TMI Tax Updates - e-Newsletter
May 19, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Entitlement to deduction under Section 80IB(10) - since this amendment is prospective and has come into effect from 01.04.2005, this condition would not apply to those housing projects which had been sanctioned and started earlier even if they finished after 01.04.2005 as that of assessee - SC
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Income Tax:
Computation of capital loss -amounts accruing, during the assessment year, to the assessee from bonds issued to it, by the Central Government, in lieu of the debt amounts payable to it for services under contract to the Iraqi Government - not a capital loss - HC
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Income Tax:
Additions u/s 41(1) - unsecured loans - no doubt for the purpose of establishing or furthering a business, yet they were loans and not trading receipts or loss from expenditure - no addition - HC
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Income Tax:
Preferential Equity Warrants - whether investment and not stock-in-trade and was not for business purpose? - the loss suffered by the assessee is a capital loss as rightly held by the assessing officer - HC
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Income Tax:
Disallowance of remuneration of the partners u/s 185 - Once he refused to treat the return as a defective one he could not have also held that the return was in derogation of sub-section 4 of section 184 of the Act nor could he in that case have refused to allow the deductions - HC
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Income Tax:
Transfer pricing adjustment - TPO has rightly rejected the use of earlier year’s data by the assessee, as the assessee failed to establish how such earlier year’s data had an influence on the prices of the current financial year - AT
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Income Tax:
Loss on trading - transaction was off market and speculative in nature. Thus the loss so incurred was speculative loss, which is not eligible for set off against the long term capital gains - AT
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Income Tax:
TCS u/s 206C - sale of forest produce, not being timber or tendu leaves - waiver from collection of TCS - matter remanded back for reconsideration - AT
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Customs:
Denial of exemption - CESTAT has proceeded on the basis that even though the samples were drawn contrary to law, the appellants would be estopped because their representative was present when the samples were drawn and they did not object immediately. This is a completely perverse finding both on fact and law. - SC
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VAT:
Penalty for non-filing of stock statement online under DVAT - The commissioner or its delegates do not have power or jurisdiction to impose such fine - only court of criminal jurisdiction has power to adjudicate the issue - HC
Articles
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (5) TMI 555
Entitlement to deduction under Section 80IB(10) - Whether Section 80IB(10)(d) of the Income Tax Act, 1961 applies to a housing project approved before 31.03.2005 but completed on or after 01.04.2005? - Held that:- In the present case, the approval of the housing project, its scope, definition and conditions, all are decided and dependent by the provisions of the relevant DC Rules. In contrast, the judgment in M/s. Reliance Jute and Industries Ltd. [1979 (10) TMI 2 - SUPREME Court] was concerned with income tax only. (b) The position of law and the rights accrued prior to enactment of Finance Act, 2004 have to be taken into account, particularly when the position becomes irreversible. (c) The provisions of Section 80IB(10) mention not only a particular date before which such a housing project is to be approved by the local authority, even a date by which the housing project is to be completed, is fixed. These dates have a specific purpose which gives time to the developers to arrange their affairs in such a manner that the housing project is started and finished within those stipulated dates. This planning, in the context of facts in these appeals, had to be much before 01.04.2005. (d) The basic objective behind Section 80IB(10) is to encourage developers to undertake housing projects for weaker section of the society, inasmuch as to qualify for deduction under this provision, it is an essential condition that the residential unit be constructed on a maximum built up area of 1000 sq.ft. where such residential unit is situated within the cities of Delhi and Mumbai or within 25 kms. from the municipal limits of these cities and 1500 sq.ft. at any other place. (e) It is the cardinal principle of interpretation that a construction resulting in unreasonably harsh and absurd results must be avoided. (f) Clause (d) makes it clear that a housing project includes shops and commercial establishments also. But from the day the said provision was inserted, they wanted to limit the built up area of shops and establishments to 5% of the aggregate built up area or 2000 sq.ft., whichever is less. However, the Legislature itself felt that this much commercial space would not meet the requirements of the residents. Therefore, in the year 2010, the Parliament has further amended this provision by providing that it should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft., whichever is higher. This is a significant modification making complete departure from the earlier yardstick. On the one hand, the permissible built up area of the shops and other commercial shops is increased from 2000 sq.ft. to 5000 sq.ft. On the other hand, though the aggregate built up area for such shops and establishment is reduced from 5% to 3%, what is significant is that it permits the builders to have 5000 sq.ft. or 3% of the aggregate built up area, 'whichever is higher'. In contrast, the provision earlier was 5% or 2000 sq.ft., 'whichever is less'. (g) From this provision, therefor, it is clear that the housing project contemplated under sub-section (10) of Section 80IB includes commercial establishments or shops also. Now, by way of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. Thus High Court was correct in allowing the exemption to assessee in present case since this amendment is prospective and has come into effect from 01.04.2005, this condition would not apply to those housing projects which had been sanctioned and started earlier even if they finished after 01.04.2005 as that of assessee. - Decided in favour of assessee.
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2015 (5) TMI 554
Unaccounted services rendered by brokers - Held that:- Delay condoned. No legal and valid ground for interference. The appellant has not been able to discharge the burden and it is not impossible. It is a primary onus and which was to be discharged and which has been held as not discharged by providing the requisite details. We do not find that the reasons assigned by the High court [2015 (2) TMI 725 - BOMBAY HIGH COURT] consistent with the material produced are vitiated by perversity or an error of law apparent on the face of the record - Decided against assessee.
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2015 (5) TMI 553
Computation of capital loss - Whether the assessee’s claim that there was a loss and/or it was a capital loss is legally tenable? - amounts accruing, during the assessment year, to the assessee from bonds issued to it, by the Central Government, in lieu of the debt amounts payable to it for services under contract to the Iraqi Government - Held that:- Holding of amounts in foreign currency for diverse reasons by itself cannot be determinative of its character. As held in Sutlej Cotton (supra), appreciation or depreciation in foreign currency value upon conversion would be either trading profit or trading loss. However, the exception to this is that if foreign exchange currency is kept as capital asset or fixed capital - in such event, the gain or loss would be of capital nature. In the present instance, the amounts as indicated earlier were payable for services provided by way of projects executed by the assessee in Iraq. The Iraqi Government’s inability to pay due to sanctions imposed by it and the subsequent Central Government’s negotiating an arrangement for its payment through bonds that were to mature in future - with interest did not in any way alter their character or convert them into capital assets as the assessee argues. Rather, this Court is also of the opinion that the analogy of bad debts and their reduction from the revenue receipts in a given year and its converse treatment - by virtue of Section 36(1)(vii) is apt to the circumstance of the case. The assessee’s claim of capital loss, based on indexed treatment of capital gain is therefore insubstantial and unfounded on any principle. - Decided in favour of the Revenue
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2015 (5) TMI 552
Reopening of assessment - Held that:- As far as the assessee’s complaint of not being made aware of the “reasons to believe” or opinion for reassessment is concerned, the argument proceeds on a misconception. The Act does not stipulate furnishing of reasons to the assessee; this condition was superadded, when the assessee, seeks such opinion and wishes to represent against it, after furnishing his/her returns upon the receipt of notice, by virtue of the order of the Supreme Court in GKN Driveshafts (India) Limited v. Income Tax Officer and Others (2002 (11) TMI 7 - SUPREME Court). In the facts of the present case, such condition did not exist nor was sought for when the reassessment notice was issued to the assesse in 2001. Thus, we are of the opinion that the assessee’s arugments with respect to justification for re-opening of assessemnt in this case are unmerited. The question of law argued by it in that context is answered against it. - Decided against assessee. Addition to loan - ITAT made addition in the hands of the assessee and not a trade advance and consequently its forfeiture did not constitute income chargeable to tax - Held that:- In the present case, the facts reveal that the assessee no doubt was able to secure the clearances of the Department of Economic Affairs as well as the Reserve Bank of India (RBI) towards its software technology project. These were based upon its assertion that Russian joint venture partners were involved. Likewise, the Department of Economic Affairs appear to have approved the setting-up of the project. Nevertheless, such clearances did not in any way undermine or displace the onus which it continued to labour under, to primarily satisfy the revenue that the amounts came from a genuine party. There were no particulars with respect to SFT or COPL, the documents incorporating these entities or even describing their identities (especially important since the assessee argued that SFT was a Govt. of USSR enterprise) was ever revealed. Those two companies’ shareholding pattern, trading or manufacturing activities, decision of Board of Directors was kept in the dark. In short, the assessee made no attempt to reveal the true identity of these two concerns. Furthermore, the credibility of these transactions too stood undermined from the very beginning considering that COPL’s role vis-a-vis SFT was never explained. It was not SFT which gave the money to the assessee. Therefore, the onus to prove that the amounts came from credible sources and creditworthiness of the entity or the source, was never discharged.In view of the above reasons, this Court is of the opinion that the findings recorded by the AO and the CIT(A) were sound and based upon a correct appraisal of the entirety of the circumstances. The ITAT fell into error in not following the established principles governing the law of Section 68 of the Act. The findings in the impugned order are accordingly set-aside. - Decided in favour of revenue. Mere change of character of the amounts in the books of the assessee is undeterminative as to whether it can be brought to tax under Section 41(1)? - Held that:- By no stretch of imagination could the initial amount of ₹ 10.65 crores have been treated as loss, expenditure or trade liability incurred during the previous year. No doubt, the circumstances whereby the assessee forfeited the amounts raised certain suspicions. As explained earlier, those suspicions led to the reopening of the previous year’s assessment and completion of reassessment by adding those amounts under Section 68. Both T.V. Sundaram (1996 (9) TMI 1 - SUPREME Court) and Punjab Distilling Industries v. CIT [1958 (11) TMI 4 - SUPREME Court] rely upon the decision in Morley v. Tattersall [1938 (5) TMI 10 - COURT OF APPEAL]. The Supreme Court however, held that once amounts are shown as trading receipts, they contain a profit making element within them. The subsequent treatment, therefore, could well attract compulsion dictated by law, i.e. their inclusion for the later year. In the present case, the amounts were never treated as trading receipts but as unsecured loans - no doubt for the purpose of establishing or furthering a business, yet they were loans and not trading receipts or loss from expenditure - the other instances attracting Section 41(1). 31. For AY 1996-97, independent of the findings with respect to treatment for earlier year as unaccounted receipt under Section 68, given the phraseology and wording of Section 41(1), the Revenue’s arguments for the latter’s applicability are without substance and merit. - Decided against revenue.
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2015 (5) TMI 551
Preferential Equity Warrants - whether investment and not stock-in-trade and was not for business purpose? - Tribunal held that the loss on the forfeiture of application money for Preferential Equity Warrants was a capital loss and not a revenue loss - Held that:- ITAT have unanimously held that the loss was capital loss and not a revenue loss. It is this order which is under challenge. Thus it cannot be said by any stretch of imagination that the authorities took a view which is perverse. The authorities definitely took a possible view. Therefore, the first question is answered in the negative and against the assessee. Whether the loss suffered by the assessee is a capital loss or revenue loss - Held that:- An answer to the question shall depend upon a further question as to whether if the investment had resulted in profit, whether the profit would have been a capital gain or revenue gain. The answer, according to us, is that the profit would have been a capital gain. We are also supported in the aforesaid view by the judgment in the case of Madan Gopal Radhey Lal (1968 (9) TMI 14 - SUPREME Court ). Therefore, the loss suffered by the assessee is a capital loss as rightly held by the assessing officer, CIT (Appeal) and the learned Income Tax Appellate Tribunal. - Decided against the assessee.
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2015 (5) TMI 550
Stay the demand of income tax, interest and penalty - Held that:- On due consideration of the submissions of the learned counsel for the parties and considering the fact that the appeals against the assessment orders for the assessment years 2003-04 to 2010-11 are pending before the Income Tax Appellate Tribunal, Indore and at present Bench of ITAT at Indore is not functioning, we direct the learned President of the Income Tax Appellate Tribunal, Mumbai to decide the application dated 22.01.2015 (Annexure P/7) filed by the petitioner for constitution of ITAT Bench in Indore for hearing stay application filed under Rule 35-A of the Income Tax Appellate Tribunal Rules, 1963 or fix the case before another Bench, as per Rules and decide the stay application expeditiously within a period of three months from the date of filing of the certified copy of this order. In the meanwhile, on depositing ₹ 5.8 crores within a period of four weeks from today, no coercive measures for recovery of the demand, including attachment of bank account, will be taken till the stay application is decided
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2015 (5) TMI 549
Disallowance of remuneration of the partners u/s 185 - instrument of change in partnership was not filed along with the return - ITAT allowed the claim - Held that:- The records reveal that a prayer was made before the assessing officer on behalf of the assessee to treat the return as a defective return because the instrument of change in the partnership deed was not annexed to the return. In that case, the assessee would be entitled to an opportunity to cure the defect. The assessing officer refused to treat the return as a defective return. Once he refused to treat the return as a defective one he could not have also held that the return was in derogation of sub-section 4 of section 184 of the Act nor could he in that case have refused to allow the deductions. If, on the contrary, he had held that the return was defective, then under sub-section 9 of section 139 the assessee would get a chance to cure the defect. In either case, the result is that section 185 read with section 184, although worded in emphatic terms, is not intended to be a mandatory provisions - Decided in favour of assessee.
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2015 (5) TMI 548
Estimation of ALV of property - IT estimating the ALV of the property at Nos. 14-16, Aurangzeb Road, New Delhi at ₹ 9,32,888 as against ₹ 5,12,932 declared by the assessee in the return - Held that:- Annual value of the property for determining the income from house property is deemed to be the sum for which the property might reasonably be expected to let from year to year or where the property is let and the annual rent received or receivable is in excess of such sum, the amount so received or receivable. It thus follows that the determination of the annual value is to be made at a sum for which the property might be reasonably expected to let from year to year and the same is to be compared with the actual rent received. If the rent so received or receivable is higher than the amount at which it would be reasonably expected to let from year to year, then the actual rent received will be adopted as an annual value. The swimming pool and health club were not business apparatus and were not used for carrying on business of trading or manufacturing or professional activities. Hence, the swimming pool could not be treated as plant. See Anand Theatre [2000 (5) TMI 4 - SUPREME Court ] - AO shall proceed to determine the annual letting value (ALV) of the suit property in respect of the years 1990-91 and 1992-93 in terms of the above directions.
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2015 (5) TMI 547
Penalty u/s 271(1)(c) - disallowance u/s 14A - Held that:- The assessee had earned dividend income which is an exempt income and assessee, on its own, disallowed a sum of 1% of dividend income u/s 14A. The Tribunal further held that the AO was not satisfied with the assessee’s quantum of disallowance and he accordingly applied Rule 8D of the Income Tax Rules 1962 and computed the disallowance which was accepted by the assessee to avoid further litigation. The Tribunal also held that the issue may call for addition to the income assessed u/s 143(3) of the Act but in order to invoke the penalty u/s 271(1)(c) of the Act, the AO has to walk a little extra mile to prove that there is failure on the part of the assessee to “conceal the particulars of income” or “furnishing of inaccurate particulars”. We are in agreement with the conclusion of the Coordinate Bench of the Tribunal that mere non-acceptance of assessee’s submissions and without any positive evidence from the AO that the assessee has concealed or has furnished inaccurate particulars of its income, did not ipso facto invite levy of penalty u/s 271(1)(c) of the Act. The present case is squarely covered in favour of the assessee by the decision of ITAT Delhi ‘E’ Bench in the case of ACIT vs M/s Mehrotra Invofin India Pvt. Ltd. (2015 (5) TMI 535 - ITAT DELHI) and hence, sole ground of the revenue being devoid of merits is dismissed. - Decided in favour of assessee.
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2015 (5) TMI 546
Transfer pricing adjustment - Adjustment to the manufacturing segment - TPO considered the international transactions of Air Solutions Segment consisting of sales of ₹ 84,50,33,854 as part of the infrastructure segment while making the adjustment - Held that:- In the T.P. order passed by the TPO under Section 92CA of the Act dt.28.10.2009, it is seen that there is neither any mention whatsoever about the two segments nor is there any finding whether the TPO accepts or rejects the segmental details furnished by the assessee. However, for the computation of the ALP of international transactions, the TPO has adopted four out of five of the comparables chosen by the assessee in its T.P. Study for its infrastructure group and also adopted the current year margins of these comparables for determining the mean margin of the comparables. From these details as emanate from the record, it is clear that the TPO has made an adjustment only to the Infrastructure Group Segment and has not proposed any T.P. Adjustment for the Air Solutions Segment. That being the case, it is but appropriate that only those transactions pertaining to the infrastructure group segment are considered for making the T.P. Adjustment. In this factual matrix, we hold and direct that the adjustments are to be made only on those transactions pertaining to the Infrastructure Group Segment, as decided by the TPO in his order under Section 92CA of the Act, and that the computation is to be decided accordingly. The segmental details made to be examined in detail to decide how much of it relates to the Infrastructure Group Segment and how much to the Air Solutions Segment. As the TPO has not examined the same and rendered any finding in this regard, we deem it appropriate to remand this issue back to the file of the TPO to examine the matter - Decided in favour of assessee for statistical purposes. Adjustment only on AE transactions - assessee contends that the adjustments are to be made only on AE transactions related to the Infrastructure Segment and not only the entire transactions of the segment - Held that:- The assessee had raised the issue before the TPO in the rectification application dt.2.2.2010, but we find that the TPO has not rendered any specific finding on the same in the order under Section 154 of the Act passed by him on 29.6.2010. Detailed examination is required to ascertain the extent of the transactions that pertain to the AEs on which adjustments have to be made. As the TPO has not examined the same or rendered any finding thereon, we are of the opinion that it would be appropriate to remand the issue back to the file of the TPO to examine and determine the quantum of AE transactions on which the T.P. Adjustment has to be made. We, therefore, restore this matter to the file of the TPO with the direction that the adjustment may be made only on the AE transactions related to the Infrastructure Group Segment . Error in computation of operating margin in Infrastructure Segment - treatment of excise duty while computing the margins - Held that:- Following the afore cited decision of the co-ordinate bench of ITAT, Bangalore in the case of Toyota Kirloskar Motors Ltd. (2013 (1) TMI 86 - ITAT BANGALORE ), we hold and direct that excise duty shall be excluded from sales as well as costs for both the assessee and the comparable companies while computing the margins. Exclusion of Escorts Ltd. as a comparable - Held that:- Since the financial figures adopted for this company were for a different period, the TPO was right in holding that it is not comparable. We, therefore, find no infirmity in the decision of the TPO in rejecting this company as a comparable company. - Decided against assessee. Multiple year data accepted - Held that:- Non-availability of information in the public data base can at best be relevant to explain the discharge of the assessee's obligation of maintaining the prescribed documentation under Section 92D(i) of the Act r.w. Rule 10B of the I.T. Rules, 1962. However, such non-availability will not dispense with the mandatory requirement of Rule 10B(4) for using current financial year data in conducting comparability analysis and in determining the ALP in accordance with section 92C(1) and 92C(2) of the Act. As it is mandatory requirement of law to utilise data of the current financial year to conduct the comparability analysis at the time of transfer pricing proceedings, the TPO is not only empowered but is also duty bound to determine the ALP using such contemporaneous data for this purpose even if such data was not available to the assessee in the public data bases at the time of preparation of its T.P. Study report. Further, we are also of the view that the TPO has rightly rejected the use of earlier year’s data by the assessee, as the assessee failed to establish how such earlier year’s data had an influence on the prices of the current financial year - Decided against assessee. Interest on Receivable - Held that:- Following the decision of Evonik Degussa India P. Ltd. (2013 (1) TMI 60 - ITAT MUMBAI), we hold that the addition on account of notional interest relating to alleged delayed payment in collection of receivables from AEs is not called for. However, as can be seen from the extract of the decision reproduced above, the above decision has been rendered in the factual context that there has been no agreement for charging interest on delayed payment. We, therefore, deem it appropriate to remand this issue back o the file of the Assessing Officer / TPO for examination as to whether there was any agreement for charging interest on late payments or not and if it is found that there was no such agreement, then the T.P. Adjustment made in this regard requires to be deleted - Decided in favour of assessee. Charge of interest u/s.234C - Held that:- The charging of interest is consequential, mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala (2001 (10) TMI 4 - SUPREME Court ) and we, therefore, uphold the action of the Assessing Officer in charging the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable u/s. 234C of the Act, if any, while giving effect to this order. - Decided against assessee.
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2015 (5) TMI 545
Addition during search - proceedings u/s 153A challenged - CIT(A) confirming the addition to the extent of ₹ 3.00 crores, on the basis of loose papers found during the course of search in the premises of assessee’s father - Held that:- The “satisfaction” mandated in sec. 153C was not arrived at by the assessing officer while examining/assessing the searched person. In the absence of the same, the notice u/s 153C issued to the assessee herein is bad in law, against the statutory mandate and hence the same is liable to be quashed. Consequently, the impugned appellate and assessment order also are liable to be quashed. A perusal of the document found during search would show that the assessee Shri Deven Mehta has no where stated that the advance payment of ₹ 3.00 crores was made by him out of his own funds. On the contrary, it states that a cheque amount for ₹ 1.00 crore is in the name of Shri Jitendra Mehta. Thus, it only talks about a property transaction only. Further, we notice that the assessing officer did not conduct any enquiry with the person named Pritibhabhi, the owners of the property or Jitendra Mehta to ascertain about the veracity of the document and further to establish that the advance payment of ₹ 3.00 crores stated therein was paid by the assessee out of his own funds. On the contrary, the assessing officer admitted in the remand report dated 20-02-2014 that the said property does not stand in the name of the assessee, i.e., even after the expiry of about five years from the present assessment year, thus supporting the contention of the assessee that the above said property transaction did not fructify. Thus, we are of the view that the assessing officer has made the impugned addition by simply placing reliance on the document without making any further enquiry to authenticate the same, which is not justified. - Decided in favour of assessee.
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2015 (5) TMI 544
Penalty u/s 271(1)(c) - tenancy rights were not acquired on 02/05/2005 and further tenancy rights are not covered u/s 32 of the Act for claim of depreciation - Held that:- If the assessee does not make a claim then no deduction may be granted. Non-allowance per se does not mean that there is concealment or furnishing inaccurate particulars. It is only after necessary permissions were obtained from the Municipal Corporation, the assessee entered into a formal lease agreement. The totality of facts clearly indicates that there was nothing wrong in making a claim by making full disclosure of facts. The fact that the Assessing Officer was not agreeing with the claim itself does not lead to the conclusion that the assessee filed inaccurate particulars or concealed its income. The decision in the case of Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT] favors the case of assessee. - Decided in favour of assessee.
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2015 (5) TMI 543
Disallowance of compensation paid to sister concern for executing transactions on the Bombay Stock Exchange - Held that:- Assessee has submitted its computation of total income, balance sheet for the relevant assessment year along with details of brokerage received by HCGSSL from which it is clear that the sister concern HCGSSL declared the said amount in their profit and loss account which is placed. Even the CIT(A) has also observed that assessee has produced the particulars of the transaction and the basis on which the compensation of ₹ 7,57,600/- was paid to the said HSSBL. We found that the payment was made out of commercial expediency and for the purpose of business expenditure. The details of brokerage received by the HCGSSL filed before the lower authorities indicates that the sister concern has already offered the said amount for taxation. Accordingly, we direct the AO to delete the disallowance. - Decided in favour of assessee. Audit fees disallowed - Held that:- As no TDS was deducted therefrom. We confirm the action of the AO for the disallowance so made. - Decided against assessee. Disallowance of professional fees - no TDS was deducted - Held that:- assessee has deducted and paid tax on the professional fees on 30-7-2008, which was before the due date of filing return of income. In view of the decision of Virgin Creation [2011 (11) TMI 348 - CALCUTTA HIGH COURT] and the decision of Oracle Software India Ltd., 2007 (5) TMI 204 - DELHI High Court ) amendment made in Section 40(a)(ia) by the Finance Act, 2010, which provides for deductibility of expenditure if TDS paid within return filing due date, amendment is curative in nature, therefore, should be given retrospective operation. Accordingly, we direct the AO to verify the date of actual payment of TDS and if he finds that the same was paid before the last date of filing of the return, he should delete the disallowance so made. - Decided in favour of assessee for statistical purposes. Disallowance of expenditure on repairs and maintenance - assessee has not provided details of TDS deducted u/s.194C/194J - Held that:- CIT(A) directed the AO to allow the said expenditure after perusal of the bills along with the log book with reference to the provisions of Section 40(a)(ia) of the I.T.Act. We do not find any infirmity in this direction of CIT(A).- Decided in favour of assessee Disallowance of loss on trading in derivative transactions by treating the same as bogus - Held that:- Considering the entire material placed on record vis-à-vis the questions and answers given by the assessee as well as by Directors of M/s Trishla Commodities, answers given during the course of cross verification, we found that assessee was not registered in Multi Commodities exchange as client of Trishla during the year under consideration. The transaction entered by the assessee was off market, wherein registration with MCX was not required. As per the bills, copy of the account of derivatives, bank statement evidencing the payment, we hold that transaction was off market and speculative in nature. Thus the loss so incurred was speculative loss, which is not eligible for set off against the long term capital gains declared by assessee. However, such speculation loss is eligible to be carried forward u/s.73(1) to be set up against speculation profit only in the subsequent year as per provisions of law. - Decided in favour of assessee.
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2015 (5) TMI 542
Unexplained investments - Unexplained credits received - accommodation entries - deposits in appellant's bank accounts received from various intermediaries operated by Sh. SK Gupta to provide accommodation entries to various beneficiaries against cash received from them - CIT(A) confirming the addition made u/s 68 - Held that:- There was no explanation filed before the AO except filing the copy of the bank pass book and it was only during the course of proceeding before the CIT(A) the assessee company tried to explain that the cash deposits were made out of the money belong to the beneficiary to whom accommodation entries were provided and the same explanation was reiterated before us. In our considered opinion, this would not meet the requirement of Section 69 of the Act. There was no material on record that Mr. S.K. Gupta who acted as intermediary between the assessee company and the beneficiary of accommodation entries had filed the confirmation letter stating that amount deposited in the Bank account was provided by him. Nor, the order of the Hon’ble Settlement Commission establishes the availability of cash with Mr. Gupta when the cash was deposited in the bank accounts of assessee company. This issue is essentially based on the facts. The interest of justice would be met, if the matter is restored to the file of the Assessing officer with a direction that the Assessing Officer shall verify the disclosure made in the case of Mr. S.K. Gupta before the Hon’ble settlement commission and whether the amount of cash deposited in the present case is covered by such disclosure. If the cash deposited in the assessee case is covered, in the disclosure of Mr. S.K. Gupta before settlement commission, the addition may be deleted. See M/s KSA Chits Pvt. Ltd. Versus Dy. Commissioner of Income Tax [2015 (3) TMI 881 - ITAT DELHI ] - Decided in favour of assessee for statistical purposes.
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2015 (5) TMI 541
Disallowance of depreciation on computer accessories - assessee claimed depreciation @ 60%, which was restricted to 15% by the AO - CIT(A) deleted the disallowance - Held that:- The issue in question is squarely covered by various decisions of different High Court including the decision of Hon’ble Jurisdictional High Court of Delhi in the case of CIT Vs. BSES Rajdhani Powers Ltd. (2010 (8) TMI 58 - DELHI HIGH COURT), allowing depreciation on computer accessories and peripherals @ 60%. - Decided in favour of assessee. Interest on payment of excise duty on supplementary bills disallowed - CIT(A) allowed the claim by holding that the impugned amount was not penal in nature - Held that:- The interest represented the amount paid on account of excise duty on supplementary bills has not been disputed by the department. This was clearly compensatory in nature and could not be treated as penal in nature because the short fall in payment of excise duty was not qua the original bills but on account of raising of supplementary bills. We, therefore, do not find any reason to interfere with the order of ld. CIT(A).- Decided in favour of assessee. Disallowance of sales tax paid - CIT(A) deleted the disallowance - Held that:- The deposit of the sales-tax was on account of non-submission of form C and VAT D1 and, therefore, this could not be held to be penal in nature. We concur with the finding of ld. CIT(A). - Decided in favour of assessee. Disallowance of Fine and Penalty - CIT(A) deleted the disallowance - Held that:- AO has arbitrarily treated the above amount similar going by nomenclature of the head as fine & penalty and has disallowed the entire amount without looking into the details submitted by the assessee vide letter dated 26.11.2010 wherein the assessee has pointed out that the account constitutes sales Tax paid for Manesar pertaining to Financial Year 2003-2004 attributed to the Sales Tax payment raised on for non collection of Form -C, VA T C-4 etc. and the same be read as part of the explanation given in Grounds of Appeal No.4 above prayed to be deleted. Balance amount represents interest on supplementary bills on Excise Duty raised to its customer for unit 11/ Manesar plant. The amount was wrongly included under the head fine & penalty but should be a part of head Excise Duty and Sales Tax loss as contained in Grounds of Appeal NO.2 above - Decided in favour of assessee. Disallowance of expenses - CIT(A) deleted the disallowance - Held that:- This being purely ad hoc disallowance made by AO without referring to any specific item of expenditure has been rightly deleted by the ld. CIT(A) Decided in favour of assessee. Disallowance u/s 14A - Held that:- The main thrust of the assessee’s submission is with regard to the computation of correct disallowance and, therefore, we admit the paper book filed by assessee and restore the matter to the file of AO for de novo adjudication in accordance with law. - Decided in favour of assessee for statistical purposes.
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2015 (5) TMI 540
Additions on account of Gross Receipts - CIT(A) confirmed addition alleging that the same has been accrued to the Appellant from M/s. Standard Chartered STCI Capital Markets Ltd. - Held that:- We agree with the revenue authorities that since the amount became due and/or accrued to the assessee, the income has emerged and therefore had to be taken as income of the assessee. The case cited by the AR has different facts, and till then it would remain contingent. But in the case in hand, the work was completed and it was the assessee who failed to have a proper collection from her clients to be paid to SC-STCI, on this default by the assessee, the amount though due was not paid to her, therefore, it was her income and the revenue authorities have correctly brought the same tax. - Decided against assessee. Business loss - Whether amount retained by M/ s. Standard Chartered-STCI Capital Markets Ltd is a loss suffered by the Appellant in the course of business of the Appellant? - Held that:- The assessee actually suffered loss, not only from the clients, who did not honour their commitments, but from her principal, i.e. SC-STCI, as well who did not pay her in line of their receipts from business and as per clause 6.15. We, therefore, hold that it was a business loss for the year under consideration.We, therefore, direct the revenue authorities to allow ₹ 21,20,714/- as business loss and consequential benefits attached to it. - Decided in favour of assessee. Disallowance of Bad Debts - assessee had been that the money could not be recovered from her clients, which were due to be paid to SCSTCI - Held that:- The issue in question is exactly the same was that in Ground above but neither the assessee nor the DR has made any attempt either to reconcile or to differentiate the amounts involved in Ground A and B. It is apparent that the figures too would tally. In such a case it would be better that the AO give an exact finding of fact. We, therefore, set aside the orders of the revenue authorities on this issue and direct the AO to adjudicate afresh. - Decided in favour of assessee for statistical purposes. Disallowance of commission paid - Held that:- The fact that the assessee was in business and has shown brokerage received at ₹ 42,28,330/- has not been disputed or disturbed by the revenue authorities. It is also a fact that as per the AO, the assessee would have received income from brokerage at ₹ 67,33,211/-, but declared only ₹ 42,28,330/- which was actually received. To earn that much brokerage, the assessee who in the business must have paid the commission to her brokers/agents and also employed certain staff. On the other hand, the revenue authorities have disallowed the payment of commission u/s 40(a)(ia), which patently means that the assessee has paid the commission and has paid salary to her employee as well. Since the revenue authorities have disallowed the payments of ₹ 4,08,872/- and ₹ 13,08,872/-, for non-deduction of TAS, the issue has created a major block to come to a logical conclusion. Thus isssues need to be adjudicated afresh in line with legal provisions of section 40(a)(ia).- Decided in favour of assessee for statistical purposes. Addition on account of unexplained cash credit & unexplained expenditure - Held that:- We have not been able to find out as to how the two figures were derived by the AO. In such a circumstance, most appropriate view would be that the orders of the revenue authorities be set aside with the directions to the AO to re-adjudicate the issues, if required.- Decided in favour of assessee for statistical purposes.
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2015 (5) TMI 539
Disallowance of expenditure incurred on costumes and dress - Held that:- Similar addition made in the case of assessee in the assessment years 2006-07 & 2008-09 was deleted by the CIT(A). In the year under consideration, the CIT(A) has confirmed the disallowance of costumes and dress expenses on the assumption that there could be possibility of personal usage in such expenses. Keeping in view the assessee‟s nature of business being anchor, we do not find any merit in the action of the CIT(A) for disallowing expenditure incurred on costumes and dress which was incurred wholly and exclusively for the purpose of business. - Decided in favour of assessee. Disallowance of car insurance, depreciation on car, motor car expenses - Held that:-Keeping in view the nature of assessee's business, we restrict the disallowance to 5% of the expenditure so incurred. - Decided partly in favour of assessee. Disallowance u/s.14A read with rule 8D - Held that:- AO has mechanically applied the provisions of rule 8D, which is not applicable in the relevant assessment year 2007-08 under consideration as per verdict of Hon‟ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd., [2010 (8) TMI 77 - BOMBAY HIGH COURT]. Keeping in view the totality of facts and circumstances, where the AO has not recorded any finding to substantiate that any expenditure has been incurred for the purpose of earning the exempt income, we restrict the disallowance to the extent of ₹ 1,00,000/- insofar as the entire exempt income was on account of tax free bond, shares, PPF etc.- Decided partly in favour of assessee. Disallowance of expenditure on purchase of paintings - Held that:- Rule 9A is a complete code in itself. The expenditure incurred on the production of film is allowed only under Rule 9A. Such expenditure is allowable as per the provisions of Rule 9A, irrespective of the year in which such expenditure is incurred and irrespective whether it is capital in nature or revenue in nature. Unlike Section 37(1) of the Act, Rule 9A does not lay down any such restrictions. Once it is established that paintings are a part of Cost of Production, the same should be allowed as deduction. The observation of the CIT(A) to the effect that paintings was for personal usage is not based on any evidence on record. Accordingly, we direct the AO to delete the addition on account of expenditure incurred on purchase of paintings. Thus ground taken by assessee for allowing depreciation of cost of paintings has become infructuous now. - Decided in favour of assessee in part. Adhoc disallowance of 15% on various expenses incurred for the movie "Kavi Alvida Na Kehna" - Held that:- Since in the instant case proper records have been maintained and also furnished before the AO and it was only the case of non-production of technical documents relating to production of films, the disallowance was made by the AO. However, a clear finding has been given by the Tribunal in the case of M/s Dharma Production Pvt. Ltd. [2013 (11) TMI 319 - ITAT MUMBAI] that these technical documents are not required to be maintained. Thus following the reasoning given during the assessment year 2009-2010 we restrict the disallowance out of the motor car expenses and depreciation on motor car to the extent of 5%. The adhoc disallowance made out of costumes and dresses expenses are hereby deleted. The disallowance made on account of telephone expenses is restricted to 5%. In the selling expenses there is no personal element, accordingly, we do not find any merit for adhoc disallowance of 10% amounting to ₹ 1,44,009/- out of selling expenses of ₹ 14,40,009/- incurred by the assessee. - Decided partly in favour of assessee.
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2015 (5) TMI 538
TCS u/s 206C - sale of forest produce, not being timber or tendu leaves - waiver from collection of TCS - Demand u/s 206C(6) and 206C(7)- Assessee in default for such non-collection of tax at source at the time of sale of the goods - assessee contended that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon - Held that:- the liability of the seller to collect tax at source is waived only on the buyer submitting Form no. 27C to him at the time of debiting the account of buyer or the receipt of payment, whichever is earlier. - Unless these conditions are cumulatively fulfilled, the seller is obliged to collect tax at source at the rates prescribed and deposit the same into the exchequer at the material time. These conditions must be fulfilled in letter and spirit without any sort of distortion or dilution or their substitution with other alike conditions as per the convenience of the parties. Assessee was unable to adduce necessary material before us in the regard that all the buyers had taken into account the purchases made from the assessee for computing income in their respective returns filed u/s 139 after paying tax due thereon. The assertion so made cannot be inferred in the absence of any positive material to prove it. There can be no presumption about the buyers having paid tax on the income by including the transactions of purchases covered u/s 206C. This position needs to be specifically demonstrated by the assessee. Under such circumstances, we are of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of ITO (TDS) for considering the details, which the assessee seeks to file for divulging that the buyers had included the income from the instant purchase transactions in their total income and filed returns u/s 139 of the Act after paying tax due thereon. We want to make it clear that if the assessee fails to specifically prove this position, then, the Officer would be fully entitled to treat it as assessee in default in terms of section 206C. Further, the liability of interest u/s 206C(7) would be fastened on the assessee from the date on which the assessee was required to collect tax at source up to the date on which the amount of tax was paid by the buyers - Decided in favour of assessee for statistical purposes.
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2015 (5) TMI 537
Penalty under Section 271(1)(c) - admission of income during survey - Held that:- As relying on case of Vasavi Shelters [2013 (4) TMI 485 - ITAT BANGALORE]wherein it was held that there can be no justification for the levy of penalty under Section 271(1)(c) of the Act in respect of income offered in the return of income for the concerned assessment year which is in a similar factual matrix as the case on hand, we hold that there can be no justification for the imposition of penalty under Section 271(1)(c) on income admitted and offered for taxation as part of the income in the return of income for Assessment Year 2007-08 filed on 26.10.2007. Consequent to this finding of ours, we cancel the penalty levied under Section 271(1)(c) - Decided in favour of assessee.
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2015 (5) TMI 536
Revision u/s 263 - levy of tax on capital gains pursuant to the development agreement - Held that:- In the present case, AO has not at all examined the issue, though, materials relating to entering into the development agreement are available on record. Therefore, there being failure on the part of AO to conduct enquiry and examine the issue or otherwise apply his mind to facts and materials on record, assessment order is erroneous and prejudicial to the interests of the revenue, thereby amenable to the jurisdiction u/s 263 of the Act. However CIT was not justified in straightaway directing AO to compute capital gain on transfer of land to the developer as per the development agreement. As before coming to conclusion that there is a transfer in terms of section 2(47)(v) various factors as indicated hereinbefore, need to be examined. Assessee’s claim that there was dispute between the parties and developer was not willing to carry out development work requires examination on the basis of evidence produced by assessee. Further, AO is required to examine assessee’s claim that he is no more owner of the property as it was sold to his wife by registered agreement of sale on 04/04/06. AO also is required to determine the year of taxability considering the claim of assessee that capital gain on transfer of land to the builder was offered by the land owners in A.Y. 2011-12 upon cancellation of development agreement and execution of sale deed. Thus we uphold the exercise of jurisdiction u/s 263 by ld. CIT, but, we modify his order by directing AO to examine the issue of accrual of capital gain in the impugned AY, independently, without being influenced by any of the observations of ld. CIT. AO must decide the issue considering all facts and materials on record as well as the submissions of assessee - Decided partly in favour of assessee for statistical purposes
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2015 (5) TMI 535
Penalty u/s. 271(1)(c) - disallowance u/s. 14A - Held that:- As decided in Commissioner of Income tax Vs. Reliance Petroproducts Pvt. Ltd. reported in [2010 (3) TMI 80 - SUPREME COURT] Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under Section 271 (l)(c). A mere making of a claim, which is not sustainable in law by itself will not amount to furnishing inaccurateparticulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. We are of the view that addition has been made by the AO on the basis of difference of opinion, as accordingly to him Rule 8D is applicable and whereas as per the appellant Rule 8D is not applicable. Accordingly, the penalty under section 271(l)(c) is not leviable and it deserves to be deleted, hence, Ld. CIT(A) has rightly deleted the penalty made by the Assessing Officer. - Decided in favour of assessee.
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Customs
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2015 (5) TMI 557
Denial of exemption on Coal import under Notification 35/90, 36/90 and 23/91 - Samples were rejected on ground of ash content being more than 12% - Samples were drawn in absence of any representative, in contravention of express provisions of IS 436 - Apex court held If the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eye of law at all - Something that is illegal cannot convert itself into something legal by the act of a third person - Held that:- In our opinion, the expression “deems it necessary” obviously means that the proper officer must have good reason to subject imported goods to a chemical or other tests. And, on the facts of the present case, it is clear that where the importer has furnished all the necessary documents to support the fact that the ash content in the coking coal imported is less than 12%, the proper officer must, when questioned, state that, at the very least, the documents produced do not inspire confidence for some good prima facie reason. In the present case, as has been noted above, the Revenue has never stated that CASCO’s certificate of quality ought to be rejected or is defective in any manner. This being the case, it is clear that the entire chemical analysis of the imported goods done by the Department was ultra vires Section 18(b) of the Customs Act. The admitted position on record is that the samples drawn were not drawn in accordance with law and were drawn with no regard whatsoever to IS 436. That IS 436 would apply to the facts of the present case is made clear by our judgment reported in Bombay Oil Industries (P) Ltd. v. Union of India [1994 (12) TMI 81 - SUPREME COURT OF INDIA], where this Court held following Union of India v. Delhi Cloth & General Mills Co. Ltd. [1962 (10) TMI 1 - SUPREME COURT OF INDIA], that if the method of testing of any item of Central Excise tariff is not mentioned, then the Indian Standard Institution’s method should be applied. That this would apply to the Customs Act as well.Clearly the samples drawn by the Inspector in the present case, have been drawn contrary to the express provisions of IS 436. On this count also, the samples being drawn not in accordance with law, test reports based on the same cannot be looked at. The Tribunal’s judgment has proceeded on the basis that even though the samples were drawn contrary to law, the appellants would be estopped because their representative was present when the samples were drawn and they did not object immediately. This is a completely perverse finding both on fact and law. On fact, it has been more than amply proved that no representative of the appellant was, in fact, present at the time the Customs Inspector took the samples. Shri K.M. Jani who was allegedly present not only stated that he did not represent the Clearing Agent of the appellants in that he was not their employee but also stated that he was not present when the samples were taken. In fact, therefore, there was no representative of the appellants when the samples were taken. In law equally the Tribunal ought to have realized that there can be no estoppel against law. If the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eye of law at all. The Customs Authorities are not absolved from following the law depending upon the acts of a particular assessee. Something that is illegal cannot convert itself into something legal by the act of a third person. - Decided in favour of appellant.
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Corporate Laws
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2015 (5) TMI 556
Charges of oppression and mismanagement under Section 397/398 read with Sections 399, 402, 403 & 406 of the Companies Act, 1956 - Application to pass ad-interim orders - Matter already under consideration of BIFR under the SICA - SICA being a Special Act shall prevail over the provisions of the Companies Act - Held that:- It is clear that in this case the Dalmia Group is making an attempt to abuse the process of law. Prima facie, it is established that the Respondent Nos.2 and 3, firstly, entered into an MOU with Seth Developers Pvt. Ltd. and Suraksha Realty Ltd. without following due course of law. The Respondent Nos.2 and 3 extracted huge amounts from the said Companies under the MOU for sale/development of the Vile Parle Property and then the Company entered into an MOU with M/s Arrow Engineering Pvt. Ltd. and further extracted the monies. Now, the Respondents are trying to enter into a new transaction with M/s. Parmida Developers Ltd. in contravention of the provisions contained in Section 173 (1) of the Act. Furthermore, there is ample prima facie material is available on record which clearly establishes that the amounts received in the name of the Company have been siphoned off by the Dalmia Group for their own personal benefits/group entities. Suffice it to say, at this stage, the actions and deeds of M/s Dalmia Group speak a lots of falsehood and unethical means for achieving their goals, which can hardly be approved. A prima facie case, therefore, is established in favour of the Petitioners. However, it is a settled proposition of law that while granting an ad- interim injunction order, the Court is required to examine, not only the "prima facie case" but also the other factors, like balance of convenience and "question of irreparable loss". In a catena of decisions, it is laid down that the satisfaction of the court that there is a prima facie case by itself is not a sufficient ground to grant an ad-interim injunction. The court further has to satisfy itself that non-interference by the court would result in irreparable injury to the party seeking relief(s) and there is no other remedy available to the party except one to grant ad-interim injunction. The court while granting or refusing to grant ad-interim injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused as compared to that which is likely to be caused to the other side if the injunction is granted. Further, the balance of convenience must also be in favour of the person seeking ad interim injunction. In the present case, the examination of the resolution under challenge passed by the Board of Directors itself suggests that the proposed Agreement/MOU sought to be implemented by the Company is subject to the approval of BIFR and Hon'ble Supreme Court in the pending matters. Therefore, the MOU, if implemented by the Company, will be non-est and void, until both the Forums approve the impugned resolution. For the said reason, the question of irreparable loss to the petition does not arise. Further, the balance of convenience is also not in favour of the Petitioners. No prejudice is going to be caused to the Petitioners as they are adequately protected by the interim orders of the Hon'ble BIFR and Hon'ble Supreme Court as referred to hereinabove. In addition, upon a careful consideration of the aforesaid proposition of law, propounded by the Hon'ble Supreme Court, I am of the considered view, that to upkeep the strict standard of judicial discipline and propriety, it would be unjust and inappropriate to pass ad-interim orders at this stage. Now, I proceed to consider to effect of the law propounded by the Hon'ble Supreme Court in the cases of Tata Motors [2008 (5) TMI 423 - SUPREME COURT OF INDIA] and Raheja Universal [2012 (10) TMI 233 - SUPREME COURT], on the question of maintainability of the petition. The next question therefore arises to answer is as to whether the present petition deserves to be dismissed due to overriding provisions of the SICA, as sought to be contended by the Ld. Sr. Counsel appearing for the Company. Having given my thoughtful consideration, I am of the view that although, the provisions of the SICA prevail over the provisions of the Companies Act as held in the cases referred to above yet, it would not be appropriate to dismiss the petition on this ground alone. To my mind, the proper recourse available to the petitioners in law is to seek approval/permission from the BIFR for further prosecution of the present petition. - Application for ad-interim orders rejected.
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Service Tax
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2015 (5) TMI 566
Penalty u/s 78 - Whether Section 78 of the Act stipulates imposition of penalty on any person liable to pay such service tax or erroneous refund as determined under Section 73A(2) of the Finance Act - Held that:- Once the service tax was not leviable under Section 68 at that point of time and the liability was only to deposit the tax under Section 73A(2), which has been done on 15.11.2008, after delay, but due to the service being not taxable at the relevant time when the invoices were raised, we are of the opinion that the case would not fall under the provisions of Section 78 for invoking of the penalty, as has been held by the Tribunal. It was the categorical stand of the appellant before the First Appellate Authority that the service tax had been collected by mistake, on account of the new provision and the office of the appellant was not fully acquainted with the interpretation of the statute due to which the default had occurred and therefore, in view of the defence taken, the Tribunal was not justified, in the present facts and circumstances, to hold that there was a wilful suppression of facts, to bring it within the ambit of Section 78. - Decided in favour of assessee.
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2015 (5) TMI 565
Maintainability of appeal - After availing the remedy unsuccessfully before another Court whether Court can accept the challenge to the self same order, which has reached its finality under writ jurisdiction or not - Held that:- it is not legally permissible, if it is done the writ court will unsettle a legally settled position. We think that when appellate authority has already decided the matter against the petitioner, the writ Court is debarred from doing so as the same binds the writ Court applying the principle of res judicata, particularly, when the appellate authoritys orders are not challenged in the writ jurisdiction - Decided against assessee.
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2015 (5) TMI 564
Demand of service tax - Liability of co-operative societies to pay service tax - Held that:- Petitioner is relegated to pursue the matter before the third respondent/Superintendent of Central Excise in response to Exts.P1 and P3 proceedings. The third respondent/Superintendent of Central Excise/competent authority shall consider the reply submitted by the petitioner and shall also hear the petitioner on the question of their liability to pay service tax; and if the liability is upheld, direction be given to the petitioner to produce further documents for quantification of the liability - Appeal disposed of.
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Central Excise
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2015 (5) TMI 561
Condonation of delay - Inordinate delay of 293 days in filing the appeal - Held that:- Reason for delay, according to the appellant, is that at that time, a new Asstt . Manager (Commercial), Shri Sandeep Berry had joined as the earlier Assistant Manager (Commercial), Shri R.P. Gupta has resigned from the services w.e.f . 8.8.2013 and the new person, Shri Sandeep Berry sent these papers to Ms. Shruti Kakar , Legal Manager and both of them by mistake treated the order a show cause notice and they did not take any action for filing the appeal. From the circumstances of the case, it is seen that there was no reason for the appellant in delay of filing of the appeal, as the appellant had been granted unconditional stay in respect of the appeal against the order-in-original dated 8.8.2012 and because of the delay in filing of the appeal against the order-in-original dated 26.08.2013, they had to pay mandatory pre-deposit of 7.5 % under the amended provisions of Section 35 F. In these circumstances, we are of the view that the delay in filing of the appeal was due to bona fide mistake on the part of the appellant's employees - Decision in the case of N. Balakrishnan (1998 (9) TMI 602 - SUPREME COURT OF INDIA) would be applicable - Delay condoned.
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2015 (5) TMI 560
Rectification of mistake - Whether Rule 5 of Hot Re-Rolling Steel Mills Annual Capacity Determination Rules, 1997 would apply to the case where annual capacity of production has been re-determined in terms of Rule 4(2) on the account of change in parameters even though re-determined capacity is less than the annual production for the financial year 1996-97 - Held that:- Initially Tribunal vide order dated 9/10/2000 which is wrongly mentioned in the order 18/12/2013 as "9/10/2010" had allowed the parties' appeal - on appeal being filed by the Revenue against the order dated 9/10/2000 of the Tribunal the issue had been decided by the Hon'ble High Court against the assessee and in the favour of the Department following Apex Court's judgment in the case of CCE Chandigarh Vs. Doaba Steel Rolling Mills (2011 (7) TMI 10 - SUPREME COURT OF INDIA). Therefore, the appeal filed by the appellant has been dismissed. In view of this, last sentence in the order dated 18/12/2013 to that "it is made clear that the order of the tribunal passed on 9/10/2010 in the present appeal shall operate" is deleted. - Rectification done.
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2015 (5) TMI 559
Benefit of Notifications 83/94-CE and 84/94-CE both dated 11.4.1994 - Penalty u/s 11AC - Held that:- Appellants have claimed the benefit of Notifications 83/94 and 84/94 for the first time before the Tribunal and obviously the same has not been examined by the original authority or by the first appellate authority. It also appears to us that the supplier of the goods, M/s. D.S. Enterprises, is a trading unit and not a manufacturing unit and the conditions stipulated under Notifications 83/94 and 84/94 are of a nature which can be satisfied by a manufacturer. Since the plea for the benefit of the two notifications has been raised for the first time, it would be proper to remand the matter to the original authority to examine whether the appellants would be really eligible to get the benefit of Notifications 83/94 or 84/94. - Matter remanded back - Decided in favour of assessee.
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2015 (5) TMI 558
Waiver of pre deposit - Duty evasion - Held that:- Duty evasion by M/s Lakhotia Metalizers Pvt. Ltd. and M/s A. B. Polymers, has been quantified from the records recovered from their premises - case is based on appreciation of evidence produced by both the sides, which would be gone in detail at the time of final disposal of the Appeals. However, from the findings of the ld. Adjudicating Commissioner, it is noted that each of the Applicants has acted and omitted in a manner contributed to the alleged duty evasion. Accordingly, prima-facie, we are of the view that none of the Applicants are able to make out a case for full waiver of the predeposit at this stage. - Partial Stay granted.
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CST, VAT & Sales Tax
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2015 (5) TMI 563
Penalty in form DVAT-24A issued under Section 33 of the Delhi Value Added Tax Act, 2004 - non-filing of stock statement online in form Stock-I - whether the respondent-commissioner has the power or jurisdiction to impose fine as a punishment under the provisions of Section 70(5) of the said Act through his delegate or such power to impose fine vests with the courts of criminal jurisdiction - Held that:- A bare reading of Section 3(38) of the General Clauses Act,1897, reveals that the expression “punishable with fine” stated under section 70(5) of the said Act indicates that section 70(5) of the said Act deals with “offence” as defined under the General Clauses Act, 1897. It is clear that the fine imposed under section 70(5) of the said act is for an “offence” as defined under Section 3(38) of the General Clauses Act, 1897 which shall be tried by the court of criminal jurisdiction in accordance with section 26(b) of the Code of Criminal Procedure, 1973. The commissioner or its delegates do not have power or jurisdiction to impose such fine. Thus, the impugned notices are liable to be quashed on the ground of jurisdiction alone. - Decided in favour of assessee.
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2015 (5) TMI 562
Denial of refund claim - Input tax - Held that:- Additional Government Pleader has fairly submitted that the respondent may be directed to dispose of the representation dated 08.09.2014, submitted by the petitioner, by granting reasonable time limit - petitioner has come out with the limited prayer of mandamus to the respondent, without adverting into the merits of the case, the respondent herein is directed to consider the representation of the petitioner dated 08.09.2014 and dispose of the same on merits and in accordance with law within a period of three weeks from the date of receipt of a copy of this order - Petition disposed of.
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