TMI Tax Updates - e-Newsletter
May 5, 2016
Case Laws in this Newsletter:
Income Tax
Customs
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
-
Income Tax:
Credit purchases are nothing but expenditure and if sundry credits are not proved by the assessee addition can be made by the AO by resorting to section 69C - HC
-
Income Tax:
AO discussed the amount of undisclosed income but did not make any addition - CIT(A) simply confirmed the addition without enhancing the order - the addition of a sum was clearly in excess of jurisdiction. - HC
-
Income Tax:
The policy of non filing and of not pressing and/or withdrawing admitted appeals having tax effect of less than ₹ 20 lacs has been specifically declared to be retrospective by the Circular dated 10th December, 2015. There is no reason why the circular should not apply to pending References - HC
-
Income Tax:
Deduction u/s. 35AD - mere usage of the warehousing facility for captive purposes would not disentitle the assessee from the claim of deduction u/s. 35AD - AT
-
Income Tax:
Set off of Unabsorbed depreciation as on April 1, 1997 can be set off against the income from any head for the immediate assessment year following April 1, 1997 (assessment year 1998-99)and thereafter if there still is any unabsorbed depreciation the same can be set off only against the business income for a period of eight (08) assessment years - SC
-
Income Tax:
Bogus purchases of goods - When the entire purchases made from TTPL was available as stock as at the year end, then the disallowance of purchases should result in corresponding reduction of the closing stock, the result of which would have NIL effect on profit and hence there was no requirement of making any addition - AT
-
Income Tax:
Benefit of proviso to section 112(1) on sale of the equity shares - tax is payable in respect of income arising from transfer of a long-term capital asset which is before giving effect to the provisions of second proviso to section 48. In such circumstances, the case gets covered under the proviso and consequently, it is the tax rate of 10% in the terms of the proviso to section 112(1) which should be correctly applied - AT
-
Income Tax:
TDS liability - No occasion to deduct tax at source in respect of the payment made to the nonresident agent - The income of nonresident commission agent cannot be considered as income arising or accruing in India - HC
-
Income Tax:
Transfer pricing adjustment - computation of the operating profit margin by increasing the cost of the sales leads to an arbitrary adjustment of the Assessee's income and that such alteration resides plainly outside the Rules and the provisions of the Act - HC
-
Income Tax:
Reopening of assessment - Jurisdiction - the question of an ITO who is not the AO who passed the original assessment order u/s 143 (3) for particular AY, exercising the powers u/s 147/148 to re-open that assessment does not arise - HC
-
Income Tax:
Amount received covered u/s 10(3) - Revenue has been unable to make out a case for treating the said receipt as of a casual and non-recurring nature that could be brought to tax u/s 10(3) r.w.s 56 - Having held that it could not be in the nature of capital gain it was not open to the Revenue to seek to bring it to a tax under the revenue receipt - HC
-
Income Tax:
Remand orders - remand is not a power to be exercised in a routine manner and should be used fairingly as an exception only when the facts warranted such course of action - no proper reasoning has been given by the Tribunal for exercising the power of remand - HC
-
Income Tax:
Reopening of assessment - The reasons cannot be supplied subsequent to the recording of such reasons either in the form of an order rejecting the objections or an affidavit filed by the Revenue - The reasons also do not provide a live link to the formation of the belief that income had escaped assessment. - HC
-
Income Tax:
Depreciation on application of software at lower rate - The actual cost of assets acquired from TGSL to be considered in terms of Explanation 3 to section 43(1) of the Act. Being so the assessee is not entitled for depreciation which was already claimed by TGSL and thereby restricting the depreciation at 25 per cent. on IPR and 60 per cent. on other software - AT
-
Income Tax:
Allowance of expenditure in respect of preliminary expenses under section 35D - an apparent extension or expansion must take place by establishing new undertaking - The expansion in the present case is acquisition of existing undertaking. Therefore, we find that the expenditure incurred by the assessee-company in connection with the issue of shares do not qualify to be amortised under section 35D - AT
-
Income Tax:
If the assessee has converted capital asset into stock in trade in prior years, then part of the profit arising on sale of land, shall be chargeable to tax under the head capital gains and part of the profit under the head business income - AT
-
Income Tax:
MAT - Computation of book profit u/s. 115JB - lease rent equalization charge cannot be said to be an unascertained liability - AT
-
Income Tax:
MAT u/s 115JB - assessee is entitled to reduce an amount on account of withdrawal from the provision for ESOP from the taxable book profit in the working of MAT - AT
-
Income Tax:
Interest on housing loan u/s 24 - The use of the word "or" in between acquired and constructed makes it clear that the property can either be acquired or constructed with the borrowed capital and if the income is earned which is assessed under the head "Income from house property" - claim of deduction allowed - AT
-
Income Tax:
Disallowance of commission payment - disallowance merits deletion as these payments have been made by the assessee on behalf of its clients and, hence, the same does not constitute its own expenditure. - AT
-
Income Tax:
Addition on account of software purchase - software was purchased and subsequently sold to customer and was not used by the assessee - addition deleted - AT
-
Income Tax:
Disallowance of expenditure - taking over of the loan or discharge of the loan - it is for the business purpose of the assessee and, hence, revenue in nature and cannot be treated as a capital loss - AT
-
Income Tax:
Interest-free advance to subsidiary company - Nexus has been established by the assessee and when there is no interest burden on the assessee by virtue of the loan advanced to its subsidiary no such interest income can be attributed in the hands of the assessee - AT
-
Income Tax:
Exemption u/s 54 - assessee has utilized the entire capital gains within the period of one year but due to certain circumstances beyond the control of the assessee, the construction of the house could not be completed within the specified period - exemption allowed - AT
-
Income Tax:
Disallowance u/s 14A - no addition can be made for interest apportioned towards exempt income, out of the interest paid, under rule 8D(2)(ii) of the Rules. - AT
-
Customs:
Service of notice would have to be effected on the owner of the goods personally or through agent so specifically authorized to accept and the right of owner of goods cannot be defeated without prior notice on him - service on the custom agent was no service - HC
-
Customs:
CHA - Confiscation/seizure of goods would not fall within the meaning of “import of goods” as used in Section 146 of the Act and Regulation 2(c) of the Customs Broker Licensing Regulations, 2013 - Cannot be termed to be a part of the duty of custom agent as being penal in nature - HC
-
Customs:
If the Department relies upon any document that they do not furnish to appellant, the appellant can always challenge the order in original passed thereafter, on the ground of violation of principles of natural justice - before completion of adjudicating process, writ petition is not maintainable - HC
-
Customs:
Once the Department takes a stand that they are not relying upon certain documents mentioned in the show cause notice, there is no way the Department can be compelled to furnish copies of such documents before adjudication - HC
-
Customs:
Condoantion of delay in filing an appeal - delay of 18 days - When a specific limitation has been prescribed under the Act, the petitioner should have filed an appeal within the stipulated time - HC
-
Indian Laws:
Mere registration of ECIR against the suspects of offence under Section 3 of PMLA cannot go to mean that such persons are accused under Section 3 of PMLA, when an ECIR is lodged with the Directorate of Enforcement there is no Magisterial intervention unlike an FIR - HC
-
Service Tax:
The claim of the appellant that of a pure agent seems to be without any evidence as there is no dispute that the appellant had charged additional amount other than the amount paid as reimbursable expenses - AT
-
Service Tax:
If any amount is deposited during the proceedings of the demand case, refund shall arise only when the demand case is finally decided in favour of the assesse - in any case the date of deposit of service tax cannot be taken as relevant date in terms of Section 11B - AT
-
Service Tax:
Refund - unjust enrichment - Merely because the amount was shown as expenditure it cannot be concluded that the burden of tax has been passed on to other indirectly - AT
-
Service Tax:
If it is established that the gross receipt of service charges is lesser than the gross service charges on which service tax was paid then the excess paid service tax is prima facie refundable to the appellant - AT
-
Service Tax:
Cenvat credit on input services used in trading activity availed - the suppression of fact involved only in the first show cause notice - But no such allegation can sustain towards all the subsequent show cause notices - AT
-
VAT:
Non-submission / Delayed submission of 'C' Forms - CST - If on sufficient cause, the Petitioner satisfies the requirements of law, then the claim cannot be rejected unjustifiably merely on the ground of belated submissions of statutory forms - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2016 (5) TMI 137
Selection of comparability - Transfer pricing adjustment - whether tribunal has erred in holding that the profits on costs of five comparable companies as abnormal without giving reasons how the functions discharged, assets deployed and risks assumed of such companies were different from the Respondent-Company - Held that:- Appellant-Revenue has not been able to controvert or deny the data relied upon by the Authorities below to come to such conclusion. The said Companies are no doubt large and distinct companies where the area of development of subject services are different and as such the profit earned therefrom cannot be a bench-marked or equated with the Respondent- Company. Shri Jain, learned Counsel has rightly relied upon the Judgment reported in the case of Commissioner of Income-tax vs. Agnity India Technologies (P.) Ltd. (2013 (7) TMI 696 - DELHI HIGH COURT ). Learned Counsel has also brought to our notice the Order of the Income Tax Appellate Tribunal whilst examining similar circumstances for the assessment year 2005-06. He has taken us through the findings therein to point out that the conclusions arrived at are based on a comparison that the condition in any uncontrolled transaction between an independent enterprises for the purpose of such comparison, economically relevant characteristics must be sufficiently comparable if two parties are to be placed in a similar situation. Learned Counsel as such submitted that it is not open for the appellant to now contend a different criteria to ascertain the comparability. In fact the Tribunal whilst passing the impugned Order has considered the said principles whilst coming to the conclusion that the said three Companies cannot be treated to be comparable to the Respondent-Assessee Company. The turn over is obviously a relevant factor to consider the comparability.
-
2016 (5) TMI 119
Amount received covered under Section 10(3) - whether receipts which are of a casual and non-recurring nature? - Held that:- The sum of ₹ 20 lakhs received by the Assessees was in the context of the cancellation of the sale certificate and the sale deed executed in their favour in relation to an immovable property and neither Assessee was dealing in immovable property as part of his business. While it could if at all be said to be in the nature of a capital receipt, what is relevant for the present case is that the Revenue has been unable to make out a case for treating the said receipt as of a casual and non-recurring nature that could be brought to tax under Section 10(3) read with Section 56 of the Act. AO was in error in proceeding on the basis that a sum of ₹ 20,00,000 received by the Assessee was in the nature of a casual and non-recurring receipt which can be brought to tax under Section 10(3) of the Act. Having held that it could not be in the nature of capital gain it was not open to the Revenue to seek to bring it to a tax under the revenue receipt. Following the decision in Cadell Weaving Mill (2001 (2) TMI 105 - BOMBAY High Court ), there can be no manner of doubt that what is in the nature of capital receipt, cannot be sought to be brought to tax by resorting to Section 10(3) read with Section 56 of the Act. - Decided against the Revenue
-
2016 (5) TMI 118
Transfer pricing adjustment - TPO, referring to Rule 10B(1)(e)(i) held that the net profit margin realized by the Assessee from an international transaction entered into with associated enterprises is to be computed in relation to the costs incurred, sales effected or assets employed by the Assessee - Held that:- ITAT has followed the decision of this Court in Li & Fung India Pvt. Ltd. v. Commissioner of Income Tax (2014 (1) TMI 501 - DELHI HIGH COURT ), where an identical issue had come up for consideration. This Court, in the said decision, came to the conclusion that the computation of the operating profit margin by increasing the cost of the sales leads to an arbitrary adjustment of the Assessee's income and that such alteration “resides plainly outside the Rules and the provisions of the Act”. The Court held that the TPO”s reasoning to enhance the costs by considering the cost of manufacture and export of finished goods was nowhere supported by Rule 10B(1) (e) of the Rules. - Decided against revenue
-
2016 (5) TMI 117
Disallowance u/s 37 - allowable business expenditure - Held that:- We find that two Authorities have taken a concurrent view that the expenditure of ₹ 1.13 crores is for business purposes i.e. increasing its sales and was in fact incurred. Therefore, allowable as deduction under Section 37 of the Act. The view taken by the Commissioner of Income Tax (Appeals) as well as the Tribunal is essentially a finding of fact. The view taken is a possible view on the facts and the same has not been shown to be perverse and / or arbitrary in any manner. - Decided in favour of assessee Fees for technical services - tds liability - nature of payment - disallowance u/s 40(a)(i) - Held that:- The issue raised herein stands concluded against the Revenue and in favour of the respondent assessee by the decision of this Court in CIT Vs. Gujarat Reclaim & Rubber Products Ltd. (2015 (12) TMI 1078 - BOMBAY HIGH COURT) and Director of Income Tax (IT)I Vs. M/s. Credit Lyonnais (2016 (3) TMI 735 - BOMBAY HIGH COURT) wherein held there was no occasion to deduct tax at source in respect of the payment made to the nonresident agent. The income of nonresident commission agent cannot be considered as income arising or accruing in India. Therefore, the provisions of Section 40(a)(i) would have no application - Decided in favour of assessee
-
2016 (5) TMI 116
Validity of block assessment - whether the seized material did not disclose any undisclosed income? - addition on account of excess transportation charges received - Held that:- The assessee did not raise the issue of any addition of a sum of ₹ 1,59,38,774/- because there was no addition of the sum of ₹ 1,59,38,774/- or any part thereof. The assessee attempted to demonstrate the fallacy in the finding arrived at by the Assessing Officer by holding at one place that there was an undisclosed income of ₹ 2.02 crores and at another place by holding that there was an undisclosed income of ₹ 1.59 crores approximately. When the Assessing Officer had not made the addition of ₹ 1,59,38,774/-, the assessee had no occasion to challenge the same. When the assessee carried the matter to the CIT (Appeal), the latter, without anything more, could have enhanced the addition. But the CIT (Appeal) did not do so. He merely confirmed the order of the Assessing Officer. Therefore, the subject matter of challenge before the learned Tribunal was the addition of ₹ 2.02 crores. The learned Tribunal could either have upheld the same or could have set aside the same. The learned Tribunal chose to set aside that addition. The matter should therefore have come to an end in the absence of any cross objection by the revenue. We are of the opinion that the addition of a sum was clearly in excess of jurisdiction. Therefore, the question is answered in the negative and in favour of the assessee.
-
2016 (5) TMI 115
Reopening of assessment - Held that:- It is well settled that the reasons recorded for reopening the assessment have to speak for themselves. They have to spell out that (i) there was a failure of the Assessee to disclose fully and truly all the material facts necessary for the assessment and (ii) the reasons must provide a live link to the formation of the belief that income had escaped assessment. These reasons cannot be supplied subsequent to the recording of such reasons either in the form of an order rejecting the objections or an affidavit filed by the Revenue. Reasons given subsequently do not satisfy the jurisdictional requirements of Section 147 (1) of the Act inasmuch as they do not indicate that there was a failure by the Assessee to disclose fully and truly all the material facts necessary for the assessment. The reasons also do not provide a live link to the formation of the belief that income had escaped assessment.Consequently, for the aforementioned reasons, the Court is satisfied that in the present case the essential requirements of Section 147 of the Act have not been satisfied by the Revenue. - Decided in favour of assessee
-
2016 (5) TMI 114
Remand orders - provision made for warranty - Held that:- It is an admitted fact that on the appeal filed by the revenue challenging the order passed by the Tribunal giving relief to the assessee as regards the provision made for warranty, this Court placing reliance on the Judgment of the Apex Court in Rotork Controls’ case (2009 (5) TMI 16 - SUPREME COURT OF INDIA ) remanded the matter to the Tribunal for disposal in accordance with law. The jurisdiction of the Tribunal being a last fact finding authority, is empowered to examine the documents placed by the assessee in support of its claim. It is settled law that remand is not a power to be exercised in a routine manner and should be used fairingly as an exception only when the facts warranted such course of action. When the materials are available on record, the Tribunal ought to have arrived at a conclusion rather than further remanding the matter back to the Assessing Officer that too, after giving a positive finding that the methodology adopted by the assessee is on a scientific and reasonable basis. We observe that no proper reasoning has been given by the Tribunal for exercising the power of remand. The directions issued by this Court while remanding the matter to the Tribunal is not considered by the Tribunal in the true spirit. It was the obligation cast on the Tribunal to examine the case of the Assessee in the light of the Judgment of the Apex Court in Rotork Controls’ case (supra) and to come to a decision. But, remanding the matter to the Assessing Officer is in disregard to the Judgment of this Court and as such we are of the opinion that the order passed by the Tribunal is unsustainable.
-
2016 (5) TMI 113
Reopening of assessment - officer who issued the notice and recorded the reasons for re-opening the assessment, i.e. the ITO Ward 39(2) was not the AO of the Assessee - Held that:- The reasons given by the Department in its counter affidavit do not in any way explain the patent illegality in invoking the powers under Section 148 of the Act for reopening the assessment of the Assessee for AY 2007-08. The mere fact that the definition of an AO in terms of Section 2(7-A) of the Act al includes a DCIT and other superior officers or an ITO of some other ward who may be vested with the relevant jurisdiction by virtue of orders issued under Section 120 (1) or Section 120 (2) of the Act will not make a difference to the above legal position. The reason is not far to seek. It is only the AO who has issued the original assessment order dated 13th April 2009 for AY 2007-08 under Section 143 (3) of the Act who is empowered to exercise powers under Section 147/148 to re-open the assessment. This is because he alone would be in a position to form reasons to believe that some income of that particular AY has escaped assessment. This again cannot be based on a mere change of opinion. Further, in terms of Section 151 of the Act such a move will have to have the prior approval of the CIT. Under the scheme of the Act, if a superior officer forms an opinion that the original assessment order is prejudicial to the interests of the Revenue, recourse can be had to Section 263 of the Act. In any event the question of an ITO who is not the AO who passed the original assessment order under Section 143 (3) of the Act for particular AY, exercising the powers under Sections 147/148 of the Act to re-open that assessment does not arise. - Decided in favour of assessee
-
2016 (5) TMI 112
Monetary limit - appeal to High court - Held that:- CBDT to ensure that there is uniformity in respect of filing of appeals has fixed threshold limits which would do away with the discretion of the officer to file and pursue the appeal remedy where the tax effect is less than the minimum amounts specified. It is noteworthy that the Circular specifically provides that where the tax effect is higher than that specified in the Circular then the filing of appeal in such cases is to be decided on the merits of the case. Therefore, to enable the Revenue to focus on matters where the tax implication is above ₹ 20 lacs only such matters should be agitated in appeal before the High Court according to the Circular. This policy of non filing and of not pressing and/or withdrawing admitted appeals having tax effect of less than ₹ 20 lacs has been specifically declared to be retrospective by the Circular dated 10th December, 2015. There is no reason why the circular should not apply to pending References where the tax effect is less than ₹ 20 lacs as the objective of the Circular would stand fulfilled on its application even to pending References more particularly bearing in mind that there are 1149 number of References still awaiting disposal by this Court and a large number of them would have tax effect of less than ₹ 20Lakhs. In the above view, we hold that as admittedly, the tax effect is less than ₹ 20 lacs in the present Reference Application at the instance of the Revenue, the same is being returned unanswered. However, we make it clear that the question of law as raised for our opinion is left open be considered in an appropriate case.
-
2016 (5) TMI 111
Deduction u/s. 35AD - expenditure incurred in construction of a SILO (warehouse) for storage of agricultural produce - Held that:- CIT(A) noted that it is not in dispute that the manner in which assessee has used its warehousing facility has enabled savings on storage cost, which it had to otherwise incur in the past years. The underlying point is that the warehouse has been utilised in the course of business. Therefore, in our considered opinion, CIT(A) made no mistake in holding that mere usage of the warehousing facility for captive purposes would not disentitle the assessee from the claim of deduction u/s. 35AD of the Act inasmuch as the assessee has otherwise complied with all the requirements to claim deduction u/s. 35AD of the Act. Therefore, we conclude by holding that the order of CIT(A) deserves to be affirmed, which we hereby do. - Decided in favour of assessee
-
2016 (5) TMI 110
Entitlement to the benefit of proviso to section 112(1) on sale of the equity shares - Rate application - assessee had applied tax rate of 10% in the terms of the proviso to section 112(1) but the AO has applied tax rate of 20% as the proviso below section 112(1)(c) was not applicable in the case of non-residents - Held that:- It is not the case of the Revenue that the assessee did not compute capital gain in terms of the first proviso. Second proviso, which is material for our purpose, provides that where long-term capital gain arises from the transfer of a long-term capital asset, `other than capital gain arising to a non-resident from the transfer of shares in an Indian company referred to in the first proviso’ , then the provisions of clause (ii) shall have effect as if for the words "cost of acquisition" and "cost of any improvement", the words "indexed cost of acquisition" and "indexed cost of any improvement" had respectively been substituted. As capital gain in the instant case has arisen to a non-resident from transfer of shares in an Indian company, it is clear that the mandate of second proviso becomes inapplicable and the case gets restricted in the first proviso to section 48 alone. Again reverting to the main issue of the applicability or otherwise of the proviso below section 112(1)(c), we find that tax is payable in respect of income arising from transfer of a long-term capital asset which is before giving effect to the provisions of second proviso to section 48. In such circumstances, the case gets covered under the proviso and consequently, it is the tax rate of 10% which should be correctly applied. Our view is fortified by the judgment of the Hon’ble jurisdictional High Court in Cairn UK Holdings Ltd. (2013 (10) TMI 430 - DELHI HIGH COURT ) in which it has been held that the long-term capital gain earned by the assessee non-resident on off market sale of shares of listed Indian company is taxable @ 10% under the proviso to section 112 and proviso to section 112(1) does not state that an assessee, who avails benefit of the first proviso to section 48, is not entitled to the benefit of lower rate of tax at 10%. As the view taken by the DRP is in consonance with that of the Hon’ble High Court, we ergo countenance the same. - Decided in favour of assessee
-
2016 (5) TMI 109
Set off of Unabsorbed depreciation - Held that:- Unabsorbed depreciation as on April 1, 1997, can be set off against the income from any head for the immediate assessment year following April 1, 1997 (assessment year 1998-99)and thereafter if there still is any unabsorbed depreciation the same can be set off only against the business income for a period of eight (08) assessment years.
-
2016 (5) TMI 108
Disallowance u/s 14A - Held that:- The investment as on 31stMarch 2008 was ₹ 3,65,32,450/- whereas the reserve and surplus of the company as on 31st March 2008 was of ₹ 18,60,41,748/-which is much higher than the investment in exempt income earning assets. The assessee demonstrated the similar situation in the earlier years when the investment was made. Thus the facts of the case of the assessee are identical to the facts of the case of HDFC Bank Ltd (2014 (8) TMI 119 - BOMBAY HIGH COURT ) to hold that no addition can be made for interest of ₹ 12,27,050/- apportioned towards exempt income, out of the interest paid, under rule 8D(2)(ii) of the Rules. However, so far as the AO’s computation of expenditure to be disallowed under rule 8D(2)(iii) is concerned, the same in our view is in conformity with the rules, hence, the same do not call for any interference. Accordingly, the ground of the assessee is partly allowed.
-
2016 (5) TMI 107
Set off of brought forward business loss and unabsorbed depreciation before allowing deduction under Section 10A - Held that:- Deduction u/s.10A of the Act is to be allowed against the eligible profits and in case there are certain left over profits for the year under appeal the same are to be adjusted against the brought forward losses and unabsorbed depreciation as claimed by the assessee in the return of income. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the deduction u/s.10A of the Act against the eligible profits before adjustment of brought forward losses/depreciation. Reduction of expenses incurred on lease line charges from export turnover - Held that:- In view of the categorical submission of the assessee before the AO that sale consideration includes telecommunication charges and it is not separately charged to customers and following the decision of the Hyderabad Bench of the Tribunal in the case of Patni Telecom Pvt. Ltd. (2008 (1) TMI 452 - ITAT HYDERABAD-A ) we are of the considered opinion that the lease line charges should not be reduced from the export turnover of the assessee while computing the deduction u/s.10A of the Act. Exclusion of leased line charges from the export turnover and the total turnover both for computing the deduction u/s.10A - Held that:- CIT(A) following the decision of the Hon’ble Bombay High Court in the case of CIT Vs. Gemplus Jewellery India Ltd. reported in [2010 (6) TMI 65 - BOMBAY HIGH COURT ] directed the AO to exclude the lease line charges from the export turnover and the total turnover both for computing deduction u/s.10A. We do not find any infirmity in the order of the CIT(A) who has followed the decision of the Hon’ble Bombay High Court while directing the AO to exclude the lease line charges from the export turnover and the total turnover for computing deduction u/s.10A of the Act. MAT - deduction of reversal of provisions made for employees stock option plan while computing book profit under section 115JB disallowed - Held that:- We find merit in the submission of the Ld. Counsel for the assessee that whether the same has been added under clause (f) or as per clause (c) to Explanation 1 of section 115JB, there will be no difference and the result would have been same had the assessee added the ESOP provision under clause (c) instead of clause (f). Since an amount of ₹ 7,67,47,000/- has already been added by the assessee while computing the book profit as per section 115JB of the I.T Act in the A.Y. 2007-08, therefore, in our opinion the assessee is entitled to reduce an amount of ₹ 5,95,15,054/- on account of withdrawal from the provision for ESOP from the taxable book profit in the working of MAT. We further find merit in the submission of the Ld. Counsel for the assessee that the proviso nowhere says that you should have added the provision under a particular clause and if the assessee has increased its book profit under any other clause of the proviso the assess is not entitled for the reduction. Since the assessee has admittedly increased its book profit in A.Y. 2007-08 as per the submission before CIT(A), which has already been recorded by the CIT(A)and the same has not been proved to be false or untrue, therefore, we are of the considered opinion that the assessee is entitled to reduce an amount of ₹ 5,95,14,054/- on account of withdrawal from the provision for ESOP from the taxable book profit in the working of MAT. Lease rent equalization provision not be included for computing book profit u/s.115JB - Held that:- CIT(A) while holding that the lease rent equalization provision should not be included for computing book profit u/s.115JB of the Act has followed the decision of the Delhi Bench of the Tribunal in the case of Goodwill India Ltd. (2006 (2) TMI 219 - ITAT DELHI-C ) and has held that lease rent equalization charge cannot be said to be an unascertained liability. Further, he has also analysed various clauses of the lease agreement according to which the terms of lease is for initial period of 3 years which can be renewed for a further period of two terms of three years each. There is also provision for increase in the monthly rent by 15% of the last paid rent at the end of each 3 year period. Thus, the assessee in fact signed the lease agreement for 9 years with provision for escalation of rent at the end of every 3 years. The Ld. Departmental Representative neither could point out any infirmity in the order of the CIT(A) appeal nor could controvert the factual findings given by the CIT(A). Decided in favor of assessee and against the revenue.
-
2016 (5) TMI 106
Disallowance of commission payment - Held that:- The impugned disallowance merits deletion as these payments have been made by the assessee on behalf of its clients and, hence, the same does not constitute its own expenditure. Even though the assessee has routed the expenditure and reimbursement received from its clients through the profit and loss account, yet it is settled principle that the books of account of the assessee cannot be the sole determinative factor to decide about the nature of expenditure.According to the assessee, the commission payments have been made to the workers as an incentive to get the work done quickly. Even though the Assessing Officer has invoked the provisions of the Explanation to section 37(1), he has not cited the relevant law, which prohibits such kind of payments. According to the learned authorised representative, it is a prevailing trade practice and such payments are not prohibited by any law. The assessee's claim that it was paid to the workers have not been disproved. Even otherwise, we have noticed earlier that the same represents payments made on behalf of its clients and, hence, the disallowance of the same is not called for in the hands of the assessee. - Decided in favour of assessee
-
2016 (5) TMI 105
Sale of the plots - chargeable to tax as business income or capital gains - Held that:- On reading of the entire documents placed before us, we could not find the relevant dates when the assessee converted this capital asset into stock in trade, if at all and what price(value), prevalent circle rates thereof,documents and actions of assessee for such conversion to convert the capital asset into stock in trade is not demonstrated. Further, from the remand report it is apparent not only the properties owned by the assessee, but the properties owned by the other person is also listed. Therefore, we are of the view that the finding of the assessing officer was not based on the list of properties purchased or owned by the assessee. It is also apparent that assessee has not shown any business income from the sale of stock in trade, which was stated to have been converted from the capital asset. If the assessee has converted capital asset into stock in trade in prior years, then part of the profit arising on sale of land, shall be chargeable to tax under the head capital gains and part of the profit under the head business income.On verification of computation of total income furnished by the assessee for assessment year 2010-11, we did not find any income offered by the assessee under the head business income on sale of the plots. As these vital facts are not brought on record, either by the assessee or by the revenue, in the interest of the Justice, we set-aside these grounds of appeal to the file of the assessing officer to verify the facts and then to decide issue accordingly. That assessing officer shall afford proper opportunity to the assessee to substantiate its claim before deciding the issue on the merit. - Decided in favour of assessee by way of remand. Disallowance of the development charges - Held that:- CIT (A), while allowing ₹ 4 lakhs and disallowing ₹ 553 400/-did not give any reason for such bifurcation. It is also not apparent that even despite the assessee has not furnished the bills and vouchers related to these expenses under this head how he has come to the conclusion that ₹ 5 53 400 is disallowable. Therefore, as these expenses are related to the development of the above said property which has been dealt with by us in ground No. 1 and 2 of the appeal, We also set aside this ground of appeal to the file of the assessing officer to verify the amount of expenditure incurred by the assessee with the supporting bills and other relevant materials. If the assessee is found to have incurred thisexpenditure, it should be granted to assessee as deduction under the head of business income if AO treats the activity of the sale of plot as business income and if the activity is found to be of sale of capital asset. Then this expenditure should be allowed as cost of improvement of the asset - Decided in favour of assessee Non granting exemption under section 54F for purchase of the residential flat - Held that:- The deduction under section 54F of the income tax act is allowable only if the assessee has earned any capital gain on sale of the property. No such deduction is allowable if the income is chargeable to tax under the head business income. As we have already set aside Ground No. 1 and 2 of the appeal of the assessee to the file of assessing officer, we also set aside this ground of appeal to the file of assessing officer and to grant deduction under section 54F if income of the assessee is chargeable to tax under the head capital gains. We also direct assessing officer to verify the claim of the assessee in accordance with the provisions of the law while granting deduction under section 54F of the income tax act after affording reasonable opportunity of hearing and to produce relevant evidence before him - Decided in favour of assessee by way of remand. Addition for the cash deposited in IDBI bank account of the assessee - Held that:- Before us, appellant submitted a chart, which it is placed at paper book paper book page No. 47 to 48. According to the chart ₹ 28,35,000/- has been deposited in cash in the IDBI bank account of the assessee. The assessee is stated that out of those ₹ 34 lakhs are withdrawn on various dates from syndicate bank and IDBI bank by the assessee. Precisely an amount of ₹ 5,75,000/- has been withdrawn from IDBI bank account itself and ₹ 34 lakhs from Syndicate bank on various dates. These facts were shown by a cash flow chart. Argument of taxing peak credit is only an alternative argument and it was not the only contention of the assessee when it is submitted the detailed cash flow chart before lower Authorities.The particular chart either was not controverted by the assessing officer, CIT (A) or learned DR before us. In view of this, we are of the view that the addition of rupees, 976805/- confirmed by the CIT appeal is not proper and we reverse his findings on this count.- Decided in favour of assessee Allowance of expenditure under the head development charges - Held that:- Assessee has claimed to have incurred an expenditure of ₹ 45 lakhs on development of the properties, and out of that the claim of ₹ 953,400/- has been made. Learned CIT (A) out of the disallowance of ₹ 9,53,400/- allowed expenditure of Rs. Four lakhs and confirmed disallowance of ₹ 5 53 400/- Both the parties contested the respective aggrieved action of CIT appeal. We have already set aside Ground No. 1, 2 and 3 of the appeal of the assessee to the file of assessing officer for determining head of taxability of income and verification of details of expenditure and then grant deduction. Therefore, we also set aside this ground of the appeal of the revenue to the file of assessing officer subject to the direction contained while deciding the appeal of the assessee Addition on account of purchase of property in cash - Held that:- It is an admitted fact that assessee has purchased residential flat on 08/02/2010 for an investment of ₹ 1962400 in cash. For the purpose of availability of the cash assessee has shown that it is received ₹ 3863905/-as its source, which has derived from sale of plot before date of investment in residential house and firm. This statement of the funds is not disputed. Therefore, in our opinion assessee has enough sources of funds available to buy that property in cash on 08/02/2010. In the result ground No. 2 of the appeal is dismissed and the action of the CIT (A) in deleting the addition of ₹ 1962,400/- is confirmed. Addition on proportionate basis as interest - Held that:- It is an admitted fact that assessee has advanced a sum of ₹ 13,24, 500/- to others without charging any interest and assessee is paying interest on other loans. Assessee has submittedstatement of affairs as on 31/03/2010where assessee has own fund of ₹ 49,51,036/-. Therefore, a presumption can be drawn that the amount that has been invested by the assessee in the interest-free advances given to some parties is out of the capital of the assessee, which is free of interest. Therefore, in view of the above, we confirm the action of the CIT (A) in deleting the disallowance on account of interest expenditure of ₹ 47135/-. Disallowance made by the assessing officer under section 37 (1) being 20% of various miscellaneous expenses - Held that:- We are of the view that no ad-hoc disallowances can be made without pointing out the instances of use of the assets or expenditure incurred for the personal purposes. - Decided in favour of assessee.
-
2016 (5) TMI 104
Bogus purchases of goods - Held that:- The assessee was able to link the closing stock with the relevant purchase bills. When the entire purchases made from TTPL was available as stock as at the year end, then the disallowance of purchases should result in corresponding reduction of the closing stock, the result of which would have NIL effect on profit and hence there was no requirement of making any addition. However, this proposition should be applied only if the purchases were held to be non-genuine. In view of the foregoing discussions, we are of the view that there is no reason to suspect the claim of purchases of goods from TTPL, particularly when the assessee is able to support the said claim with documentary evidences, stock register, confirmations etc and more particularly in view of the fact that the assessee has exported the very same goods. In our view, the theory of human probability has been applied to only part of transactions and not to the whole round of transactions. In any case, it cannot be said that the claim of the assessee defies the human probabilities, when one examines the documents furnished by the assessee. Accordingly, we are of the view that the Ld CIT(A) was not justified in confirming the addition made by the AO. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the impugned addition. - Decided in favour of assessee.
-
2016 (5) TMI 103
Interest on housing loan under section 24 rejected - Held that:- Deduction is allowable on account of interest paid on the borrowed capital within three years from the end of the financial year in which capital was borrowed and in the relevant assessment year, the deduction allowable was of ₹ 1,50,000 which has been enhanced to ₹ 2,00,000 by the Finance Act (No. 2), 2014, with effect from April 1, 2015. As per the Explanation appended to the proviso of the aforesaid section, it is also clear that the property either be acquired or constructed with the borrowed capital. It is nowhere mentioned that the property must be acquired as well as constructed with the borrowed capital. The use of the word "or" in between acquired and constructed makes it clear that the property can either be acquired or constructed with the borrowed capital and if the income is earned which is assessed under the head "Income from house property", the deduction to the maximum extent of ₹ 1,50,000 is allowable on account of interest paid on the loan raised to acquire the property. In the present case, the assessee raised loan of ₹ 22.50 lakhs from the Indian Overseas Bank and acquired the property, income of which was assessed under the head "Income from house property". Therefore, the interest paid amounting to ₹ 1,42,123 was deductible under section 24(b) of the Act. In that view of the matter we set aside the impugned order and direct the Assessing Officer to allow the claim of the assessee. Deduction under section 80C - Held that:- In the present case, the assessee borrowed the amount for acquiring the property whose income was assessed under the head "Income from house property" and made the repayment of the said loan. Therefore, the said repayment was eligible for claiming the deduction under section 80C of the Act. In that view of the matter, we set aside the impugned order and direct the Assessing Officer to include the amount claimed by the assessee while working out the deduction under section 80C of the Act. - Decided in favour of assessee
-
2016 (5) TMI 102
Disallowance of expenditure - existence of business expediency - taking over of the loan or discharge of the loan of RIL due to ICICI Bank - capital loss - Held that:- The loan from ICICI Bank Ltd. to RIL has been advanced as a term loan for working capital requirements of RIL and the same has been discharged by the assessee in view of the debt restructuring scheme. The debt restructuring scheme is pursuant to transfer of the cement business from RIL to the assessee herein. Thus, the business expediency of the transaction is established. Further, as regards the learned Commissioner of Income-tax (Appeals)'s finding that the loan is in the capital field and, therefore, the resultant loss is capital loss and is not allowable under section 37(1) of the Income-tax Act, we find that the sum of ₹ 12 crores is not towards payment of interest but it is for the repayment of the principal as well as the interest as on the date of repayment of the loan. The sum of ₹ 12 crores has been offered by RIL as "the liability no longer required and written back" but in the hands of the assessee, it is an expenditure to safeguard its interests or its investment in the subsidiary company. Therefore, it is for the business purpose of the assessee and, hence, revenue in nature and cannot be treated as a capital loss - Decided in favour of assessee Interest-free advance to its subsidiary company in the U.S.A - Held that:- The transaction of capital financing including any type of long- term or short-term borrowing, etc., has become an international transaction with retrospective effect by virtue of clause (i)(c) of the Explanation to section 92B with effect from April 1, 2002, as inserted by the Finance Act of 2012. Therefore, during the relevant period, i.e., financial year 2006-07, when the said transaction was not an international transaction, no such imputation can be made. As far as the nexus between the interest-free loan and the interest-free advance is concerned, we are satisfied that the nexus has been established by the assessee and when there is no interest burden on the assessee by virtue of the loan advanced to its subsidiary, we are of the opinion that no such interest income can be attributed in the hands of the assessee - - Decided in favour of assessee
-
2016 (5) TMI 101
Exemption u/s 54 - CIT(A) allowed the claim - Held that:- We find that in the case of the assessee, the assessee has utilised the entire capital gains within the period of one year but due to certain circumstances beyond the control of the assessee, the construction of the house could not be completed within the specified period. As it is not disputed by the authorities below that the assessee has invested the amount of capital gain for construction of a residential house within the specified period, we do not see any reason to interfere with the order of the learned Commissioner of Income-tax (Appeals) which is inconsonance with the precedents on the issue. - Decided against revenue
-
2016 (5) TMI 100
Addition on account of software purchase - CIT(A) deleted the addition - Held that:- As find from the findings of the learned Commissioner of Income-tax (Appeals) that from the details and copies of purchase invoices and sales of software invoices it was evident that software was purchased and subsequently sold to customer and was not used by the assessee, have not been controverted by the Department. We, accordingly, confirm the order of the Commissioner of Income-tax (Appeals) on this issue. - Decided against revenue Addition on account of sales and maintenance of software - CIT(A) deleted the addition - Held that:- The assessee is following the mercantile system of accounting and as per the accounting standard 9, the net effect of the accounting treatment was for only that part of the annual maintenance contract receipt was taken into consideration which pertained to the year under consideration. This method has consistently been followed by the assessee. We, therefore, do not find any reason to interfere with the order of the learned Commissioner of Income-tax (Appeals). Ground fails against revenue
-
2016 (5) TMI 99
Disallowance u/s 14A - Held that:- In respect of the assessment year 2007-08, in our opinion, rule 8D has no application, since this was inserted with effect from March 24, 2008. Since rule 8D has no retrospective effect, it cannot be applied for the assessment year 2007-08. Accordingly, for the assessment year 2007-08, we direct the Assessing Officer to disallow 2 per cent. This ground of appeal is partly allowed for the assessment year 2007-08. Coming to the assessment years 2008-09 and 2009-10, the disallowance under section 14A read with rule 8D should not exceed the exempt income. The Mumbai Bench in its order in Daga Global Chemicals P. Ltd. v. Asst. CIT [2015 (1) TMI 1204 - ITAT MUMBAI ] sustained the disallowance on applicability of the provisions of section 14A read with rule 8D. However, the alternative claim of the assessee was that disallowance if at all should be made, it should be restricted to exempt income earned and not beyond that. Accordingly, the Assessing Officer is directed to look at this issue on this angle and decide it afresh in the light of the above decision of the Mumbai Bench of the Tribunal - Decided partly in favour of assessee Allowance of expenditure in respect of preliminary expenses under section 35D - Held that:- There is no doubt that expenses were not incurred before the commencement of the business. Therefore, the first condition is not complied with. The second condition is that the expenses incurred after commencement of the business, should be incurred in connection with extension of its business or in connection with setting up of a new unit. There is no case of setting up of a new unit. The question is whether there was an extension of its existing undertaking ? A great emphasis has to be given on the expression "undertaking". Business expansion and market expansion of an existing business will not amount to extension of the "undertaking". The expression "undertaking" denotes a visible expenditure on the physical facilities for manufacture and production. An undertaking is always having an area of physical structure which produces goods and services by utilising the necessary factors of production. Enhancement of the geographical area of marketing does not amount to expansion or extension of the undertaking. The expression used in the statute is "extension of its undertaking". It clearly manifests that an apparent extension or expansion must take place by establishing new undertaking. There is no such case as far as the present case is concerned. The expansion in the present case is acquisition of existing undertaking. Therefore, we find that the expenditure incurred by the assessee-company in connection with the issue of shares do not qualify to be amortised under section 35D. - Decided in favour of the Department. Alternate plea of the assessee is to allow the same under section 37 of the Act and the expenditure was incurred for services rendered in connection with the issue of shares to raise the capital block of the assessee-company - Held that:- Once shares are issued for cash, the assessee-company gets the funds in its hands and once the funds have come into the hands of the assessee-company, the process of issue of share capital is complete. Therefore, the scope of expenditure incurred for raising the share capital by issuing shares must also stop at that point. The scope should not be enlarged further. It is the wisdom of the company to decide in which manner the funds available with it, collected by way of issue of shares, should be applied. If the funds are utilised for working capital requirements, it is only an appropriation of funds available in the hands of the company. Raising the capital and utilising the funds are different. Application of funds does not decide the character of the money collected against the issue of shares. Money collected against the issue of shares always remains as capital. Therefore, the argument of the learned authorised representative that the expenditure incurred for issue of shares to and raise share capital for working capital requirements need to be allowed as revenue expenditure cannot be accepted. Accordingly, this ground of appeal of the assessee is rejected and the ground of appeal of the Revenue is allowed. Disallowance of depreciation on application of software at lower rate - disallowance of depreciation on behalf of the entire purchase value of application of software and reducing the rate - Held that:- As seen from the order of the Commissioner of Income-tax (Appeals) during the course of the assessment proceedings, the assessee voluntarily offered to reduce its claim towards depreciation on the software at the rates prescribed in new Appendix I under the Income-tax Rules, 1962, and depreciation on the intangible assets being IPR, at the rate of 25 per cent. as prescribed under the Rules. Accordingly, the assessee has revised its claim of depreciation on software and intangible asset of IPR. However, the Additional Commissioner of Income-tax denied the depreciation on the IPR, represented by the software GBM on the ground that depreciation to an extent of 100 per cent. in respect of this asset was already claimed by TGSL and in view of Explanation 3 placed under section 43(1), the actual cost of this asset, in the hands of the assessee, has to be reckoned as "nil" only. This conclusion of the Additional Commissioner of Income-tax was based on the financial statement of TGSL. The contention of the assessee is that the treatment given by TGSL in its account cannot be a reason to deny the depreciation on the cost incurred by the assessee. In our opinion, this argument of the assessee's counsel cannot be upheld. The actual cost of assets acquired from TGSL to be considered in terms of Explanation 3 to section 43(1) of the Act. Being so, the lower authorities are justified in observing that the assessee is not entitled for depreciation which was already claimed by TGSL and thereby restricting the depreciation at 25 per cent. on IPR and 60 per cent. on other software - Decided against assessee Disallowance of depreciation on temporary wooden structures - main contention of the assessee is that whatever improvement took place in the leasehold premises and all the assets created therein are temporary in nature and it does not result in enduring benefit - Held that:- It is essential that the expenditure incurred on the construction of any structure on the leased premises should result in enduring benefit. That any expenditure incurred for civil work by a lessee in respect of the leased premises, without any further proof cannot be said to be capital expenditure or revenue expenditure. In order to find out the nature of expenditure, it is necessary to find out the nature of construction put up, the purpose of construction/renovation and the use to which the construction put up and also if it is a case of repair, replacement, addition or improvement has to be gone into. It is only on the afore said material, keeping in mind the principles enunciated in the judgments by the Supreme Court and keeping in mind section 37 and section 32 of the Act, that one has to determine whether the expenditure is revenue expenditure or capital expenditure. What would apply to civil work equally applies to electrical work or interior decoration. The assessee had not stated the nature of civil works constructed, the nature of interior decoration made to the leasehold premises and also the nature of electrical work undertaken. In the absence of that material and without proper application of mind, the assessing authority proceeded on the footing that the expenditure constituted capital expenditure. In view of the above, we remit the issue in dispute to the Assessing Officer to consider whether the expenditure is revenue or capital in nature and decide afresh. Apportioning common expenses towards STPI unit not on the basis of turnover followed by the company - Held that:- The Commissioner of Income-tax (Appeals) has given a finding that apportionment of expenses to be done on the basis of turnover of the STPI unit and non-STPI unit. In our opinion, this is fair and appropriate finding, which is confirmed
-
2016 (5) TMI 98
Revision u/s 263 - unexplained advance from Shri Ram Singh and deposit of the cash in the bank account - Held that:- Assessing Officer asked for the explanation of the assessee at assessment stage with regard to cash deposited in the bank account. The assessee furnished copies of the bank accounts for perusal of the Assessing Officer along with cash book in which cash was shown to have been received as advance against property from Shri Ram Singh. The agreement in question was also produced before the Assessing Officer for his perusal and the Assessing Officer recorded the statement of Shri Ram Singh in which Shri Ram Singh has confirmed entering into agreement to sell with the assessee and giving advance of ₹ 6,50,000. In his statement, he has also explained source of his income. The order-sheet recorded by the Assessing Officer at assessment stage clearly shows that the Assessing Officer asked the assessee to produce Shri Ram Singh for examination and the Assessing Officer recorded further in the order-sheet that the statement of Shri Ram Singh was recorded. It is not in dispute that the statement of Shri Ram Singh has initials of the Assessing Officer even as per the findings of the Commissioner of Income-tax. Therefore, there is no question of doubting the statement of Shri Ram Singh recorded at the assessment stage. These facts, therefore, clearly prove that the Assessing Officer examined this issue in detail at the assessment stage and accepted the explanation of the assessee with regard to advance from Shri Ram Singh and deposit of the cash in the bank account. The Assessing Officer, therefore, made proper enquiries at the assessment stage Assessing Officer passed the order in accordance with law and if the Commissioner of Income-tax did not accept the view of the Assessing Officer and wanted to take a different view, would not give rise to any occasion to proceed under section 263 of the Act merely on audit object. We, accordingly, set aside the order under section 263 of the Income-tax Act and quash the same. - Decided in favour of assessee
-
2016 (5) TMI 97
Stay of demand seeked - Transfer pricing adjustment - Held that:- The ratio of the amount paid (to the total outstanding demand) ought to be justifiably computed by excluding the tax relatable thereto (i.e., issue (b)), which would reduce the overall percentage (47%) for the current year to a lower ratio. Again, the transfer pricing issue considered by the tribunal for the preceding year covers an income of ₹ 405.03 crores, as against the total disputed addition qua TP adjustments at ₹ 508.48 crores, so that no case on merits stands made before us by the assessee for the balance disputed sum of ₹ 103.45 cr. In our view, however, directing for payment may not be justified considering the favorable development (from the assessee’s stand-point) of the decision in Tata Consultancy Services Limited (2015 (11) TMI 862 - ITAT MUMBAI), which would cover the transfer pricing adjustment in its entirety, besides the several decisions by the tribunal noted in the stay application toward the other (five) transfer pricing adjustments (for ₹ 103.45 cr.) made in assessment. We are also painfully conscious that huge sums (of the assessee) stand locked up in disputed payments, for which it is not responsible in any manner. In view of the above, in our considered view, the assessee deserves a stay without any further payment. The assessee shall not seek adjournment without justifiable cause. We decide accordingly.
-
2016 (5) TMI 96
Stay - Penalty under section 271C - tds u/s 194H - whether the assessee is required to make any TDS under section 194H is pending adjudication before the Hon’ble Supreme Court of India as divergent views have been expressed by various High Courts in India? - Held that:- The appeals on merits are coming up for hearing before the Hon’ble Supreme Court in the month of April, 2016 and taking due note of the same, this Tribunal has already granted stay of collection of the outstanding tax demand under section 201(1) and the interest thereon under section 201(1A) of the I.T. Act after also taking note of the fact that the assessee has already paid 40% of the demand as directed by the jurisdictional High Court. We find that these stay petitions are against the collection of the demand of penalty under section 271C of the I.T. Act which are consequent to the orders under section 201(1) and 201(1A) of the I.T. Act. As the assessee has already paid 20% of the demand of penalty under section 271C of the I.T. Act, we are satisfied that balance of convenience is in favour of the assessee. Therefore, we deem it fit and proper to stay the balance of the demand for a period of 180 days from today or till the disposal of the appeals whichever is earlier. The Registry is directed to post the appeals for hearing on 8th June, 2016. Since the date is announced in the open Court before both the parties, no fresh notice is need be given. Accordingly, stay petitions of the assessee are allowed.
-
2016 (5) TMI 95
Reopening of assessment - reasons to believe - Held that:- From the particulars called for by the Assessing Officer at the time of original assessment proceedings, submissions made by the assessee before the Assessing Officer at the time of original assessment proceedings and the reasons recorded for initiation of reassessment proceedings, it is very much evident that the reassessment proceedings were initiated by the Assessing Officer on the basis of same set of facts which were available before the Assessing Officer at the time of the original assessment. We are of the considered view that the Assessing Officer, at the time of original assessment, was very well aware about the primary facts. The Assessing Officer, while reopening the assessment under section 147, has made no reference to any new material which has come into her possession after the completion of the original assessment under section 143(3) of the Act. In our opinion, it is merely a fresh application of mind by the Assessing Officer to the same set of facts. Thus, it is our considered view that it is a case of mere change of opinion on the material which was already available on record at the time of completion of the original assessment. Therefore, the proceedings for reassessment under section 147 fail to stand the test. - Decided in favour of assessee
-
2016 (5) TMI 94
Addition on deposits made in the bank account - appointment of handwriting expert - Held that:- The handwriting expert engaged by the Assessing Officer has compared the signature of the assessee with the summons dated December 13, 2010, which is highly doubtful and could not be given any credence. When two different reports of the handwriting experts were available on record, i.e., one engaged by the Assessing Officer and the two engaged by the assessee and when both gave different versions, it would have been better to refer the matter to the Government handwriting expert for examining the correctness of the matter. Despite request made by the assessee in this regard before the learned Commissioner of Income-tax (Appeals), no steps have been taken to verify the handwriting of the assessee. Since the relevant documents for opening of a new bank account have not been brought on record and no comparison has been made with the same, therefore, the Assessing Officer has failed to bring sufficient evidence on record to justify the findings that the assessee opened the said bank account under her signature. Considering the above, it is clear that there is doubt in the version of the Revenue-Department to prove that the assessee has opened the bank account in question. Therefore, no liability can be put up on the assessee for deposits made in this bank account of ₹ 41,31,432. We, therefore, do not find any justification to sustain the orders of the authorities below in making the addition of ₹ 41,31,432. We, accordingly, set aside the orders of the authorities below and delete the addition - Decided in favour of assessee
-
2016 (5) TMI 93
Cessation of liability - Addition on the basis of search - Retraction of statement - Held that:- It is clear that the seized paper (paper book page 82) is not reliable, did not show the correct state of affairs and the same is not corroborated by any independent evidence. There is interpolation of the date in the same and the language contained therein clearly show that the letter is not disclosing the correct facts. It is also not explained why the original letter remained with the assessee and how the payment of ₹ 90 lakhs have been verified. M/s. PACL Ltd. did not confirm alleged payment. Therefore, the assessee had a justification to retract from the earlier statement making surrender of ₹ 90 lakhs. The assessee, has been able to show that the retraction from the earlier statement was justified and based on the facts and material on record. The learned Commissioner of Income-tax (Appeals), on proper appreciation of facts and material on record, correctly deleted the addition. The decision relied upon by the learned Departmental representative would not support the case of the Revenue because of the facts and circumstances as considered above. We, therefore, do not find any error in the order of the learned Commissioner of Income-tax (Appeals) in deleting the addition. - Decided in favour of assessee.
-
2016 (5) TMI 92
Reopening of assessment - receipt of gifts unexplained - Held that:- it is clear that information was received by the Assessing Officer from the Deputy Commissioner of Income-tax, CC-V, Ludhiana, dated March 5, 2007, which did not reveal any fact of escapement of any income. It refers only the decision of the hon'ble Punjab and Haryana High Court in the case of Lall Chand Kalra (1981 (1) TMI 275 - PUNJAB & HARYANA HIGH COURT ). This did not say that the assessee received any bogus gift. The reasons did not satisfy the requirements of section 147 of the Income-tax Act. There is no reference to any document or statement except reference to the judgment of the High Court. The same could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income in the case of the assessee. There is nothing in the reasons recorded to show any tangible material had come into possession of the Assessing Officer subsequent to the issue of intimation. A valid reopening of assessment has to be based only on tangible material to justify the conclusion that there is escapement of income. The Assessing Officer recorded wrong facts in the reasons as mentioned above and, thus, has not applied his mind before forming belief of escapement of income. The information dated March 5, 2007, was not a pointer and did not indicate the escapement of income. The Assessing Officer did not examine the information which was nothing and did not speak of escapement of income before recording his own satisfaction of escaped income initiating the reassessment proceedings. Thus, the Assessing Officer acted only on the basis of suspicion and the same could not be said that it was based on belief that income charged to tax has escaped assessment. - Decided in favour of assessee
-
2016 (5) TMI 91
Revision u/s 263 - addition on the basis of seized documents - Held that:- It is admitted fact that during the course of search, the seized paper as was recovered, was a cancelled/crossed document. Therefore, there is no question of considering the same against the assessee, that too when the same is not signed by the assessee-company. Furthermore, when the original seized document pages 34-35 of annexure A-9 was considered and discussed in detail and it is held by the appellate authorities that no addition could be made on the basis of the same cancelled document against the assessee, there is no question of considering the same against the assessee on the basis of copy of the same seized document. When the matter in issue has already been examined by the appellate authorities, prior to the proceedings under section 263 of the Act, the learned Principal Commissioner of Income-tax should not have resorted to the present proceedings under section 263. When the order of the Assessing Officer is merged with the orders of the appellate authorities, therefore, proceedings under section 263 of the Act on the same matter in issue could not be resorted to in view of the Explanation (c) of sub section (1) of section 263 of the Act. In this case, the Assessing Officer examined the seized document at the assessment stage and his order has been set aside by the appellate authorities, therefore, there is no question of considering his order to be erroneous in so far as prejudicial to the interests of the Revenue. In this case, when the seized document itself was not relied upon by the appellate authorities, the copy of the same agreement as was received through independent sources, as stated by the learned Principal Commissioner of Income-tax would not make any difference in favour of the Revenue. - Decided in favour of assessee.
-
2016 (5) TMI 90
Computing capital gain - Determination of value u/s 50C without referring the matter to the Departmental Valuation Officer (DVO) - Held that:- From the order of the learned Assessing Officer it is apparent that the AO has not referred the matter to the learned Departmental Valuation Officer for valuing the property as per section 50C(2) of the Act. The assessee had submitted before the learned Assessing Officer regarding the litigation involved in the title of the property which was not considered by the learned Assessing Officer. When the assessee had challenged the value determined by the learned Assessing Officer citing the various reasons it was the primary duty of the learned Assessing Officer to refer the matter to the learned Departmental Valuation Officer for valuation of the immovable property. Commissioner of Income-tax (Appeals) has also simply brushed aside the contention of the assessee by stating in his order that at the time of assessment proceedings the assessee has not requested the learned Assessing Officer to refer the matter to the learned Departmental Valuation Officer. Considering the facts and circumstances of the case, we are of the considered view that in the interest of justice the matter has to be referred back to the file of the learned Assessing Officer with a direction to refer the matter to the learned Departmental Valuation Officer and thereafter pass an appropriate order as per law and merit after affording sufficient opportunity to the assessee of being heard.
-
Customs
-
2016 (5) TMI 127
Refusal of the adjudicating authority to provide copies of certain documents mentioned in the show cause notice - Import of gold jewellery from Thailand - Availment of benefit of exemption under Customs Notification No.85/2004 dated 31.8.2004 read with Customs Notification No.101/2004 dated 31.8.2012 - Held that:- the show cause notice made a mention about certain documents, but, by the orders impugned in the writ petitions, the Department has taken a stand that those documents are not relied upon. Once the Department takes a stand that they are not relying upon certain documents mentioned in the show cause notice, there is no way the appellants could compel the Department to furnish copies of such documents before adjudication. If at all the Department relies upon any document that they do not furnish to appellant, the appellant can always challenge the order in original passed thereafter, on the ground of violation of principles of natural justice. But, at the stage of adjudication proceedings, the appellant cannot forestall the enquiry. Therefore, nothing wrong is found in the order of learned Judge. - Decided against the appellant
-
2016 (5) TMI 126
Condoantion of delay in filing an appeal - delay of 18 days - Period of limitation - Valuation of imported goods - Seeking direction to assess the payment of duty as per the Section 4 of the Central Excise Act, 1944 - Held that:- the petitioner has taken different avenues to challenge the Bill of Entry dated 01.05.2014. First he filed an appeal before the Commissioner of Appeals-II, which was dismissed on the ground of limitation. Thereafter, this Court also confirmed the order passed by the Commissioner of Appeals-II in the writ petition. Now, after the dismissal of the said writ petition, the petitioner has challenged the original Bill of Entry dated 01.05.2014. Hence, if the petitioner is allowed to challenge the Bill of Entry dated 01.05.2014, after the dismissal of the appeal and the writ petition, the matter will not reach finality. That apart, when a specific limitation has been prescribed under the Act, the petitioner should have filed an appeal within the stipulated time. Having failed to do so and having lost in the writ petition also, the prayer sought in the writ petition cannot be allowed. - Decided against the petitioner
-
2016 (5) TMI 125
Validity of impugned order passed by the learned Single Judge - Directions provided to release the goods imported by respondent - Show cause notice in terms of Section 110(2) of the Customs Act, 1962 are not issued in view of the expiry of six months from the date of seizure of goods - Appellant submitted that the goods were actually detained under Section 17(2) of the Customs Act and there was no confiscation under Section 110 of the Act, hence, Section 110(2) of the Act had no application and there was no question of permitting return of goods to the respondent. Held that:- none of the procedures as stipulated under Section 153 of the Act were followed by the appellant while serving a show cause notice before exercising power under proviso to sub-section 2 of Section 110 of the Act. The service on the custom agent was no service and vitiates the order. Section 146(A) of the Act provides that any person who is to appear before an officer of the customs/appellate authority may do so other than where appearance is required under Section 108, by an authorized representative. Section 146A(2) provides that an authorized representative would include a relative/regular employee/customs broker licensed under Section 146/legal practitioner/person who has acquired such qualification as may be specified. Similarly, Section 147 of the Act provides for liability of principal and agent. Section 147(1) provides that where the Act requires anything to be done by the owner/importer/exporter, the same may be done by his agent. Confiscation/seizure of goods would not fall within the meaning of “import of goods” as used in Section 146 of the Act and Regulation 2(c) of the Customs Broker Licensing Regulations, 2013. Such confiscation being penal in nature cannot be termed to be a part of the duty of a custom agent. Service would have to be effected on the owner of the goods personally or through agent so specifically authorized to accept. The right of owner of goods cannot be defeated without prior notice on him. Hence, the contention of the appellant that service of the show cause notice could also be effected on the Custom Agent in view of Sections 146, 146A & 147 of the Act is a contention without merits and the view of the learned Single Judge that for a custom agent to be able to receive notice of show cause in circumstance as stated above is agreed. - Decided against the revenue
-
2016 (5) TMI 124
Suspension of import / advance license - import of bearings - fraud - High Court held that when the bills of entry was filed there was no valid licence in the names of importer also there was no application for transferability made on 19th August, 1999 nor the licence was made transferable reported in [2014 (9) TMI 289 - Bombay High Court] - Hon'ble Supreme Court on the regard being made on the submission of petitioner that the Tribunal as well as the High Court has failed to appreciate the controversy in proper perspective, for though the licence is subsequent but the goods had already been imported and, therefore, the petitioner is entitled to benefit of clause 7.17 of the Policy, had ordered to issue notice.
-
PMLA
-
2016 (5) TMI 120
Validity of summons issued under Section 50(2) and (3) of PMLA - whether summons are violative of the Constitutional protection and guarantee under Article 20(3) of the Constitution of India - Commission of an offence of money-laundering under Section 3 of PMLA punishable under Section 4 of PMLA, hence, ECIR - Held that:- ECIR is not filed before any jurisdictional Magistrate and is only an information report with the Directorate of Enforcement. The stage of filing of complaint for prosecution under PMLA is envisaged under Section 44(1)(b) of PMLA. Admittedly, that stage has not yet reached. Thus, though the charge sheet filed by the CBI is to the extent of predicate offences, so far as offence under Section 3 of PMLA is concerned, the matter is clearly at the investigation stage. At this stage, investigation is only for the purpose of collecting evidence with regard to proceeds of crime in the hands of the persons suspected and their involvement, if any, in the offence under Section 3 of PMLA. Therefore, i am unable to equate ECIR registered by the first respondent to an FIR under Section 154 Cr.P.C and consequently, agreed with the learned Additional Solicitor General that under PMLA the petitioners are not accused at present. Consequently, therefore, the submission of the petitioners on the assumption that petitioners are accused under PMLA is liable to be rejected. Therefore, the summons issued to the second petitioner under Section 50(2) and (3) of PMLA is non-violative of the Constitutional protection and guarantee under Article 20(3) of the Constitution of India. Seeking protection against testimonial compulsion - Held that:- in view of the various decision of Supreme Court, when an ECIR is lodged with the Directorate of Enforcement there is no Magisterial intervention unlike an FIR and mere registration of ECIR against the suspects of offence under Section 3 of PMLA cannot go to mean that such persons are accused under Section 3 of PMLA. Therefore, the protection against testimonial compulsion as under Cr.P.C as well as under Article 20(3) of the Constitution of India, would not be available. Also as the petitioners are not accused under PMLA, the reading down of Section 50 of PMLA, even if permissible, would not arise on the facts and circumstances of the case. - Decided against the petitioner
-
Service Tax
-
2016 (5) TMI 136
Refund claim - Amount of service tax paid in excess than the amount actually payable by them under Management & Repair Services - Held that:- if it is established that the gross receipt of service charges is lesser than the gross service charges on which service tax was paid then the excess paid service tax is prima facie refundable to the appellant. If the lower authority has any doubt about the accounting, calculation, the right course of action is that he should call the appellant in person and give them the opportunity to explain the doubts as regard the accounting and calculation etc. Therefore, the matter is remanded back to the original adjudicating authority with a direction to verify the claim properly with the books of account and details submitted by the appellant. If there is any doubt or query the appellant should be called and given an opportunity to explain the books of account, the accounting of the receipt of service charges, payment of service tax and the excess paid service tax etc. on verification, if the adjudicating authority finds that there is an excess payment of service tax, the same should be refunded in accordance with law. - Decided in favour of appellant by way of remand
-
2016 (5) TMI 135
Disallowance of Cenvat credit - Insurance Auxiliary Service - Availed Cenvat Credit in respect of certain service which is exclusively used for non taxable activity that is auction sale abandoned cargo and export of stuff cargo - Appellant contended that auction of abandoned goods being a trading activity is not a exempted service as the trading activity was covered under the definition of exempted service only w.e.f. 01.04.2011. Held that:- even prior to 1.4.2011 since no service tax was payable on auction sale of abandoned cargo and export cargo, credit was not admissible on the input service used in such output activity as per the definition of input service. Therefore the Cenvat Credit on the input service used for auction sale of abandoned cargo and export cargo is not admissible to the appellant. Period of limitation - Demand of Service tax - Auction of sale of abandoned cargo - Held that:- the demand proceeding on the auction of sale of abandoned cargo itself was alarm to the appellant that whether the Cenvat Credit should be availed on the input service used in the auction sale of abandoned cargo. Therefore despite knowing all the facts, the appellant kept on availing Cenvat Credit. As regard details of availment of Cenvat Credit on the nature of input service is not known to the department therefore it cannot be accepted from the department to issue show cause notice within 1year unless until the facts are unearthed. Therefore, as there is a suppression of fact on the part of the appellant, extended period in the first show cause notice was rightly invoked. Imposition of penalty under Section 78 - Held that:- Section 78 penalty can be imposed only when there is a suppression of fact, fraud, collusion, willful misstatement etc. In the present case, the suppression of fact involved only in the first show cause notice. However, all the subsequent show cause notices were issued after knowing the facts involved in the first show cause notice, therefore in the subsequent show cause notices it cannot be said that there is suppression of fact on the part of the appellant, nor it can be said that the department had no knowledge about the fact of the case after issuance of first show cause notice. Therefore penalty under Section 78 is not sustainable corresponding to demand of Cenvat Credit for the period after September 2005 but sustainable for the period October 2003 to September 2005. - Decided partly in favour of appellant
-
2016 (5) TMI 134
Taxability - Amount received under the category of “Management Consultancy and Manpower Recruitment Supply Agency Service” - Appellant wrongly claimed expenses as reimbursable and did not include the same in the taxable value for payment of service tax - Held that:- the appellant has been showing the amounts which has been claimed as reimbursable are not an amount towards the services but are in respect of various fees paid to DGFT authorities towards the application fees, licence fees, etc. Also the demand drafts raised in the name of DGFT authorities and receipts are issued by DGFT authorities in respect of the appellant's client who were undertaking the liasioning work with the authorities. Therefore, the service tax liability, as confirmed, is incorrect as the said amounts on which tax liability has been raised is nothing but reimbursement of the expenses incurred by the appellant for the licence fees, etc. Disallowance of Cenvat credit - Held that:- the said amount is in respect of service tax paid on broad band services, courier services, internet and automobile service stations. These services are utilised by the appellant for rendering the output services i.e. "Management Consultancy Services". Therefore, the appellant was and is eligible to avail Cenvat credit of this amount. Accordingly the impugned order is set aside. The issue, TDS credited to the debtors ledger for which no income tax refund has been received, needs reconsideration by the adjudicating authority as service tax payable on TDS which has been credited is more or less seems to be an accounting entry which needs to be appreciated in its proper perspective. As regards advance received prior to provisions of tax payable on advances/change in definition of services to be provided is included, it is the tax liability and advance payments received which according to the appellant, is not taxable because of various reasons, which has not been addressed by the lower authorities. Therefore, the impugned order is set aside and matter remanded back. As regards Service tax on advance/payment received of exempted services towards services provided to SEZ, Service tax on reimbursement of expenses received in the capacity of Pure agent and Service tax on receipt of amount towards reimbursement of statutory expenses, it is found that these amounts are considered by the lower authorities as taxable, but are nothing but reimbursable amounts of various expenses paid by the appellant as a pure agent. There is no dispute that these three payments on which tax liability has been raised is in respect of the payment received for exempted services provided to SEZ and reimbursable expenses of the licence fees, etc. paid by the appellant. So, the appellant has made out a case in their favour in respect of these three tax demands. Accordingly, the impugned order is set aside to that extent. As regards Service tax on reimbursement of expenses in the capacity of pure agent, it is the claim of the appellant that these tax liabilities is also on the reimbursable expenses in the capacity of pure agent but it is found that it is not so. It is noted that the appellant has been charging more than the expenditure incurred by him as a pure agent while billing the clients. So, the claim of the appellant that of a pure agent in these demands seems to be without any evidence as there is no dispute that the appellant had charged additional amount other than the amount paid as reimbursable expenses. Therefore, the service tax liability is upheld along with interest and is liable for penalty as per Section 76 of the Finance Act, 1994. - appeal disposed of
-
2016 (5) TMI 133
Demand of Service tax - Overseas service under reverse charge mechanism - Deposit of amount of service tax as per the objection raised by the audit officer - Appellant submitted that it is a settled position that refund if any arises against the pre-deposit made during the proceedings shall be refundable as outcome of the adjudication of such demand. The relevant date for the purpose of refund under Section 11B is the date of the adjudication order on the demand case and not from the date of deposit of service tax. Also the amount deposited during investigation is treated as pre-deposit and the same become refundable as and when the case of demand of service tax is finalized. Held that:- the demand raised in the show cause notice was dropped by the adjudicating authority and the service tax paid by the appellant is treated as pre-deposit. In case, if any amount deposited during the proceedings of the demand case, refund shall arise only when the demand case is finally decided in favour of the assesse. Though the appellant filed refund claim prior to the dropping of demand but the refund arise from the date of adjudication order by which the demand was dropped. Therefore in any case the date of deposit of service tax cannot be taken as relevant date in terms of Section 11B of the Act. The judgments relied upon by the appellant are applicable as in those judgment it has been held that the refund of any amount deposited during the investigation and proceedings the limitation of 1 year from the date of deposit shall not apply. Therefore, the refund is not hit by limitation. - Appeal allowed by way of remand
-
2016 (5) TMI 132
Rejection of refund claim - Amount paid prior to show cause notice - Maintenance and Repair service and other service - Refund claim rejected on the ground that appellants have not proved that the burden of duty has not been passed on to other person and Commissioner (Appeals) ordered the amount to be credited to be Consumer Welfare fund - Held that:- because the appellants showed the amount of ₹ 89,1507- as expenditure in the books of account, they have passed on the burden to their customers and therefore, the refund claim is hit by unjust enrichment. Though the appellants produced the Certificate of Chartered Accountant, it is seen that Commissioner (Appeals) has not considered the Certificate of Chartered Accountant furnished by the appellant, which states that the incidence of tax has not been passed on to other. It is for the department to show by adducing some material that the incidence of tax has been passed on. As during the relevant period, the said services were not taxable, the issue held in the appellant's favour. Merely because the amount was shown as expenditure it cannot be concluded that the burden of tax has been passed on to other indirectly. The burden rests upon the department to prove that this amount had been recovered by appellant from buyer as increased price.Therefore, by following the ratio of various judgments the claim of refund is not hit by the bar of unjust enrichment and the order directing to credit the sanctioned refund to Consumer Welfare Fund is therefore not sustainable. - Decided in favour of appellant with consequential relief
-
Central Excise
-
2016 (5) TMI 131
Re-assessment of Assessable value - revenue contended that after the clearance of the goods from their factory gate to their depot, the same were being sold at a higher price and as such the appellants are required to pay duty on their depot sale price. Held that:- in terms of the earlier order of the Tribunal, the matter was remanded to adopt the approved assessable value at the factory gate in respect of sales made through depots, where there were sales from the factory gate as also from the depots. The lower authorities have done this exercise. While doing so, they have refused to adopt the approved assessable value. We note that the original dispute relates to the depot sale price and there was never any dispute as regards the correctness or otherwise of the factory gate assessable value approved in their price list. As such it is not open to the Revenue to re-assess the factory gate sale price and to recalculate the appellant’s liability accordingly. Therefore, we are once again constrained to remand the matter to the lower authorities with clear and specific directions to adopt the approved assessable value in terms of the price lists filed in Part-I. Appellant submits that all such approved price lists are available with them and shall be produced before the original adjudicating authority. However, we make it clear that such exercise shall be done by the adjudicating authority only in respect of those models which are cleared from the factory gate as also from depots. In respect of models which are cleared exclusively from the depots, appellant has not contested the duty demand and has agreed that it is the depot sale price which has been correctly adopted by the lower authorities. Inasmuch as the issue relates to year 1993-94, we expect the adjudicating authority to finalize the de novo proceedings as soon as possible. - Matter remanded back
-
2016 (5) TMI 130
Penalty under Section 11AC - Apex Court found no merit in the petition regarding Tribunal has committed an error of having made available the option of reduced penalty and this is contrary to the spirit of law on the subject reported in [2016 (4) TMI 930 - SUPREME COURT] - In this review petition the Apex Court is convinced that the judgment of which review has been sought does not suffer from any error apparent warranting its reconsideration. - Apex Court dismissed the review petition
-
2016 (5) TMI 129
Includibility - Expenses for loading & filing of tankers prior to delivery & sale - CESTAT held that such charges are not includible in the assessable value reported in [2007 (8) TMI 231 - CESTAT, BANGALORE] - Apex Court dismissed the appeal since the tax effect is low and it is not inclined to entertain the appeal
-
2016 (5) TMI 128
Undervaluation of goods - Mutuality of interest - interconnected undertaking - Burden of proof - CESTAT held that there was no undervaluation of goods as mutuality of interest is unproved reported in [2015 (5) TMI 332 - CESTAT CHENNAI] - Apex Court did not seen any good ground to interfere with the judgment and order passed by the Tribunal, hence dismissed the appeal
-
CST, VAT & Sales Tax
-
2016 (5) TMI 123
Imposition of penalty at 150% of the tax - Running a Beach Resorts, having various tyes of rooms in the resorts and is providing accommodation to the customers, on rental basis - Paying the Luxury Tax as per the provisions of the TNTL Act 1981 - Suppressed turnover receipt of room rent - Held that:- the petitioner has not filed his objections before the respondent, so the liberty is to be given to the petitioner to file his objections. The impugned orders are set aside and the matters are remanded back to the respondent for fresh consideration. - Petitions disposed of
-
2016 (5) TMI 122
Non-submission / Delayed submission of 'C' Forms - Attachment of bank account - towards the arrears of tax - attachment has been made without there being an assessment order passed for the assessment years CST 2013-2014 and TIN 2013-2014 - belated submission of C forms and F forms - Held that:- upon perusal of the Rules related to furnishing of Form C and Form F as provided under the Pondicherry VAT Rules, it is apparent that the time limit has been fixed. At the same time, it cannot be lost sight that the Central Sales Tax Rules does not provide for any time limit. Since the State being the authority to make its own Rules and the question is as to whether the Respondents would be justified in rejecting the claim of the concessional levy/exemption on the ground of non-furnishing of statutory forms within 90 days time fixed under the Act. Furnishing of the statutory forms is not within the control of the Petitioner and is dependent on the other State dealers' cooperation. If on sufficient cause, the Petitioner satisfies the requirements of law, then the claim cannot be rejected unjustifiably merely on the ground of belated submissions of statutory forms. By following the decision of Full Bench in the case of State of Tamil Nadu Vs. Arulmurugan and Company [1982 (11) TMI 143 - MADRAS HIGH COURT] confirmed by the Hon'ble Supreme Court, as the Petitioner also made rectification applications, satisfied with the claim of the Petitioner, the Petitioner can be given an opportunity to produce all the statutory forms for making appropriate assessment orders. Therefore, the impugned orders are quashed and the 1st Respondent is directed to consider the rectification applications of the Petitioner filed under Section 73 of the Pondicherry Value Added Tax Act, 2007 read with Section 9(2) of the Central Sales Tax Act, 1956 and rectify the errors, if any, on the face of the record and consider the statutory forms 'C' and 'F' filed by the petitioner online or manually, and pass appropriate orders, on merits and in accordance with law. - Petition disposed of
-
2016 (5) TMI 121
Seeking direction for the release of goods detained without insisting on payment of any tax or compounding fee - Goods detained for the technical reason that the petitioner has not generated and submitted the E-Transit pass - Violation of Section 72(1)(a) of the TNVAT Act - Held that:- as the petitioner has got right of revision before the appropriate authority without prejudice to their contention in the said revision, the petitioner is directed to pay the one time tax of ₹ 1,15,010/- to the respondent and get the goods consignment released. On payment of the one time tax, the respondent is directed to release the goods consignment detained under the Goods Detention Notice dated 25.01.2016. It is made clear that the petitioner is making the one time tax payment of ₹ 1,15,010/- without prejudice to their contentions to be raised in the revision. - Petition disposed of
|
