this Court in titled as Commissioner vs. Mahindra and Mahindra Limited (Th. Managing Director) [ 2018 (5) TMI 358 - SUPREME COURT] this special leave petition is hereby dismissed.
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2019 (5) TMI 744
Penalty u/s 271(1)(c) - non specification whether the assessee is accused of concealment of particulars of any taxable income or it had furnished inaccurate particulars of such income ? - HELD THAT:- The show cause notice u/s. 274 of the Act is defective as it does not spell out the grounds on which the penalty is sought to be imposed. Following the decision of M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] we hold that the orders imposing penalty in all the assessment years have to be held as invalid and consequently penalty imposed is cancelled. - Decided in favour of assessee.
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2019 (5) TMI 743
Penalty levied u/s. 271(1)(c) - non specification of specific charge against the assessee namely as to whether the assessee was being proceeded against for having concealed particulars of income or having furnished inaccurate particulars of income - HELD THAT:- Notice issued by the Assessing Officer under Section 274 read with Section 271(l)(c) to be bad in law as it did not specify which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee.
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2019 (5) TMI 742
Estimation of net profit - Rejection of books of accounts - HELD THAT:- Facts of every year are separate and one just cannot apply results of preceding year on the current year but looking to the fact that type of business is the same and there is no future thrust to the assessee s business as the sales have increased drastically and no evidence have been placed on record to prove as to why there is a sharp decrease in the net profit even when other assessee s running similar type of business are showning better net profit rate. CIT(A) has referred and relied on judgment in the case of Trilok Chand Girdharilal Party vs. ITO [ 2014 (3) TMI 807 - RAJASTHAN HIGH COURT] confirming the action of the assessing officer of rejecting the trading results and invoking the provisions of Section 145(3) as no proper sale vouchers were maintained and fairly estimated the net profit. Hon'ble Court confirmed the view taken by the Ld. AO adopting average gross profit rate which was upheld by CIT(A) and ITAT. We therefore find merit in the finding of CIT(A) calculating net profit rate 2.16% being average of net profit rate declared by assessee for 5 years at 2.77%, 1.33%, 1.54%, 1.77% and 3.5% thereby deleting the addition of ₹ 60,57,651/- Rejection of claim u/s 54B - no evidence placed in support to seek claim - HELD THAT:- The assessee sold land and received sale consideration of ₹ 14,32,000/- thereon. Cost of acquisition of the land and transfer expenses were shown at ₹ 8,14,555/-. The short term capital gain is arising at ₹ 6,17,445/-. The assessee made a claim of exemption u/s 54B of the Act at ₹ 6,17,445/- but no evidence placed in support thereof before both the lower authorities. Even during the course of hearing before the Tribunal assessee has not made any submissions with regard to claim of deduction u/s 54B of the Act at ₹ 6,17,445/-. There seems no reason to interfere in the finding of Ld. CIT(A) confirming the addition. - Decided against assessee. Unexplained unsecured loan u/s 68 - HELD THAT:- During the course of hearing before the Tribunal no other evidences have been put forth by the assessee in order to prove identity, creditworthiness and genuineness of the alleged unsecured loan. We, therefore, find no reason to interfere in the finding of the CIT(A) confirming the addition Unexplained investments u/s 69 - before the CIT(A) assessee filed the details along with proof of taking house loan for the purchase of flat. DR failed to rebut the finding of the Ld. CIT(A) - HELD THAT:- The alleged purchase of flat cannot be categorized under the unexplained investments u/s 69 as the same have been recorded in the regular books of accounts along with housing loan taken for financing the purchase of the flat. No interference is therefore, called for in the finding of the CIT(A) deleting the addition. Penalty u/s 271(1)(c) - estimated profits made by the AO by applying net profit rate of 3.5% on the sales disclosed by the assessee - HELD THAT:- From going through the assessment order it is discernable that AO rejected the books u/s 145(3) for not maintaining quantitative records and sales vouchers. No doubt has been raised for the purchase made by the assessee from the Excise Department. It is well established fact that the assessee engaged in the Liquor contractor business have to prepare regular quantitative details to be furnished to the Excise Authority. The regular stock is taken. No anomaly has been found in the audited books of account. Addition has been made only by estimating profits. No adverse finding has been given for any instances which could prove that assessee has concealed income or furnish inaccurate particulars of income. Levying penalty on the estimated profits was not justified and is uncalled for. Therefore, Ld. CIT(A) has rightly deleted the penalty levied u/s 271(1)(c) on the addition for estimated profits and no interference is therefore called for. Incorrect claim u/s 54B - In the income tax return filed by the assessee inaccurate particulars of income were furnished in order to claim deduction/exemption 54B of the Act. Till the hearing before the Tribunal Ld. counsel for the assessee has been unable to prove with adequate material that claim made was a bonafide claim. The assessee furnished inaccurate particulars of income, making an incorrect claim u/s 54B. AO was justified in levying penalty u/s 271(1)(c) and this action was rightly confirmed by the Ld. CIT(A). Ground no.1 of assessee s appeal stands dismissed.
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2019 (5) TMI 741
Assessment u/s 153A - proof of incriminating material found during the search operation - HELD THAT:- The issue has already been decided in the matter of Asst. Commissioner of Income Tax-vs-The Jayesh Steel Pvt. Ltd. [ 2018 (11) TMI 1614 - ITAT AHMEDABAD] in favour of the assessee wherein it was decided that since the additions in question are not based on any incriminating material found during the search operation, as is the undisputed factual position in this case, the very foundation of the additions ceases to be sustainable in law - Decided against revenue
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2019 (5) TMI 740
Power of CIT(A) to entertain appeal - violation of provisions of section 249(4) - assessee had not paid admitted tax on the returned income - difference of opinion between Members on the Bench - CIT(A) entertaining the assessee s appeal without fulfilling conditions of section 249(4)(a) - HELD THAT:- While construing section 129E of the Customs Act, which is analogous to section 249(4) of the Income Tax Act , Hon ble Supreme Court in VIJAY PRAKASH D. MEHTA VERSUS COLLECTOR OF CUSTOMS (PREVENTIVE) , BOMBAY [ 1988 (8) TMI 109 - SUPREME COURT] has observed that purpose of conditions incorporated in section 129E is to make people to comply with the provisions. Similar object is being achieved with the help of section 249(4)(a). With regard to other cases, and to take care of hardship of tax payers, remedy is being provided in sub-clause (b) of section 249(4). It is pertinent to observe that at the time of hearing, the ld.counsel for the assessee also not disputed this construction of section 249(4)(a). He raised alternative submissions, which we are going to deal with in the later part of this order. Thus, we are of the firm view that if an assessee filed return of income, admitted taxes under self-assessment, then unless these taxes are paid, his appeal will be hit by section 249(4)(a) and it cannot be entertained by the CIT(A). First proposition raised by the ld.counsel for the assessee was that the assessee has not paid tax on the returned income, therefore, return deserves to be treated as defective within meaning of section 139(9) Explanation (c) and if return is defective, then no cognizance of such return for passing assessment order can be taken. If it is construed that no return was filed (being non-est on account of defective return), then case of the assessee will fall within the section 249(4)(b) and CIT(A) could exempt the assessee from payment of alleged advance taxes required to be paid. We do not find any merit in this proposition of the ld.counsel for the assessee. Next proposition raised by the ld.counsel for the assessee before us was that real income ought to have been taxed, and for that purpose, he made reference to the decision of Hon ble Supreme Court in the case of Godhra Electricity Co. Ltd. [ 1997 (4) TMI 4 - SUPREME COURT] and Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] . On due consideration of the above proposition, we are of the view that all these arguments on merit can possibly be raised if there is a valid appeal before the ld.CIT(A). Upto and until, the assessee pays tax on self-assessment/returned income, no other plea could be entertained. By entertaining such plea, we will be committing same mistake as has been committed by the ld.CIT(A). The ld.counsel for the assessee on the strength of Hon ble Karnataka High Court s decision in the case of D. Komlakshi [ 2006 (11) TMI 155 - KARNATAKA HIGH COURT] contended that the assessee be given an opportunity to pay tax on the returned income now, and direct the ld.CIT(A) to decide the appeal on merit. As far as the above contention is concerned, no such plea was raised before the Division Bench who heard the appeal on 21.3.2013. Issue before us is to resolve difference of opinion amongst the members, whether having regard to the provisions of section 249(4)(a) of the Act the ld.CIT(A) has erred in law and on facts in entertaining assessee s appeal. By entertaining the additional plea, we will be enhancing the scope of reference which is not within the power of this Bench. Hence, this plea cannot be examined in the present proceedings. Therefore, in view of the above discussion, we agree with the ld.Judicial Member and hold that the ld.CIT(A) has erred in entertaining the assessee s appeal without fulfilling conditions of section 249(4)(a).
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2019 (5) TMI 739
Penalty u/s 271(1)(c) - Addition towards borrowal from friends and relatives for financing his son s USA visa - penalty imposed by rejecting confirmations filed by the depositors on the ground that depositors were not capable of advancing such sum - HELD THAT:- The assessee was a salaried employee working with postal department. According to him, these loans were taken for the purpose of obtaining VISA for his son. He has withdrawn the money from his bank account and repaid to the creditors in cash. His explanation was not accepted in the quantum proceedings, probably he failed to substantiate his explanation, but against the order of the ITAT, appeal of the assessee stands admitted before the Hon ble High Court. It is settled position of law that when the evidences and explanation furnished by the assessee in support of cash credits are not acceptable by the department, then addition u/s 68 can be made, but penalty u/s 271(1)(c) is not automatic. Thus, from the material available on record, we are of the view that the explanation of the assessee was not found to be false, but it could not be accepted on account of substantiation of his claim with help of some solid evidences. Therefore, it is not a fit case for visiting the assessee with penalty. We allow the appeal of the assessee
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2019 (5) TMI 738
Penalty levied u/s 271AAA - cash surrendered during search conducted on the assessee u/s 132 - HELD THAT:- As SHRI. ASHOK JINDAL, SHRI. AMIT JINDAL VERSUS THE D.C.I.T., CENTRAL CIRCLE-1, CHANDIGARH. [ 2018 (10) TMI 1673 - ITAT CHANDIGARH] admittedly, no portion of the surrender had been assessed separately under any other head. Therefore in the case of Sanjeev Goyal [ 2015 (11) TMI 1618 - ITAT CHANDIGARH] applied to the entire surrender made, and the CIT(A), we hold had wrongly segregated the surrender made on account of cash by stating that the same was assessable u/s 69A when the fact was that it had not been so assessed. In fact on going through the order of the ITAT in the case of Sanjeev Goyal (supra) we find that it has been held in the said case that the disclosure of income u/s 132(4) during search having been made and the assessee having surrendered the same and included the same in the returns filed which have been accepted by the Revenue, no penalty u/s 271AAA is leviable for not specifying the manner of earning the income surrendered. All the aforesaid conditions admittedly stood fulfilled in the case of surrender made on account of documents found and capital introduced in the firm, as per the CIT(A). The cash was also part of the same surrender and no distinction has been brought out of the same with the rest of the surrender made. We therefore hold that there was no basis for upholding the levy of penalty on the cash surrendered and the same is therefore directed to be deleted. The appeal filed by the assessee is, therefore, allowed. - Decided in favour of assessee.
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2019 (5) TMI 737
Determination of the ALP - ITeS services - selection of comparable - HELD THAT:- Looking to the functions performed by the Accentia technology and the various kinds of advanced assets in the form of software etcetera utilized, it is apparent that functionally the above company is not comparable with the assessee company. Hence we direct the learned transfer pricing officer /learned AO to exclude the above company from the comparability analysis. Infosys BPO Ltd - board of directors in that meeting held on 06/10/2008 approved subject to the approval of the Karnataka and mothers High Court of scheme of amalgamation to amalgamate PAN financial services India private limited which is engaged in providing business process management services with the Infosys BPO Ltd with effect from 01/04/2008. Therefore even if there is an amalgamation or merger, it has happened in financial year 2008 09, and impugned financial year before us is financial year 2009 10 , hence it does not pertain to this year and therefore for this reason Infosys BPO cannot be excluded. The reasons given by us above, we direct the learned TPO/AO to exclude the Infosys BPO Ltd from the comparability analysis for the reasons of having huge brand value. TCS E serve international Ltd - annual Report of the above comparable company. Apparently TCS E serve international is a subsidiary of Tata consultancy services Ltd. Behind the above comparable company, there is a Tata brand , which is almost 10 times bigger than Infosys brand ( on market cap basis) . On the perusal of schedule M of the profit and loss account there is a payment of 3738 000s towards the Tata brand equity contribution. For this reason that it belongs to Tata group and has also contributed to Tata brand which is one of the largest brand in the information technology segment, there is a definite impact on the pricing capacity of the comparable which the assessee lacks. Hence, we find that TCS E serve international Ltd deserves to be excluded. Accordingly we direct the learned TPO AO to exclude the above comparable. TCS E serve limited - it is functionally dissimilar engaged in the transaction processing and technical services like software testing, verification and validation of the software. It was further stated that like TCS E serve international Ltd it also belongs to the Tata group and owns significant intangible as well as makes payment for Tata brand equity. It is further stated that the scale of operation of this company itself makes it not comparable with the assessee.Transfer pricing officer rejected the arguments of the assessee similar to TCS E serve international Ltd. The learned dispute resolution panel also rejected the objection of the assessee. On identical facts and circumstances we have excluded TCS E serve international Ltd that it belongs to a Tata group and has paid contribution for Tata brand. We have also perused the annual report of the comparable company which is placed on careful analysis of the annual report it is found that in schedule N , Tata brand equity contribution of this comparable companies is ₹ 46065 (in thousands) - we direct the learned transfer pricing officer to exclude the above comparable from the comparability analysis. E4e healthcare business services Ltd - as perused schedule 16 notes to the accounts wherein commitments and contingent liabilities company it is referred that company s software development centers in India are 100 % export oriented units under the software technology Park guidelines. But that does not make that assessee is engaged in the business of software development activities also, unless, the accounts, revenue stream, relevant cost, directors report, management discussion and analysis shows otherwise. It is also not mentioned anywhere in the report that assessee is engaged in medical transcription, according services. We reject the contention of the learned authorised representative and uphold the order of the learned TPO as well as the learned dispute resolution panel, that this company is functionally comparable as it is engaged in the outsourcing services as assessee is engaged in. Working capital adjustment - no working provided - HELD THAT:- Assessee has only relied upon the submissions made before the learned dispute resolution panel for allowability of the working capital adjustment, however, it did not provide any working of the same. In view of the absence of proper working and the reasons given by the assessee before the lower authorities or before us, we do not find any reason to accept the contention of the learned authorised representative. Therefore we reject the argument of the working capital adjustment while computing the margins. Judicial decisions on the transfer pricing adjustment not followed by the lower authorities - HELD THAT:- comparability analysis is a complete factual analysis and therefore any comparable which is held to be not comparable for consideration in case of any other assessee cannot be held to be not comparable with the whole world, as that would make that comparable which has been excluded on the basis of the judicial precedent as a unique comparable and only one alien existing in the whole corporate world. Such is not the mandate of the income tax act and rules there under. The comparability is to be tested only with the functional analysis of the assessee viz a viz the comparable contested. The judicial decisions, unless otherwise warranted, cannot be relied upon for exclusion of such comparables. Hence we reject the ground number 3 of the appeal. Receivables outstanding beyond 30 days from the associated enterprise - deemed as loan and charging notional interest at the rate of one month LIBOR +400 basis points resulting into the interest rate of 4.78% for the period of delay in receipt of payment beyond 30 days of the invoice - HELD THAT:- The issue has been squarely covered in favour of the assessee by the decision of the honourable Delhi High Court wherein it was found that though there is a credit period allowed by the assessee to the associated enterprise of only 180 days however the associated enterprise are allowed to linger for long and interest was computed by the AO/TPO, the honourable Delhi High Court KUSUM HEALTH CARE PVT. LTD. [ 2017 (4) TMI 1254 - DELHI HIGH COURT] deleted the above adjustment. Therefore respectfully following the decision of the honourable Delhi High Court we direct the learned AO/TPO to delete the above adjustment to the arm s-length price on account of delayed receivable from its associated enterprise as the facts are similar as stated in the decision of the honourable Delhi High Court.
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2019 (5) TMI 726
Obligation to seek exemption under Section 12AA - real income accrued to society - 'statutory levy' under the VAT Act, 2005 is being collected by virtue of the powers entrusted by the State Government to the respondent Assessee - surplus of income over expenditure - retention of a part of the VAT collected by the respondent Assessee till the process of determination of its actual expenditure incurred on the collection, followed by deposit of balance surplus amount in the Government Treasury for onward transmission to the State Government - HELD THAT:- SLP dismissed.
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2019 (5) TMI 736
Revision u/s 263 - exercise of revisionary jurisdiction by CIT u/s 263 against the order passed u/s 143(3) r.w.s. 147 wherein the assessment proceedings were re-opened on specific reasons recorded for re-opening - revision on issues which did not form subject of re-opening of the assessment or order of reassessment - HELD THAT:- Once, the re-assessment proceedings are initiated on a specific issue and the addition is made in the hands of the assessee then the CIT is precluded from exercise of jurisdiction u/s 263 on a ground which is not covered by the reasons during the reopening of the assessment since the time for completing the assessment u/s 143(3) had expired. Hence, we find no merit in the exercise of revisionary power by the CIT u/s 263 in the present facts and circumstances. We find support from the ratio laid down in the case of M/s. Ashoka Buildcon Limited Vs. ACIT [ 2010 (4) TMI 152 - BOMBAY HIGH COURT] wherein also the question was of revisionary proceedings initiated u/s 263 against the assessment made which was re-opened u/s 147. The Hon ble Bombay High Court noted that the re-assessment proceedings were in relation to a particular grounds and subsequent thereto of passing of the re-assessment and exercise of jurisdiction u/s 263 with reference to the issues, which did not form subject of re-opening of assessment cannot be exercised. The order of revision passed in the present case, on issues which did not form subject of re-opening of the assessment or order of reassessment, cannot be upheld. Therefore the revisionary proceedings exercised by the CIT is not correct. Hence, the said order of CIT is set aside. A.Y. 2011-12 - exercise of revisionary jurisdiction u/s 263 by CIT - document found from the residential premises of Shri Anant Keshav Rajegaonkar wherein the transaction totaling to ₹ 2.98 crore is mentioned - HELD THAT:- It may be pointed out that the transaction relates to number of years and we have already referred to the details in the paras above. The first year was A.Y. 2006-07 wherein the amount mentioned on the document was ₹ 19 lakh. We have already held the exercise of jurisdiction by the CIT u/s 263 to be not in accordance with the law in the paras above. Now coming to appeal in A.Y. 2007-08, wherein the transaction noted is ₹ 127 lakh, the assessment for this year was completed under section 143(3) of the Act but no proceedings u/s 263 of the Act have been initiated against the assessee. Similarly, for A.Ys. 2008-09 and 2009-10 wherein the transactions noted were ₹ 45 lakh and ₹ 40 lakh, respectively, though the assessment has been completed in the hands of the assessee but no proceedings u/s 263 of the Act have been completed. In the captioned assessment year i.e., A.Y. 2011-12, the amount noted in the seized document is ₹ 67 lakh and is the basis for exercise of revisionary power by the Commissioner of Income Tax against the assessee. Once the transaction has been accepted in the earlier years and the transaction emanate from the same seized document, then the Revenue authorities cannot take different stand in different years. - Decided in favour of assessee - no merit in the exercise of jurisdiction u/s 263 against the assessee by the CIT - Decided in favour of assessee.
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2019 (5) TMI 725
Disallowance u/s 14A - AO had proceeded to calculate the disallowance based upon the investments made by the assessee - as held by HC that in the absence of any exempt income disallowance was impermissible - HELD THAT:- The petition is dismissed both on the ground of delay as well as on merits.
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2019 (5) TMI 705
TDS u/s 195 - Disallowance u/s 40(a)(ia) - commission paid to non-resident - income accrued in India - HELD THAT:- Commission payments made to the non-resident agents did not have any taxability in India, even under the provisions of the domestic law i.e. Section 9. Once we come to the conclusion that the income embedded in these payments did not have any tax implications in India, no fault can be found in not deducting tax at source from these payments or, for that purpose, even not approaching the Assessing Officer for order under section 195. In our considered view, the assessee, for the detailed reasons set our above, did not have tax withholding liability from these payments. As held in the case of GE India Technology Centre (P.) Ltd. v. CIT [ 2010 (9) TMI 7 - SUPREME COURT] payer is bound to withhold tax from the foreign remittance only if the sum paid is assessable to tax in India. The assessee cannot, therefore, be faulted for not approaching the Assessing Officer under section 195 either. As regards the withdrawal of the CBDT circular holding that the commission payments to non-resident agents are not taxable in India, nothing really turns on the circular, as de hors the aforesaid circular, we have adjudicated upon the taxability of the commission agent's income in India in terms of the provisions of the Income Tax Act as also the relevant tax treaty provisions. See WELSPUN CORPORATION LIMITED AND VICE-VERSA [ 2017 (1) TMI 1084 - ITAT AHMEDABAD]
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2019 (5) TMI 735
Revision u/s 263 by CIT - excess claim of deduction u/s 54B - non application of mind by AO - HELD THAT:- AO has not given any reason as to how purchase of land prior to transfer of capital asset is eligible for claim of deduction under s.54B(1) of the Act. Thus, as a corollary, the AO has accepted the claim of deduction by oversight and without any application of mind in this regard. No evidence has been adduced before us to show that the issue was present to the mind of the AO. A wrong acceptance of claim of deduction would not given inference towards application of mind. Secondly, the eligibility of deduction under s.54B in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and thus apparently not sustainable having regard to express the provision of the statute. The legislature in its own wisdom has used the expression before the transfer of long term asset as well as after the transfer of capital asset at appropriate places viz. Section 54. The intention of the legislature is thus quite clear. Therefore, claim of deduction accepted by the AO despite unequivocal language of the Act, in our view, is erroneous as contemplated u/s 263. Such error on the part of the AO has caused definite prejudice to the interest of the Revenue. The action of the Pr.CIT is thus within the realm of powers vested under s.263. The Pr.CIT has distinguished the case laws cited which is found to be in order. We do not see irregularity in the assumption of jurisdiction by the Pr.CIT under s.263 of the Act - Decided against assessee.
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2019 (5) TMI 753
Interest u/s 244A - interest on interest, where there is no inordinate delay in payment of refund - HELD THAT:- The view of Hon'ble Supreme Court in Sandvik Asia Ltd. [ 2006 (1) TMI 55 - SUPREME COURT] has since been reversed by later decision in the case of CIT Vs. Gujarat Fluoro Chemicals [ 2013 (10) TMI 117 - SUPREME COURT] in which, taking note of the said decision of Sandvik Asia Ltd., as well as the later amendment of law with effect from 01.04.1989 by insertion of Section 244A of the Act, the Hon'ble Supreme Court has clarified that it is only the interest provided for under Section 244A of the Act, which may be claimed by the Assessee on the refunds, and no other interest can be claimed by the Assessee. We remit the matter back to the learned Tribunal to decide the Appeal again in accordance with law, in view of the later decision of the Hon'ble Supreme Court and the amendment of law.
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2019 (5) TMI 704
Deduction u/s 80P(2)(d) - interest earned from deposits in Co-operative Banks and nationalised Banks - HELD THAT:- This issue for consideration before us has been considered and decided against the assessee by following the decision of THE TOTAGARS CO-OPERATIVE SALE SOCIETY, [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] considering M/S. THE TOTGARS COOPERATIVE SALE SOCIETY LIMITED VERSUS INCOME TAX OFFICER. KARNATAKA [ 2010 (2) TMI 3 - SUPREME COURT] we hold that the assessee is not entitled for being allowed deduction under section 80P(2)(d) of the Act on interest income earned on deposits made with Co-operative Banks and nationalized Banks - Decided against assessee. Deduction u/s 80P( 2) (c) - Profits and gains used in section 80P(2)(c) - as submitted that the profits and gains attributable to such activities include the activities of the assessee and the profit earned by the assessee from such activities - claim of the assessee is that the assessee falls within the category of 80P(2)(c) and therefore is entitled to deduction as mentioned in the said provision upto an amount of ₹ 50,000/-, whereas case of the Revenue is that as the activities of the assessee are not eligible for deduction under any of the clauses - HELD THAT:- This issue is no more resintegra as various high court and tribunal had decided this issue in favour of assessee. See FILM NAGAR CO-OPERATIVE HOUSING SOCIETY LTD. VERSUS INCOME-TAX OFFICER. [ 2002 (7) TMI 233 - ITAT HYDERABAD-B] , TAMIL NADU BRICK AND TILE MANUFACTURERS INDUSTRIAL SERVICE CO-OPERATIVE SOCIETY LTD. VERSUS COMMISSIONER OF INCOME-TAX. [ 2002 (12) TMI 24 - MADRAS HIGH COURT] In view of the above the assessee is entitle to deduction under section 80P( 2) (c) of the Act as the assessee was carrying the cooperative activities within the meaning of law - Decided in favour of assessee
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2019 (5) TMI 734
Demand u/s 206C(1) and u/s 206C(7) - TCS - requirement to collect tax at source while selling scrap - assessee is engaged in the business of ship breaking - seeking declaration from the buyer that he is purchasing the goods for re-use in manufacturing process - HELD THAT:- As mandates any person responsible for collecting taxes u/s 206(1) need not to do so if he obtains a declaration from the buyer that he is purchasing the goods for re-use in manufacturing process or producing article or things. It does not say that such declaration has to be obtained at the very same moment when sale is effected. In the present case, the assessee has submitted declaration before the AO in requisite forms. CIT(A) has appreciated the facts in right perspective and rightly held that the assessee was not required to collect taxes at sources when sales were made as required under section 206C. We do not find any error in the order of the ld.CIT(A), hence, appeal of the Revenue is devoid of any merit. - Decided in favour of assessee.
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2019 (5) TMI 752
Revision u/s 263 after Reopening of assessment initiated - applicability of the provisions of Section 50C while computing the capital gains - enquiry by AO - HELD THAT:- Tribunal recorded findings of fact to the effect that the Assessing Officer actually carried out an enquiry after the reopening of the proceedings and that once there was an application of mind, on the part of the Assessing Officer, it was not open to the Commissioner to invoke the jurisdiction u/s 263 It is seen from the Order of the Commissioner u/s 263 that the Assessment was actually reopened on the ground that the assessee did not offer capital gains. The reopening was u/s 148 after issuing notice u/s 147. Thereafter, the assessment was completed u/s 143(3). In such circumstances, what the Commissioner attempted to do by invoking Section 263 of the Act was only to re-appreciate the facts. Since it is not permissible, the appeal does not give rise to any substantial question of law. Hence, it is dismissed.
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2019 (5) TMI 733
Income accrued in India - Referral fees received by the assessee from Credit Suisse Securities (India) Pvt. Limited - constitute Fees for Technical services - Indo- Swiss DTAA HELD THAT:- As decided in assessee's own case [ 2018 (2) TMI 969 - ITAT MUMBAI] referral fee , being in the nature of commission was to be treated as being in the nature of business income ; both, under the Act as well as under the Indo-Singapore Double Taxation Avoidance Agreement (DTAA), and not as fees for technical services . - Decided in favour of assessee Taxability of interest paid by assessee to its head office - income attributable to head office and liable to tax in India - Article- 7(2) of India - Switzerland Tax Treaty - function carried out, assets deployed and the risk assumed by the head office - Whether interest attributed to India Branch shall be part of business income of Indian Branch whereas the interest attributable to head office would be taxable under domestic source of rule of taxation u/s 9(1)(v) and is liable to tax in India? - HELD THAT:- As in Sumitomo Mitsui Banking Corporation [ 2012 (4) TMI 80 - ITAT MUMBAI] held that wherein Indian Branch of foreign bank paid interest to head office and other overseas branches of the Foreign Bank, on advances received by it, said interest is neither deductable in the hand of Indian Branch or chargeable to tax in the hand of head office and overseas branches being all single entity. Similar contention as raised by AO in the present case that provision of section 9(1)(v) prescribed that interest payable by PE in India being income deemed to accrue or arise in India is chargeable to tax. The Special Bench further held that such interest payable by PE to head office being payment made to self does not give rise to income i.e. chargeable to tax in India as held by Hon ble Supreme Court in Kikabhai Premchand [ 1953 (10) TMI 5 - SUPREME COURT] and the question of bringing the said income to tax by relying on the provision of section 9(1)(v), therefore, does not arise. The interest paid to head office of the assessee bank by its branch which constitute its PE in India is not deductible as expenditure under the domestic law being payment to self, the same is taxable by determine the profit attributable to the PE which is taxable in India as per the provision of Article 7(2) 7(3) of Indo-Japanese Tax Treaty r.w. paragraph-8 of Protocol which are more beneficial to the assessee. It was also held that the said interest, however, cannot be taxed in India in the hands of assessee bank, a foreign enterprises being payment made to self which cannot give rise to the income i.e. taxable in India as per the domestic law. The observation made by AO that interest payment made to head office is attribution to the interest income of head office as provided under Article-7(2) of India - Switzerland Tax Treaty on the basis of function carried out, assets deployed and the risk assumed by the head office is misconceived.
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2019 (5) TMI 732
Deduction u/s 80IAB - netting of interest - interest income is eligible for deduction under section 80IAB - HELD THAT:- The coordinate bench has held that the entire interest income is eligible for deduction under section 80IAB, and, for this short reason, the grievance against netting of interest is wholly academic and infructuous. The stand of the CIT(A) thus attained finality. In the case of CIT Vs Nirma Limited [ 2014 (10) TMI 388 - GUJARAT HIGH COURT] has held that netting of interest for the purpose of this deduction can be allowed. Whichever way one looks at it, the issue is covered, in favour of the assessee, by the binding judicial precedents. We, therefore, have no reasons to disturb the conclusions arrived at by the learned CIT(A). We uphold the relief granted by the CIT(A) and decline to interfere in the matter. Deduction u/s 80G - eligible donations in proportion of the turnover and to that extent the deduction u/s 80IB - HELD THAT:- It is only in computation of total income that the deduction u/s 80G is to be allowed, and, as learned CIT(A) rightly observes, it is not an expense which is to be allocated to different heads or sources of income. A donation is in the nature of allocation of income and the tax deduction for eligible deduction is a tax policy driven deduction for encouraging such public spirited application of income. The stand of the assessee was indeed correct and the CIT(A) was perfectly justified in upholding the same. We approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter. Re-compute the deduction u/s 80IAB - increasing the amount of deduction by the amount of disallowance u/s 14A - HELD THAT:- When the profit goes up as a result of disallowances of expenses, the eligibility for deduction in respect of such profit correspondingly increases. Circular does not specifically deal with section 14A disallowance, as the circular itself states in so many words the cases cited above are only illustrative and the principle is that the courts have generally held that if the expenditure disallowed is related to the business activity against which the Chapter VI-A deduction has been claimed, the deduction needs to be allowed on the enhanced profits . We uphold the conclusions arrived at by the CIT(A) on this point as well, and decline to interfere in the matter. TP adjustment regarding guarantee fees - Re-compute the adjustment by adopting the rate of guarantee fee at 2% against the rate of 3% adopted by the TPO - HELD THAT:- In the case of Micro Ink [ 2015 (12) TMI 143 - ITAT AHMEDABAD] we hold that issuance of guarantees, without incurring any specific costs, does not constitute an international transaction, and, accordingly, no arm s length price adjustment can be made in respect of issuance of corporate guarantees. Once we hold so, the ALP adjustment sustained by the CIT(A) must stand deleted. Grievance of the Assessing Officer against the partial relief granted by the CIT(A), in view of the findings above, becomes infructuous and is dismissed as such. Disallowance u/s 14A - HELD THAT:- In the light of Hon ble jurisdictional High Court s judgment in the case of CIT Vs Corrtech Energy Pvt Ltd [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] the disallowance u/s 14A cannot exceed the amount of tax exempt income. In the present year, admittedly the dividend income is only ₹ 1,77,47,783. . The disallowance u/s 14A cannot, therefore, exceed the said amount. To this extent, we uphold the grievance of the assessee and restrict the disallowance u/s 14A. TP upward adjustment - non-charging of interest on the loan provided to Associate Enterprise for purchase of Aircraft - ALP adjustment by adopting 7.14% as arm s length interest for borrowings by the AE - HELD THAT:- When the AE itself has borrowed the monies from the SBI at LIBOR plus 145 bps the arm s length price of the borrowings cannot indeed be taken as more than LIBOR plus 145 bps. The additional risk adjustment for credit rating of the subsidiary is clearly unwarranted. The correct ALP interest rate, in the present case, thus works out to 2.69% plus 1.45%, i.e. 4.14%. We, accordingly, direct the Assessing Officer to restrict the ALP adjustment to 4.14%.
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2019 (5) TMI 751
Taxability of employees stock option plan - perquisite chargeable to tax - employer - employee relationship - assessing officer held that the gains on the sale of shares constituted a perquisite chargeable to tax and alternatively to treat the same as short term capital gains without any exemption u/s 54 - HELD THAT:- It is seen from the impugned order of the tribunal that the tribunal has recorded a finding of fact that there was no employer employee relationship between the respondent and the company whose shares were offered to the respondent for purchase. Therefore, the first question of law, which proceeds as though there was employer employee relationship, has no legs to stand in the light of the factual finding. Deduction u/s 54 EA - sale of shares allegedly, converted into Employees Stock Option Plan and paid long term capital gains at 10% - HELD THAT:- The second question of law should fail as a consequence of the factual finding recorded in para 16 of the judgment of the tribunal. The tribunal has recorded a finding in para 16 that stock options were granted by a company by name WLC, which is holding a 40% stake in M/s.Parke-Davis. Therefore, the tribunal was right in holding that proceeds on sale of shares are assessable as long-term capital gains and assessee is entitled all the reliefs u/s 54 as claimed by the assessee
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2019 (5) TMI 750
Writ against order of AO - alleged non-compliance of direction of tribunal principal of natural justice - addition u/s 68 - unexplained cash deposits - AO worked out the peak credit at a particular amount and brought it to tax - CIT(A) enhance the addition - Tribunal remanded the matter back to the AO for fresh consideration - AO refused to go into the source of deposits and confined the discussion only to the computation of peak credit - assessee filed present writ petition against the said order - HELD THAT:- We do not find that there was any violation of principles of natural justice. The refusal of the Assessing Officer to look into the sources of cash deposits, on the ground that there was no positive direction in this regard by the ITAT, cannot be taken to be a violation of the principles of natural justice. If the refusal of the Assessing Officer is wrong, it is a matter to be canvassed in the regular appeal. We can indicate is that though the Tribunal stated towards the end of para No.5 of its order that the grounds of appeal Nos.2 to 4 are treated as allowed, the discussion was confined only to re-computation of peak credit. Therefore, the allegation of non-compliance with the directions issued by the Income Tax Appellate Tribunal, is not patently made out so as to enable the petitioner to bypass the alternative remedy of appeal. Therefore, we find no reason to entertain the writ petition. Hence, the Writ Petition is dismissed, leaving it open to the petitioner to approach the CIT (Appeals). The Registry is directed to return the original impugned order. The CIT (Appeals) shall independently consider any such appeal filed by the petitioner without being influenced by any observations contained here.
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2019 (5) TMI 731
Reopening of assessment u/s 147 - no notice u/s 148 have been issued on correct address - service of notice u/s 148 - HELD THAT:- In A.Y. 2007-2008, the assessee filed the return of income giving the correct address at F-55D, GTB Enclave, New Delhi. Same address have been mentioned by the A.O. in the assessment orders for the A.Ys. 2005-2006 and 2006- 2007 u/s 143(3) which were passed before issuing of the notice u/s 148. Therefore, it was, within the knowledge of the A.O. that assessee is not available at F-16 Preet Vihar, Delhi. Therefore, there was no reason to prepare the notice u/s 148, on that address. No assessment record has been produced before us to show if the notice u/s 148 have even issued to the assessee through registered post. Copy of the Office record of the A.O. is filed with regard to speed-post but no postal receipt have been produced to show even if the notice u/s 148 have been issued through speed-post at the correct address of the assessee. Therefore, in the absence of production of assessment record, nothing is proved if any notice u/s 148 have been issued to the assessee. It is clear that no notice under section 148 have been served upon the assessee for completion of the assessment. Therefore, the jurisdictional pre-condition, is not satisfied for finalizing the reassessment order. The decisions relied upon by Assessee are squarely apply to the facts and circumstances of the case. We are of the view that Revenue has failed to prove that notice u/s 148 have been served open the assessee which is mandatory in nature - quash the re-assessment order - Appeal of Assessee is allowed.
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Customs
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2019 (5) TMI 724
Penalty under sub-section (1) of Section 30 of Customs Act, 1962 - Amendment in IGM - whether the appellant is liable for penalty as per the provision of section 30(1) read with Section 117 of Customs Act only for the reason that the appellant have made application for additional entry in IGM? HELD THAT:- In the entire facts of the case there is no intentional offence on the part of the appellant, it is beyond the control of the appellant that in the landed goods, two plates were found in excess accordingly, they have on their own filed an application for allowing supplementary/ additional entry in relevant IGM which was also permitted by the Mundra Custom House on a deposit of ₹ 1000/- being a custom fees - there are no reasons to impose any penalty. On going through the section 30(1) read with Clause (iii), it is found that the penalty can be imposed only if there is delay in delay in submission of IGM to the proper officer, however in the present case, there is no delivery of submission in IGM. The appellant is not liable for penalty under Section 30(1) read with Section 117 of Customs Act - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 723
Imposition of penalty in terms of regulation 12(8) of HCCAR 2009 - violation of regulation 6(f) and 6(q) of Handling of Cargo in Custom Area Regulation 2009 or not? - it was alleged that goods were allowed to be cleared by custodian without approval of the proper officer of custom - HELD THAT:- The goods from the custom area cannot be allowed to be removed without the permission in writing of the proper office. It is also a fact that at the time of removal of goods M/s Hindalco did not pay the applicable IGST which was effective from 01.07.2017 however the same was paid on 28.08.2017. Therefore, the appellant being a custodian has contravened the provisions of Regulation 6(f) and 6(q) of HCCAR, 2009 for this offence the penalty is provided under Regulation 12(8) of HCCAR 2009. The appellant though violated the Regulation but it was not intentional, particularly when the levy of IGST came into effect on the same day i.e. 01.07.2017 - quantum of penalty is reduced - appeal allowed in part.
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2019 (5) TMI 722
Refund of SAD - N/N. 102/2007-Cus dated 14.09.2007 - Refund rejected on the ground that the refund claim was filed after one year from date of payment of Customs (SAD) in terms of amended Notification No. 93/2008-Cus dated 01.08.2008 - HELD THAT:- If the entire notification is read harmoniously, there are various conditions such as, goods should be sold in the market VAT/ Sale tax should be paid on such sale etc. only thereafter, the appellant is entitled for refund. There is no time limit prescribed that the goods may be sold within one year from the date of payment of excise duty. Even though, the payment of custom duty is made but unless until the goods are sold, the refund does not arise, therefore, in one hand the time limit is prescribed i.e. one year from the date of payment of custom duty and in other hand, assessee is eligible to file refund claim only when the goods are sold and VAT/ Sales Tax was paid. These both conditions are contrary, therefore, considering the overall notification harmoniously, one year should be reckoned from the date of sale of the goods. The refund claim could not have been rejected on time bar - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 721
Duty Drawback - re-export of goods - rejection on the ground that the duty on the imported goods along with interest has not been paid - HELD THAT:- The appellant has already made payment of redemption fine and penalty and is requesting for re-export of the goods. Even if the Appellant is made to make payment of duty on such imported goods but he is eligible for drawback of 98% of the duty payable on the importation of the goods in terms of Section 74 of the Customs Act. The facts of importation of goods due to awarding of contract by ONGC and cancellation of same which led to seizure of goods is not in dispute. It is not a deliberate intention case of non payment of duty on imported goods and the Appellant after payment of redemption fine and penalty has option either to pay duty if he wants to keep the goods in India or to re-export the same - In case of re-export for which he is eligible, the net effect of duty payable by him would be 2% i.e. difference between the duty payable and drawback amount under Section 74 of the Customs Act. It is also clear that he is eligible for 98% duty drawback of the duty paid by them. The Hon ble Bombay High Court in case of CIPLA LIMITED VERSUS UNION OF INDIA [ 1995 (6) TMI 23 - HIGH COURT OF JUDICATURE AT BOMBAY] has allowed the assessee to re-export the goods on payment of differential duty of 2% after adjusting the drawback of 98% of duty admissible to them in terms of Section 74 of the Customs Act, 1962. The impugned order is not sustainable and the appellants are allowed to re-export the impugned imported goods on payment of 2% differential duty, which shall be adjusted against the pre-deposit of 7.5% which was made by them as mandatory pre-deposit while filing the appeal before the Tribunal against the OIO dated 23.11.2016 - Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 720
Refund of SAD - N/N. 102/2007 - denial of refund on the ground that the invoices produced by him are forged and fabricated and the certificate issued by the Chartered Accountant was also found to be false certificate - HELD THAT:- Merely on finding of discrepancies in the invoices, the original authority has no basis to come to the findings that the invoices were forged and fabricated. Forging of the invoices for claiming the refund is a serious allegation against the appellant which should not have been levelled without any enquiry and investigation. Further the appellant has explained the discrepancies but the same was not considered by both the authorities. Further the certificate issued by the Chartered Accountant was held as false certificate without any basis. The said certificate was furnished as per the requirement of the Notification which should have been considered by both the authorities in order to decide the claim of the appellant but the same was not done. The case need to be remanded back to the original authority with the direction to consider the correlation sheets filed by the appellants certified by the Chartered Accountant for claiming the refund of SAD - appeal allowed by way of remand.
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Corporate Laws
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2019 (5) TMI 730
Offence of theft - oppression and mismanagement - Theft of documents - immovable property - respondents herein are alleged to have used the documents of appellant-Corporation without calling upon them to produce the documents in accordance with law - cognizance of the offence u/s 380 IPC - quashing of FIR u/s 482 Cr.P.C. HELD THAT:- The High Court, in our view, was not right in holding that the replication of the documents or use of information in the documents No.1 to 28 and the contents thereon are not corporeal property and would not amount to theft qua documents No.1 to 28. The documents and the replication of the documents and the contents thereon have physical presence and therefore, are certainly corporeal property and the same can be the subject matter of theft. In the present case, the documents are used in good faith in the legal proceedings i.e. Company Petition filed by respondents No.1 to 5 alleging oppression and mismanagement and the other suits are the civil suits challenging the cancellation of the Trusts. These cases are pending and both the parties are hotly contesting those cases. Use of the documents in judicial proceeding by the respondents is to substantiate the case of oppression and mismanagement of the appellant-Company. Absolutely, no dishonest intention or wrongful gain could be attributed to the respondents. Likewise, there is no wrongful loss to the appellants so as to attract the ingredients of Sections 378 and 380 IPC. The intention under Section 24 IPC dishonestly must be to cause wrongful loss to the other or to have wrongful gain for oneself. In determining whether a person has acted dishonestly or not, it is the intention which has to be seen. By filing the documents in the legal proceedings, there is no intention on the part of the respondents to cause wrongful loss to the appellant nor intention to make wrongful gain to themselves. Filing of the documents in the legal proceedings is only to vindicate their stand in the company petition. We find much force in the submission of the learned senior counsel, Mr. Sibal, appearing for respondents No.1 to 5 that the attempt of the appellant in trying to prosecute the respondents appears to arm-twist the respondents in an attempt to shut out the relevant material documents before the CLB proceedings by prosecuting respondents No.1 to 9 and in the civil suits. As discussed earlier, there are no specific allegations as to when, where and how the respondents have committed theft; nor are there specific allegations against the respondents accused. Allegations in the complaint, being taken at their face value, do not disclose prima-facie case nor the ingredients of the offence of house theft or misappropriation are made out. In the present case, it is one thing to say that the documents have not been secured in accordance with the law and no value could be attached to them. But merely because documents have been produced from one source or other, it cannot be said that documents have been dishonestly removed to obtain wrongful gain to the respondents and cause wrongful loss to the appellant. Where it appears that the criminal complaint has been filed to bring pressure upon the respondents who are shown as accused in the criminal case, the complaint is to be quashed. The FIR or the criminal proceedings can be quashed if the allegations do not make out a prima-facie case or allegations are so improbable that no prudent person would ever reach a just conclusion that there are sufficient grounds for proceeding against the accused. So far as, the allegation of retention of the documents No.29 to 54, in our view, no allegation as to when and how the original documents were removed and retained by the respondents. Where on the admitted facts no prima-case case is made out against the accused for proceeding or when the Supreme Court is satisfied that the criminal proceedings amount to abuse of process of court, Supreme Court has the power to quash any judicial proceedings in exercise of its power under Article 136 of the Constitution of India. In our view, the present case is a fit case for exercising the power in quashing the criminal complaint qua the documents No.29 to 54 also. By the order of the Magistrate dated 08.10.2010, cognizance was taken against respondents No.1 to 16 for commission of the offences under Sections 380, 411 and 120B IPC. There are no averments in the complaint nor are there allegations in the statement of the complainant or the witness P.B. Dinesh as to when and how the theft was committed and the order of the Magistrate dated 08.10.2010 taking cognizance of the criminal case against respondents No.1 to 16 qua documents No.1 to 54 is liable to be set aside - It is held that the document as defined in Section 29 IPC is a moveable property within the meaning of Section 22 IPC which can be the subject matter of theft. The information contained thereon in the documents would also fall within the purview of the corporeal property and can be the subject matter of the theft. The findings of the High Court is modified to that extent. The use of documents No.1 to 28 and documents No.29 to 54 by the respondents in judicial proceedings is to substantiate their case namely, oppression and mismanagement of the administration of appellant-Company and their plea in other pending proceedings and such use of the documents in the litigations pending between the parties would not amount to theft. No dishonest intention or wrongful gain could be attributed to the respondents and there is no wrongful loss to the appellant so as to attract the ingredients of Sections 378 and 380 IPC. Continuation of the criminal proceedings would be an abuse of the process of the court. The order of the Magistrate dated 08.10.2010 taking cognizance of the offences and the issuance of summons to respondents No.1 to 16 and the criminal proceedings thereon are liable to be quashed. Appeal dismissed - decided against appellant.
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Service Tax
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2019 (5) TMI 719
Refund of service tax paid - principles of unjust enrichment - amount credit on Consumer Welfare Fund on the ground that the financial records of the appellant for the period 2012-2013 and 2013-14 show that the amount under claim of refund has been treated as expense and thereby passed on the effect of the amount of service tax to their customers - HELD THAT:- In the present case, the Doctrine of Unjust Enrichment is not applicable because the Range Officer after verifying the records of the appellant has filed a report wherein he has categorically stated that the appellant has not collected the service tax from the service recipient and the aspect of unjust enrichment is absent in the present case. Further, the original authority as well as the appellate authority has come to the conclusion that since the appellant has shown the amount of refund as expenses in the Profit and Loss Account and thereby they have passed on to its customers. This issue has been considered by the Madras High Court in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS FLOW TECH POWER [ 2006 (1) TMI 37 - HIGH COURT OF JUDICATURE (MADRAS)] , and it has come to the conclusion that the unjust enrichment is not applicable even when the refund amount is claimed as expenses in the Profit and Loss Account. Refund allowed - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 718
Valuation - Service of Motor Vehicle - Business Auxiliary Service - whether the value of the consumable and parts on which the VAT stands paid by the appellant is required to be included in the value of services so provided by the appellant or not? HELD THAT:- The issue decided in the case of M/S. SAMTECH INDUSTRIES AND OTHERS VERSUS CCE. KANPUR AND OTHERS [ 2014 (4) TMI 995 - CESTAT NEW DELHI ], where it was held that value of goods used for providing the service, which had been shown by the appellant separately in their invoices and on which Sales Tax/VAT had been paid, cannot be included for assessable value and no Service Tax can be charged on the same. Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 717
Valuation - Construction of Residential Complex Services - benefit of abatement - period involved is 2005-06 to 2009-10 - HELD THAT:- The Supreme Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ] examined as to whether Works Contract Service can be classified under Section 65(105)(zzzh) and held that the scope of Section 65(105) (zzzh) is limited to cover contract of service simplicitor only and not a composite works contract. The Supreme Court noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) was introduced to cover composite works contract and so works contract cannot be covered under any other category of services prior to 01 June, 2007. Composite Works Contract cannot be taxed under CCS under Section 65(105) (zzzh) as the scope is limited to cover contract of service simplicitor only. The position that comes out very clearly, therefore, is that even prior to 01 June, 2007 and post 01 June, 2007, the nature of service rendered by the Appellant was WCS and not CCS. The show cause notice alleged that the Appellant was providing CCS service and the demand has also been confirmed under this category by the adjudicating authority. The impugned order, therefore, deserves to be set aside for this reason alone since the demand made under a particular category of service found to be incorrect in a subsequent proceeding, cannot be sustained. Demand set aside - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 716
Time Limitation - Maintenance or Repair of Software service - whether the demand on Maintenance or Repair of Software set aside by Commissioner (Appeals) on the ground of limitation requires to be interfered or not? - HELD THAT:- The definition of Maintenance or Repair Service under section 65(64) of the Finance Act, 1994 was amended and the explanation stated therein that the term goods includes software was introduced with effect from 16-5-2008. Prior to 16-5-2008, there was confusion as to the leviability of Service Tax on Maintenance or Repair of Software. It is very much clear that during the disputed period that there was utter confusion with respect to levy of Service Tax on Maintenance or Repair of Computer Software. The Commissioner (Appeals) has discussed in detail with regard to the said circulars and notifications. He has thereafter set aside the demand on Maintenance or Repair of Software to be not sustainable as the ingredients to invoke the extended period are absent. CENVAT Credit - input services - Telephone Services - Mediclaim Insurance of employees - HELD THAT:- The period in question is prior to 1-4-2011 when the definition of Input services had a wide ambit as it included almost all activities related to business - credit allowed. Appeal dismissed - decided against Revenue.
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Central Excise
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2019 (5) TMI 714
Valuation - clearance to sister unit as well as independent buyer - case of the department is that even in case of clearances made to their sister concern, the price charged to independent un-related buyer shall be adopted for payment of duty in respect of clearances made to related sister concern - HELD THAT:- The entire demand was confirmed relying on the Larger Bench judgment in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [ 2007 (2) TMI 5 - CESTAT, MUMBAI] according to which if the goods are cleared to independent un-related buyer as well as related buyer in such case the price charge to un-related buyer shall be adopted in the case of clearances made to related buyer, accordingly, valuation in terms of Rule 8 was not applied. However, subsequent to passing of the impugned order, there are vital challenges of circumstances i.e. the Rule 8 was amended vide Notification No. 14/13-CE (NT) dated 22.11.2013 and by taking cognizance of Circular, the Tribunal has passed the decision in the case of M/S ULTRATECH CEMENT LIMITED VERSUS CCE ST, INDORE/ RAIPUR [ 2017 (11) TMI 1385 - CESTAT NEW DELHI] . In view of the fact that so much change have taken placed subsequent to the passing of the order, therefore, the matter needs a fresh look on all subsequent development. Appeal allowed by way of remand.
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2019 (5) TMI 713
Clandestine removal - Jumbo Rolls - allegation in this show cause notice is that M/s SPPL cleared jumbo rolls of 3000m length and misdeclared them as of 1000m length and thereby under paid Central Excise duty - sufficient evidence of the alleged clandestine removal present or not - time limitation - HELD THAT:- The documents of the transporter in this particular factual matrix is quite relevant because the goods have to be carried for a very long distance and the liability of the transporter for transporting the goods as well as the payment for transportation requires him to record the actual quantity of goods being transported. It does not matter whether the seller or the buyer pays for transportation. Nobody will pay for 3x quantity of goods when only x quantity of goods is transported. Further, in case of an accident or damage or theft the liability of the transporter will also be accordingly. No transporter will take upon him the liability of 3x quantity of goods when he is actually carrying x quantity of goods. In this case, the transporter not only issued GCNs but has also maintained computerised record of the goods transported presumably because he is dealing with two large companies. Both the GCNs and the statements by the transporter show the actual quantity of goods transported by weight. There is sufficient evidence of clandestine removal by SPPL. It is impossible to have every single document to show with mathematical precision the clandestine removal starting from raw material to their production and clearance because by its very nature, clandestine removal is done without recording the figures. If all figures were recorded faithfully in the documents there will not be any clandestine removal. Therefore, in each and every case of alleged clandestine removal the facts and circumstances must be evaluated to come to a conclusion if there is sufficient evidence of clandestine removal or otherwise. It is true that the officers have searched the premises of SPPL almost one year after the initial detection in the premises of M/s VH. If the search was conducted prior to this date they possibly would have found more evidence. Time Limitation - HELD THAT:- Section 11A of Central Excise Act provides for demand to be raised within five years from the relevant date in case of suppression of facts which has been the present case - there are no basis for the argument of the learned counsel for the appellant that the demand must be raised within one year from the date on which the department comes to know of the alleged clandestine removal. Appeal dismissed - decided against appellant.
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2019 (5) TMI 712
CENVAT Credit - input services - service of renting of motor vehicle - service of General Insurance service - Manpower Supply for road construction - period from April 2016 to March 2017 - HELD THAT:- This Tribunal in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [ 2016 (11) TMI 1126 - CESTAT NEW DELHI] has considered the issue after the amendment in the definition of input service w.e.f 1.4.2011 and the Tribunal in this case has observed the interpretation of the lower authorities that motor vehicle are not capital goods for the service recipient cannot be appreciated inasmuch as motor vehicles are admittedly capital goods in terms of the Rule 2(A) of Cenvat Credit Rules. Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 711
Levy of penalty - clearance of Cement without payment of duty for export - failure to produce copy of ARE-1 s within 24 hours of clearance of goods - failure to produce proof of export within 45 days of export as prescribed under the said Notification - suppression of facts or not - imposition of penalty - HELD THAT:- It is a case of non-submission of proof of export which is a procedural lapse and accordingly the appellant has paid the duty along with interest to the extent of not submitting the proof of export. Further, the penalty envisaged under Section 11Ac read with Rule 25 is not warranted in the present case as the ingredients required for imposition of penalty such as fraud, wilful mis-statement, collusion or suppression of fact with intent to evade payment of duty is absent in the present case. Penalty u/s 11AC - HELD THAT:- In the present case, the provisions of Section 11AC have not been complied with and in the absence of which imposition of penalty under Section 11AC is not sustainable in law - penalty set aside. Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 710
Clandestine removal - M.S. Billets - entire case of the Revenue is based upon the entries made on the loose slips recovered during the course of visit of the officers read with the statement of the authorized Signatory, Shri Shankey Goyal and the shortages detected in the stock of final products. HELD THAT:- The statement of the authorized signatory stands retracted subsequently and has also not been tested upon the touch stone of the cross examination and examination-in-chief. The Hon ble Punjab Haryana High Court in the case of Jindal Drugs Pvt. Ltd. Vs. Union of India [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT ] has held that the statement, which has not been cross-examined and examination in-chief, has to be kept out of consideration. It is well settled law that the allegation of clandestine removal is required to be uphold on the basis of the clinching evidence requiring proof of purchase of various raw materials, use of extra electricity, sale of final products, clandestine removal, transportation, payment , realization of sale proceeds, mode and flow back of funds - Inasmuch as in the present case, the Revenue s entire case is solely based upon the scribbling made in the recovered loose papers, without there being any evidence of actual manufacture and removal of the final products, there are no reasons to uphold the findings of the clandestine removal. Appeal allowed - decided in favor of appellant.
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2019 (5) TMI 715
Refund claim - assessee has received the duty amount from M/s ITC ltd which in turn passed on to the consumer - HELD THAT:- The first question turns on facts. Therefore, we do not think that the same deserves any consideration as substantial question of law. Unjust enrichment - finalization of the provisional assessment under Rule 9B(5) of CEA - HELD THAT:- The second question is covered by a decision of this Court in THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD-III COMMISSIONERATE. VERSUS M/S. AMRUTANJAN HEALTH CARE LTD. [2018 (5) TMI 309 - ANDHRA PRADESH HIGH COURT] where it was held that refund arising out of the finalization of provisional assessments during the period February 1985 to April 1995 need not pass the test of unjust enrichment as the amendment to sub-rule 5 of Rule 9B came into force only w.e.f. 25.06.1999. Appeal dismissed - decided against appellant.
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CST, VAT & Sales Tax
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2019 (5) TMI 709
Validity of assessment order - difference of sales turnover between returns and Profit Loss Account - Wrong claim of Input Tax Credit on inter state purchases - Purchases from RC cancelled dealers - TNVAT Act - HELD THAT:- This Court is of the considered view that the observation of the respondent that the petitioner has not produced any documentary evidence in support of the contention is totally absurd and has been made by total non- application of mind. Insofar as the claim relating to purchases from R.C. cancelled dealers is concerned, the respondent while reversing the input tax credit has observed that the petitioner has accepted the wrong claim of Input Tax credit from the non-existing TIN numbers of the other end sellers, which is totally incorrect. Even in the replies dated 12.10.2015 and 08.02.2016 to the pre-revision notice dated 09.09.2015, they have categorically denied that their wrongly claimed input tax credit for non-existing other side canceled dealers - Even before assessment proceedings, they have disclosed the correct TIN numbers of all other end sellers which is also extracted in the impugned assessment order. This being the case, the observation made by the respondent that the petitioner has accepted the wrong claim of ITC from the non-existing TIN Numbers i.e from cancelled dealers is absolutely incorrect. Mismatch claim - HELD THAT:- Since according to the respondent, the original tax invoices were not produced by the petitioner, the respondent has come to a wrong conclusion that the input tax credit has to be reversed on the ground of mismatch between the purchases reported by the petitioner and sales reported by the other end sellers - Under the impugned assessment order, a sum of ₹ 29,32,343/- towards reversal of input tax credit on account of mismatch was assessed by the respondents, which according to the considered view of this Court has been assessed by total non-application of mind - a penalty has also been assessed under Sections 27(3) and 27(4) of the TN VAT Act, 2006, which according to the considered view of this Court has also been passed by total non-application of mind. The impugned assessment order dated 30.11.2016 has been passed by the respondent by total non-application of mind and the same will have to be quashed - the matter is remanded back to the respondents for fresh consideration and the respondent shall pass final orders after giving adequate opportunity to the petitioner - Petition allowed by way of remand.
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2019 (5) TMI 708
Principles of natural justice - Validity of assessment order - TNVAT Act - It is the case of the petitioner that the respondent has arbitrarily, illegally and against the principles of natural justice has passed the impugned assessment order dated 24.12.2018 - HELD THAT:- In the case on hand, the petitioner has been afforded adequate opportunities and has also been granted the right of personal hearing which he failed to utilize but instead of participating in the assessment proceedings by attending to the hearings personally, after passing of the assessment order or instead of filing a statutory appeal under section 51 of the TN VAT Act 2006, has filed this writ petition which is not maintainable in the considered view of this Court - The only remedy for the petitioner is only to file a statutory appeal under Section 51 of the TN VAT Act, 2006 as there is no violation of the principles of natural justice by the respondent. Petition dismissed.
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Indian Laws
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2019 (5) TMI 707
Capitalization of Foreign Exchange Rate Variation (FERV) - apportionment of FERV into debt and equity after FERV has been calculated and added to capital cost - HELD THAT:- Noting the premise on which the Act was enacted and the fact that the Tariff Regulations, 2001 prescribed under the aegis of this Act do not provide for apportionment of FERV in a particular debtequity ratio, this Court is not inclined to interfere in the matter. The present dispute arises with respect to tariff charged between 01.04.2001 and 31.03.2004 on account of FERV calculation and apportionment. Any variation in the apportionment of FERV now, for the abovementioned period, will consequently be passed on to the consumers. This will be unfair to the consumers who were not consumers for the abovementioned period but will eventually bear the brunt of transactions which took place 1518 years ago. This is another ground for noninterference in the present matter. Appeal dismissed.
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2019 (5) TMI 706
Smuggling - poppy straw - psychotropic substance or not - defence of the Appellant was that he was legally transporting the goods of the licensee contractor Bishan Singh who had a valid licence issued by the District Excise Officer. A charge was framed against the Appellant under Section 8 read with Section 15 and Section 8 read with Section 26 of the NDPS Act - HELD THAT:- Section 8 of the NDPS Act prohibits cultivation of opium poppy and also prohibits, inter alia, production, manufacture, possession, sale, purchase, and transport of any narcotic drug or psychotropic substance - Section 26 deals with a wilful breach of a condition of the licence for which a penalty is not prescribed elsewhere in the NDPS Act and prescribes punishment with imprisonment for a term that may extend to three years or with fine or with both. There was a failure on the part of the prosecution to prove the offence alleged against the Appellant. It is clear from the record that the Appellant admitted the seizure of 10 bags of poppy straw from a truck which was stationed at village Palasiya. The only defence before the Courts below was that the transportation was legal as it was being done on the strength of a valid licence issued by a competent authority. The truck was standing on a road near village Palasiya which is 18 kilometers away from one of the villages which is mentioned in the license and from where the Appellant could have loaded and transported the poppy straw according to the licence - The conclusion of the Trial Court regarding the guilt of the Appellant under Section 8 read with Section 15 of the NDPS Act does not call for any interference. Whether the Appellant has been rightly convicted under Section 8 read with Section 15 of the NDPS Act? - HELD THAT:- As the contravention of license in relation to poppy straw has been dealt with in Section 15, Section 26 of the Act is not attracted and the Courts below are right in holding that the Appellant is liable to conviction under Section 8 read with Section 15 of the NDPS Act. Appeal dismissed - decided against appellant.
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