TMI Tax Updates - e-Newsletter
May 21, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
EXPLANATORY NOTES ON PROVISIONS OF THE INCOME DECLARATION SCHEME, 2016 AS PROVIDED IN CHAPTER IX OF THE FINANCE ACT, 2016 - Circular
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Income Tax:
Additional Depreciation u/s 32(1)(iia) of the Income Tax Act, 1961 - Board has accepted the position that printing or printing and publishing amounts to manufacture or production of article or thing.
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Income Tax:
Income Declaration Scheme Rules, 2016 as Notified by the CBDT will come into effect w.e.f. 1.6.2016
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Income Tax:
The ROC website does not contain the nature of transactions except containing the balance sheet, list of directors and shareholders. Hence from the said website, it is very strange that how the Learned AO was able to conclude that the transactions are accommodation entries. - AT
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Income Tax:
When the assessees exercised option for Stock Appreciation Rights, they were residents in India. Therefore, when the Stock Appreciation Rights was vested irrespective of the residency, the same is liable for taxation in India - AT
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Income Tax:
In the absence of a categorical finding by the Department that the surrendered amount was in the nature of income, the penalty u/s 271(1)(c) cannot be levied. - AT
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Income Tax:
Registration u/s 12AA - The only condition at the time of granting registration by the CIT(E) is to see whether the objects are of charitable in nature and the activities are genuine in nature. By holding that some of the objects of the trust are religious in nature, it cannot be inferred that these are not charitable in nature. - AT
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Income Tax:
Grant of approval under section 10(23C)(vi)- the school is not governed by the provision of RTE Act at all and the basic premise of the Ld. Principal Chief Commissioner of Income Tax for denying approval of the assessee society therefore fails - AT
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Income Tax:
Disallowance of bad debt/business loss being the amount forfeited by BHEL on account of termination of contract - The assessee probably came to terms with the occasion of suffering such losses in wake of the fact of saving itself from incurring further huge losses. - claim allowed - AT
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Income Tax:
Once it is found that the amount realized by sale of carbon credit is not taxable as profit, naturally it will have no adverse effect on the Revenue. - Revision proceeding u/s 263 are not correct - HC
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Income Tax:
Penalty u/s 271(1)(c) - assessee failed to explain the genuine credits/liability in books of account on the matter in issue and has therefore, furnished inaccurate particulars of income so as to invite levy of the penalty - HC
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Income Tax:
Revision u/s 264 in favor of assessee - CIT has rightly rejected the application on the ground that once the income is offered, then the same cannot be withdrawn. - HC
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Income Tax:
Revision u/s 263 - Is the finding of the CIT that unaccounted money was or could have been laundered as clean share capital by creating facade of paper work, routing the money through several bank accounts and getting it the seal of statutory approval by getting the case reopened u/s 147 suo motu perverse? - HC uphold the revision proceedings.
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Income Tax:
Power of AO for extension of time for filing of special audit report u/s 142(2A) - relationship of auditor (CA) with the assessee - If the submissions of the Revenue were to be accepted, then it would mean that the application can be made not only by the Assessee but by a Chartered Accountant of the Assessee nominated by the Commissioner u/s 142(2A) - The Court declines to do so. - HC
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Income Tax:
Reopening of assessment proceedings are valid where AO was of the view that the Assessee had 'artificially and with an ulterior motive' reduced the income from the property by setting off loss accruing to the firm. - HC
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Income Tax:
Time barred assessment u/s 153 - Time-limit for completion of assessments and reassessments - HC excluded the period during which the draft assessment was forwarded to the IAC till the date of receiving the instructions from the IAC u/s 144B - Order of HC sustained - SC
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Customs:
Refund - in case of export of goods, unjust enrichment is not applicable - therefore, refund is not liable to be credited in the Consumer Welfare Fund - AT
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Customs:
Valuation - revenue has not brought on records any evidence to indicate that the appellant and the supplier were in collusion to suppress the value nor there is any corroborative evidence of suppression of the value or repartition of any amount over and above the invoiced value - demand set aside - AT
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Service Tax:
No penalty can be charged for non-filing / delayed filing of ST-3 return in case there is no service tax liability for Such period - But, levy of penalty confirmed for the period where service tax was payable but return was not filed or delayed filed - Section 70 r.w Rule 7C of Service Tax Rules - AT
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Service Tax:
Business Auxiliary Service - Arranging loans to customers from banks - BAS or BSS - appellant's argument that they have provided only space to the bank and therefore, their service is classifiable under ‘Business Support Service’ is not supported or backed by any evidence - AT
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Central Excise:
CENVAT credit attributable to the inputs gone into manufacturing of exempted goods - having been paid the amount as per the provisions of Rule 6 along with interest there was no need for visiting the appellant with penalty - AT
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Central Excise:
Job-work - Cenvat credit - there is no condition under Rule 4(5) (b) of Cenvat Credit Rules that moulds sent by the respondents has to be brought back within 180 days and failure to do so would render the respondents liable to reverse the Cenvat credit availed on the same - AT
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Central Excise:
Whether the refund claim can be sanctioned without availability of proof of payment in the shape of Original TR 6 Challan - only for want of Original TR 6 Challan rejection of the refund claim is not proper. - AT
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Central Excise:
Cenvat Credit - As per various judgments also it can be seen that the Credit was regularized in case of wire drawing units as per the amendment made in Rule 16 of Central Excise Rules. Even in the absence of specific amendment in respect to the wire drawing unit, the credit was otherwise admissible as per unamended Rule 16 of Central Excise Rules, 2002 - AT
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VAT:
Whether the Entry Tax under the provisions of the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 can be levied upon the goods brought into railway area where the petitioners are carrying on their trade and business - Held Yes - HC
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VAT:
Rate of Sales Tax / VAT - manufactured smokeless soft fuel i.e. smokeless coke out of coal is distinct commodity and also understood in common parlance different from coal - HC
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VAT:
Revised return - additional tax liability - if the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (5) TMI 820
Addition towards commission on accommodation entries - taxability in the hands of assessee - Held that:- No evidence has been brought on record by the revenue to prove that the transactions of 24 companies with Bhushan group of companies are accommodation entries. No material has been brought on record to prove that the said companies were actually engaged in providing accommodation entries. No material has been found in search or survey to conclusively establish that all the 24 companies are dummy and the assessee had managed and controlled their financial affairs. The Learned AO had alleged that cheques were issued in lieu of cash received. But then, there was no recovery of unaccounted cash during the search or survey operations.No evidence has been brought on record by the revenue to prove that the assessee had earned commission income @ 0.55% on these alleged accommodation entries. Moreover, the receipt of commission income of ₹ 1.66 crores for all the asst years put together as assessed by the Learned AO is not matched by recovery of undisclosed assets or documents indicating undisclosed expenditure which were found during search and survey operations. No material was found in search and survey operations which would prove that the assessee was managing or controlling the 24 companies except placing reliance on statements of certain employees of those companies which were later retracted by them. No material has been brought on record by the revenue to prove that sufficient action was taken by the revenue on the employees who had retracted the statements and who had also originally offered to pay tax on the commission income derived by them. No examination was carried out by the revenue with Mr.R.K.Gupta , Vice President and Company Secretary of M/s Bhushan Power & Steel Ltd who had addressed a letter dated 10.2.2010 stating that documents like memorandum of sale of shares, delivery of share certificates etc are being sent for getting signature from directors of respective companies of Mr.S.M.Nahata. This letter was admittedly addressed by Mr.R.K.Gupta to one of the employee of those companies which were found in the office premises of the assessee. The assessee had already demonstrated the circumstances under which the papers of those companies had come to his possession i.e in his professional capacity. No evidences has been brought on record by the Learned AO except alleging that the money was routed in the bank account of the companies through other bank accounts. But then the onus was on the Learned AO to discover such bank accounts and establish the money trail.The Learned AO has failed to point out any bank account in which cash was initially deposited. The ROC website does not contain the nature of transactions except containing the balance sheet, list of directors and shareholders. Hence from the said website, it is very strange that how the Learned AO was able to conclude that the transactions are accommodation entries. The valuable assets found during the search and survey such as cash and jewellery have been properly explained by the assessee and no addition has been made on that account by the Learned AO. The details of 21 bank accounts were also found in the search and survey operations which were explained at the assessment stage that all the bank accounts were duly disclosed in the regular books of accounts of account holders which has been accepted by the Learned AO. There was no discovery of any bank account wherein the commission allegedly received by the assessee was found deposited.The entire addition has been made by the Learned AO only based on mere suspicion, surmises and conjectures.- Decided in favour of assessee
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2016 (5) TMI 819
TDS on Stock Appreciation Rights as a perquisite in the hands of the assessees - India - USA DTAA - whether the Stock Appreciation Rights availed by the assessees suffered tax twice, once in USA and again in India? - Held that:- The incentive was given to the assessees as a compensation for the services rendered to M/s Cognizant Technologies India Pvt. Ltd. It was not given for transfer of capital asset or termination of any source of income. Therefore, the right conferred on the assessees, namely, Stock Appreciation Rights under the scheme cannot be construed as capital asset. What was conferred on the assessees is only valuation of appreciation for a specified number of stocks. The stock itself was not conferred on the assessees. The stock was retained in the common kit and the appreciation value was given to the assessees. This was given because the assessees were employees of subsidiary company of M/s Cognizant Technology Solutions Corporation, a Delaware Corporation, USA. Since the right to receive the appreciation value alone was conferred on the assessees and not right on the stock itself, this Tribunal is of the considered opinion that what was received by the assessees is not capital asset. Hence, the same is liable for taxation as revenue receipt. There is no material available on record to suggest that the value of Stock Appreciation Rights was suffered tax in USA. The assessees have not produced the certificate before the authorities below or before this Tribunal from USA tax authorities to support the claim that the same was subjected to tax in USA. Since the assessees claim that the value of Stock Appreciation Rights was subjected to taxation in USA, this Tribunal is of the considered opinion that the same has to be examined in the light of the Double Taxation Avoidance Agreement between Government of India and Government of USA on the basis of the certificate issued by the tax authorities in USA. Therefore, while confirming that the value of Stock Appreciation Rights received by the assessees is liable for taxation, the matter is remitted back to the file of the Assessing Officer for limited purpose of examining whether the assessee has paid tax in USA on the value of the very same Stock Appreciation Rights in the light of the Double Taxation Avoidance Agreement between Government of India and Government of USA. The benefit was conferred on the assessees in the form of Stock Appreciation Rights for the services rendered to the subsidiary company, M/s Cognizant Technologies India Pvt. Ltd. Therefore, merely because the assessees were nonresidents and rendered service outside India during the vesting period that cannot be a reason for claiming that the same was not taxable in India. Admittedly, when the assessees exercised option for Stock Appreciation Rights, they were residents in India. Therefore, when the Stock Appreciation Rights was vested irrespective of the residency, the same is liable for taxation in India. - Decided partly in favour of assessee for statistical purposes.
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2016 (5) TMI 818
Penalty u/s 271(1)(c) - income surrendered - Held that:- As during survey, admittedly, certain documents were found, which were not explainable by the assessee. However, there was neither any detection by the Department on the basis of these documents, that these contain some element of income pertaining to the assessee. Admittedly, also that the assessee made surrender, however, the assessee kept on maintaining that this is not its total income, at best, these are the advances, against which it will have to deliver goods in future. This fact is very clearly emerging from the surrender letter. These contentions of the assessee had nowhere been rebutted by the lower authorities at any stage. In the present case, without any rebuttal by the lower authorities, we can very safely infer that whatever amount was surrendered by the assessee was not its actual income, but just an estimate. Why and how the assessee decided to surrender the same and pay additional taxes on it, is not a question, before us, to go into. In these circumstances, it cannot be said that the income was surrendered after detection by the Department. As no income accrued to the assessee during the relevant assessment year. Though it is also a matter to be deliberated upon that there were certain amounts jotted down on the seized documents, which were not explainable by the assessee. However, none has gone into to find the nature of these figures, in view of the fact that the assessee itself surrendered certain amounts and paid due taxes thereon. In the absence of a categorical finding by the Department that the surrendered amount was in the nature of income, the penalty under section 271(1)(c) of the Act cannot be levied. - Decided in favour of assessee
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2016 (5) TMI 817
Registration under section 12AA rejected - CIT(A) is of the view that the trust is not engaged in any form of charitable activities as is envisaged in section 2(15) of the Act and this view was formed considering the specific religious purposes of the objects mentioned in the trust deed of the assessee - Held that:- On going through the said objects of the trust, we see that these relate to imparting free Gurmat Sangeet, holding Kirtan Darbar, organizing Gurmat camps and to construct buildings, etc. The purpose of the trust is to run institution to spread teachings of Holy Guru Granth Sahib. At first, we observe that these objects nowhere point to the propagation of religious teachings and singing. Even if singing or teachings of specific kind are promoted through these objects, nowhere from other objects of the trust it is coming out that these teachings are to be given to a particular community only. The teachings of the Guru Granth Sahib are meant for each and every community and cannot be said to be for the propagation of a particular religious tenet. After observing such, we also emphasize that for granting registration under section 12AA of the Act, there is no bar on any trust which as per the Commissioner of Income Tax (Exemptions) cannot be given registration because of its being religious in nature. The only condition at the time of granting registration by the Commissioner of Income Tax (Exemptions) is to see whether the objects are of charitable in nature and the activities are genuine in nature. By holding that some of the objects of the trust are religious in nature, it cannot be inferred that these are not charitable in nature. Commissioner of Income Tax (Exemptions) concluded that these objects tend to point out that it is a closely held private trust whose purpose is to propagate religious tenets of Gurbani through music or singing. This is not a right reason for denying registration under section 12AA of the Act. There is no bar under section 12A not to give registration to a religious trust. Even a religious trust having charitable objects can be given registration under section 12AA of the Act. As regards the activities being for furtherance of the cause for a particular community, proper care has been taken by the Income Tax Act in its provisions of sections 11 and 13 of the Income Tax Act. However, at a time of giving registration under section 12AA of the Act, these are not the relevant things to be seen. These matters are to be looked after by the Assessing Officer during the assessment proceedings on yearly basis while granting exemptions to the assessee under section 11 of the Act. In order to arrive at the true purpose of a trust, the objectives are to be considered as a whole. Nowhere from any of the objects of the assessee, it appears that it aims to provide any benefit to a specific person or persons. We are in agreement with the submissions made by the learned counsel for the assessee that at the time of granting of registration, the only two factors, which are to be taken into consideration by the Commissioner of Income Tax (Exemptions) are charitable character of the objects of the trust and genuineness of the activities. Nowhere in his whole order, the Commissioner of Income Tax (Exemptions) has brought on record any evidence or material to show that the objects of the assessee trust are not charitable or the activities of the assessee trust are not genuine. In view of this, we direct the Commissioner of Income Tax (Exemptions) to grant registration under section 12AA of the Act to the assessee. - Decided in favour of assessee
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2016 (5) TMI 816
Grant of approval under section 10(23C)(vi) rejected - schools governed by RTE Act - Held that:- A bare perusal of the provisions of Section 2(n) read with Section 2(f) would reveal that the schools which are covered by the provisions of RTE Act are those which impart elementary education, meaning education from class 1 to class 8. In the present case it is an undisputed fact that the school run by the assessee society is imparting education below class 1. Clearly the asessee society is not a school as per the definition given in the RTE Act in section 2(n) and is therefore not covered by the provisions of the RTE Act. Further the provisions of Section 12(1)(c) read alongwith the proviso reveals that the where schools imparting elementary education are also imparting pre school education, the provision of compulsory admission to 25% students belonging to the weaker section of the society, shall apply to the pre school education admission also. In the present case the school run by the assessee society is not imparting elementary education in the first place therefore the question of attracting the provision of section 12(1)(c) and the proviso thereto does not arise at all. Therefore in our considered opinion the school is not governed by the provision of RTE Act at all and the basic premise of the Ld. Principal Chief Commissioner of Income Tax for denying approval of the assessee society therefore fails. Thus as the school is not covered under the RTE Act, we set aside the order of the Principal Chief Commissioner of Income Tax and direct him to grant registration to the assessee society under 10(23C)(vi). - Decided in favour of assessee.
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2016 (5) TMI 815
Disallowance u/s 14A - Held that:- For the purpose of disallowance of other expenses, we do not find any satisfaction recorded by the Assessing Officer in his order explicitly or implicitly to the fact that the claim of the assessee that no expenses have been incurred for earning exempt income is wrong. Reliance on the judgment of Punjab & Haryana High Court in the case of CIT Vs. Deepak Mittal (2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT ), whereby it has been held that in the absence of any satisfaction recorded by the Assessing Officer, no disallowance of administrative expenses under section 14A can be made. As regards the act of the learned CIT (Appeals) in upholding the disallowance to the extent of ₹ 10 lacs, we do not find any substance in such an act on the part of the learned CIT (Appeals) since we are in agreement with the submissions of the learned D.R. that to the extent that if any disallowance has to be made under section 14A of the Act, the same has to be calculated as per Rule 8D w.e.f. assessment year 2008-09. However,, as per the facts of the present case, we have already held that there is no occasion to make disallowance under section 14A of the Act - Decided in favour of assessee Disallowance of bad debt/business loss being the amount forfeited by BHEL on account of termination of contract - Held that:- The enduring benefit derived at by the assessee at the time of foregoing the buying agreement. In our opinion, no such benefit of enduring nature has been derived by assessee at the time of suffering losses on account of forfeiture of advance money. The decision of course, was taken by the assessee in a way only to relieve itself from the huge amount of money to be paid for a machinery of lesser capacity in comparison to a machinery of higher capacity available to it at a lower cost. The assessee probably came to terms with the occasion of suffering such losses in wake of the fact of saving itself from incurring further huge losses. This act goes further to prove that the losses are incurred on a decision of prudence taken for the business. Since no capital asset came into existence, the loss is allowable as a business loss.- Decided in favour of assessee
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2016 (5) TMI 814
Disallowance under section 14A r.w. Rule 8D - Held that:- Disallowance under section 14A r.w. Rule 8D cannot be made in respect of shares held as stock-in-trade and therefore direct the AO to delete the disallowance made under section 14A r.w. Rule 8D. See India Advantage Securities Ltd. [2015 (6) TMI 140 - BOMBAY HIGH COURT ] - Decided in favour of assessee Disallowance of Business Loss by invoking Explanation to section 73 - Held that:- The amendment inserted in Explanation to section 73 of the Act by Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 is clarificatory in nature and would therefore operate retrospectively from 01.04.1977 from which date the Explanation to section 73 was placed on the statute since this amendment to section 73 of the Act ‘ or a company the principal business of which is the business of trading in shares ’ brings in the assessee whose principal business is trading of shares. Therefore, the loss incurred in share trading business by such companies, i.e. like the assessee will not be treated as speculation business loss but normal business loss, and hence the same loss can be adjusted against other business income or income from any other sources of the year under consideration. In this view of the matter, we direct the AO to allow the assessee’s claim for setting off the loss from ‘share trading business’ against ‘other business income’ and income from any other sources during the year under consideration. Since we have allowed the assessee’s primary contention/ground, we do not consider it necessary to adjudicate the alternative contention raised by the assessee. Disallowance of transaction charges paid to the Stock Exchange - non TDS - Held that:- Respectfully following the decision of the Hon'ble Apex Court in the case of Kotak Securities Ltd. [2016 (3) TMI 1026 - SUPREME COURT] we hold that no TDS is deductible on payment of transaction charges paid by members to Stock Exchange under section 194J of the Act, as they are not for technical services rendered but are in the nature of payments for facilities provided by the Stock Exchange and accordingly direct the AO to delete the disallowance made on account of transaction charges paid to Stock Exchange. - Decided in favour of assessee
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2016 (5) TMI 813
Subsidy received from DOT for rural telephony - eligibility for deduction u/s 80-IA - Held that:- As in terms of the non-obstante clause used in section 80IA(2A), deduction for telecommunication services is available in respect of 'profits of eligible business' and is not restricted to 'profits derived from eligible business' as mentioned in section 80IA. Giving due recognition for the peculiarities of the telecommunication services where heavy investment costs in the initial years are a necessity they have been allowed to be recovered by way of profits to the extent of hundred percent from that activity in the first five years and thereafter the allowable deduction is substantially reduced to thirty percent in the next five years presuming that by then the heavy infrastructural costs would have been recovered and/or the objectives of the governmental policy would have been attained. Keeping in mind the services and functions performed by such an assessee towards the aims of the government policy wherein gestation period necessarily looking at the nature of the undertaking is very long. Thus, for the purposes of the time frame the legislature has given the timeline of fifteen years from which ten consecutive years could be opted. The fact remains that the legislature aware of the differences in the use of terms used consciously ensures that "profits and gains derived from" used in sub-section (1) is not used in sub-section (2A). Instead in sub-section (2A) the term used is "profits and gains of eligible business" juxta posed with the glaring fact that the sub-section (2A) starts with a non-obstante clause namely "Notwithstanding" qualified further by the use of the words "anything contained in". In the face of the clear and unambiguous statutory provisions we find ourselves unable to agree with the arguments advanced by the Ld. CIT DR however valiantly as what the law is has very clearly been enunciated and set out in the relevant provision giving cause to no debate whatsoever. - Decided in favour of assessee Disallowance of depreciation claimed for the current year - Held that:- The Government of India has transferred the assets to the petitioner company at their book value i.e., the value at which thesaid assets are reflected in the books of DTS and DTO and the book value of the Government of India's holding in the petitioner company as shareholder and a creditor aggregates the book value of the assets transferred. The configuration of the capital structure of the petitioner has no impact on the value of the Government's holding in the petitioner company as reserves of a company are subsumed in the book value of its capital. We find no basis, at all, for the Assessing Officer to surmise that reserves represent a subsidy, grant or reimbursement from which the cost of assets of the petitioner company are met and the whole consideration received by the Government of India for transfer of business is limited to the value of loans and the face value of the shares issued to the Government of India. A reserve represents the shareholders' fund and may be utilized in various ways including to declare dividends or for issuing bonus shares. There is no plausible reason to assume that the value of shareholders' holding in a company is limited to the face value of the issued and paid up share-capital and the reserves represent a subsidy or a grant or a reimbursement by the shareholders from which directly or indirectly the cost of the assets in the hands of a company are met.- Decided in favour of assessee Disallowance @15% of Licence and Spectrum fees - Held that:- 'License fees' being a charge received by the government for parting with rights, is neither a tax, nor a duty, nor a fees, nor a cess within the meaning of S.43B of the Act. Hence this Sec.43B cannot be applied. - Decided in favour of assessee Disallowance on account of write off of losses - Held that:- Once through writing back in the computation of Income of the Provisions made for asset write-offs, and then again if the same were to be disallowed separately by the A.O. The accounting entries passed in this regard are consistently being followed from year to year. It appears that the full accounting implication of this item of 'Write off of Assets' in light of the corresponding 'Provision accounts' for 'Decommissioned Assets has not been fully understood. The A.O's step of disallowing these expense does result in a double disallowance of the same expenditure, which is being Credited to the Provision Account, and the Provision Account itself being written back. I therefore direct the deletion of this addition erroneously made by the learned A.O upon a mis-reading of the facts and accounting involved.- Decided in favour of assessee
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2016 (5) TMI 812
Exemption under section 11 denied - assessee is registered under section 12AA - nature of object - Held that:- Definitely the object of the society contains sale and purchase as one of its objects, still the ultimate object is not to give benefit to some specific person. Nowhere in his order, the Assessing Officer has been able to bring on record any material or evidence that the assessee is carrying on any activity which is driven by object of profit making. The assessee manufactures articles as required by the Government and sell those to the Government concern only. Another fact coming out from the order of the Assessing Officer that the assessee is making sales to the concern which was less than market rate, this fact also strengthens the case of the assessee that it is not driven by profit motive. No allegation of violation of any provision of section 13 of the Act is coming out from the order of the Assessing Officer nor it was contended before us. If the assessee does not do the activity of sale and purchase, it will come to a standstill and will not be able to work and the objects for which registration was granted to it will cease to exist. In order to attain its objects it has to in any case, carry on activities of sale and purchase. In this view, we do not find that the activities of sale and purchase which have been questioned by the Assessing Officer have been carried on by the assessee with the objective to earn profit. Once it is seen that the object of the assessee is not to carrying on the business for profit motive, we can very easily infer that whatever activities in the nature of business the assessee is carrying are all incidental to attainment of its main object. In such a scenario, the provisions of section 11(4A) of the Act comes into play and the assessee has to maintain separate books of account for said business. However, in the present case, the assessee is carrying all its activities out of grants received by the Government, therefore, there cannot be two separate set of books. This fact has not been controverted by the Assessing Officer, nor the learned D.R. while arguing before us, does the same. In view of the above, as per the proposition laid down by the Delhi High Court in the case of India Trade Promotion Organization (2015 (1) TMI 928 - DELHI HIGH COURT ), the case of the assessee is not hit by the proviso to section 2(15) of the Act. Therefore, for the assessment year under consideration, the assessee is eligible for exemption under section 11 of the Act. - Decided in favour of assessee.
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2016 (5) TMI 811
Disallowance of salary expenses - the assessee Society was granted registration u/s 12AA - Held that:- CIT(A) was full y justified in admitting the additional evidence. We may also observe here that Assessing officer has disallowed 50% of the salary expenses on adhoc basis without pointing out any particular instance to show that the part of payment was bogus. Thus, we full y agree with this observation of the C IT(A) that there was no basis for making disallowance of 50% of salary expenses. As regards the disallowance out of salary expenses at ₹ 5 lakhs sustained by the C IT(A), we are of the view, that disallowance of ₹ 5 lakhs is quite reasonable and justified keeping in view the facts and circumstances of the present case. Accordingly, we decline to interfere with the order of the CIT(A) on this issue. Addition made on account of disallowance of expenses u/s 40(a)(ia) - Held that:- Provisions of section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of section 11. Addition of unvouched expenses and expenses of personal nature - Held that:- C IT(A) has correctly observed that the expenses incurred on account of business promotion, Misc. expenses, repair and maintenance office expenses, D.G. set and Printing and stationery expenses are required for smooth running of the educational institution. By any stretch of imagination, these expenses cannot be held unreasonable or excessive. We also agree with the CIT(A) that 1/10 t h of vehicle running and maintenance expenses is to be treated as personal in nature because the element of personal use of vehicle cannot be ruled out in this case. There is no evidence on record to show that the assessee had maintained the log book of the vehicle. Thus, considering the entire facts and circumstances of the case, we uphold the order of CIT(A) Withdrawal of registration u/s 12AA - Held that:- CIT(A) has deleted various additions made by the Assessing officer and after re-computation condition of application of 85% of income stands satisfied and, therefore, there remains no ground for withdrawal of the registration granted u/s 12AA of the Act. According to Ld. Counsel for the assessee, this ground has been raised by the Revenue considering the additions made by the Assessing officer. In our opinion, the order of the CIT(A) is correct and the ground raised by the Revenue that the trust has applied 62.32 % of its income for the purposes of which trust had been created has no force - Decided against the revenue.
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2016 (5) TMI 810
Reopening of assessment - Held that:- Admittedly, the assessment was completed under Section 143(3) of the Act on 13.12.2010. There was no discussion in the assessment order about the cost incurred by the assessee for ESOP scheme. When the Assessing Officer has not framed any opinion in the original assessment, this Tribunal is of the considered opinion that it cannot be said that the Assessing Officer reopened the assessment due to change of opinion. For change of opinion, an opinion must have been formed by the Assessing Officer in the original assessment order. In the absence of any opinion formed by the Assessing Officer in the original assessment under Section 143(3) of the Act, at no stretch of imagination it can be said that the Assessing Officer reopened the assessment due to change of opinion. In view of the above, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment within a period of four years from the end of the relevant assessment year Disallowance towards ESOP expenses - Held that:- Since the shares were purchased by the Trust from the promoters of the assessee-company at the rate of ₹ 15/- per equity share and the same was also claimed to be allotted to the employees of the assessee-company at a price of ₹ 15/- per equity share, this Tribunal is of the considered opinion that the buy back of the shares from the very same employees at a cost of ₹ 340/- per equity share cannot be an expenditure for the assessee-company. This Tribunal is of the considered opinion that the claim of the assessee is only to reduce the taxable income of the assessee. Therefore, the same cannot be allowed under Section 37 of the Act. Addition of brokerage income - Held that:- Admittedly, the Profit & Loss account shows brokerage income after netting to the extent of ₹ 50,23,360/-. The claim of the assessee that a sum of ₹ 50,23,360/- is payable to various clients since there was dispute pending among them, was not substantiated by any material. The assessee could not produce any evidence before the authorities below that the liability has arisen during the year under consideration. It is also not in dispute that the brokerage income was shown as trading receipt in the books of account. The only contention of the assessee before the Assessing Officer is that the refund arises only in case the case was decided in favour of respective clients. Therefore, the liability of the assessee is contingent one on deciding the issue in favour of respective clients. As on today, the amount was treated as trading receipt in the books of account, and the assessee is not expected to refund the same till the issue was decided in favour of respective clients, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly found that the claim of the assessee cannot be allowed as revenue expenditure. In the absence of any material to show the liability of the assessee, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed Disallowance under Section 14A of the Act read with Rule 8D - Held that:- The CIT(Appeals), after considering the material available on record, found that the assessee has earned dividend income of ₹ 15,41,947/- which was exempted from the provisions of Income-tax Act. The assessee claimed before the lower authorities that a sum of ₹ 15,41,947/- was received through ECS credit. Therefore, no expenditure was incurred for earning the dividend income. The assessee itself disallowed a sum of ₹ 7,200/- towards administrative expenses. Being not satisfied with the explanation of the assessee, the Assessing Officer adopted the provisions of Rule 8D and found the average expenditure by applying limb (ii) and (iii) of Rule 8D(2) to ₹ 4,44,491/-. After reducing the expenditure admitted by the assessee to the extent of ₹ 7,200/-, the balance of ₹ 4,37,291/- was treated as expenditure for earning the excess income. Since the CIT(Appeals), after applying the provisions of Rule 8D(2), which is mandatory for the year under consideration, rightly confirmed the disallowance made by the Assessing Officer at Rs. 4,37,291/-, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Computation of book profit under Section 115JB - Held that:- A sum of ₹ 4,37,291/- was disallowed being an expenditure for earning dividend income. The question arises for consideration is whether ₹ 4,37,291/- was to be increased while computing income under Section 115JB of the Act? We have carefully gone through the provisions of Section 115JB of the Act. Explanation 1(f) to Section 115JB(2) of the Act clearly says that the amount of expenditure relatable to any income to which Section 10 (other than the provisions contained in clause (38) thereof) has to be increased with book profit computed under the provisions of Parts II and III of Schedule VI to the Companies Act, 1956. In the case before us, the dividend income earned by the assessee to the extent of ₹ 15,41,947/- is exempted under Section 10(34) of the Act. Therefore, the expenditure relatable to such income has to be increased after computing the book profit under the provisions of Companies Act. In view of the specific provision in Explanation 1(f) to Section 115JB(2) of the Act, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Deduction of interest under Section 244A - Held that:- A bare reading of assessment order shows that the assessee by letter dated 03.09.2012 accepted the interest amount received to the extent of ₹ 7,11,919/- which needs to be added to the total income of the assessee. The assessee itself admitted before the Assessing Officer by letter dated 03.09.2012 that the interest income of ₹ 7,11,919/- may be added to the total income. In view of this, the Assessing Officer has rightly found that the sum of ₹ 7,11,919/- would form part of total income. The CIT(Appeals) confirmed the order of the Assessing Officer. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. TDS credit - Held that:- In the absence of any evidence for TDS to the extent of ₹ 13,81,600/-, the CIT(Appeals) directed the Assessing Officer to verify the claim on the basis of CBDT circular. This Tribunal is of the considered opinion that the Assessing Officer has to verify the claim and if any TDS was made, credit should be given in accordance with the provisions of Income-tax Act and the instruction given by the CBDT. Therefore, this Tribunal do not find any infirmity in the order of the lower authority and accordingly the same is confirmed. Allowability of expenditure - Held that:- The payment was in pursuance of arbitration award passed by arbitrators in the course of business activity. Of course, there was a violation of contractual obligation. Therefore, the arbitrator decided the matter in favour of claimant. This Tribunal is of the considered opinion that meeting the obligations pursuant to award passed by arbitration cannot be construed as penal consequence. This Tribunal is of the considered opinion that the expenditure of ₹ 3,30,348/- incurred by the assessee consequent to arbitration, was for the purpose of meeting the business expenditure. Therefore, it cannot be construed as penalty. This is only violation of contractual obligation. Hence, the expenditure has to be allowed as revenue in nature. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of the lower authorities are set aside and the addition is deleted. Disallowance of bad debt - Held that:- Merely because the clients could not honour their respective commitment of paying the purchase price, it does not mean that the assessee suffers loss at this stage. The assessee has to first sell the shares and the assessee could not realise the entire amount invested, then the amount which could not be realized may be claimed as business loss. At no stretch of imagination, it can be said that the amount due from the clients is bad debt. Since the provisions of Section 36(2)(i) was not complied with, this Tribunal is of the considered opinion that the outstanding amount cannot be construed as bad debt. Therefore, there is no question of allowing the same as bad debt. Since the shares remained with the assessee and it can be sold at any time, at the best, it can be claimed as business loss in the year in which those shares are sold provided there is any actual loss. Accordingly, the Assessing Officer shall verify whether the assessee sold the shares during the year under consideration and suffered any loss. If the assessee suffered loss on sale of such shares, the same shall be allowed as business loss.
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2016 (5) TMI 809
Disallowance of foreign exchange fluctuation loss - Held that:- In the absence of applicability of section 43 A of the Act to the facts of the case and in the absence of any other provision of the Income Tax Act dealing with the issue, claim of exchange fluctuation loss in revenue account by the Assessee in accordance with generally accepted accounting practices and mandatory accounting standards notified by the ICAI and also in conformity with CBDT notification can not be faulted. No inconsistency with any provision of Act or with any accounting practices has been brought to our notice. Otherwise also, in the light of fact that the conversion in foreign currency loans which led to impugned loss, were dictated by revenue considerations towards saving interest costs etc. we have no hesitation in coming to the conclusion that loss being on revenue account is an allowable expenditure under S. 37(1) of the Act. The order of the CIT(A) sustaining the disallowance is not called for and is thus reversed. - Decided in favour of assessee
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2016 (5) TMI 808
Purchase of software - royalty payment - Held that:- As the assessee buys software from its “AE” and only facilitates the installation of these software in the premises of the customers will not be treated as “royalty”. Hence, these transactions can only be treated as ‘purchase of software’. - Decided in favour of assessee TDS u/s 195 - Disallowance towards payment made towards fees for annual maintenance services - TDS liability - Held that:- The assessee has made the payment of AMS fees in the following AY and TDS was made accordingly. Hence, we direct the AO to verify the same and, if found proper, it may be allowed. Needless to say that assessee may be given proper opportunity of being heard
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2016 (5) TMI 807
Penalty under section 271(1)(c) - claim of exemption under section 10(20) - Held that:- The explanation of the assessee with regard to his claim of exemption under section 10(20) of the Act is that the same is based on a bonafide belief and on certain other cases of the assessees carrying on the same type of activities, these judgments have been referred to by him before the learned CIT (Appeals) also. This is a case of a claim of exemption made by the assessee which was ultimately denied to it. Making of a claim, which is not sustained, does not amount to levy of penalty under section 271(1)(c) of the Act. Reliance placed by the assessee on Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT ) is not out of place since this is not a case where the assessee has concealed some particulars of its income or furnished any inaccurate particulars. In fact, all the facts and figures have been taken by the Assessing Officer from the return filed by the assessee only. The argument of the assessee that if it had taken registration under section 12A of the Act, the whole income would be eligible for exemption under section 11 of the Act, is of no consequence. However, we find that the argument of the assessee that it is a Government organization and no malafide can be imposed on it, is a relevant consideration while levying penalty under section 271(1)(c) of the Act. - Decided in favour of assessee Rental incomes shown by the assessee under the head 'income from business or profession' - Held that:- It has all along been claimed that it is a bonafide belief of the assessee that these rental incomes are part of its business income. Though we are aware of the fact that the issue stands against the assessee in quantum, but we cannot brush aside the fact that the issue of considering certain incomes under a particular head is a debatable and controversial issue all along. There are judgments of various High Courts as well as of various Benches of the Tribunal, whereby the dispute regarding the rental income to be taxed under the head 'income from house property' or under the head 'business income' are considered. In view of this, we observe that it may be a case of making additions or disallowances but not a case of levying penalty under section 271(1)(c) of the Act. In view of the above, the Assessing Officer is directed to delete the penalty levied by him under section 271(1)(c) of the Act. - Decided in favour of assessee
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2016 (5) TMI 806
Capital gain liability - assessee charged commission from the original owners for executing sale deeds as GPA holder - Held that:- The character of transaction would not change even if commission charged or not. Considering the above facts, it is clear that when revenue has accepted contention of the assessee in subsequent assessment year 2008-09 that assessee acted as GPA holder only and no capital gain is chargeable in his hands, therefore, on identical facts, revenue cannot direct to charge capital gains in the hands of the assessee for selling properties by the assessee as GPA holder on behalf of the owners of the properties. The Revenue authorities shall have to follow rule of consistency. Assessee is not owner of the properties of which he has acted as GPA holder only. No profit arises on executing Sale Deed by assessee as GPA holder. There is also no transfer of capital asset by assessee so as to attract the provisions of capital gains in his hands. Addition, therefore, is wholly unjustified and shall have to be deleted. We, accordingly, set aside the orders of authorities below and delete the addition - Decided in favour of assessee Addition in respect of advance money received from the buyers - Held that:- According to the agreement, the buyer shall have to get Sale Deed registered and to pay the balance amount by 05.01.2007. It is admitted fact that no sale deed was executed and terms of the agreement were not complied with. The assessee claimed to have refunded advance money of ₹ 50,000/- to the buyer but no evidence have been produced in support of the contention that actually assessee refunded amount of ₹ 50,000/- to the buyer. Mere entry in the cash book without supporting document is not enough to prove the return of the amount in question, therefore, authorities below as per agreement, rightly inferred that amount in question have been forfeited and as such had become income of the assessee. - Decided against assessee Addition on account of 15% disallowance out of development charges - Held that:- No merit in this ground of appeal of the assessee. The assessee pleaded before ld. CIT(Appeals) that he is not investigating agency and has no power to call any person for investigation. The explanation of the assessee shows that assessee has no evidence or material to rebut findings of authorities below. This ground of appeal has no merit, the same is dismissed. - Decided against assessee Addition on account of commission paid for sale of plot - Held that:- No merit in this ground of appeal of the assessee. The assessee failed to produce any evidence of payment of the commission. No particulars were given and no evidence have been filed as to what services have been rendered by the agent on behalf of the assessee. In the absence of any evidence, we do not find any merit in this ground of appeal of the assessee.- Decided against assessee Disallowance of proportionate interest on account of interest free loans for non business purposes - Held that:- Restore this issue to the file of Assessing Officer with direction to re-decide this issue after verifying the facts of availability of the capital and reserve funds with the assessee and direct Assessing Officer to re-decide this issue in the light of decision of Hon'ble Supreme Court in the case of Hero Cycles P. Ltd. (2015 (11) TMI 1314 - SUPREME COURT OF INDIA ). Addition being 1/5th of several expenses i.e. petrol expenses, car repair, driver's salary and telephone expenses etc. confirmed No specific details have been produced before us to prove that these expenses have not been used by assessee and his family members for personal purpose - Decided against assessee
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2016 (5) TMI 805
Time barred assessment u/s 153 - Time-limit for completion of assessments and reassessments - HC excluded the period during which the draft assessment was forwarded to the IAC till the date of receiving the instructions from the IAC under Section 144B of the Act - Held that:- From the reading of Section 153, the period (not exceeding 180 days) commencing from the date on which the ITO forwards the draft order under sub-Section (1) of Section 144B to the assessee and ending with the date on which the ITO receives the directions from the IAC under sub-Section (4) of Section 144B, is to be excluded while computing the period of limitation. Even though an order is made under section 125A(1) empowering the Inspecting Assistant Commissioner to perform the functions of an Income-tax Officer, yet if he has not exercised the power or performed the function of an Income-tax Officer, the provisions requiring approval or sanction of the Inspecting Assistant Commissioner will be applicable. Sub-section (4) nowhere provides that, if some directions by the Inspecting Assistant Commissioner are issued as provided under sub-section (2), then provisions requiring approval or sanction of the Inspecting Assistant Commissioner will not be applicable. In the instant case, we find that it is not the IAC who exercises the powers or performs the functions of the ITO, even when such a power was conferred upon him, concurrently with the ITO. The significant feature of Section 125A of the Act is that even when the IAC is given the same powers and functions which are to be performed by the ITO in relation to any area or classes or person or income or classes of income or cases or classes of cases, on the conferment of such powers, the ITO does not stand denuded of those powers. With conferment of such powers on the IAC gives him “concurrent” jurisdiction which means that both, ITO as well as the IAC, are empowered to exercise those functions including passing assessment order. It is still open to the ITO to assume the jurisdiction and pass the order in case the IAC does not exercise those powers in respect of the assessment year. Provisions of Section 144B would not apply only if the IAC exercises powers or performs the functions of an ITO. What is important is the actual exercise of powers and not merely conferment of the powers that are borne out from the bare reading of sub-Section (4) of Section 125B. Sub-Section (7), in no uncertain terms, mentions that Section 144B will not apply only in that case where the IAC “exercises the powers or performs the functions of an ITO” in pursuance of an order made under Section 125 or Section 125A. In the instant case, as already noted above, no such power was exercised or function of an ITO was performed by the IAC. We would like to point out here that the High Court of Gujarat while dismissing the appeal of the Revenue failed to take into account the earlier judgment of the Co-ordinate Bench of the High Court in CIT vs. Shree Digvijay Woollen Mills Ltd. [1993 (12) TMI 13 - GUJARAT High Court ] which has taken the view that we have expressed above. Appeal filed by the assesee against the judgment of the Allahabad High Court is dismissed affirming the view in the said case which is reported as Commissioner of Income tax vs. Saraya Sugar Mills P. Ltd. [2010 (11) TMI 685 - Allahabad High Court ]
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2016 (5) TMI 804
Reopening of assessment - share of loss from the firm wrongly claimed - Held that:- When the case at hand is examined, it is seen that the return filed having been processed under Section 143 (1) of the Act, there was no occasion for the AO to form an opinion on whether that was any escapement of income to begin with. A perusal of reasons to believe reveals that the AO on going through the return subsequently found that the Assessee had showed a loss of the firm, M/s. Rangwala Enterprises at ₹ 3,12,885. A loss of ₹ 12,94,055 of the firm was converted into a loss of the proprietary concern. Thus it was after comparing the profit and loss account for the two periods, i.e., prior to the Assessee taking over the partnership firm and thereafter it was noticed that the Assessee had wrongly claimed share of loss from the firm which was impermissible in terms of Section 10 (2A) of the Act. The AO was of the view that the Assessee had 'artificially and with an ulterior motive' reduced the income from the property by setting off loss accruing to the firm. Apart from this the P&L account of the Assessee showed that she has claimed a loss on account of the bad debt of the firm. The central submission of Assessee that the above reason to believe had to be based on some new tangible material cannot be accepted in light of the legal position explained hereinbefore. At the same time, the Court does not consider to express any opinion at this stage on the AO's reason to believe except to hold that it cannot be said to have been based on a mere „change of opinion‟. The other objections of the Assessee to the reopening are left open to be urged before the AO in the assessment proceedings in accordance with law. By the order dated 26th November 2002 the Court had directed that the assessment proceedings would go on before the AO but no final order would be passed. The Court now vacates the said interim order and directs that the AO will now pass a final order within eight weeks from today, after affording the Petitioner one opportunity of being heard.
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2016 (5) TMI 803
Rejection of books of accounts - whether the assessment should have been @ 10% of the Gross Contract Receipt or at some reduced rate? - Held that:- The past tax history of the assessee may be one of the guiding factors for making best judgement assessment under Section 144 of the Act but the Gross Contract Receipt of the relevant year appears to be a more authentic and a sure guide for the assessment. The past tax history would have been more useful in the absence of Gross Contract Receipt. Accordingly, assessment on its basis cannot be faulted merely for the reason that past tax history was not considered. The question is to whether the assessment should have been @ 10% of the Gross Contract Receipt or at some reduced rate dependants upon the facts and circumstances of the each case. In the event, the assessing authority has exercise the discretion to assess it on 10% of the Gross Contract Receipt, the same is not liable to be disturbed in exercise of extra ordinary discretionary jurisdiction, unless it is shown that the application of the said rate was patently erroneous in law. No such material has been placed before to show that the assessment @ 10% of the Gross Contract Receipt is arbitrary or palpably erroneous.
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2016 (5) TMI 802
Power of AO for extension of time for filing of special audit report u/s 142(2A) - relationship of auditor (CA) with the assessee - Held that:- the Court is unable to agree with the counsel for the Revenue that in the present case the ITAT exceeded its jurisdiction in examining the question whether the AO was justified in extending the time for the auditor nominated under Section 142 (2A) to submit the audit report. The Court accordingly declines to frame any question on this issue. In terms of Section 142(2A), special audit is conducted under an order passed by the AO, by an accountant as defined in Explanation below Section 288(2) of the Act who is nominated either by the Commissioner and such nominated auditor is permitted to furnish an audit report in the prescribed form. When the said provision is read with Explanation below Section 288(2) of the Act, it is apparent that the said nominated auditor is not expected to be in a relationship of an agent of the Assessee or in any other capacity except as a nominee of the Commissioner. It is perhaps for this reason the proviso to sub-Section 2C of Section 142 specifically states that the extension of time for submitting the audit report can be made by the AO “on an application made in this behalf by the Assessee” If the legislative intent was to permit the application to be made by the auditor nominated by the Commissioner, that would have been expressly provided for in the proviso to Section 142 (2C) of the Act. If the submissions of learned counsel for the Revenue were to be accepted, then it would mean that the application can be made not only by the Assessee but by a Chartered Accountant of the Assessee nominated by the Commissioner in terms of Section 142 (2A) of the Act. The Court declines to do so. Consequently, the Court declines to frame a question on this issue as well.
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2016 (5) TMI 801
Revision u/s 263 - Is the finding of the Commissioner of Income Tax that unaccounted money was or could have been laundered as clean share capital by creating facade of paper work, routing the money through several bank accounts and getting it the seal of statutory approval by getting the case reopened under Section 147 suo motu perverse? - Held that:- Money allegedly received on account of share application can be roped in under Section 68 of the Income Tax Act if the source of the receipt is not satisfactorily established by the assessee. Mere fact that the payment was received by cheque or that the applicants were companies, borne on the file of Registrar of Companies were held to be neutral facts and did not prove that the transaction was genuine as was held in the case of CIT –Vs- Nova Promoters and Finlease (P) Ltd. (2012 (2) TMI 194 - DELHI HIGH COURT ). Similar views were expressed by this Court in the case of CIT –Vs- Precision Finance Pvt. Ltd. (1993 (6) TMI 17 - CALCUTTA High Court ). We need not decide in this case as to whether the proviso to Section 68 of the Income Tax Act is retrospective in nature. To that extent the question is kept open. We may however point out that the Special Bench of Delhi High Court in the case of Sophia Finance Ltd. (supra) held that “the ITO may even be justified in trying to ascertain the source of depositor”. Therefore, the submission that the source of source is not a relevant enquiry does not appear to be correct. We find no substance in the submission that the exercise of power under Section 263 by the Commissioner was an act of reactivating stale issues. In the case of Gabriel India Ltd. (1993 (4) TMI 55 - BOMBAY High Court ) the CIT was unable to point out any error in the explanation furnished by the assessee. Whereas in the present case we have tabulated the evidence which was before the assessing officer which should have provoked him to make further investigation. The assessing officer did not attach any importance to that aspect of the matter as discussed above by us. The judgement in the case of Leisure Wear Exports Pvt. Ltd. (supra) relied upon by Mr. Poddar has no applicability because the evidence furnished by the assessee in this case does suggest a cover up. We also have held prima facie that neither the transaction appears to be genuine nor are the applicants of share are creditworthy. We have demonstrated in some detail as to why is the order of the assessing officer erroneous and prejudicial to the revenue. - Decided against assessee
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2016 (5) TMI 800
Denial of benefit of deduction under Section 80P(2) (a)(vi) - Held that:- Tribunal had rightly held that the profits and gains earned by the assessee is not attributable to the collective disposal of labour of its members as all the members were not engaged in the labour work and the work done by the assessee was through outside employees and labourers who were not members of the society nor they had any voting rights of the society. Accordingly, the disallowance under Section 80P(2)(a)(vi) of the Act was upheld. It being concurrently recorded by the authorities below on appreciation of material on record that the profit earned by the assessee cannot be regarded as profit derived by the labour cooperative society from the activity of collective disposal of labour of its members, the assessee had rightly been held not entitled to claim deduction under Section 80P(2)(a)(vi) of the Act. - Decided against assessee
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2016 (5) TMI 799
Addition on account of unexplained unsecured loans - Held that:- We find no merit in the said ground of appeal raised by the revenue in view of the confirmations being filed by the assessee in respect of the balance three loan creditors i.e. S/Shri Deepak Mahindra, Dr. Murari Lal Aggarwal and Rajinder Mohan Singla. The assessee has also furnished on record the confirmation of the aforesaid parties. The addition was made by Assessing Officer for non furnishing of balance confirmation of loan creditors. In view thereof where the assessee has duly complied with the requisitions of the Assessing Officer, there is no merit in any disallowance - Decided in favour of assessee Addition on account of alleged unexplained payment for purchase of land - Held that:- The assessee during the year under consideration had purchased a plot of land for a total consideration of ₹ 2,15,90,000/-. However, the market value of the said land was taken at ₹ 2,37,45,000/- by the registering authorities. The seller of the property had reflected the sale price i.e.Rs. 2,15,90,000/- in their hands and the same was accepted while assessment order passed under section 143(3) of the Act. The assessee has furnished on record the information sought by the Assessing Officer in the case of the seller under section 133(6) of the Act which are placed at pages 20 to 22 of the paper book. The CIT(A) has observed that price of the land as mentioned in the sale deed and not the market price has been confirmed by the seller in response to the queries raised by the Assessing Officer directly to them. Further, there is no evidence of payment of any amount over and above the sale consideration recorded in the sale deed. In the absence of the same, we are in conformity with the order of the CIT(A) in deleting the addition of ₹ 21,55,000/-. In any case, the addition, if any, under the provisions of section 50C of the Income Tax Act are attracted in the hands of the seller and not in the hands of the purchaser - Decided in favour of assessee Addition on unexplained payment of stamp duty etc. for the purchase of land - Held that:- he assessee claims that the said stamp duty has been paid out of the cash available in its books of account. The learned DR for the revenue had not controverted the findings of the CIT(A). In the absence of any contrary findings, we are in conformity with the order of CIT(A) in deleting the addition of ₹ 24,10,000/-. The source of credit also stands explained being out of the unsecured loans raised by the assessee which in turn were looked into by the Assessing Officer that since the assessee has also explained the source of the cash in hand and established the availability of cash, we uphold the order of CIT(A) in deleting the addition - Decided in favour of assessee Unexplained deposits in the bank account of the assessee - Held that:- Assessee had furnished the copy of bank statement of Shri Gulshan Arora, from whom a sum of ₹ 90,000/- was received by cheque and the balance ₹ 40,000/- was deposited out of cash in hand available with the assessee and the photocopy of relevant pages of cash book was furnished on record. The CIT(A) deleted the addition of ₹ 1,30,000/-. We are in conformity with the order of CIT(A) in view of the explanation of the assessee wherein a sum of ₹ 90,000/- has been received vide cheque from Shri Gulshan Arora, who in turn has confirmed the same. The balance ₹ 40,.000/- is claimed by the assessee to have been deposited in cash out of the cash available, which is evidenced by the entries in the cash book.- Decided in favour of assessee
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2016 (5) TMI 798
Revision u/s 264 in favor of assessee - return was filed under Section 139(4) within the time allowed and the return was filed, admitting an income of ₹ 25,18,256/- including the additional income of ₹ 25,00,000/- offered during the course of survey - Held that:- once the income is offered, then the same cannot be withdrawn. - When the return of income was filed voluntarily, no addition was made and the income returned was accepted, without making any addition, the petitioner cannot now take a stand that the statement was given only on the threat made by the respondent. As rightly pointed out by the respondent, the petitioner cannot plead ignorance and that the income that has to be assessed in the previous years and the income that has to be assessed in the hands of partners are to be excluded. Further the respondent had pointed out that in spite of the assessee has the option to file revised return till 31.03.2002 as per the provisions of Section 139(5) of the Income Tax Act, the assessee did not opt to do so. The finding of the respondent that the assessee's contention is a clear after thought is correct. Under this circumstance, do not find any reason to interfere with the order passed by the respondent.
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2016 (5) TMI 797
Reopening of assessment - maintainability of appeal - Held that:- Admittedly, the original assessment order was passed on 27.12.2010 under section 143(3) of the Act. The petitioner filed appeal before the CIT(A). Vide order dated 11.7.2011, the CIT(A) partly allowed the appeal. Against the said order, the petitioner as well as the department filed appeals before the Tribunal which are pending. During the pendency of the appeal, order under section 263 of the Act was passed by the CIT while exercising revisionary jurisdiction on certain issues. Further additions/disallownaces were made. The appeals filed before the Tribunal were partly allowed. Thereafter, reassessment proceedings were initiated under section 147 of the Act vide notice issued under section 148 of the Act. The objections filed by the petitioner were dismissed vide order dated 21.3.2016 by respondent No.1. Final reassessment order was passed on 31.3.2016 under Section 143/147 of the Act. After hearing learned counsel for the petitioner and perusing the sequence of facts as noticed above, we find that the petitioner has an alternative remedy of appeal against the final reassessment order dated 31.3.2016 passed by respondent No.1 under sections 143/147 of the Act In view of above, we do not find any ground to entertain this petition under Articles 226/227 of the Constitution of India. Consequently, the writ petition is dismissed
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2016 (5) TMI 796
Transfer pricing adjustment - application of cash profit to operating cost as Profit Level Indicator under Transactional Net Margin Method for determining Arm's Length Price - CIT(A) deleted the addition - Held that:- The entire purpose of determining the ALP is to ensure that there is no Base Erosion and Profit Shifting. The tax proceedings are not adversarial in nature and there can be no estoppal in pointing out the correct facts before the Appellate Authority particularly when all facts are on record. This very objection as urged by the Revenue before us was raised before the Tribunal viz. that the ratio of cost profit to operating cost was urged for the first time in appeal before the CIT(A). However as the impugned order records all the materials/details relevant to determine the TNMM on application of ratio of cash profit to operating cost was on record before the Assessing Officer. No fresh documents were brought on record before the CIT (A). It was only on the basis of documents which were already on record and were subject matter of examination by the TPO. Thus the TPO in his remand report found that in the facts of this case the ratio of cash profit to operating cost to determine the ALP was correctly raised by the respondent-assessee. Therefore question no.(i) as framed does not give rise to any substantial question of law. Applicability of principle of res judicata - Held that:- The ratio of cash profit/operating cost in application of the TNMM method was infact accepted by the TPO itself for Assessment Years 200708 and 200809. Thus it is an acceptable ratio while applying the TNMM method. In any case on facts as obtained from the remand report of the TPO, the Authorities under the Act i.e. the CIT (A) as well as the Tribunal have for the subject assessment year found that the ratio of cash profits to operating cost is appropriate to determine the ALP.
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2016 (5) TMI 795
Penalty u/s 271(1)(c) - sundry creditors outstanding - Held that:- The Assessing Officer asked the assessee to furnish confirmations in respect of sundry creditors outstanding in the books of account of the assessee. The case was adjourned to 17.12.2008 and on this date, assessee has not filed the confirmations of the above four creditors and the matter was, therefore, adjourned by the Assessing Officer to 22.12.2008. On 22.12.2008, the counsel or assessee has shown his inability to furnish the confirmation of these four creditors. The copy of the surrender letter is filed at page 23 of the paper book in which the assessee agreed to include the amount of ₹ 5,24,000/- in his income and to pay the tax on the same. The addition was, therefore, made on agreed basis when assessee was cornered by the Assessing Officer to explain the genuineness of the credit in the matter and assessee failed to prove genuine credit/liability in books of account. There is no question of assessee surrendering the amount in question voluntarily. In the present case, at the assessment stage as well as at the penalty proceedings, the assessee has failed to explain the genuineness of the credits in the matter. Whatever explanation was filed, was not substantiated through any evidence or material on record. Thus, assessee failed to explain the genuine credits/liability in books of account on the matter in issue and has therefore, furnished inaccurate particulars of income so as to invite levy of the penalty - Decided in favour of revenue
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2016 (5) TMI 794
Capital gain not offered in original return of income - whether the Tribunal is justified in holding that the explanation offered by the assessee for not offering the capital gain in the original return on income was bonafide explain, when the fact and circumstances revealed that the assessee has declared the concealed income only on the detection of the same during the course of survey in the premises of developer? - Held that:- Two authorities one CIT(Appeals) and another, Tribunal, after undertaking the fact finding exercise as to whether the explanation submitted is bonafide or not, has found that the appellant has acted in a bonafide manner and the explanation is accepted. As such, the aforesaid finding of fact should rest with the conclusion of the Tribunal since the judicial scrutiny by this Court is limited to only substantial questions of law. We are not at all impressed by the submission for two fold reasons. One, is that appreciation of evidence is once again a question of fact and not a question of law. The second, is that it is not a matter where the Tribunal has not considered the entire facts and circumstances of the case under which the income was offered by the assessee as the income from house property by submission of revised returns and payment of tax even before the proceedings were initiated by the department after survey. Apart from the above, the additional aspect is that the view of the Tribunal on acquiring property under barter system could not be totally ruled out even if the contention of the assessee was to be considered as to be bonafide or not. Under these circumstances, it cannot be said that the Tribunal has recorded a factual finding without their being any material. The moment one says that the material is not sufficient or the evidence on record was not properly appreciated it would result in upsetting the fact finding by the Tribunal, which is beyond the scope of judicial scrutiny. - Decided against revenue
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2016 (5) TMI 793
Sale of carbon credits - revenue or capital receipt - Tribunal quashing the order under Section 263 - whether he consideration received from the sale of carbon credits is not derived from the eligible business undertakings? - Held that:- In the case of Commissioner of Income Tax v. Maheshwari Devi Jute Mills Ltd. [1965 (4) TMI 10 - SUPREME Court] , wherein the question came up for consideration before the Apex Court as to whether by sale of loom-hours, the amount received could be termed as capital receipt or the income out of business. In the said decision, the Apex Court held that the amount received out of sale of loom-hours can be termed as capital receipt and not income out of business. When the carbon credit is generated out of environmental concerns, and it is not having the character of trading activity, the Tribunal has rightly held that it is capital receipt and it is not income out of business and hence, not liable to pay income tax. Once it is found that the amount realized by sale of carbon credit is not taxable as profit, naturally it will have no adverse effect on the Revenue. It is settled legal position that one of the requirements for exercise of power under Section 263 of the Act, is that the order passed by the lower authority should not only be erroneous, but should also be prejudicial to the interest of the Revenue, which is lacking in the present case and rightly found so by the Tribunal. No substantial question of law - Decided against revenue
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2016 (5) TMI 792
Addition on account of non-conciliation of professional receipts with TDS certificates - Held that:- Tribunal considered this submission of both sides and found that the assessee was engaged as an Advocate to argue the matters by what is popularly known as Advocates on record or instructing Advocates method, meaning thereby the client does not engage the assessee directly but a professional or the Advocate engaged by the client requests the assessee to argue the case. The brief is then taken as the counsel brief. That being the practice, the assessee gave an explanation that the breakup as desired cannot be given and with regard to all payments. It is pointed out that at times, assessee receives fees directly from the clients or from the instructing Advocates or Chartered Accountants if such professionals have collected the amounts from the clients. Under these circumstances, the breakup as desired cannot be placed on record. An explanation which has been given by the assessee and accepted in the past has been now accepted by the Tribunal once again. Since it is accepted for the Assessment Year 2006-07, in the peculiar facts, in relation to the present assessee, we are of the view that this Appeal does not deserve to be entertained. It does not give rise to any substantial question of law.
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2016 (5) TMI 791
Validity of assessment u/s 153A - Held that:- Tribunal has neither examined the records of all the cases before the AO nor any finding is recorded on the aspects of the satisfaction note and, as the Tribunal is the final fact finding authority, we fi nd that the matter should be relegated to the Tribunal for examining the said aspect, namely whether there was compliance of the requirement of satisfaction recording before final conclusion was drawn and as to whether the assessment made under Section 153C is in accordance with the provisions of the Act or bad in law or li able to be quashed or not. As observed earlier, since there is no consideration by the Tribunal on the said aspects, it would be just and proper to relegate the matter to the Tribunal for reconsidering the matter on the aforesaid aspect. Tribunal has, after dis missing the contention of the assessee regarding the assessment not being in accordance with the provisions of the Act under Section 143(3) read with Section 153C, has examined the other aspects namely of the estimated gross profit at the rate of 7% or 6% and further addition of the amount of liability to pay interest to appellant-assessee. Considering the above it appears to us when we are inclined to relegate the matter to the Tribunal on the issue which goes to the root of the matter, it would be premature on our part to address ourselves on the aspects of the assessment already made and considered by the Tribunal in the impugned order. Hence,the impugned orders passed by the Tribunal are set aside with a further direction that all appeals shall stand restored to the Tribunal. The Tribunal shall examine the aspects of satisfaction note if any, and whether the same can be termed sufficient compliance or not for the assessment to be initiate d or to be made or finalized under Section 153C of the Act.
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2016 (5) TMI 790
Disallowance made u/s 14A r.w.r 8D - Held that:- The assessee does not have income which is exempt from tax. Under these circumstances no disallowance can be made u/s 14A of the Act. See Cheminvest Ltd. vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT ) - Decided in favour of assessee Disallowance made by invoking section 40(a)(ia)- Held that:- The assessee should have made every effort to gather necessary evidence from the payees i.e. M/s. Yash Ram Films Pvt. Ltd. and M/s. Saregama India Ltd. that they have paid taxes on these receipts from the assesee and then sought for set aside of the case. The assessee should prima facie demonstrate that in its case the second proviso to section 40(a) (ia) is attracted before seeking set aside of the matter. As in this case the revenue has already obtained some information u/s 133(6) of the Act, we are of the opinion that this issue should be set aside to the file of the AO for fresh adjudication. The assessee shall make every effort to obtain from the payees, evidence that they have filed their return of income and paid taxes on these payments and furnish the same to the AO - Decided in favour of assessee for statistical purposes. Disallowance of deduction claimed u/s 80IC - Held that:- Factual submissions have not been controverted by the AO or the Ld. CIT(A). The AO at page 5 records that the assessee has provided the working capital requirement of the two units. This note was rejected only of the ground that the majority of the purchases of Rudrapur Unit are made through Greater Noida unit. This is a rejection based on surmise. We find that the percentage of profit declared by Greater Noida unit are much higher than the percentage of profit declared by Rudrapur unit. The assessee has also demonstrated that the working capital required by the Rudrapur unit is much lessor that the working capital required by the Greater Noida unit. The banks which have granted loans, have done so for Greater Noida unit only. Ld. DR could not controvert this factual submissions of the Ld. Counsel for the assessee. Under these circumstances, we are of the considered opinion that the AO should have been consistent in his stand on allocation of expenditure in all the years in which the account of the assessee have been scrutinised. The AO should have give specific reasons as to why he does not agree with the calculations furnished by the assessee or the note on requirement of the working capital for both the units before rejecting the allocation made by the assessee. In the absence of such reasons we uphold the contentions of the assessee and set aside the order of the Ld. CIT(A) on this issue - Decided in favour of assessee
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2016 (5) TMI 789
Disallowance of depreciation in respect of Effluent Treatment Plant (E.T.P) - date of installation and put to use for the first time - Held that:- There is nothing on record which could positively establish the use of the ETP from 01.10.2005, as in the form of commissioning report; ETP power consumption (which is separately metered); consumption of chemicals for use in ETP, et. as. The EAR contains specific reference to the ETP records. The EAR is also silent in this regard, being, as afore-noted, only for the period January 2007 onwards. We are, at the same time, conscious that there has been no verification qua this aspect of the matter by the Revenue, who has proceeded by accepting the assessee’s claim. The assessee, therefore, has not got an opportunity to properly represent its case in the matter. We, accordingly, restrain from issuing any final finding in the matter, and consider it only proper to restore this aspect of the matter back to the file of the A.O. The assessing authority, where not satisfied with the assessee’s explanation, or if the assessee itself concedes not to press this aspect, shall, in giving effect to this order, allow deprecation at 50% of the cost for the current and the following year in-as-much as we have confirmed it to be eligible for deprecation @ 100%. This, it would be appreciated, is even otherwise incumbent on him in-as-much as he has to, while allowing additional depreciation for the current and/or the following year, withdraw the depreciation for the subsequent years; the issue at hand concerning the rate of depreciation, so that the issue in essence involves timing difference.
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2016 (5) TMI 788
Validity of assessment u/s 158BC - Held that:- In the instant case, the search was commenced on 15-10-1997 and it was suspended on 16-10-1997 by stating that the search was concluded temporarily. The seizure of certain documents has taken place on that date only. Subsequent searches were related to lifting of prohibitory orders and placing the documents again under the P.O. Even though it is contended that certain unaccounted share certificates were seized subsequently, the said claim suffers from two infirmities, viz., (a) the assessee claims that the share certificates have simply been inventorised on those dates, meaning thereby, the seizure has already been completed on 16.10.1997 and (b) the inventorisation has also been done by some unauthorized officials. Hence in our view, the date of execution of last authorization should be taken as 16.10.1997 only and hence the assessing officer should have passed the block assessment order before 31.10.1999. However, the assessing officer has passed the order only 31.1.2000 and hence the same is barred by limitation and is liable to be quashed. Accordingly we set aside the orders passed by both the tax authorities. - Decided in favour of assessee
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2016 (5) TMI 787
Validity of proceedings under section 163(1) - Held that:- The proceedings under section 163(1) were initiated pursuant to search and seizure operation but beyond the time prescribed under section 149(3) of the Act. Therefore, we are satisfied that the above decision is applicable to the facts of the case before us. Respectfully following the same, we set aside the orders of the A.O. under section 163(1) of the I.T. Act for the A.Ys. 2004-05 to 2008-09. The assessee’s ground of appeal No.18 on this issue is treated as allowed and all the other grounds are not adjudicated at this stage as it would only be an academic exercise. As regards the assessee’s appeal for the A.Y. 2009-2010 the Ld. Counsel for the assessee, submitted that since there has been no demand pursuant to the assessment under section 143(3) read with section 153C of the I.T. Act on the assessee by treating the assessee as a “Representative Assessee” under section 163(1) of the Act, the assessee is not pressing the appeal before the Tribunal against the order passed under section 163(1) of the I.T. Act and may be allowed to withdraw the same. A letter dated 03.05.2016 is filed to this effect. Accordingly, the assessee’s appeal for the A.Y. 2009-10 is dismissed as withdrawn.
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Customs
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2016 (5) TMI 833
Whether the Commissioner (Appeals) was to decide only personal penalty or the issue of confiscation, the penalty and redemption fine related thereto - Held that:- the Hon;ble Member has mentioned that he is unable to go into merit of the case and the matter was remanded to the Commissioner (Appeals) to reconsider the issue and pass a fresh order on merit. It was observed that the appeal before the Commissioner (Appeals) as well as before this Tribunal was undisputedly, not only on the issue of penalty but also the issue of confiscation and redemption fine was challenged. I also tried to find out in the proceeding that at any stage where the appellant conceded and gave up the issue of confiscation of goods and redemption fine, but I found that appellant has not conceded on the issue of confiscation and penalty, therefore while remanding the matter by this Tribunal to the Commissioner (Appeals), all the issues were kept open to reconsider by the Commissioner (Appeals). Commissioner (Appeals) decided the issue of personal penalty in isolation without deciding the confiscation and redemption fine on merit. Therefore, the impugned order deserves to be set aside and matter to be remanded to the Commissioner (Appeals) to decide all the issues involved in the appeal filed by the appellant. As regard submission of the appellant that since goods have been sold by the department and the same is not available for redemption, the redemption fine penalty will not sustain and the appellant is entitle for refund the value of the goods in terms of the Hon'ble Supreme Court and Karnataka High Court judgments. It is found that since the Commissioner (Appeals) has yet to decide the merit of entire case, it will be pre-mature to pass any order on this aspect. However, the Ld. Commissioner (Appeals) while deciding the case on merit may consider this issue. Appeal allowed by way of remand
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2016 (5) TMI 832
Confiscation in lieu of redemption fine - Imposition of penalty - Export of skimmed milk powder - prohibited by DGFT Notification No. 23(RE-2010/2009-2014 dated 18/2/2011. Held that:- the shipping bills was presented on 10/2/2011 and 16/2/2011 and on the date of entry of the goods the goods, was not prohibited. The goods arrived at the customs area on 22/2/2011 and 23/2/2011 even if these dates are considered, on these dates also goods were not prohibited as per notification No. 23(RE-2010/2009-2014 dated 18/2/2011 read with transitional provision as provided under para 1.5 of Foreign Trade Policy, 2009-2014 therefore even though the goods were declared prohibited on 18/2/2011 transitional provision was restricted in certain condition by notification No. 37(RE-2010)/2009-2014 dated 24/3/2011. But the fact remains that on the date of entry of the goods in terms of Section 50 the goods were not prohibited therefore confiscation under Section 113(d) was not warranted. It is also noted that at the time of opening L.C., dispatch of the goods from the factory to the port, filing of shipping bill before the customs, the goods were not notified as prohibited goods therefore it is beyond the control of exporter to avoid the dispatch of the goods from the factory to the port. Therefore, the goods cannot be confiscated. - Decided in favour of appellant with consequential relief
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2016 (5) TMI 831
Refund claim - Appellant could not establish that the imported goods have not been exported - Import of glass motifs - Exemption claimed under Notification No. 17/2001-Cus. dated 1.3.2001 - Held that:- it is an undisputed fact from the books of accounts of the appellant that the entire imported goods were shown as purchase in the books of accounts of the appellant against which their 100% clearance is for export. There is no contrary evidence adduced by the department that any of the quantity of imported goods cleared in the domestic market. Therefore, it can be conveniently concluded that all the goods imported by the appellant were exported, as nothing was cleared in the domestic market. Whether refund claim is liable to be credited in the Consumer Welfare Fund - Unjust enrichment - Held that:- the books of account of the appellant shows that the entire income of the appellant during the relevant period is towards the export of the goods and there is no sale in the domestic market. Therefore, even without going to one to one co-relation, it is established that the incidence of duty paid by the appellant was not passed on to any other person in India. It is settled position of law that in case of export of goods, unjust enrichment is not applicable. Therefore, refund is not liable to be credited in the Consumer Welfare Fund. - Decided in favour of appellant with consequential relief
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2016 (5) TMI 830
Imposition of penalty - Smuggling of Red Sanders - Non-compliance of KYC Norms in terms of Public Notice No. 17/2012 - Held that:- appellant has not taken the KYC norms of the exporter/person who has placed the order for container for the purpose of stuffing of the goods. Therefore, by following the decision of this Tribunal in the case of Scope Amra Logistics (I) Pvt. Ltd. Vs. C.C.E.C & S.T., Aurangabad [2015 (6) TMI 652 - CESTAT MUMBAI] which is on the same footing of present appellant, the appellant is found guilty of non-compliance of Public Notice No. 17/2012 and liable for penalty. The penalty is reduced from ₹ 10 lakhs to ₹ 3 lakhs. - Decided partly in favour of appellant
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2016 (5) TMI 829
Import of Star Aniseeds - Mis-declaration of declared value - Enhancement of value on the basis of Spices Market Weekly - Held that:- a value declared by an importer who had imported the consignment four months, after the consignment cleared, is not in consonance of the provisions of the Customs Act, as on the day of import there seems to be no contemporaneous imports and the value declared by the appellant was accepted. We are not in the position to come to a conclusion whether the imports made in May 2001, were solitary imports or regular imports. At the same time it is noted that various imports made by the appellant during the same time, the transaction value remained the same. It is also noted that revenue has not brought on records any evidence to indicate that the appellant and the supplier were in collusion to suppress the value nor there is any corroborative evidence of suppression of the value or repartition of any amount over and above the invoiced value. Therefore, in the absence of any such evidence, rejection of transaction value as declared is incorrect and such order is unsustainable. The ratio of the decision of Hon'ble High Court in the case of Basant Industries [1995 (1) TMI 89 - SUPREME COURT OF INDIA] and the decision of Tribunal in the case of Kanhaiyalal & Co. [2003 (8) TMI 423 - CESTAT, MUMBAI], would directly apply to the present case. - Decided in favour of appellant
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Corporate Laws
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2016 (5) TMI 825
Sanction of scheme of demerger - Held that:- No objectionable feature in the Scheme detrimental to the interest of the employees of the Transferor/Demerged Company or of the Transferee/Resulting Companies. Further, the Scheme is fair, just, sound and is not against any public policy or public interest. That apart, no proceedings are pending under sections 235 to 251 of the Companies Act, 1956. Further, all the statutory provisions have been complied with. In fine, there shall be an order, approving the scheme of arrangement for demerger between the Transferor/Demerged Company viz., M/s Arvind Green Infra Private Limited and the Transferee/Resulting Companies viz., M/s Aniruth Green India Private Limited, M/s Aadhav Energy Tech Private Limited and M/s. Apsara Power India Private Limited including reduction of preference share capital of the Demerged Company as per the Scheme, with effect from the Appointed Date, viz.,12th September, 2015, as the procedure laid down under Section 391 to 394 of the Companies Act, 1956 were duly complied with. Hence, the Scheme of Arrangement for Demerger proposed by the petitioners is approved and all the four Company Petitions are allowed as prayed for.
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2016 (5) TMI 824
Winding up petition - Held that:- This court finds a justification on the part of the company petitioner to knock the door of the company court seeking for winding up of the company. When that is the one of the legal course available to the company petitioner, this court cannot shut its door to the company petitioner, on technical reasons. In my considered view, while rendering substantial justice, neither the technicalities nor, to certain extent, untenable factual objections, can block the way of this court in doing so. In this case, the Division Bench has already rejected those objections. It is well settled that when substantial justice and technicalities are pitted against each other, only the substantial justice should prevail over all other technicalities. See Laxmibai vs Bhagwantbuva [2013 (1) TMI 858 - SUPREME COURT] Therefore, there is every justifiable reason to admit the company petition. Accordingly, the company petition is admitted. (i) Issue Notice on the Court Notice Board. (ii) Issue Notice to the respondent. (iii) Issue Notice to the Registrar of Companies, Madras. (iv) Affixure of notice at the premises of the Registered Office of the respondent company. (v) The petitioner is directed to publish the company petition in one issue of Tamil daily "Malai Murasu" in one issue of English Daily "Indian Express" and in the Tamil Nadu Government Gazette fixing the date of hearing on 10.6.2016. (vi) The petitioner is directed to publish the company petition giving at least fourteen days clear advance notice. (vii) The Official Liquidator, High Court, Madras as Provisional Liquidator is directed to take charge of the assets of the respondent company. The Ex-Directors of the respondent company is directed to file their statement of affairs before the Official Liquidator within a period of 21 days. The company shall deposit a sum of ₹ 20,000/- towards initial expenses before the Official Liquidator in this matter.
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2016 (5) TMI 823
Demerger - seeking dispensation of the convening of meetings of their Equity Shareholders and Creditors for sanctioning of the Scheme of Demerger - Held that:- There are 3 (three) Equity Shareholders of the Sun-N-Shade Sunvisors Private Limited (Applicant/Demerged Company) as per the list, certified by the Director of the Company and Ashwani & Company, Chartered Accountants annexed at Annexure P-4 (Colly). Out of the three, two Equity Shareholders holding 95.42% of shares have given their consent/NOC to the Scheme, which are also annexed with the aforesaid Annexure P-4 (Colly). The Sun-N-Shade Sunvisors Private Limited (Applicant/Demerged Company) has 24 (Twenty Four) Unsecured Creditors as per the list, certified by the Director of the Company and Ashwani & Company, Chartered Accountants annexed at Annexure P-5 (Colly) and all of them have given their consents to the Scheme, the same are also annexed with the aforesaid Annexure P-5 (Colly). The Sun-N-Shade Sunvisors Private Limited (Applicant/Demerged Company) has only 1 (One) Secured Creditor as per the list, certified by the Director of the Company and Ashwani & Company, Chartered Accountants annexed at Annexure P-6 (Colly) and the said Secured Creditor has given its consent to the Scheme, which is annexed with the aforesaid Annexure P-6 (Colly). The Sun-N-Shade Production Private Limited (Applicant/Resultant Company) has 2 (two) Shareholders as per the list, certified by the authorised signatory of the Company and Ashwani & Company, Chartered Accountants annexed at Annexure P-10 (Colly) and both the Shareholders have given their consents/NOCs to the Scheme, which are annexed with the aforesaid Annexure P-10 (Colly). There are no Unsecured and Secured Creditors of the Sun-N-Shade Production Private Limited (Applicant/Resultant Company) as certified by the authorised signatory of the Company and Ashwani & Company, Chartered Accountants vide certificates annexed at Annexure P-11 (Colly) and P-12 (Colly), respectively. Keeping in view of the matter, reasons stated above, and the consent to the Scheme given by the majority of Shareholders of the applicant/Demerged company constituting 95.42% of the total Shareholdings, there is no reason to decline the prayer of the applicant/Demerged company to dispense with the convening of their meeting and as such convening of the meeting of Equity Shareholders of the applicant/Demerged Company is hereby ordered to be dispensed with. Convening of meetings of the Secured and Unsecured Creditors of the applicant/Demerged Company and Equity Shareholders of the applicant/Resultant company are also hereby ordered to be dispensed with. Since, there are no Secured and Unsecured Creditors of the applicant/Resultant Company, therefore, there is nothing to convene their meetings.
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Service Tax
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2016 (5) TMI 846
Legal services - levy of service tax - Delhi court grant stays the operation of amendments with the following directions:- It is directed that till the next date the operation of the execution of para 1(a) (i) (b) of Notification No.9/2016-ST, para 1(a) (iii) and (b) (iii) of Notification No.18/2016-ST and para 2 (1) (a) of Notification No.19/2016-ST be and is hereby stayed and the Respondents are directed to continue the reverse charge mechanism for payment of service tax for Senior Advocates under Notification No.30/2012-ST.
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2016 (5) TMI 845
Waiver of penalty imposed under Section 78 of the Finance Act, 1994 and late fee - Section 80 ibid - Erection, commission and installation services providing exclusively to state Government company - Delay in filing of ST-3 returns under Section 70 of the Finance Act, 1994 read with Rule 7C of Service Tax Rules - Held that:- the appellant have entertained bonafide belief in non payment of service tax for the reason that the show cause notice demanded the service tax for an amount of ₹ 2.80 crore for the period April, 2008 to March, 2013 whereas in the impugned order the demand was reduced to ₹ 26.36 lacs which is for the period July, 2012 to March, 2013, this shows that there was serious confusion among the assessee as well as department about the levy of service tax on the services provided to State Government Electricity distribution companies. However when the issue was made clear the entire service tax demand confirmed has been paid before adjudication alongwith interest. I found that appellant have shown reasonable cause for non payment of service tax on due date. Accordingly they have made out a case for waiver of penalty in terms of Section 80 of the Finance Act,1994. Therefore the penalty imposed under section 78 invoking Section 80 of the Finance Act is waived of. As regard the late fee, it is found that admittedly the service tax was confirmed only for the period July, 2012 to March, 2013 therefore no late fee can be charged for delay of filing/non filing of ST3 returns for the period prior to 1/7/2012. However, the service tax liability confirmed and admittedly paid by the appellant for the period July, 2012 to March, 2013, the appellant was duty bound to file ST3 returns for this period on due date therefore the appellant is liable for late fee for non filing/delayed filing of ST3 returns for the period July, 2012 to March, 2013 in terms of Section 70 read with Rule 7C of Service Tax Rules, 1994. - Decided partly in favour of appellant
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2016 (5) TMI 844
Business Auxiliary Service - Arranging loans to customers from banks and thus promoting/marketing services provided by banks i.e Direct Selling Agent of the bank - Demand of Service tax along with interest and penalties - Held that:- appellant's argument that they have provided only space to the bank and therefore, their service is classifiable under ‘Business Support Service’ is not supported or backed by any evidence in the form of an agreement with the bank. Reliance on the judgment of Chambal Motors (P) Ltd. v. Commissioner of Central Excise, Jaipur-I [2007 (10) TMI 552 - CESTAT NEW DELHI] and Auto World Vs. Comm. of C.Ex., Allahabad [2008 (5) TMI 120 - CESTAT NEW DELHI(CESTAT)] does not favour the appellant. In the former case, it was held that Service Tax is payable on the commission received from the banks and, in the latter judgment it was held that the service rendered by the applicant falls under Business Auxiliary Service. Therefore, Service Tax is payable by the appellant. The plea that the demand is time-barred is not acceptable because there was suppression of facts regarding receipt of commission from the bank and, therefore, extended period of time is invocable. Benefit of exemption - Notification No. 6/2005 - Held that:- it is found that the Commissioner came to the conclusion that they are using a brand name which disentitles them from the benefit of the notification. It is also noted that there is no evidence on record to indicate that the total value of service provided by them apart from the value of services to the bank did not exceed the exemption limit. - Decided against the appellant
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2016 (5) TMI 843
Denial of Cenvat credit - availed Marine Insurance Policy Service - Service tax paid on insurance of the goods cleared from the factory gate till that reaches abroad - Held that:- it does not appeal to common sense as to why insurance is not integral to export to protect the property for the reason that one would not prefer to cause prejudice to him. Taking up marine insurance policy not being in dispute as well as export not in dispute, followed by reversal of the credit under protest. Therefore, the order of the Commissioner (Appeals) is set aside as it does not appear to be proper and reasonable to survive. - Decided in favour of appellant
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2016 (5) TMI 842
Period of limitation - Appeal filed belatedly - Appellant contended that they have not received the order-in-original on time - Held that:- the stand of the first authority to hold that the order-in-original was served on the appellant on 25-8-2009, is incorrect, especially when the postal authorities has returned the envelope with remarks of (LEFT) and no alternative mode of service was resorted to deliver the order-in-original. Therefore, there was no delay in filing the appeal before the first appellate authority. Accordingly, the impugned order is set aside and matter remanded back to the first appellate authority to restore the appeal to its original number and to reconsider issue afresh after following principles of natural justice. - Appeal allowed by way of remand
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Central Excise
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2016 (5) TMI 840
Imposition of penalty - Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 - Improper Non-reversal of CENVAT credit attributable to the inputs gone into manufacturing of exempted goods - having been paid the amount as per the provisions of Rule 6 along with interest there was no need for visiting the appellant with penalty.
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2016 (5) TMI 839
Demand of short paid duty - Unit closed from January 1998 to March 1998 - Discharged duty under Section 3A of Central Excise Act, 1944 read with Rule 96ZP of erstwhile Central Excise Rules, 1944 - Held that:- since the applicant exercised their option to discharge duty under Rule 96ZP(3), therefore, the period of closure of factory/non-production in our view is immaterial. Therefore, by following the Judgment of Hon'ble Supreme Court in the case of Commissioner of C.Ex. & Customs Vs. Venus Castings Pvt. Ltd. [2000 (4) TMI 37 - SUPREME COURT OF INDIA], wherein it has been laid down that the assessee when exercises option to follow either of the procedures, cannot switch over to the one, beneficial to him, in the same financial year. Therefore, the duty short paid has been rightly confirmed by the Ld. Commissioner and to this extent the order is upheld. Imposition of penalty and recovery of interest - Held that:- in view of the judgment of Hon'ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills Vs.CCE [2015 (11) TMI 1172 - SUPREME COURT], penalty and interest under Rule 96ZP ibid cannot be sustained. - Appeal disposed of
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2016 (5) TMI 838
Demand of duty and interest thereon - Contravention of provisions of Rule 8(3A) - Duty paid through Cenvat credit - Held that:- by following the judgment of Hon'ble High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] where it was held that the Rule 8(3A) is unconstitutional and shall be rendered invalid. Therefore, the impugned order is not sustainable and set aside. Imposition of penalty - Rule 25 of the Central Excise Rules - Held that:- the penalty can only be imposed on the appellant under Rule 27 of the Central Excise Rules and accordingly I impose a penalty of ₹ 5,000/- (Rupees Five Thousand only) on the appellant for violation of the procedures contained in the Rules. - Decided partly in favour of appellant
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2016 (5) TMI 837
Job-work - Eligibility of refund claim - Availability of Cenvat credit - Moulds not used in appellant’s factory - Ground of rejection of refund claim is beyond the scope of SCN - Appellant submitted that the SCN is faulty in as much as the applicable rule in this case is 4(5)(b) of Cenvat Credit Rules, 2004 wherein there is no condition of receiving back the moulds within 180 days. The show cause notice wrongly applied rule 4(5)(a). Held that:- there can be no doubt that the spirit behind the CENVAT scheme which is a beneficial one, would be lost, if a statutory benefit is denied by wrong interpretation of certain procedural provisions which permit the facility so long as the item in question are treated either as inputs or as capital goods. Therefore, the denial of credit is clearly an error. Since the moulds in question are admittedly used by the job workers to whom the appellant had send the same by following the procedure prescribed under the CENVAT Credit Rules, denial of refund of reversed credit is not in order. Therefore, by following the judgment of Hon'ble Bombay High Court as upheld by Hon'ble Supreme Court in the case of CCE, Nagpur vs. Indorama Textiles Limited [2009 (10) TMI 571 - BOMBAY HIGH COURT] and the Tribunal ruling in CCE & C, Daman, VAPI vs. Guala Closures (I) Private Limited [2009 (1) TMI 564 - CESTAT, AHMEDABAD], there is no condition under Rule 4(5) (b) of Cenvat Credit Rules that moulds sent by the respondents has to be brought back within 180 days and failure to do so would render the respondents liable to reverse the Cenvat credit availed on the same. The part of the order rejecting the refund claim is set aside with consequential relief. - Decided in favour of appellant
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2016 (5) TMI 836
Whether the refund claim can be sanctioned without availability of proof of payment in the shape of Original TR 6 Challan - Appellant paid duty which was acknowledged by the department - Held that:- it is observer that the departmental authority have not verified from their accounts department that whether the payment has been credited in the government account or otherwise, therefore without carrying out such exercise merely in absence of original TR 6 Challan refund cannot be rejected. There are various means of ascertaining the fact of payment of duty i.e. transaction shown in the bank account of the appellant, in the account of government treasury, booking of such deposit in the books of accounts of the appellant etc. From these evidence also it can be ascertained whether the amount of excise duty has actually been credited in the government account or otherwise but no such verification or efforts has done to find out the fact on the basis of above method was carried out therefore only for want of Original TR 6 Challan rejection of the refund claim is not proper. For this reason matter needs to be remanded to the original adjudicating authority to verify payment of duty. Period of limitation - Refund claim - Duty deposited as pre-deposit at the stage of appeal - Held that:- it is settled legal position that refund will arise only when issue of demand is settled. Since the demand had been confirmed by the Adjudicating authority, unless and until the said demand is set aside either by the Commissioner(Appeals) or Tribunal as the case may be, refund does not become mature. Even if, appellant files refund within the one year from the date of payment, the same is either be rejected on the ground of pre-mature or the same shall be kept pending, therefore there was no purpose of filing refund claim within the one year from the date of payment of duty. In fact duty of ₹ 49 Crores paid as pre-deposit and the same became refundable only after demand is dropped. In the present case the demand is dropped vide adjudication order dated 16/7/2007 and the refund claim was filed on 17/10/2007 i.e. well within the stipulated period from the date of Tribunal order. Therefore, the issue of time bar is in favour of the appellant in view of the judgment of Hon’ble Supreme Court in case of West Coast Paper Mills Ltd [2004 (2) TMI 680 - SUPREME COURT OF INDIA], therefore the demand is not time bar. Refund claim - Unjust enrichment - Held that:- duty paid much later than the clearance of the goods i.e. after issuance of show cause notice, therefore it is clear that the incidence of duty was at least not passed on to the customer, to whom the goods were supplied in respect of which duty of ₹ 49 Crores paid by the appellant. Also Revenue could not produce any evidence that the amount of ₹ 49 Crores was recovered by the appellant either from the customers, to whom goods were sold or from any other persons. There is force in the argument of the appellant that in case the price are fixed by the government as per APM, unjust enrichment is not applicable as the duty paid or payable does not influence price fixed by the government. C.A. also has given the certificate to this effect that incidence of duty paid by the appellant has not been passed on to any other persons. Though C.A. certificate alone cannot be basis of proof that there is no unjust enrichment, but in the present case C.A. certificate coupled with fact that duty paid by the appellant appears to not have been collected and the price is fixed by the government as per APM, it prima facie appears that incidence of duty was not passed on by the appellant. However it is observed that lower authority has not properly verified the above aspect therefore the same needs to be re-verified. - Appeal disposed of by way of remand
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2016 (5) TMI 835
Eligibility for Cenvat credit on inputs - Wire rod - Conversion of wire rod into Copper Coated CO2 Mig Welding Wire - Whether a process of drawing of the wire and amounts to manufacture or not - Held that:- as per Rule 16 of the Central Excise Rules, 2002, it is clear that the assesee is entitle to avail Cenvat credit on the duty paid goods even though the said duty paid goods does not undergo manufacturing process. The only condition is that if the duty paid goods is cleared after process which amounts to manufacture, the assesee is required to pay duty on the transaction value and if the goods are cleared without manufacturing process the duty which required to be paid is equal to the Cenvat credit availed. Rule 16 also holds the duty paid goods as inputs therefore the Cenvat credit is admissible. As per various judgments also it can be seen that the Credit was regularized in case of wire drawing units as per the amendment made in Rule 16 of Central Excise Rules. Even in the absence of specific amendment in respect to the wire drawing unit, the credit was otherwise admissible as per unamended Rule 16 of Central Excise Rules, 2002. - Decided against the revenue
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2016 (5) TMI 834
Service of notice - Whether the CESTAT is justified in accepting that the order dated 21.12.2010 was adequately served upon the appellant - no evidence adduced as to whether the post was ever tendered or affixed in the manner provided under sub-section (1) of Section 37 C of the Central Excise Act, 1944 - Held that:- it is obligatory upon the Tribunal to satisfy itself about delivery or tendering of the notice before presuming that the notice was served as per sub-section (2) of Section 37 C of the Act of 1944. No such prima facie satisfaction has been recorded by the Tribunal. - Appeal allowed by way of remand
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CST, VAT & Sales Tax
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2016 (5) TMI 828
Whether the Entry Tax under the provisions of the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 can be levied upon the goods brought into railway area where the petitioners are carrying on their trade and business - Held that:- submission of petitioners that they are not liable for payment of entry tax is liable to be rejected as Article 285 of the Constitution of India only applies if the property is of the Union of India and the tax is directly imposed. Here, entry tax has been imposed under the Act of 1976 on the entry of goods into the local area for consumption, use or sale by the petitioners who are said to be dealers under the Act of 1976. By applying the decision of Supreme Court in the case of Senior Divisional Mechanical Engineer v. State of Orissa and others, the mandate under Article 285 of the Constitution of India does not extend to the taxes leviable for entry of goods into the local area and entry tax cannot be called as a tax directly imposed upon the income or property of the Union as taxable event under the Orissa Entry Tax Act, 1999 is on the entry of scheduled goods into the local area and not on the goods itself. Therefore, the petitioners are not exempted from payment of entry tax by virtue of the provisions contained in sub-section (1) of Section 184 of the Railways Act, 1989. - Decided against the petitioner
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2016 (5) TMI 827
Whether levy of tax under M.P. Commercial Tax Act, 1994, as per entry 22 of Part V of Schedule II on smokeless coke obtained from processing of coal purchased from registered dealer after paying full tax @ 4% is justified under law or not - Appellant engaged in conversion of coal into smokeless soft fuel, ie., smokeless coke by application of mechanized plants. Held that:- there was no need to list the coal and coke in other forms separately, because Entry No.22 of Part V of Schedule-II of the Madhya Pradesh Commercial Tax Act, 1994 is wide enough to cover all varieties of coal and byproducts of coal. Smokeless soft fuel fuel i.e. smokeless coke is a different commodity, its use is different from coal and coal-tar and carbon to some extent is separated from the coal by process of heating, burning and quenching, therefore, the manufactured item becomes different from coal. Provision of Section 9-B of the Madhya Pradesh Commercial Tax Act, 1994 is clear on this point and the Department has levied tax, in accordance with the aforesaid provision and has not levied double taxes, because it is levying only on difference of sale price and purchase price. Therefore, manufactured smokeless soft fuel i.e. smokeless coke out of coal is distinct commodity and also understood in common parlance different from coal, therefore, commodity manufactured is liable to tax under Section 9 of the Madhya Pradesh Commercial Tax Act, 1994. - Decided against the petitioner
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2016 (5) TMI 826
Binding effect of circular dated 7.7.2008 vide No.VAT/CR-31/2008-09 and interpretation thereof - Return filed beyond the period of six months showing the additional tax liability - Levying of penalty and interest - Held that:- circular transpires that whenever the word is ‘ any additional tax liability’ it would mean ‘additional net tax liability’ because the moment there is use of the word ‘additional’, it would mean that either the tax is already paid, but shortly paid or even after the credit of input tax, the further liability of the tax remains which is required to be paid by the return. The attempt to contend that it should be revised return only for the purpose of absolute additional tax liability and not to include the adjustments thereof with input credit, cannot be countenanced for the simple reason that whenever the matter pertains to payment of additional tax liability, it would always mean the credit or set off to be made of the tax already paid and the consequential amount of tax by way of additional tax liability. Therefore, if the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability. In our view, the interpretation put forward on behalf of the Revenue to the circular dated 7.7.2008 cannot be accepted. Interpretation of view taken by this Court in the decision which have been referred to as that of the learned Single Judge and of the Division Bench in the Order - Held that:- this Court did not find that even if the input tax credit is claimed for the respective tax period for which the return has been filed resulting into additional tax liability, then also input tax credit cannot be given adjustment thereof or would be unavailable. Therefore, the Revisional Authority has not properly considered the referred decision of this Court in State of Karnataka Vs. Centum Industries Private Limited, Bangalore [2015 (10) TMI 47 - KARNATAKA HIGH COURT]. If the matter is examined in the light of the aforesaid two aspects and the reasons recorded by the Revisional Authority are considered, it is found that the order cannot be sustained in the eye of law. Therefore, it would be appropriate to refer the matter to the Revisional Authority for reconsideration thereof in the light of the observations made by this Court. - Appeal disposed of by way of remand
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Wealth tax
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2016 (5) TMI 841
Property included in net wealth - Held that:- In a situation like the present one where the possession and control of the property vests with the Assessee to the exclusion of everyone else and it is the Assessee who is exploiting the property for its own purposes, it is not open to the Assessee to contend that the property in question does not belong to it. Consequently the question framed is answered in the negative, i.e., in favour of the Revenue and against the Assessee by holding that the ITAT erred in holding that the property at 8 and 9 Zamrudpur could not be included in the net wealth of the Assessee for AYs 1989-90, 1990-91 and 1991-92. The impugned order dated 29th September 2003 of the ITAT to that extent is hereby set aside. - Decided against assessee
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Indian Laws
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2016 (5) TMI 822
SARFAESI Act - alternative statutory remedy - maintainability of petition - Held that:- An action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person 1 affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT. Thus, any aggrieved person can file appeal before the Debts Recovery Tribunal and therefore when alternative statutory remedy of filing an appeal under Section 17 of the SARFAESI Act is available to the petitioner, learned Single Judge has rightly not entertained the petition. We are also in complete agreement with the reasoning given by the learned Single Judge while rejecting the petition. In view of the aforesaid discussion, this appeal is required to be dismissed and accordingly dismissed. However, it is clarified that if the appeal is filed under Section 17 of the SARFAESI Act, the DRT shall decide the same in accordance with law on its own merits without being influenced by the observations made by us in this order.
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2016 (5) TMI 821
Waiver of complete pre-deposit - required to deposit 50% of entire amount of loan determined by DRT - tribunal did not waive the entire prerequisite statutory amount under section 21 of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 - Held that:- the respondent could not show any statutory provision or any judicial pronouncement on the point enumerating the circumstances under which the entire amount can be waived and under which the amount can be reduced. Whereas, in the case of ITC Limited vs. CC (Appeals) and CE [2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD] this court has touched this aspect of the matter, may be under the different statute, but the principles laid down by the Division Bench are near to the truth in the context of the present case too as in the present case there is provision for complete waiver provided the Appellate Tribunal is satisfied, whereas in the Central Excise Act there is no provision for complete waiver. Therefore, the petitioners' case stands on better footing looking into the provision to section 21 of DRRBFI Act, 1993, and, in the Appellate Tribunal has erred in not considering that aspect of the matter including prima facie, merit of the case while passing the impugned order, therefore, the same cannot be sustained in the eye of law. - Decided in favour of petitioner
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