TMI Tax Updates - e-Newsletter
May 18, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Entitlement to benefit of Section 42 - business for prospecting, etc., for mineral oil. - discrepancy in the agreement - allowances, as stipulated in the Section, were not specifically mentioned in the agreement - appellant is not entitled to the relief claimed - SC
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Income Tax:
Exemption certificate for non deduction of TDS u/s 197 rejected - there has been no change in the nature of interest earned on the funds provided by the State Government which have gone in the Bank and it is not open to the Department to come to a different conclusion in view of the overriding effect of the provisions of Article 289 of the Constitution of India. - HC
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Income Tax:
Charitable object - The primary object of insertion of proviso to section 2(15) was to curb the practice of earning income by way of carrying on of trade or commerce and claiming the same as exempt in the garb of pursuing the alleged charitable object of general public utility. - AT
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Income Tax:
Penalty u/s 271(1)(c) - furnished wrong particulars of its income in terms of profits u/s 115JB - Computation of Minimum Alternate Tax (MAT) - levy of penalty confirmed - AT
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Income Tax:
Computation of capital gain - Sec. 50C applies only to a capital asset being land or building or both, it cannot be made applicable to lease rights in a land. - AT
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Income Tax:
Rent paid by director of the company in her individual capacity - directors serve as agents - any transaction carried out by the directors on behalf of the company is a valid transaction - AT
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Corporate Law:
Application under section 111A of the Companies Act, 1956 for register the shares - The stand of the respondent with regard to the one lime settlement and not to effect the transfer of shares is unwarranted and is not a ground to deny the right of the petitioner. - CLB
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Central Excise:
CENVAT Credit - duty paying documents - Whether the respondent is entitled to claim CENVAT Credit prior to 16/06/2005 on the basis of TR6 Challan, in terms of Rule 9 which was introduced on 16/06/2005 under reverse charge - Held Yes - HC
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Central Excise:
In view of the discrepancies the authenticity and veracity of data retrieved by investigation from the silver pen-drive is not reliable and can not be accepted as a piece of evidence in deciding the case of undervaluation and clandestine removal against the present appellants - AT
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Central Excise:
Valuation of goods - Suppression of value - until and unless the Revenue is able to prove that the value is suppressed due to the advances taken, the notional interest cannot be added. - AT
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Central Excise:
CENVAT Credit - Valuation - body builder who build body on the chassis received from the chassis manufacturers - Job work - Since there is no captive consumption , Rule 8 is not applicable - AT
Articles
Notifications
Circulars / Instructions / Orders
News
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Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified
Case Laws:
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Income Tax
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2015 (5) TMI 521
Entitlement to benefit of Section 42 - business for prospecting, etc., for mineral oil. - discrepancy in the agreement - allowances, as stipulated in the Section, were not specifically mentioned in the agreement - Whether benefit under Section 42 was envisaged in the 1992 NIT and in the PSCs, but due to oversight or mistake, the same was not included and mentioned in the written contract, and if so, the effect thereof? - Held that:- Keeping in mind principles as concluded from situations/aspects relating to the contracts entered into by the State/public Authority with private parties and after considering the arguments of respective parties, we are of the view that on the facts of the present case, it is not a fit case where the High Court should have exercised discretionary jurisdiction under Article 226 of the Constitution. First, the matter is in the realm of pure contract. It is not a case where any statutory contract is awarded. As pointed out the contract in question was signed after the approval of Cabinet was obtained. In the said contract, there was no clause pertaining to Section 42 of the Act. In the two PSCs, no provision is made for making admissible the aforesaid allowances to the assessee. It is obvious that the Assessing Officer could not have granted these allowances/deductions to the assessee in the absence of such stipulations, a mandatory requirement, in the PSCs. The appellant is presumed to have knowledge of the legal provision, namely, in the absence of such a clause, special allowances under Section 42 would impermissible. Still it signed the contract without such a clause, with open eyes. No doubt, the appellant claimed these deductions in its income tax returns and it was even allowed these deductions by the Income Tax Authorities. Further, no doubt, on this premise, it shared the profits with the Government as well. However, this conduct of the appellant or even the respondents, was outside the scope of the contract and that by itself may not give any right to the appellant to claim a relief in the nature of Mandamus to direct the Government to incorporate such a clause in the contract, in the face of the specific provisions in the contract to the contrary as noted above, particularly, Article 32 thereof. It was purely a contractual matter with no element of public law involved thereunder. Having considered the matter in the aforesaid prospective, we come to the irresistible conclusion that the appellant is not entitled to the relief claimed. Though it may be somewhat harsh on the appellant when it availed the benefit of Section 42 for few years and acted on the understanding that such a benefit would be given to it, but we have no option but to hold that PSCs did not provide for this benefit to be given to the appellant and the contract can be amended only if both the parties agree to do so, and not otherwise. Therefore, we are constrained to dismiss the appeal for the reasons given above. - Decided against assessee.
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2015 (5) TMI 520
Condonation of delay - Held that:- Delay in the present case is only of one day, we find that the approach of the Respondents in refusing to condone the delay is a pedantic which, if allowed to stand, would result in great hardship to the Petitioners for no fault of the Petitioners. The Petitioners have also produced the hard copy to show that in fact such return in Form - 1 were filed on 31.03.2008 which was admittedly the last date for filing such returns. This factual aspects have not been disputed by the Respondents. Needless to say, we have not examined the merits of the claim of the Petitioners based on the returns filed by the Petitioners but only considered whether the delay in filing such returns deserves to be condoned. Such returns and the claim of the Petitioners have to be examined by the Respondents on its own merits. Petition allowed.
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2015 (5) TMI 519
Exemption certificate for non deduction of TDS under Section 197 rejected - as per assessee interest in question earned on the funds provided by the State Government is not at all the income of the petitioner and not only it has never been taxed but has continuously been given the benefit of exemption certificate under Section 197 - Held that:- This Court finds sufficient force in the submission of learned counsel for the petitioner. The impugned order passed in the present matter does not show any application of mind as no reasons have been assigned for rejecting the proposal for issuance of exemption certificate under Section 197 of the Act whereas on a proper consideration of the direction of this Court in a similar writ application, the CIT, (TDS) had passed earlier the order dated 24.4.2010. The said order was a reasoned order after noting the prima facie satisfaction of this Court under its order dated 20.7.2009 and cannot be said to be unlawful by the Income Tax Authorities and further relying upon the decisions of the Delhi High Court and Karnataka High Court, reported in COMMISSIONER OF INCOME-TAX Versus DELHI STATE INDUSTRIAL DEVELOPMENT [2007 (4) TMI 150 - HIGH COURT, DELHI] and Commissioner of Income-Tax And Another Versus Karnataka Urban Infrastructure Development And Finance Corporation [2006 (2) TMI 114 - KARNATAKA High Court]. Thus, if at all, the respondent-authorities were of the view that they could take a different stand in a fresh assessment order, there being admittedly no question of res judicata in assessment of income for different assessment years, they were still required to do so acting properly in the matter by giving good reasons for disagreeing with the earlier order dated 20.4.2010 which has not been done in the present matter. As a matter of fact, there has been no change in the nature of interest earned on the funds provided by the State Government which have gone in the Bank and it is not open to the Department to come to a different conclusion in view of the overriding effect of the provisions of Article 289 of the Constitution of India. For the aforesaid reasons, the writ application is allowed. The impugned letter communicating the decision of the CIT (TDS) is quashed. The respondents shall issue exemption certificate to the petitioner, accordingly. - Decided in favour of assessee.
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2015 (5) TMI 518
Imposition of fringe benefit tax - Tata Brand equity contribution - Tribunal deleted tax imposed - Held that:- Budget Speech of the Minister of Finance while presenting the Budget for the year 2005-2006, the explanatory notes and the circulars have been rightly understood by the Tribunal to mean that the basis of tax is the benefits or perquisites which emanate out of an employer-employee relationship. That is a prerequisite and for levy of fringe benefit tax. The Tribunal, in paragraph 8 and 9 has concluded that in the present facts and circumstances, no such case as would enable charging fringe tax emerges. The subscription amount has been paid as per the contractual agreement between the assessee and M/s. Tata Sons Limited. The invoices raised by M/s. Tata Sons Limited are for the services provided and there is no employer employee relationship between the parties. We do not find that such a conclusion is perverse. Mr. Andhyarujina is, therefore, right in relying on the materials which have been handed in to us and which find place equally in the Tribunal's order. Those have been referred to and in the relevant factual backdrop so also on perusal of the agreement in its entirety, that the Tribunal concluded that there is no merit in the Revenue's appeal. - Decided in favour of assessee.
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2015 (5) TMI 517
Disallowance u/s 40A(2)(A) - excessive and unreasonable expenses - sister concerns - imposition of higher rate for conversion charges in respect of pig iron and C.I. Scrap - Held that:- The Assessee has not furnished any information or evidence to show that even the rate of 2766.76 M.T. on account of conversion of pig iron and C.I. Scrap is equal to the market rate the assessee has nowhere pleaded that the rate of 2766.76 paid for conversion of pig iron & C.I. Scrap is reasonable and not excessive having regard to the legitimate need of the business and the market value of the matter we are therefore of the considered view that the rate of 2766.76 paid by the Assessee to M/s. Marcandy Pd. Radha Pd. P. Ltd. on account of the conversion charges of pig iron & C.I. Scrap is excessive and unreasonable and is liable to be disallowed to the extent of its being so excessive or unreasonable. The rate of conversion adopted by the A.O. at ₹ 2,000/- per M.T. for the year under consideration is found reasonable and proper in as much as the assessee has not disputed as such this rate adopted by the A.O. We therefore direct to allow the deduction of conversion charges for pig iron & C.I. scrap @ ₹ 2,000/- per M.T. and to allow the conversion charges in respect of railway sleeper scrap @ ₹ 2,766.76 per M.T. as claimed by the Assessee The A.O. shall modify the assessment order accordingly. Also Assessing Officer had specifically noted that the rate of conversion adopted by the Assessing Officer was not disputed by the assessee. It is also evident from the letter dated 21st November, 1998 that the sister concern had explained for charging rate of conversion charges at 2766.76 for the accounting year 1993-94. No interference to above tribunal order required - Decided against assessee.
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2015 (5) TMI 516
Validity of re-assessment u/s 147 - non serving notice u/s 143(2) - Held that:- The assessment in question is invalid because of lack of jurisdiction of the Assessing Officer as the revenue has failed to show that the notice u/s 143(2) was served on the assessee within the stipulated period. Accordingly, we quash/ set aside the assessment in question. Also see ITO Vs. Naseman Farms Pvt. Ltd.[2015 (4) TMI 764 - ITAT DELHI ] - Decided in favour of assessee.
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2015 (5) TMI 515
Revision u/s 263 - AO failed to examine the applicability of 1st and 2nd proviso of Section 2(15) of the Income Tax Act read with 3rd proviso to Section 143(3) and provisions of Section 13(8) although neither 3rd proviso to Section 143(3) nor Section 13(8) were on statute book when AO. passed the assessment order - income not being returned by assessee in its incometax return or in form 10BB - Held that:- Objection of ld. DIT(E) as regards the income not being returned by assessee in its incometax return or in form 10BB is concerned, the same was claimed as exempt on account of concept of mutuality, as in earlier years and, therefore, there was no basis for the AO to take any contrary view on the same. Accordingly, the proceedings u/s 263 initiated by ld. DIT(E) on this count is not at all tenable in law, particularly when this view has been taken by the department since inception. The primary object of insertion of proviso to section 2(15) was to curb the practice of earning income by way of carrying on of trade or commerce and claiming the same as exempt in the garb of pursuing the alleged charitable object of general public utility. This proviso never meant to deny the exemption to those institutions, where the predominant object is undeniably a charitable object and in order to achieve the same incidental activities, essential in the given circumstances, are carried on.In view of the above discussion we hold that the proviso to section 2(15) is not at all applicable in the present case and, therefore, ld. DIT(E) was not at all justified in invoking the proceedings u/s 263. We fail to understand as to how these activities can be said to have an iota of commercial/ trade colour. The dominant object of the assessee is definitely for the well being of public at large by organizing various seminars for the welfare of people by disseminating knowledge in various fields in order to uplift the social consciousness of the society at large. (The composition of membership clearly exemplifies the real intention of assessee. We fail to understand as to how the hostel accommodation provided to various invitees could be considered as a commercial activity. Before any activity can be branded as being in the nature of trade or commerce, the AO has to demonstrate the intention of parties Backed with facts and figures of carrying out activities with profit motive. Mere surplus from any activity, which undisputedly has been undertaken to achieve the dominant object, does not imply that the same is run with profit motive. The intention has to be gathered from circumstances which compelled the carrying on an activity. In the present case, ld. counsel has clearly demonstrated that surplus was generated from interest income and not from catering or hostel activities. Therefore, the objection of ld. DIT(E) does not survive on this count also. Assessee’s case is squarely covered by the decision of India Trade Promotion Organization Vs. Director General of incomew Tax [2015 (1) TMI 928 - DELHI HIGH COURT].Thus in the facts and circumstances of the present case, the ld. DIT(E) was not justified in initiating revisionary proceedings u/s 263 of the Act. - Decided in favour of assessee.
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2015 (5) TMI 514
Penalty under section 271(1)(c) - wrong claim of the depreciation in respect of fixed assets - Held that:- when the assessee itself reversed its overstated claim of depreciation in the subsequent return, when the mistake of over statement of claim of depreciation was pointed out by the C&AG report, voluntarily and the Assessing Officer raised query subsequent to voluntarily reversed of the said claim then act of conscious and malafidely furnishing of inaccurate particulars of income or concealment of particulars of income cannot be attributed to the assessee public sector undertaking. Therefore, in view of foregoing discussions, we hold that the explanation offered by the assessee was sustainable and bona fide and therefore, penalty u/s 271(1)(c) of the Act is not imposeable on the assessee. Thus AO is directed to delete the impugned penalty levied on the assessee u/s 271(1)(c) of the Act. - Decided in favour of assessee.
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2015 (5) TMI 513
Penalty u/s 271(1)(c) - furnished wrong particulars of its income in terms of profits u/s 115JB - Computation of Minimum Alternate Tax (MAT) - Held that:- During the original assessment proceedings, obviously the appellant had furnished wrong particulars of its income in terms of profits u/s 115JB of the Act. Even during the course of reassessment proceedings, the appellant did not explain/clarify such facts and figures, as nobody attended on behalf of the appellant. Similarly, during the penalty proceedings also, nobody attended, on behalf of the appellant and any explanations/ clarifications were not submitted. During the appellate proceedings also, the appellant has not furnished complete facts and figures. Hence, it cannot be' concluded that the appellant had filed complete particulars' of its income during the original assessment proceedings, from which the appellant's correct income could have been computed. Neither any explanations/ clarifications were furnished during the reassessment proceedings. It is only on account of the reopening of the assessment that correct income of the appellant has been assessed. Thus the computation of book profit under section 115JB on the part of the appellant was inaccurate. The he case of the appellant is fully covered by clause (A) of the above Explanation-1 to section 271 (1)(c) - Decided against assessee.
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2015 (5) TMI 512
Deduction under section 80IB denied - value of plant and machinery of the assessee company having been exceeded to ₹ 5 crores, it was not a SSI (Small Scale Industrial) Unit eligible for claiming deduction under section 80IB - Held that:- The common issue involved in the present appeals thus is squarely covered in favour of the assessee by the decision of the Hon’ble Karnataka High Court in the case of M/s. Ace Multi Axes Systems Ltd.[2014 (8) TMI 596 - KARNATAKA HIGH COURT] wherein held that as keeping in mind the industrial growth which is required to be achieved, if two interpretations are possible, the courts have to lean in favour of extending the benefit of deduction to an assessee who has availed the opportunity given to him under law and has grown in his business. Therefore we are of the view, if a small scale industry, in the course of 10 years, stabilizes early, makes further investments in the business and it results in it's going outside the purview of the definition of a small scale industry, that should not come in the way of its churning benefit under Sec.80lB for 10 consecutive years from the initial assessment year. In the present case the appellant was first recognized as a permanent SSI Unit in the year 1992 and at the time of recognition the investment limit was ₹ 60 lakhs. Thereafter, it was increased to ₹ 3 crores in the year 1997 and later in the year 1999 it was reduced back to ₹ 1 crore and clarifications were given by the Ministry concerned that where the units have taken steps for implementation of their project and investment exceeded ₹ 1 crore in the years 1997 and 1998, they should continue to be regarded as SSI Units. It is only after formation of a new agency by name Micro, Small and Medium Enterprises, under the Ministry of Industries, in the year 2006 the investment limit was fixed at ₹ 5 crores. As over the years, they are running their unit adhering to the norms fixed by the Government from time to time and, in any case, when all the conditions stipulated for SSI Units are being followed by them and recognized as SSI Unit by the prescribed authority, they cannot be disallowed the deduction under section 80IB of the Act - decided in favour of assessee.
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2015 (5) TMI 511
Penalty under section 271(1)(c) - CIT(A) deleted penalty levy - whether the Tribunal while complying with the provisions of section 255(4) of the Act can consider the judgment of the Hon'ble High Court in the case of ABG Heavy Industries [2010 (2) TMI 108 - BOMBAY HIGH COURT]? - grievance with the majority view - Held that:- In the light of the clear directions given by the Hon'ble Bombay High Court in the appeals filed by the assessee for the impugned assessment years inter alia directed the Tribunal to consider the said decision of ABG Heavy Industries and all other decisions, we can consider the said judgments of ABG Heavy Industries and also the other judgments for allowing the deduction u/s. 80IA(4) of the Act while giving effect to the opinion of the Third Member as per the provisions of section 255(4) of the Act. Following the directions of the Hon'ble Bombay High Court being the Jurisdictional High Court, the Tribunal is bound to follow the directions and we do accordingly. In case anyone has grievances with the majority view, the aggrieved party can seek appropriate remedy against the same. That situation will come only when the majority view is implemented and a formal order is passed on the appeal. However, just because one of the parties before us has a grievance with the majority view, notwithstanding the merits of such grievance, even if any, we must not delay the judicial process of giving effect to the majority view. The majority view in these appeals is that the learned CIT(A) was correct in confirming the impugned penalties of ₹ 54,82,239 and ₹ 34,90,015 in the case of Jupiter Corporation Services Ltd for the assessment year 1995-96 and 1996-97 and of ₹ 9,17, 680 in the case of Smt Sulochana V Gupta for the assessment year 1996-97. We, accordingly, confirm the same. - Respectfully following the same and rejecting the objections raised by the learned counsel for the assessee, we hold that the majority view is that CIT(A) was not justified in deleting the penalties, imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961, of ₹ 46,64,350 for the assessment year 1995-96, ₹ 2,88,42,796 for the assessment year 1996-97 and of ₹ 34,78,593 for the assessment year 1997-98. The relief so granted by the CIT(A) thus stands vacated and the penalty orders passed by the Assessing Officer stands restored. - Decided against assessee.
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2015 (5) TMI 510
Penalty under section 271(1)(c) - CIT(A) confirmed penalty levy - whether the Tribunal while complying with the provisions of section 255(4) of the Act can consider the judgment of the Hon'ble High Court in the case of ABG Heavy Industries [2010 (2) TMI 108 - BOMBAY HIGH COURT]? - grievance with the majority view - Held that:- In the light of the clear directions given by the Hon'ble Bombay High Court in the appeals filed by the assessee for the impugned assessment years inter alia directed the Tribunal to consider the said decision of ABG Heavy Industries and all other decisions, we can consider the said judgments of ABG Heavy Industries and also the other judgments for allowing the deduction u/s. 80IA(4) of the Act while giving effect to the opinion of the Third Member as per the provisions of section 255(4) of the Act. Following the directions of the Hon'ble Bombay High Court being the Jurisdictional High Court, the Tribunal is bound to follow the directions and we do accordingly. In case anyone has grievances with the majority view, the aggrieved party can seek appropriate remedy against the same. That situation will come only when the majority view is implemented and a formal order is passed on the appeal. However, just because one of the parties before us has a grievance with the majority view, notwithstanding the merits of such grievance, even if any, we must not delay the judicial process of giving effect to the majority view. The majority view in these appeals is that the learned CIT(A) was correct in confirming the impugned penalties of ₹ 54,82,239 and ₹ 34,90,015 in the case of Jupiter Corporation Services Ltd for the assessment year 1995-96 and 1996-97 and of ₹ 9,17, 680 in the case of Smt Sulochana V Gupta for the assessment year 1996-97. We, accordingly, confirm the same. - Decided against assessee.
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2015 (5) TMI 509
Computation of capital gain - Compulsory acquisition of land by Government of Maharashtra from JHF - what is the date of acquisition of the impugned property? - Held that:- It is an undisputed fact that the Maharashtra Government acquired the land belonging to the father of the assessee which was acquired by him prior to 1972. It is also an undisputed fact that subsequent to the notification issued by the Ld. CIT(A), land was allotted to the assessee and the family members as compensation in lieu of the land acquired. The letter of allotment is issued by CIDCO Ltd. Dated 29.8.2003 and 8.9.2003. With this letter of allotment the assessee acquired a right to receive the land which was subsequently transferred on 19.7.2007 by way of tripartite agreement with CIDCO Ltd. And M/s. Sea Queen Developments. Reliance on the decision of Shri Atul G. Puranik (2011 (5) TMI 576 - ITAT, Mumbai) is well founded. The date of allotment of leasehold land is rightly taken by the Ld. CIT(A) as the date of acquisition resulting into long term capital gains as the transfer took place on 19.7.2007 i.e. after more than 36 months from the date of acquisition. - Decided against revenue. Cost of acquisition of the impugned property - Held that:- In the case of Shri Atul G. Puranik (supra), the Tribunal has held that the actual cost or alternatively the market value of the leasehold right should be taken as cost of acquisition. In the present case, we find that the assessee has paid cost towards these impugned 2 plots at ₹ 1,63,212/- which has also been ascertained by the authorities and confirmed by them. As actual amount paid by the assessee for getting the leasehold right in these plots is available on record, we do not find it necessary for adopting market value of the same. As mentioned above, this view is also supported by the decision in the case of Shri Atul G. Puranik (supra). Accordingly, ₹ 1,63,212/- is the cost of acquisition of the two plots rightly taken by the Ld. CIT(A) and therefore we do not find any error or infirmity in this finding of the Ld. CIT(A). - Decided against assessee. Sale consideration - Held that:- The assessee s claim of taking the consideration as per agreement entered in 1999 does not hold any water as we have held that the leasehold right has come into existence only in the year 2003. We find that the assessee himself has furnished valuor s report which states the sale consideration at ₹ 5,72,94,000/-. We find that the Ld. CIT(A) has accepted assessee s valuor s report on this issue. We, therefore do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee. Co-owners for the impugned property - assessee claimed that there were 9 legal heirs of Shri Ramchandra Mahadu Tandel, therefore the assessee s share in the said capital gain should be taken only 1/9th - CIT(A) dismissed this claim of the assessee holding that only four members have signed the deal therefore assessee s share comes to 25% - Held that:- Before us, the Ld. Counsel for the assessee stated that an affidavit from the sisters of the assessee have been filed before the Ld. CIT(A) and in the affidavit it has been specifically mentioned that the sisters have also received consideration from the sale of leasehold right. We find that there is no mention of the affidavit in the findings of the Ld. CIT(A). We, therefore, restore this issue to the file of the AO. The AO is directed to verify the contents of the affidavit and decide the issue afresh as per provisions of the law after giving reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. Applicability of Sec. 50C - Held that:- It is an undisputed fact that the assessee has transferred leasehold rights in the two plots. This issue was also considered by the Tribunal in the case of Shri Atul G. Puranik (supra) wherein the Tribunal has held that Sec. 50C applies only to a capital asset being land or building or both, it cannot be made applicable to lease rights in a land. As the Ld. CIT(A) has followed this decision of the Tribunal and no contrary decision has been brought on record before us by the Ld. DR, we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against revenue.
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2015 (5) TMI 508
TDS u/s 194H - Disallowance of discounts/ incentives paid to its buyers - CIT(A) deleted the addition - whether discounts/ incentive was in the nature of commission so as to attract TDS and disallowance can be made u/s 40a(ia)as held by CIT(A)?- Held that:- As relying on case of the Idea Cellular [2010 (2) TMI 24 - DELHI HIGH COURT] we endorse the finding of the ld CIT(A) that the payment made by the assessee to its sub-distributors constituted commission and tax had to be deducted at source on such payment and we find that Vodaphone company deducted TDS u/s 194H of the Act, on the payment of ₹ 16,15,873/- as the payments are in the nature of brokerage or commission paid to the assessee. Further the assessee in its written submissions has admitted the fact that the payment to the extent of ₹ 15,84,800/- were in the nature of commission, which were passed on to the dealers and retailers. The ld CIT(A) has rightly observed that CIFF ID incentives are the payments made by the assessee to its employees etc and DMS and Market expenses are also the expenditure made by it and it is only the First Call First Recharge (FCFR) incentive which is the “Commissions” which was passed on to the dealers/ retailers. And so this amount/ discount/ incentive alone attracts provision of TDS u/s 194H of the Act, we endorse this finding of the ld CIT(A). However we find force in the argument of the ld DR that the ld CIT(A) gave show-cause notice to the assessee and called for the details of the commission disbursed to its dealer to non-deduction of TDS, but we find that ld CIT(A) has not given any opportunity to the AO before embarking into such an exercise. The ld CIT(A) has given relief to the assessee of ₹ 9,94,673/-, because the discounts/ incentives / commission disbursed was less than ₹ 2,500/-. And has directed an addition of ₹ 3,06,460/- because the discounts and incentives to the dealers were more than ₹ 2,500/-. In such circumstances it would be just and proper to set aside the order of the ld CIT(A) and remand the matter back to the file of AO to examine and verify whether the commission/ discount/ incentive given by the assessee to its dealers are correct and we direct that AO shall examine and verify this fact aspect and the amount disbursed if it falls below ₹ 25,00/- it shall not attract TDS and the amounts disbursed which is more that ₹ 2,500/- shall attract TDS and shall be disallowed. - Decided in favour of revenue for statistical purposes.
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2015 (5) TMI 507
Disallowance of interest on PDCs paid out of books of account - CIT(A) deleted the addition - Held that:- The issue in question is covered by the order of the Tribunal in the group case of the assessee namely M/s IAG Promoters and Developers Pvt. Ltd. [2014 (12) TMI 216 - ITAT DELHI] wherein held that ground raised by the Revenue is misconceived because the CIT(A) has not deleted the addition. The CIT(A) has only directed the A.O. to recomputed the interest on post dated cheques after six months from the date of issue of PDCs. - Decided against assessee. Disallowance of additional payment in violation of Stamp Duty Act, 1899 - CIT(A) deleted the addition - Held that:- Since the facts in the present case are identical to the facts considered by the Tribunal in the case of M/s. Westland Developer Pvt. Ltd. [2014 (12) TMI 254 - ITAT DELHI] wherein held section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatable to the addition has been claimed and the assessee has successfully demonstrated that the payment were reimbursement made by CWPPL, thus we hold that CIT (A) is justified in deleting the addition. Also see case of Glitz Builders and Promoters Pvt.Ltd. [2015 (5) TMI 384 - ITAT DELHI] – Decided in favour of assessee.
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2015 (5) TMI 506
Fringe benefits Tax (FBT) - there does not exist any employer-employee relationship between itself and its payees so as to attract the fringe benefit provisions as per assessee - Held that:- Fringe benefit provisions do not apply to sales promotions expenses as the same do not bestow any benefit to the assessee’s employees. Therefore, the assessee’s grounds relating to payment to Seminar & Conference expenses,Sales Promotion Expenses and Cost of Free Samples given to Doctors succeed. - Decided in favour of assessee. Expenses on gifts to business associates and club member fees - Held that:- On being asked the assessee fails to prove that its employees have not at all enjoyed either of the two facilities. Thus, we assume that some of its employees must have availed these benefits. Thus, we accept the assessee’s arguments only in part and delete the impugned additions to the extent of 50% of the sums involve. - Decided partly in favour of assessee. Reimbursement of medical expenses to the assessee’s individual employees - Held that:- The assessee has incurred these amounts for payment of medical reimbursements to its individual employees not exceeding ₹ 15,000/-. Section 17(2) 1st proviso (v) grants exemption to such benefits in the hands of individual employees from being taxed upto the very monetary limit. Section 115WB(3) also excludes operation of sub section 1 in case of such a benefit. We quote case law of Bosch Limited V/s. Dy.CIT, [2011 (10) TMI 383 - ITAT BANGALORE] Godrej Properties Ltd. Vs. ACIT (2012) [2010 (12) TMI 605 - ITAT, Mumbai] and hold that the lower authorities findings under challenge have to be reversed. The Revenue does not point out any distinction on facts. Therefore, the assessee’s arguments challenging inclusion of the impugned individual medical reimbursements in fringe benefits also succeed. - Decided in favour of assessee.
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2015 (5) TMI 505
Penalty levied u/s 271(1)(c) - unexplained assets - Held that:- So far the gold ornaments are concerned, the assessee has given the proper explanation for the source of gold ornaments in respect of each and every assessee. The Assessing Officer substantially accepted the assessee’s explanation and treated only a small part of the gold ornaments to be unexplained. Therefore, in our opinion, the assessee has given proper explanation in respect of the gold ornaments which is not found to be false or untrue, though the Assessing Officer accepted the assessee’s explanation partially on estimated basis. In the above circumstances, in our opinion, levy of penalty in respect of part of the gold ornaments which are treated as unexplained is not justified. However, the facts are different in respect of cash found and investments in other assets like KVP, NSC and SBI Bond. No proper explanation has been given in respect of cash found or the investment in KVP, NSC and SBI Bond. The only explanation for cash in hand was that it belongs to various family members and the savings is out of the withdrawal for household expenditure in the preceding year. We have seen that the withdrawal by the assessee in the preceding year is meager with which the assessee would be able to manage the household expenses only and would not be able to save much. No evidence has been given that the part of the cash belongs to the family members. The Assessing Officer has already given the credit on estimated basis in respect of some cash in hand. In view of above, we are of the opinion that in respect of cash in hand which is treated as unexplained and also the investments in KVP, NSC and SBI Bond, it cannot be said that the assessee was able to substantiate his explanation. The explanation given was general, without any supporting evidences. In view of above, we are of the opinion that the levy of penalty u/s 271(1)(c) in respect of unexplained jewelry was not justified while the levy of penalty in respect of unexplained cash and investments in KVP, NSC, SBI Bond was justified. - Decided partly in favour of assessee.
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2015 (5) TMI 504
Disallowance under section 43B - late deposit of employees contribution to the Provident Fund for Factory and Federation Staff - CIT(A) deleted the addition - Held that:- The Tribunal in assessee’s own case for assessment year 2007-08 was regarding deletion of addition by the Assessing Officer on account of late deposit of employees’ contribution to Provident Fund and it was held by the Tribunal in that year that since the entire amount of Provident Fund contribution was deposited before due date of filing of return, the same is allowable as per the amended provisions of section 43B of the Act. In the present year also, a clear finding is given by CIT(A) on page No. 4 of his order that all the amounts of Provident Fund has been deposited before the due date of filing the return.- Decided against revenue. Suppression of production of sugar and its sale without recording entry in the books of accounts - CIT(A) deleted the addition - Held that:- Assessing Officer has adopted yield at 9% as against 8.37% reported by the assessee. The Assessing Officer has alleged in the assessment order that Kisan Sahkari Chini Mills, Puranpur has reported yield at 9.38% in the year under consideration as against 8.37% reported by the assessee. Hence, it is seen that the facts of the present year are identical to the facts in assessment year 2007-08. Since under similar facts, the addition was deleted by the Tribunal in assessment year 2007-08, we do not find any reason to take a contrary view in the present year and therefore, on this issue also, we decline to interfere in the order of CIT(A). - Decided against revenue. Undisclosed Production of Baggasse and its sale without accounting for in the books of account - CIT(A) deleted the addition - Held that:- The yield of main product or by-product is not constant in each and every case and every year. It is dependable on so many factors and therefore, merely on this basis that in the case of one assessee in one particular year, higher yield was recorded and that should be considered as yield of baggasse for all the assessees in all the years, is not correct. There is no other reason given by the Assessing Officer for doubting the yield of baggasse reported by the assessee in the Tax Audit Report. In our considered opinion, on the basis of a single case of a different assessee for one assessment order i.e. 92-93, the addition made by the Assessing Officer is not justified in the absence of any other supporting material - Decided against revenue. Addition on account of closing stock of sugar including the Excise Duty - CIT(A) deleted the addition - Held that:- In assessment year 2007-08, similar matter was restored back by the Tribunal to the file of CIT(A) for fresh decision wherein held There is no finding given by CIT(A) regarding the main objection of the Assessing Officer that the same stock for which the assessee adopted rate of ₹ 1,630/-, ₹ 1,665/-, ₹ 1,700/- and ₹ 1,735/- respectively per quintal as on 31/03/2006, in the present year, the assessee has applied a rate of ₹ 1,250/- ₹ 1,285/-, ₹ 1,320/- and ₹ 1,355/- per quintal respectively. If the same stock is lying then what is the basis of applying lower rate in the present year is not clear and CIT(A) has not given any finding on this aspect. Thus set aside the order of CIT(A) and restore the matter back to his file for deciding the issue afresh by passing reasoned and speaking order - Decided in favour of revenue for statistical purposes.
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2015 (5) TMI 503
Excessive salary paid to Directors - Disallowance under section 40A(2)(b) - CIT(A) deleted addition - Held that:- CIT(A) has made a finding of fact and has rightly held that the tax avoidance was never intended by assessee company and, therefore, we are in agreement with his finding. - Decided against revenue. Penalty/ fine imposed by ICICI Bank - CIT(A) deleted addition - Held that:- The nature of expenses is not in the nature of penalty but are expenses in the normal cause of business and we are in agreement with the findings of Ld. CIT(A) and, therefore ground of Revenue’s appeal is also dismissed.- Decided against revenue. Disallowance of advertisement expenses - Addition on account of capital expenditure - CIT(A) deleted addition - Held that:- In the case of CIT vs. liberty Group Marketing Division [2008 (4) TMI 219 - PUNJAB AND HARYANA HIGH COURT] in which it was held that the expenditure of glow sign board did not bring into existence any assets and enduring benefit for the business. Similarly, reliance was placed on Delhi Tribunal in the case of ITO vs. Spice Communications ltd. [2009 (10) TMI 648 - ITAT DELHI] in which it was held that by incurring expenditure on advertisement and sales promotion, assessee does not acquire any fixed capital assets.- Decided against revenue. Rent paid by director of the company in her individual capacity - Held that:- As per section 291 of the Act, 1956 provides for general powers of the board to its directors and directors serve as agents of the company and therefore, any transaction carried out by the directors on behalf of the company is a valid transaction. Keeping in view the fact that the company had used this premises for carrying out its business in Mumbai, which was undisputed by the Ld. AO, thus hold that the disallowance made by the Ld. A.O. on this ground was unjustified. - Decided against revenue.
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2015 (5) TMI 502
Determination of ALP on account of issue of equity shares - TPO adopted the value of each equity share as ₹ 756/- per share whereas according to the assessee it issued 555 lakhs equity shares each at ₹ 100/- per share during the relevant financial year - Held that:- Having regard to the circumstances of the case and in the light of the binding decisions of the Hon'ble Bombay High Court in Vodafone India Services Pvt. Ltd. case [2014 (10) TMI 278 - BOMBAY HIGH COURT] we hold that the AO erred in making the impugned addition referable to the price of shares and of the interest on deemed loan to the holding company. - Decided in favour of assessee. Disallowing site survey expenditure and professional fees - Held that:- The plea of the assessee that the expenditure pertains to general site survey and all the sites were not selected for erecting towers is not disputed by Revenue. In such an event of the matter it cannot be said that any new asset has come into existence with regard to the abandoned sites. Such being the case it is but natural to conclude that the expenditure incurred by the assessee has not given any enduring benefit to the assessee. The case law relied upon by the assessee squarely applies to the instant case and therefore we hold that the expenditure incurred by the assessee is allowable as deduction and consequently there is no question of allowing depreciation on the same. - Decided partly in favour of assessee.
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Customs
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2015 (5) TMI 524
Confiscation of goods - provisional release of goods - Furnishment of bank guarantee - whether the conditions imposed for withdrawal of seized goods attempted to export and for probable imposition of fine and penalty are harsh and arbitrary - Held that:- In the present case, overvaluation of 500% has been alleged. Further, no provisional assessment is resorted. It is observed that the appellant have not been co-operating with the department and have been avoiding summons and have not provided necessary information required to process the case. Once attempt to export is made after gross overvaluation and later appellant have come forward to withdraw consignments, intention to defraud revenue are prima facie indicated. It is further observed that the Commissioner (Appeals) has already taken excessive lenient view and has reduced bank guarantee from 25% of the FOB value of the goods to 15% of the FOB value of the goods. In these circumstances, there is no justification to consider any further modification relating to furnishing of Bank Guarantee. In the circumstances when consignment has been allowed to be withdrawn, reduction in bank guarantee was not justified. Since over valuation of attempted export is alleged, sufficient security has to be ensured for imposition of sufficient fine an penalty to discourage this type of attempt. - no force in appellant's request to further modify of Commissioner (Appeals)'s order - Decided ahainst assessee.
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Corporate Laws
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2015 (5) TMI 523
Application under section 111A of the Companies Act, 1956 for register the shares - Shares pledge on account to avail bill re-discounting facility - Default in making payments in respect of the bills discounted - Shareholder signed the share transer forms in favour of the petitioner - Held that:- It is an admitted fact that the respondent company availed rediscounting facility of ₹ 75 lakhs from the petitioner and at the time of sanctioning the petitioner vide its letter dated 08.07.1996 made it clear that the directors shall pledge 12,00,00 shares of the R1 Company and 40,000 shares of IVR Constructions. Accordingly the respondents entered into an agreement with the petitioner on 09.09.1996 and in the terms of the agreement the pledge of 12,00,000 equity shares and 40,000 equity shares have been mentioned. The petitioner and the respondent had signed the agreement and there is no dispute. Further the promoter of the respondent company i.e. Shri Sundar Iyer entered an unattested agreement dated 09.09.1996 with the respondent company. The above unattested agreement is not in dispute. As per the above agreement the shareholder of the respondent company has categorically stated that as per the sanctioned letter the shareholder pledged the above shares in favour of the petitioner for effecting the transfer of said shares to pay the said loans or any other dues of petitioner. The shareholder also signed the share transfer forms in favour of the petitioner. Further as per clause 5 the petitioner can call upon the shareholder of the respondent company to execute the transfers in favour of the petitioner. Thus the shareholder of the respondent company is bound by the said agreement. Failing to repay the loan amounts to the petitioner by the respondent the petitioner requested the respondent to effect the transfer of shares pledged by the shareholder in favour of the petitioner in accordance with the terms and conditions of the unattested agreement entered by the shareholder. From the documents it is crystal clear that the petitioner has taken various steps to recover the loan however the respondent failed to repay the amount borrowed by the respondent. The petitioner has bonafidely exercised its right to claim transfer of pledged shares in favour of the petitioner. The stand of the respondent with regard to the one lime settlement and not to effect the transfer of shares is unwarranted and is not a ground to deny the right of the petitioner. Accordingly and in exercise of power conferred under section 111A of the Companies Act, 1956, I hereby direct the respondent company to register the shares in the name of the petitioner and return the share certificates with duly endorsement of transfer within a period of six weeks. Further the petitioner is entitled to the benefits accrued on the shares including the bonus shares, dividend etc. - Decided in favour of appellant.
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2015 (5) TMI 522
Notice of Termination - Allegations of various related party transactions - Demand of appointment of an Independent Expert Committee to look into allegations - Matter of perjury liable to be punished u/s 448 & 449 of the Companies Act 2013, r/w 195 & 340 of Cr. P.C. - Held that:- On hearing the submissions of either side, it appears the petitioner entered into a Special Agreement called 'Employment Agreement' on 27.3.2014 with the company, with a condition that the company is at liberty to give termination of his employment at any time giving a notice granting 90 days time to remedy the allegations raised against him, as mentioned in the Employment Agreement. When the petitioner consecutively failed to meet the assurances he had given from time to time, the Board unanimously has come to a conclusion that the petitioner failed to achieve and fulfil the objectives, milestones, targets and roles approved by the Board of Directors and agreed by the petitioner. Since the Board felt that he was indulged in related party transactions and failed to remain transparent in financial transactions, the Board was driven to take a decision to issue notice for termination of the petitioner as MD of the company giving 90 days time. In the backdrop of this factual scenario, in the interest of the company, the petitioner will have to abide by the decision taken by the Board. He cannot take a cover of generalised provisions earmarked as rights of promoters to say that he is not bound by the employment agreement dated 27.3.2014. Since he himself agreed to get terminated by the company on notice with 90 days time, he is now estopped to say that he is not bound by the agreement he entered into.For the reasons mentioned above, this Bench observes that Board has not violated any of the provisions of Articles of Association or the Agreements entered in between the petitioner and the company in issuing Notice of Termination. Matter of Perjury - I believe that the deponent did not make any false statement causing other side or court believe such statement assumed as false statement to give false evidence, unless such antedating is material alteration to the facts in issue. An affidavit with incorrect date at the most could be considered as carelessness or mistake unknowingly crept, therefore this cannot be stretched to an extent to say it perjury. Here in the present case, mentioning ante-date or incorrect date is no way related to the subject in the case, no false statement is made to give false evidence against rival party, or to make this court to believe something that is not true therefore there is no merit in the application saying mentioning wrong date amounts to perjury. It could be understood that wrong mentioning of date amounts to perjury provided it is made with an intention to make the court to believe the same so as to turn down the truth. It is not the case here. - Decided against the appellant.
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Service Tax
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2015 (5) TMI 534
Invocation of extended period of limitation - Whether the appellant, a Government of Karnataka undertaking/Organization is liable to pay service tax on the processing fee (according to them) collected by them is liable to service tax under 'Management or Business Consultancy Services' or not - Held that:- According to the definition any person engaged in providing any service either directly or indirectly in connection with the management of any organization or business in any manner is providing Management or Business Consultancy Service. The inclusive portion coming thereafter can be considered as an expansion of the definition and therefore any service provided in connection with the management or business is liable to tax. Management of business no doubt would start right from identification of a place to set up business and it cannot be said that management will start only after everything is done. Therefore when the appellant collects processing fee for various services which are required for setting up of industry, we can take a view that it amounts to rendering of the service of business consultancy. Nevertheless being a Government organization and further there can be two views as whether the service provided by the appellants is Management or Business Consultancy or not and therefore it may not be appropriate to invoke extended period. Therefore in our opinion the demand cannot be sustained beyond the normal period of limitation. - Decided partly in favour of assessee.
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2015 (5) TMI 533
Waiver of pre deposit - Eligibility of a manufacturer availing CENVAT credit of input services - Trading activity - Held that:- appellant shall be liable to pay interest on the amount of irregular credit availed during the period from October 2006 to March 2008 and have to reverse proportionate CENVAT credit proportionate to the trading turnover up to March 2011. The data given by the appellant for this period has been accepted and accordingly the appellants have calculated the proportionate credit payable as ₹ 9,26,481/- and balance payable is ₹ 6,09,728/- if the entire trading value is taken for the purpose of calculation. In our opinion, prima facie the entire trading value has to be taken. In view of the above discussion, the appellant is directed to deposit the interest amount on the CENVAT credit irregularly availed during the period up to March 2008 and balance of proportionate credit and interest for the period from April 2008 to March 2011 within eight weeks - Partial stay granted.
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Central Excise
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2015 (5) TMI 529
CENVAT Credit - duty paying documents - Whether the respondent is entitled to claim CENVAT Credit prior to 16/06/2005 on the basis of TR6 Challan, in terms of Rule 9 which was introduced on 16/06/2005 - reverse charge - Held that:- In terms of clause (e) of sub-Rule (1) of Rule 9, of the Rules of 2004, a challan evidencing payment of service tax was a specified document for the purpose of availing service tax credit and the entities listed in clauses (i), (ii), and (iv) of Rule 2 of the Service Tax Rules, 1994 can take the service tax credit on the strength of such challan. But, however, in the case of goods transport agency, although the recipient of the services has been made liable to pay service tax with effect from 1st January, 2005 vide Notification dated 3/12/2004, but the agency has been made eligible to take credit thereof only from 16th June, 2005, vide Notification dated 7th June, 2005, by virtue of which clause (v) of sub-Rule (1) of Rule 2 of the Service Tax Rules, 1994 was inserted making the recipients of goods transport agency service eligible to take credit of the service tax paid on such goods transport agency services. - admittedly, the respondents have availed of such credit during the said period, it was the contention of the appellants that the respondents were not entitled to such credit. The fact that the respondents have paid service tax and, as such, are entitled to Credit during the said period has not been disputed by the appellant. As per Rule 3 of the CENVAT Credit Rules, 2004, CENVAT credit of, inter alia, service tax leviable and paid on any input services can be availed of. Authorities below have accepted that the respondents are entitled to such CENVAT Credit. The only point for consideration, in such circumstances is the type of document required to be produced to avail of such credit. The respondents have produced the TR 6 Challan which is emanated from the office of the appellants themselves to support their claim for such CENVAT Credit, which material was accepted by the authorities below whilst passing the impugned order. - question of discarding the said Challan to avail of such CENVAT Credit, as contended by the learned Counsel appearing for the appellant, cannot be accepted. The Authorities below, as such, have rightly accepted the said Challan as proof of payment of service tax and, as such, no infirmity can be found in the orders passed by the Authorities below. In any vent, the appellants are not entitled to rely upon Rule 9 to refuse the credit to the respondents, as Rule 9 is a procedural aspect which cannot deny the claim of the respondents to avail of such CENVAT Credit which they are, otherwise, admittedly, entitled to - Decided against Revenue.
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2015 (5) TMI 528
Clandestine removal of goods - Valuation of goods - enhancement of value of frit based on the pen-drive recovered from SANYO and writing pads recovered - Held that:- A precise enumeration of all situations in which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to being present - reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. A co-ordinate Bench of this Tribunal has, in another decision, once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (5) TMI 543 - CESTAT NEW DELHI]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. Estimation of quantity of goods manufactured and clandestine removal of goods by the appellants can not be slapped on the basis of averages arrived and calculated based on norms of gas consumption in manufacture of 1 MT of frit. It is rightly contested by the appellants that frit manufactured is not covered by any notification issued under Section 3A of the Central Excise Act, 1944 where Compounded Levy has been prescribed and capacity of the unit is required to be fixed on gas consumption basis, as done by the Revenue. It is observed that Revenue has attempted to adopt an estimation method for demanding duty and proving clandestine removal which is not prescribed by law. It has been admitted by Shri V.N. Thakkar (Superintendent) DGCEI in the cross-examination before the Adjudicating authority that when an article is seized, the same is placed in a sealed cover and mention of the same is made in the Panchnama. It is also admitted by Shri Thakkar that as he remembers the seized pen-drive was placed in a paper cover and sealed with adhesive tapes. It is the claim of the appellants that the way the said pen-drive was handled, it is possible that the same could be tempered with as the same was kept in the paper cover sealed with adhesive tapes. A second Panchnama was made on 30.8.2008 where the said pen-drive was mentioned to have been taken out of a sealed cover when the first Panchnama never mentioned keeping the said pen-drive in a sealed cover. It is also observed that on 30.8.2008 the sealed cover was opened but contents of the silver pen-drive were not opened on 30.8.3008 but instead another black colour pen-drive was opened. On 06.9.2008 under a Panchnama the said silver pen-drive taken out of the sealed cover and on opening this pen drive in the Tally Folder, no data was found to be available. It is observed that in Panchnama dated 12.09.2008, the print out of account AJTAK taken contained 52 pages and account of appellant Wellsuit appeared at page 30 out of 52 pages. Another Panchnama dated 24.09.2008 indicate in Annexure A3 that the number of pages of Account Aajtak were 94 and the name of appellant existed at page 43 as against page 30 mentioned in Panchnama dated 12.09.2008. Appellants have also raised the issue regarding discrepancies in the name of the panch witnesses. It is also contended that Revenue had not followed the procedure as stipulated in Section 36B of the Central Excise Act, 1944. In view of the above discrepancies the authenticity and veracity of data retrieved by investigation from the silver pen-drive is not reliable and can not be accepted as a piece of evidence in deciding the case of undervaluation and clandestine removal against the present appellants. Exact amount of such additional consideration was required to be determined for addition to the transaction value even if all the statements and documents were held to be admissible evidence and satisfied the test of Section 9D of the Central Excise Act, 1944 - valuation has been enhanced solely based on the assumption that after booking of the case these appellant enhanced their prices. In the case of transaction value realm the same product can be sold at different prices as per Section 4 of the Central Excise Act, 1944 unless actual additional consideration has been shown to have flown back to the appellants. In the absence of exact quantification of cash received by individual frit manufacturer, transaction value can not be enhanced even if there are half cooked circumstantial evidences to the proceedings indicating suspected undervaluation. It is now well understood that suspicion howsoever grave can not take the place of an evidence. Therefore, it may not be correct to hold that preponderance of probability should always be given to the Revenue, as Hon'ble Apex Court in a particular held it to be so. - Decided in favour of assessee.
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2015 (5) TMI 527
Refund claim - Jurisdiction of Tribunal - SEZ unit located in India - Held that:- Wordings of clause (b) of proviso to Section 35B(1) is clear that only those cases where the goods have been exported to any country or territory which is outside of India, will fall under this clause and only in those cases this Appellate Tribunal has no jurisdiction to entertain the appeal. However, in the present case the goods were not exported to any country outside of India, but supply to SEZ which is undisputedly located within India. In view of this fact and legal provision of Section 35B(1) proviso to clause (b) a different meaning cannot be inferred as against the plain language of the provision which mandate that only in those cases where goods are export to outside of India, this Appellate Tribunal has no jurisdiction to entertain the appeal. Therefore, we are of the view that in the present case where refund/rebate is related to supplies made to SEZ within India, this Tribunal has jurisdiction to entertain the appeal. - matter shouldbe placed before the Larger Bench to decide the preliminary issue that in the matter of refund/rebate against the supply of goods to the SEZ located in India, whether the appeal lies before this Appellate Tribunal or a Revision Application before the Joint Secretary (Revisionary Authority) to Government of India. Matter referred to larger bench.
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2015 (5) TMI 526
Valuation of goods - Suppression of value - inclusion of notional interest - Held that:- Contract value has not been reduced due to advance taken and in case of higher advances, the value is lower. In the list given in the show cause notice, it is seen that in large number of cases, the advance amount is 10% of the contract value and in few cases the advances are in the range of 20 to 25%. However, the show cause notice does not give the value of the lifts where the advances in the higher range have been taken and in the absence of such details, it cannot be said that the contract value is suppressed or reduced due to higher advance taken. - until and unless the Revenue is able to prove that the value is suppressed due to the advances taken, the notional interest cannot be added. - Decided in favour of assessee.
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2015 (5) TMI 525
CENVAT Credit - Valuation - body builder who build body on the chassis received from the chassis manufacturers - Job work - Department's view is that the case is covered by Rule 10A(ii) of the Central Excise Valuation Rules, 2000 and accordingly, the duty should be paid on 110% of the fabrication charges under Rule 8 of the valuation Rules - Held that:- Ashok Leyland and vehicle factory, Jabalpur have cleared the duty paid chassis to the appellant and the appellant have not taken the cenvat credit of that duty and after constructing the body on the chassis, the complete vehicles were returned by them to the depot of M/s Ashok Leyland and vehicle factory, Jabalpur from where the vehicles were supplied to the Directorate of Ordnance Services, New Delhi. The appellant undisputedly have paid duty on the fabrication charges in terms of notification no. 6/06-E (Serial No. 41) whose applicability is not disputed by the Department. The fabrication charges have been determined by subtracting the value of the chassis from the price at which the vehicles were supplied to Armed Forces by M/s Ashok Leyland and vehicle factory, Jabalpur. - Rule 8 of the Central Excise Valuation Rules is applicable only when the goods manufactured by a manufacturer are captively consumed by him or by some other manufacturer on his behalf, but this is not the case here, as the appellant after manufacturing the complete vehicle by constructing the body on the duty paid chassis received by them, returned the complete vehicles to M/s Ashok Leyland/ vehicle factory Jabalpur who in turn supplied those vehicles to the Armed Forces. - Decision in the case Rolastar (P) Ltd. [2011 (9) TMI 776 - CESTAT, AHMEDABAD] followed - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2015 (5) TMI 532
Extension of interim stay - Finalization of proceedings - Held that:- petitioner submits that the condition imposed as per Ext.P17 was not satisfied , earnestly under the belief that the proceedings will be finalised without any delay and that the petitioner was expecting favourable orders from the revisional authority/third respondent. It is also pointed out that the petitioner is ready and willing to satisfy the said condition, for which short time is sought for. - Government Pleader points out that if the petitioner proves his bonafides by effecting deposit within 'ten days', the matter can be considered and disposed of accordingly - it is fit and proper to grant one more chance to the petitioner to satisfy the condition imposed vide Ext.P17. The petitioner shall continue to enjoy the benefit of interim stay, if the petitioner complies with the condition, within 'ten' days - Decided conditionally in favour of assessee.
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2015 (5) TMI 531
Rejection of the petitioner's return filed as being incorrect and incomplete - Held that:- It is seen that the writ petition was entertained by this Court, since the challenge to the validity of Section 19(2) of the Act was pending at the relevant point of time. It is not disputed by the petitioner that the validity of the said enactment was upheld by the Hon'ble Division Bench of this Court by order dated 17.07.2013. Therefore, the petitioner cannot maintain this writ petition against the impugned proceedings, which is only a show cause notice, since the statutory provision has been upheld to be a valid piece of legislation. Therefore, only remedy left to the petitioner is to submit its reply to the impugned proceedings. - Decided against assessee.
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2015 (5) TMI 530
Stock transfer to Calcutta - Levy of tax on DEPB licences in Calcutta - Held that:- On perusal of the impugned order, it is seen that the Assessing Officer is solely guided by the proposal given by the Enforcement Wing Officers and there is no independent application of mind by the Assessing Officer, while assessing the petitioner's returns. Hence, the impugned proceedings are held to be bad in law. Furthermore, the contention that no penalty is leviable, was specifically raised by the petitioner, since the assessments were completed by taking materials from the books of account produced by the petitioner. In such circumstances, the question of levy of penalty does not arise and the fundamental aspect has also been ignored by the Assessing Officer. Therefore, the petitioner is entitled to succeed. - Decided in favour of assessee.
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