TMI Tax Updates - e-Newsletter
July 29, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
e-way bill system - Bihar GST - procedure for transportation of goods by or on behalf of a registered or unregistered person or by or on behalf of a registered or un-registered transporter.
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GST:
Goods and services Tax Settlement of funds Rules, 2017 - Notification
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Income Tax:
Penalty u/s. 271AAA - disclosure as undisclosed income - When the base requirement itself fails, the question of denying the benefit of no penalty would not arise. - HC
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Income Tax:
Penalty - genuineness of the gifts - There was concealment on the part of the assessee so as to levy penalty under Section 271(1)(c) of the Act. Thus, the Tribunal was right in denying benefit under Proviso to Section 56(2)(vi) - HC
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Income Tax:
Section 2(14) stipulates that property can be ‘capital asset’ even if connected with business of the assessee. - land/properties were held by the assessee as ‘capital assets’ before its sale and consequential gains arising on sale thereto is chargeable under the head ‘capital gains’.
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Income Tax:
No part of the subsidy was specifically intended to subsidize the cost of any fixed asset - Therefore, for the purpose of computing depreciation allowable to the assessee, the subsidy amount cannot be reduced from the actual cost of the capital asset.
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Income Tax:
No business expediency or necessity was established by assessee to bear such a huge expenditure on foreign education of son of assessee’s promoter, who was not even a regular employee of the assessee company at the time of joining the course abroad - Expenses disallowed.
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Income Tax:
Since it was the choice of the assessee as to whether to file an objection before the DRP or to pursue the normal channel of filing appeal against the assessment order before the ld. CIT(A). Therefore, the appeal filed by the assessee before the ld. CIT(A) was maintainable.
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Customs:
Clarification regarding exports under claim for drawback in the GST scenario - Circular
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DGFT:
Allocation of quantity for export of preferential quota sugar to USA under TRQ quota - Public Notice
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DGFT:
Modification of SION existing at Sl. No E 8 for export product "Cashew Kernel” - Public Notice
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State GST:
e-way bill system - Andhra Pradesh GST - Every registered person or unregistered person or a person liable to be registered under the AP Goods and Services Tax Act - 2017 shall generate e-Waybill in Form GST Waybill-1
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Service Tax:
Refund of input services - all the input services viz., Parking, Cafeteria, Fitouts, Building, Housekeeping, Management Consultant Services, Custom House Agent Service, Supply of Tangible Goods Service, Event Management Service fall in the definition of ‘input service' as provided under Rule 2(l) of the CCR
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Central Excise:
CENVAT credit - sales promotion includes services by way of sale of dutiable goods on commission basis and this notification is made applicable retrospectively - credit allowed
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VAT:
Recovery of tax arrears - attachment of the petitioner’s residential-cum-office premises - There is no authority in law in which the tax authorities can forcibly collect post dated cheques. - HC
Articles
Notifications
Companies Law-
F. No. 1/13/2013 CL-V - dated
27-7-2017
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Co. Law
Companies (Incorporation) Second Amendment Rules, 2017
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No. 16/37/2017 -Legal - dated
25-7-2017
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Co. Law
Constitution of two Review Committee (s) for reviewing the 10 year old and above cases of different regions and in office of SFIO for withdrawal of prosecutions - regarding
Customs-
36/2017 - dated
28-7-2017
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ADD
Seeks to continue anti-dumping inforce concerning imports of 'polytetraflouroethylene or PTFE' originating in exported from China PR
GST-
F. No. 31013/16/2017-ST-I-DoR - G.S.R. 964(E) - dated
27-7-2017
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CGST
Goods and services Tax Settlement of funds Rules, 2017
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17/2017 - dated
27-7-2017
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CGST
Central Goods and Services Tax (Fourth Amendment) Rules, 2017
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F.No.354/117/2017-TRU - dated
27-7-2017
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CGST Rate
Corrigendum – Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017
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F. No. 354/117/2017-TRU - dated
27-7-2017
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CGST Rate
Corrigendum – Notification No. 2/2017-Central Tax (Rate) dated 28th June 2017
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F. No. 354/117/2017-TRU - dated
27-7-2017
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IGST Rate
Corrigendum – Notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017
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F. No. 354/117/2017-TRU - dated
27-7-2017
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IGST Rate
Corrigendum - Notification No. 2/2017-Integrated Tax (Rate), dated the 28th June, 2017
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F.No.354/117/2017-TRU - dated
27-7-2017
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UTGST Rate
Corrigendum – Notification No. 2/2017-Union Territory Tax (Rate), dated the 28th June, 2017
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F. No. 354/117/2017-TRU - dated
27-7-2017
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UTGST Rate
Corrigendum – Notification No. 1/2017-Union Territory Tax (Rate), dated the 28th June, 2017
GST - States-
G.O.Ms. No. 309 - dated
24-7-2017
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Andhra Pradesh SGST
'e-way bill system' is developed and approved by the Council.
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G.O. Ms. No. 082 - dated
14-7-2017
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Tamil Nadu SGST
APPOINTMENT OF CLASSES OF OFFICERS.
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G.O. Ms. No. 081 - dated
13-7-2017
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Tamil Nadu SGST
ERRATA TO NOTIFICATION No. II(2)/CTR/532(d-4)/2017.
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G.O. Ms. No. 080 (e-2) (No. II(2)/CTR/557(e-2)/2017) - dated
11-7-2017
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Tamil Nadu SGST
ERRATUM TO Notification No. II(2)/CTR/532(d-5)/2017
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G.O. Ms. No. 080 (e-1) (No. II(2)/CTR/557(e-1)/2017) - dated
11-7-2017
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Tamil Nadu SGST
ERRATA TO Notification No. II(2)/CTR/532(d-4)/2017
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G.O. Ms. No. 078 - dated
29-6-2017
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Tamil Nadu SGST
Electronic commerce operator.
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G.O. Ms. No. 077 - dated
29-6-2017
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Tamil Nadu SGST
United Nations or a specified international organisation.
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G.O. Ms. No. 076 - dated
29-6-2017
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Tamil Nadu SGST
Notifies the no refund of unutilised input tax credit.
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G.O. Ms. No. 075 - dated
29-6-2017
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Tamil Nadu SGST
Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G.
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G.O. Ms. No. 074 - dated
29-6-2017
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Tamil Nadu SGST
Notifies the categories of supply of services.
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G.O. Ms. No. 073 - dated
29-6-2017
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Tamil Nadu SGST
Exempts the intra-State supply of services calculated at the rate of state tax specified.
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G.O. Ms. No. 072 - dated
29-6-2017
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Tamil Nadu SGST
Notifies state tax, on the intra-State supply of services.
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G.O. Ms. No. 071 - dated
29-6-2017
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Tamil Nadu SGST
Exempts intra-State supplies of second hand goods.
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G.O. Ms. No. 070 - dated
29-6-2017
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Tamil Nadu SGST
Exempts intra-State supplies of goods or services or both received by a deductor under section 51.
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G.O. Ms. No. 069 - dated
29-6-2017
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Tamil Nadu SGST
Exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received.
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G.O. Ms. No. 068 - dated
29-6-2017
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Tamil Nadu SGST
Exemption The supply of goods by the CSD to the Unit Run Canteens
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G.O. Ms. No. 067 - dated
29-6-2017
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Tamil Nadu SGST
Supply of Services Canteen Stores Department.
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G.O. Ms. No. 066 - dated
29-6-2017
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Tamil Nadu SGST
No refund of unutilised input tax credit.
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G.O. Ms. No. 065 - dated
29-6-2017
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Tamil Nadu SGST
Intra-state supply of such goods state tax shall be paid on reverse charge basis.
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G.O. Ms. No. 064 - dated
29-6-2017
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Tamil Nadu SGST
Exempts intra-State supplies of goods amount calculated at the rate of State tax specified.
Income Tax-
73/2017 - dated
26-7-2017
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IT
Amendment in Notification No. 93/2016 dated 14/10/2016
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (7) TMI 967
Reopening of assessment - reasons to believe - perusal of the accounts did not reveal that the Assessee added back the capital expenditure on acquisition of software and the value of the fixed assets - Held that:- Revenue has sought to urge during the course of the submissions before this Court is not even urged in the counter-affidavit. All that is stated is that despite what the Assessee has averred being ‘prima facie’ in the order, the Revenue still needs to verify that fact. The audited accounts were already available with the AO and formed part of the assessment record. They did not require re-assessment proceedings for the purpose of such verification. In any event, the Court declines to accept these reasons as being valid reasons for re-opening of the assessment. Finance lease - Held that:- The lessee was allowed only to claim the deduction for lease rent in respect of leased assets and not claim depreciation. Consequently, for the purposes of accounting treatment as mandated by AS-19, the Assessee capitalized the value of the motor vehicles taken on lease and showed the finance lease account payable as secured loan in its books of accounts. While the interest on the said amount was directly debited to the Profit and Loss Account and claimed as deduction in the computation of taxable income, the principal portion of the finance lease rent paid by the Assessee reduced the finance lease liability that was not debited to the Profit and Loss Account. As part of the accounting treatment, the depreciation was debited to the Profit and Loss account. For the purposes of tax treatment, however, the depreciation was in fact added back. The Assessee separately claimed the principal portion of the leased rent. The Assessee was guided by Circular No. 2 of 2001 issued by the Central Board of Direct Taxes (‘CBDT’) which provided that AS-19 would have no implication on the allowance of depreciation on the assets under the provisions of the Act. All of this was already explained in the original assessment proceedings and examined by the AO. A complete disclosure is made in the balance sheet. Note 5 to the accounts also explained this. In the later AY i.e., AY 2005-06, the AO again examined this issue and accepted the explanation offered by the Assessee. Not a valid reason for re-opening of the accounts. Eligibility conditions under Section 80-IA and 80-IB - Held that:- As pointed out by the Assessee for the subsequent AY 1995-96, the Revenue has accepted that the Assessee fulfils the eligibility conditions under Section 80-IA and 80-IB of the Act as “processing of blank CDs, dedicating them to a specific use, constitutes manufacture in terms of Section 80-IA(12)(b) read with Section 33B of the Income Tax Act” The fact that there was a separate auditor in respect of the Form 10-CCB for the purposes of claiming deduction under Sections 80-IA and 80-IB has been acknowledged by the Revenue itself. How all of this can go to deprive the Assessee of the deduction is not clear. In any event, the jurisdictional requirement that there must be some tangible material warranting prima facie to the belief that income has escaped assessment does not stand satisfied. The reasons have no communication as to what was the material fact which was not disclosed by the Assessee during the original assessment proceedings. The audited accounts give an explanation for the cost of the master copy. Again, the order of the AO reveals that the issue was discussed at length. This cost was disallowed as capital expenditure to the extent of ₹ 9,95,460. As regards the comments of the Auditor, the entire relevant passage reveals that the comments are in the context of paras 2 (a) - (h) which cannot be acted upon by the Assessee. In fact, in view of each of the items of classification in the Auditor’s report, there is addition to the Assessee’s income in the revised return. The Court is, therefore, satisfied that none of the reasons for re-opening the assessment satisfy the legal requirement as stipulated in the proviso to Section 147 of the Act. - Decided in favour of assessee.
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2017 (7) TMI 966
Penalty u/s. 271AAA - disclosure as undisclosed income - Held that:- In the present case, the Revenue failed to question the assessee while recording his statement under section 132 (4) of the Act as regards the manner of deriving such income, the Revenue cannot jump to the consequential or later requirement of substantiating the manner of deriving the income. In the context of the requirement of the assessee specifying the manner of deriving the income the decision of this Court in case of Commissioner of Income Tax vs. Mahendra C.Shah (2008 (2) TMI 32 - GUJARAT HIGH COURT ) would hold the field even in the context of sub-section (2) of section 271AAA of the Act. It is only when the officer of the raiding party recording the statement of the assessee under section 132(4) of the Act elicits a response from the assessee's this requirement, the assessee's responsibility to substantiate the manner of deriving such income would commence. When the base requirement itself fails, the question of denying the benefit of no penalty would not arise. - Decided against revenue
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2017 (7) TMI 965
Nature of income - income from other sources OR capital gains - sale of land by the owners to the new purchasers - proof of genuineness of the banakhat dated 16.12.1986 - Tribunal found that the Assessing Officer was justified in disbelieving the entire transaction as projected by the assessee - Held that:- The agreement to sale is dated 16.12.1986. In such document, it is recited that the owners agreed to sale the land to the assessee for a sale consideration of ₹ 10 lakhs out of which ₹ 5 lakhs was paid. This agreement to sale is neither registered nor a notarized document and is executed on a stamp paper without any further authentication. Sum of ₹ 5 lakhs is stated to have been received by the land owners piecemeal over a period of time apparently in cash. Neither the dates nor any other details of such payments are mentioned. For over 22 years, the assessee did not assert his right to purchase the land nor did the sellers demand the remaining sale consideration. The sale deed dated 10.09.2008 does show the assessee as a confirming party, but does not refer to any payment made or to be made in lieu of his surrendering his rights under the agreement to sale. In the said deed though it is stated that the assessee was in possession and in cultivation of the land in question there is no other evidence including form no.7/12 of land registers of the Revenue record suggesting possession or cultivation of the assessee. The payment of ₹ 1.32 crores is stated to have been spread over a period of time, long after the sale deed was executed and is supposed to be backed by a document titled as mutual money transaction agreement. It is quite inconcieviable that a person who claims the right to purchase a land under an agreement would sign the sale deed in favour of a third party acting as a confirming party without his consideration for such purpose being either actually paid or even promised to be paid. Multiple factors noted above when seen cumulatively leaves little doubt that the Tribunal arrived at a factual finding which calls for no interference. No question of law therefore arises. - Decided against assessee.
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2017 (7) TMI 964
Liability to pay interest tax on the interest earned - Held that:- Under clause (a) of Section 10, therefore, in case where an Assessing Officer has reason to believe that by reason of omission or failure on the part of the assessee to make a return or to disclose fully all the material facts necessary for the assessment, chargeable interest has escaped assessment or has been under-assessed or is subject to excessive relief, he may at any time serve on the assessee a notice and proceed to assess or reassess the amount chargeable to interest tax in terms of Section 7 of the Act. Clause (a) thus clearly envisages assessment or reassessment where interest chargeable to tax has escaped assessment for the reason of the omission or failure on the part of the assessee to make a return. This is precisely what has happened in the present case. The judgement of the Supreme Court in case of Standard Chartered Finance Ltd. [2016 (3) TMI 150 - SUPREME COURT ] cannot be seen as laying down the proposition that even if no assessment was on account of return not having been filed by the Assessee, Section 10 would not apply and the Assessing Officer would be precluded from assessing or reassessing the chargeable interest. As noted clause (a) of Section 10 envisages a clear situation where for the reason of omission or failure on the part of the assessee to make a return, the Assessing Officer has reason to believe that chargeable interest has escaped assessment. In such a situation, he has the authority to assess or reassess the chargeable interest. This question, therefore, does not arise and the Civil Application is therefore rejected.
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2017 (7) TMI 963
Reopening of assessment - disallowance of loss - Held that:- From the materials on record, it can be seen that the Assessing Officer from the outset was not convinced about disallowing the sum claimed by the assessee by way of loss. He elaborated his reasons in his letter dated 06.05.2008 written to the Commissioner. Relevant portion of the letter we have reproduced in this order, perusal of which, leaves little doubt that the Assessing Officer firmly believed that the assessee’s stand on such claim of loss was correct and that the internal audit objection was invalid. If this be the position, settled law would prevent the Revenue from reopening the assessment on this ground. It is well settled that Section 147 of the Act refers to the reason of the Assessing Officer to believe that income chargeable to tax has escaped assessment. The satisfaction of the Assessing Officer is of paramount consideration and cannot be substituted by any other agency or authority even if it happens to be a higher authority. The Income Tax Act contains revision in terms of Section 263 of the Act if an order of assessment is found to be erroneous or prejudicial to the interest of the Revenue. Reopening of an assessment, however, has vastly different repercussions and entirely different parameters would apply. This was not a case where the Assessing Officer formed a belief that income chargeable to tax had escaped assessment. May be in the present case, the directives did not come from the audit party but some internal audit mechanism referred to as internal audit party. This, however, would not be of any significance. As long as it can be gathered that the Assessing Officer was compelled to issue notice of reopening against his own belief that no income chargeable to tax had escaped assessment, the notice must fail. - Decided in favour of assessee.
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2017 (7) TMI 962
Reopening of assessment - Reason to believe - earning exempt income but not disallowing any expense under Section 14A of the Act - Held that:- As seen that the AY in question is AY 2003-04. During the AY dividend income was not exempt. As regards the other items of exempt income, the Assessee furnished a detailed computation in which it showed that the interest on tax-free bonds was fully furnished. There were queries raised by the AO in this regard which were answered. These were considered by the AO and thereafter the assessment was framed under Section 143 (3) of the Act. In the circumstances, the blanket statement by the AO that the Petitioner failed to disclose all material facts is not supported by any evidence on record. Deduction under Section 10A - Held that:- The AO’s reason for re-opening is that along with the certificate in Form 56F, which was the certificate of the CA, the working sheet of deduction was not enclosed. That was not a requirement of law. What Form 56F has to be accompanied with is specified under the Income Tax Rules itself. The mere fact that the working sheet may not have been enclosed does not amount to a failure by the Assessee to make a full and true disclosure of all material facts. Consequently, the Court is satisfied that the second reason for re-opening is also unsustainable in law. Deduction under Section 35D - reason given by the AO is that the Assessee did not make a similar deduction for the earlier two AYs i.e., 2001-02 and 2002-03 - Held that:- The mere fact that the Assessee may not have claimed such deduction for two of the five years it was entitled to, cannot deprive it of its legitimate claim for such deduction in the AY in question. In an answer to a query raised by the AO in this behalf, the Assessee has explained how in the revised return it included a claim for the said deduction which was inadvertently left out while filing the original return. This was permissible for the Assessee to do. Consequently, even this reason appears to be untenable in law. Payment made by the Assessee for software licence - Held that:- AO formed the opinion contrary to what was formed when the original assessment was framed that the deduction claimed was capital expenditure and not revenue expenditure. This was the very ground on which in Commissioner of Income Tax-II v. Maruti Suzuki India Ltd. (2012 (10) TMI 1145 - DELHI HIGH COURT) a re-opening of the assessment was sought to be made. This Court held that such a reason for re-opening was based on a mere change of opinion since all the necessary relevant facts were fully and truly disclosed when the initial assessment proceedings took place. Even here, there was no basis for the AO to form an opinion that the software license expenses were not revenue expenditure but capital expenditure. The question of there being any failure by the Assessee to make full and true disclosure of all material facts in this regard has not even been mentioned by the AO. Even this reason, therefore, is untenable in law. Claim for depreciation on computer peripherals - Held that:- This Court in Commissioner of Income Tax v. BSES Yamuna Power Ltd. (2010 (8) TMI 58 - DELHI HIGH COURT) upheld the claim of 60% depreciation on computer peripherals. In the compilation filed before the AO as well as in the tax audit report, the basis of such claim has been clearly set out by the Assessee. There is no indication by the AO in the reasons for re-opening about the failure, if any, by the Assessee to make a full and true disclosure of any material facts. This reason for re-opening also, therefore, is based not on any tangible material but on a mere change of opinion. Failure by the Assessee to furnish the details of payment exceeding ₹ 1 lakh in the course of the original assessment proceedings - Held that:- The Court finds that one of the queries raised by the AO in its communication to the Assessee in the course of the assessment proceedings completed under Section 143(3) of the Act was asking it to furnish details of purchases of more than ₹ 1 lakh accompanied by ledger extracts of such persons. In reply thereto, the Assessee pointed out that this involved voluminous records. The AO appears to have not pursued the matter thereafter. Therefore, there was no failure by the Assessee to make a true and full disclosure. Assessee appeal allowed.
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2017 (7) TMI 961
Penalty u/s 271(1)(c) - concealed income in the nature of 'success sharing bonus' being the money received by her from the Dutch company for giving up her right to sue for damages - nature of income - substantial question of law - Held that:- The question before us is whether the conduct of the Assessee in filing returns in the instant case, is one that warrants imposition of penalty owing to non disclosure / concealment. Assuming for a moment, if this court later returns a finding in the above said Tax Case Appeal that the receipt in question from the Dutch company should be treated as revenue receipt and not as capital receipt, that would not in any manner lead to the conclusion that the Assessee is guilty of deliberate non disclosure / deliberate concealment. That decision will only answer the question as to whether the Assessee is liable to pay tax or not. What is to be noted is, as on the date of filing of the return by the Assessee for the said assessment year in the instant case, which is 31.3.2010, the issue is as to whether the relevant payment is revenue receipt or capital receipt was clearly debatable and therefore, Assessee chose to take a position which is favourable for her. This in our opinion does not in any manner qualify as deliberate non disclosure or concealment. We do not find any mens rea on the part of the Assessee qua concealment and non disclosure. Therefore, we have no hesitation in coming to the conclusion that this may not be a case which warrants penalty proceedings under Section 271(1)(c) of the IT Act. However, this being an appeal under Section 260A of the IT Act, it can be entertained only on substantial questions of law and not even on questions of law. As there is nothing of substance, of purport or nothing that would decide the right of parties qua questions of law, we have no hesitation in holding that the two questions of law as propounded by Revenue are not substantial questions of law at all. We are also of the view that they may not even qualify as questions of law as the very language in which the questions are couched would demonstrate that there is a huge factual element built into them. Independent of the aforesaid two questions suggested by the Revenue in the Memorandum of Appeal, we also applied our mind to see if any substantial question of law arises in the instant case. To our mind, there is none. Therefore, we have no hesitation in coming to the conclusion that no substantial question of law arises in the instant case. Owing to all that have been stated supra, the instant case is not fit enough to be entertained under Section 260A of the IT Act. More so, as no substantial question of law arises, the instant appeal deserves to be dismissed.
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2017 (7) TMI 960
Exemption claimed u/s 10B denied - Treatment to transfer of license to use software - ‘sale’ OR ‘royalty' - Held that:- The assessee had also filed some additional evidences before the CIT(A) in support of its claim of exemption under Section 10B of the Act. These submissions of the assessee were never filed before the Assessing Officer during the assessment proceedings and thus remained unexamined by the Assessing Officer. Accordingly, the CIT(A) called for the comments of the Assessing Officer. The CIT(A) passed order dated 18.09.2013 to the effect that no such remand report was received till the date of passing of order and allowed the appeal of the assessee on this issue. We find that in the circumstances of the case, the matter requires to be remanded to the Assessing Officer for deciding it afresh after considering the additional evidence produced by the assessee.
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2017 (7) TMI 959
Penalty under Section 271(1) (c) - Transfer exigible to tax by reference to Section 2(47)(v) of the Income Tax Act, 1961 read with Section 53-A of the Transfer of Property Act, 1882 - JDA entered by assessee - Held that:- Learned counsel for the appellant has not been able to controvert the applicability of the decision rendered in C.S. Atwal’s case (2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT ) and that no capital gains on unrealized amount would accrue or arise to the assessee. Once that is so, no penalty under Section 271(1) (c) of the Act would be exigible. The substantial questions of law claimed in this appeal are answered in favour of assessee.
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2017 (7) TMI 958
Penalty under Section 271(1)(c) - no explanation offered by the assessee to explain the genuineness of the gifts - Held that:- As recorded by the Tribunal that no explanation was offered by the assessee to explain the genuineness of the gifts. He merely gave the name of the donors but did not prove their identity, credit-worthiness and genuineness of the transactions. It was concluded by the Tribunal that since the assessee did not offer any explanation and whatever explanation was offered was not substantiated through any evidence or material on record, explanation 1 to Section 271(1)(c) of the Act was clearly attracted to his case. There was concealment on the part of the assessee so as to levy penalty under Section 271(1)(c) of the Act. Thus, the Tribunal was right in denying benefit under Proviso to Section 56(2)(vi) of the Act and levying penalty under Section 271(1)(c) of the Act. - Decide against assessee.
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2017 (7) TMI 957
Addition u/s 68 - Held that:- According to Section 68 of the Act, where any sum is found credited in the books of account of an assessee maintained for any previous year and the asseessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of that previous year. It has been categorically recorded by the Tribunal that the provisions of Section 68 of the Act were clearly not attracted to the amount representing purchases made on credits. In the present case, the concerned transactions were only of supply of material and, therefore, provisions of Section 68 of the Act were not applicable. Further the trade creditors in the earlier years i.e. assessment years 2007-08 and 2008-09 stood accepted in scrutiny assessments. Thus, the genuineness of expenses under consideration could not be doubted. - Decided against revenue
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2017 (7) TMI 956
Allowing the deduction u/s 80IA to the assessee on the basis of return filed after the issue of notice u/s 153A - Held that:- Tribunal has justified deduction under Section 80IA on the basis of return filed under Section 153A by observing that for the assessment year 2009-10 and onwards, the time for filing revised return has not expired and, therefore, claim for deduction under Section 80IA if not made earlier could have been made in the revised return. Once it could have been claimed in revised return under Section 139 (1), the same could have also been claimed under Section 153 (A). Sri Manish Misra, learned counsel for appellant contended that return under Section 153 (A) is not a revised return but it is a original return. If that be so, then in our view, deduction under Section 80IA, if otherwise admissible, always could have been claimed and we are not shown any authority otherwise to take a different view. Therefore, in both way, deduction under Section 80IA , if otherwise admissible, could have been claimed by Assesses. Whether Assesses is not ''Developer' but ''Contractor'? - Held that:- Tribunal has confirmed findings of fact recorded by CIT (A) holding that Assesses is a ''Developer' and not a ''Contractor' and the otherwise findings recorded by A.O have been reversed by CIT (A). Since it is a finding of fact concurrently recorded by CIT (A) and Tribunal, which has not been shown perverse on contrary to record. No substantial question of law. Assessee appeal allowed.
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2017 (7) TMI 955
Deduction on account of bad debts u/s 36 (1) disallowed - Held that:- The Supreme Court in TRF Limited Vs. Commissioner of Income Tax (2010 (2) TMI 211 - SUPREME COURT) has ruled that for claiming deduction under Section 36 (1) (vii) of the Act the appellant assessee has only to establish that the bad debts were written off and it is not necessary to establish that the debts have become irrecoverable. The appellant assessee for the assessment year 2010-11 pursuant to the resolution of the Board of Directors of the Company taken during the financial year 2009-10 has actually written off the amount of ₹ 4520.19 lacs as bad debts. In other words, when a conscious decision is taken on consideration of the various factors that particular amount has become unrecoverable that is sufficient enough to write off the same as bad debt even though for some reason it may subsequently be recovered. That being the position, we are of the opinion that the tribunal has taken a very casual approach in dismissing the appeal of the assessee appeal on the above score by refusing to allow deduction under Section 36 (1) (vii) of the Act. Accordingly, we answer the above question in favour of the assessee
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2017 (7) TMI 954
Gains arising on sale of Santaj land and Rakanpur land - LTCG OR business income - Held that:- We find that the action of the AO was simply guided by the considerations of the Revenue alone to collect more taxes without bringing any concrete material on record to justify that the acquisition of land under sale was induced by commercial spirit. At this juncture, we observe that section 2(14) stipulates that property can be ‘capital asset’ even if connected with business of the assessee. Therefore, the assessee is entitled in law to hold certain class of assets as capital asset even while he is dealing with the asset of similar nature in business with commercial objectives. Thus, we find that plea of the assessee has merits and deserves acceptance. We accordingly hold that land/properties were held by the assessee as ‘capital assets’ before its sale and consequential gains arising on sale thereto is chargeable under the head ‘capital gains’. Accordingly, the AO is directed to consider the capital gains arising on sale of land/properties as chargeable under the head ‘capital gains’ as claimed by the assessee. - Appeal of the Assessee is allowed.
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2017 (7) TMI 953
TPA - ALP determination - selection of comparable - selection criteria - Held that:- The issue is now settled that high profit or loss cannot be a criteria for inclusion or exclusion of companies in the set of comparables. However, if the high profit or loss is by the reason of some extraordinary circumstances then those extraordinary circumstances which has led to the high profit or loss can be considered as a criteria for inclusion or exclusion of the companies in the list of comparables. Therefore, the mere high profit margin or loss cannot be considered as a parameter or criteria for selection of comparable companies Assessee is a subsidiary of Exeter Educational Management Systems Inc. USA and provides software development services for the administration of higher education institutions worldwide thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable. Eligible for deduction u/s. 10A - denial of reversal of provision for management charges payable to its parent company - Held that:- Referring to assessees's submission that this amount was allowed as business expenditure in the earlier year and therefore the business profit of the assessee for the purpose of deduction u/s. 10A was reduced by this amount in the earlier year also as during the year under consideration the assessee has reversed the provision which has resulted increase in the business income of the assessee and therefore it is eligible for deduction u/s. 10A this fact of provision being allowed as business expenditure in the earlier year has not been verified by the authorities below and therefore in the absence of any finding on this issue by the authorities below it is not possible to give a concluding finding at this stage. Thus in the facts and circumstances of the case we set aside this issue to the record of the AO for verification
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2017 (7) TMI 952
Applying provision of Explanation 10 of Section 43(1) on account of subsidy received - Held that:- The admitted facts are that during the year under consideration assessee-company received incentive subsidy from Govt. of Jharkhand as encouragement for setting up of new industrial project and/or expansion/modernization of the existing unit. It is also a fact that maximum limit of the subsidy was restricted with reference to the value of fixed capital investments in land, building, plant and machinery but no part of the subsidy was specifically intended to subsidize the cost of any fixed asset, therefore, it cannot be said that the subsidy was to meet a portion of cost of the asset. According to us, the assessee has rightly not reduced the amount of subsidy received from the actual cost/WDV of the fixed assets while claiming depreciation For the purpose of computing depreciation allowable to the assessee, the subsidy amount cannot be reduced from the actual cost of the capital asset. Thus, we have no hesitation to reverse the order of the lower authorities. The Assessing Officer is directed accordingly. This issue of assessee's appeal is allowed.
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2017 (7) TMI 951
Disallowance of depreciation on Generator and Sortex Machine installed during the year - “passive use” OR “active use” - Held that:- The assessee is entitled to get benefit of depreciation on such plant and machinery, which were not put to use actively. Apart from above, it is also worth consideration that sortex machine and generator, being plant and machinery, also form the part of block of assets and therefore, it is not justified to allow part of depreciation from the said block of assets and to make part disallowance thereof. A perusal of the impugned order further shows that the assessee also made a submission before the ld. CIT(A) that Sortex Machine was put to use on 12.03.2010 and 5.77 quintal of rice was processed through this machine on trial basis. However, the ld. CIT(A) appears to have given no finding on this submission of assessee. CIT(A) was not justified in disallowing the depreciation on generator and sortex machine, as claimed by the assessee. - Decided in favour of assessee.
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2017 (7) TMI 950
Fee paid to ROC for increasing the share capital is to be treated as capital expenditure Disallowance u/s. 40(a)(i) - payment on account of International Private Leased Circuit (IPLC) charges and connectivity charges to non-resident parties without tax deduction at source - Held that:- Since in the call connectivity and transmission from end of the Indian Territory at Mumbai to the termination of call in USA, no technical knowledge has been made available to the assessee, respectfully following the decision of the Tribunal in the case of Bharti Airtel Ltd Vs. ITO ( 2016 (3) TMI 680 - ITAT DELHI), we hold that payment for the services of call transmission through dedicated bandwidth provided by the non-resident parties to the assessee , cannot be termed as Fee for Technical services under the treaty also, in the hands of the recipients Expenditure towards traveling and educational tuition fee incurred outside India on the education of promoter - Held that:- There is nothing on record to establish as to how the educational course (BBA/MBA) done by Karun Ansal abroad was beneficial to the business of call centre then run by the assessee-company. We, therefore, find no justification to discard the finding reached by the ld. CIT(A) that Sh. Karun Ansal did not attend any specialized course and the simple degree of BBA cannot be said to be directly linked to the business of running a call centre in which the appellant was engaged and therefore, the decision of the Board of Directors of the appellant company to sponsor Karun Ansal for foreign education was for other than business consideration. It is also evident from the record, that there was no agreement between the assessee company and Karun Ansal nor is there any such request from Karun Ansal for further MBA course. Suo moto extension of sponsorship of Karun Ansal by the assessee company without any agreement between the assessee company and Karun Ansal for such extension for MBA course speaks a lot against the assessee. No business expediency or necessity was established by assessee to bear such a huge expenditure on foreign education of son of assessee’s promoter, who was not even a regular employee of the assessee company at the time of joining the course abroad - Decided against assessee. FBT computation - Held that:- Direct the AO to recalculate the Fringe Benefit Tax after excluding the Training and Development Expenses for the reason that these expenses have not been treated as business expenditure deductible u/s. 37(1) of the Act. No justification to sustain the penalty imposed by the authorities below u/s. 271(1)(c) of the Act.
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2017 (7) TMI 949
TPA - TPO has determined the AMP expenses to be international transaction - Held that:- We are of the considered view that when the TPO has determined the AMP expenses to be international transaction, he had no occasion to follow the ratio of the judgments in Rayban Sun Optics India Ltd. vs. CIT [2016 (9) TMI 1293 - DELHI HIGH COURT], Pr. CIT vs. Toshiba India Pvt. Ltd. [2016 (8) TMI 1175 - DELHI HIGH COURT] and Pr. CIT vs. Bose Corporation (India) Pvt. Ltd. (2016 (8) TMI 1177 - DELHI HIGH COURT) rendered by Hon’ble jurisdictional High Court discussed in the preceding paras. Aforesaid decisions have consistently been followed by coordinate Benches of the Tribunal. In these circumstances, we are of the considered view that it would be in the interest of justice if the impugned order is set aside and the matter is restored to the file of TPO/AO for fresh determination of the question to determine, “as to whether AMP expenditure is international transaction”, in the light of the judgments rendered by Hon’ble Delhi High Court discussed in preceding paras. In case the existence of such an international transaction is not proved, there shall not be any transfer pricing addition. However, in case the international transaction is proved to be existed, then the TPO will determine such international transaction in the light of the judgment rendered by Hon’ble jurisdictional High Court after providing an opportunity of being heard to the assessee. Disallowing write off of demonstration equipment inventory - whether such inventory should have been valued at cost disregarding the fact that Net Realizable Value (NRV) or demonstration inventory is lower than the cost - Held that:- DRP predominantly decided the issue on the ground that taxpayer has failed to discharge the onus cast upon it to disprove that NRV actually remains sufficiently above the cost price of the equipment and hence as per the accounting policy of the company and the AS-2 of ICAI prescribing valuation of the closing stock, the taxpayer should have adopted cost value of the valuation of the closing stock of the demo equipment. DRP also held that it appears that the provision of demo equipment is based upon pure assumption, hence the same cannot be treated as real expenses and before the AO, taxpayer could not produce any documentary evidence like sale bill to prove that any of the demo equipments was sold at 42% of its normal sale price. The assessee company has also not submitted the particulars of scrap sale for last five years before DRP. Thus we deem it necessary to provide an opportunity of being heard to the assessee company to produce the documentary evidence
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2017 (7) TMI 948
Validity of appeal filed before CIT(A) instead of filing objection - assessment order u/s 143(3) r.w.s. 144C - eligibility to file objections - Held that:- From the plain reading of the provisions contained in Sub-section (2) of Section 144C of the Act, it is clear that on receipt of the draft order, the eligible assessee shall file his objection, if any, to the ld. DRP and the AO within 30 days on receipt of draft order, and as per the provision contained in Sub-section (5), the DRP shall, in a case where any objection is received under Sub-section (2) of Section 144C of the Act shall, issue such direction as it thinks fit for the guidance of the AO to enable him to complete the assessment. But in the present case, nothing is brought on record to substantiate that any draft assessment order was passed by the AO or the objections were filed by the assessee or any direction was given by the ld. DRP. Therefore, the ld. CIT(A) was not justified in observing that the assessment order has been passed by the AO on the direction of the ld. DRP. On the contrary, the AO passed the assessment order u/s 143(3) r.w.s. 144C of the Act. From the CBDT Circular No. 5/2010, it is crystal clear that in case the assessee does not file objection, the AO shall pass the assessment order and thereafter the assessee can file an appeal against such assessment order before the ld. CIT(A). In the present case also the assessee did not file any objection before the DRP and filed the appeal before the ld. CIT(A), since it was the choice of the assessee as to whether to file an objection before the DRP or to pursue the normal channel of filing appeal against the assessment order before the ld. CIT(A). Therefore, the appeal filed by the assessee before the ld. CIT(A) was maintainable. We set aside the impugned order and direct the ld. CIT(A) to admit the appeal of the assessee and decide the same in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
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Customs
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2017 (7) TMI 929
Valuation - export of readymade garments - overvaluation - confiscation - redemption fine - penalty - Held that: - even though, the appellant presently is contesting the value determined by Revenue without any market enquiry, we find that the value has been determined on the basis of the documents submitted by the Director of the respondent. The main thrust of the argument raised by the respondent was not on value but on the quantum of fine and penalty ordered after confiscation of the impugned export goods. Consequently, we find no reason to interfere with the value as determined by the adjudicating authority. Appeal dismissed - decided against Revenue.
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Insolvency & Bankruptcy
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2017 (7) TMI 926
Initiation of insolvency process - Insolvency and Bankruptcy Code 2016 - Held that:- Insolvency process deserves to be initiated as the requirements of Section 10 of the Code and Rules framed thereunder have been fulfilled. A perusal of section 10 would show that a corporate debtor may file such application for initiating the insolvency resolution process where it has committed a default. It is required to furnish information relating to its books of account and the documents relating to the period as may be specified. A perusal of the paper book would show that books of account and other attendant documents have been filed and an Interim Resolution Professional has also been proposed. The petitioner itself has admitted default. Accordingly, we hold that the Petition merits admission and the same is accordingly admitted. Keeping in view the object of the 'Code' namely to get rid of 'NPA' accounts and allow the dead investment to come into circulation. We were in fact disposed to the view of refusing Moratorium in the present case for the above reasons but have not taken that extreme view. However, the resolution in the present case must conclude within 180 days. No further time would be warranted unless creditors decide otherwise. The Interim Resolution Professional shall perform all other duties cast upon him in accordance with the provisions of the code like making of public announcement, taking over the affairs of the management of the corporate debtors and many other duties as per the Code. The operational creditors in IB No.20(PB)/2017 may file its claims before the Insolvency Resolution Professional in accordance with the public notice to be issued like all other claimants. As a sequel to the above discussion is admitted and is disposed of as such. However, IB No.20(PB)/2017 is dismissed with the observation that 'operational creditor' therein may file its claim before the Insolvency Resolution Professional, as per the public notice which is likely to be issued.
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2017 (7) TMI 925
Initiating corporate insolvency resolution process - Insolvency and Bankruptcy Code, 2016 - Held that:- The figures extracted indicate the losses with continued fall in revenue, therefore, it seems that the applicant has fallen into debt trap and is competent to set in motion the insolvency resolution process as contemplated under the 'Code'. On the basis of the aforesaid statements of the affairs of the company, the outstanding amount as per the books of the company towards financial creditors is ₹ 206.45 crores and the amount in default towards financial creditors is ₹ 206.64 crores. It is represented that the total amount of operational creditors (Raw Material Suppliers) is ₹ 9.25 crores and the amount in default is ₹ 9.25 crores. The total amount of operational creditors (Government dues) is ₹ 0.55 crores and the amount in default is ₹ 14.53 crores. The total amount of operational creditors (Workers/Employees) is ₹ 0.22 crores and the amount in default is nil. The total amount of operational creditors (Service providers) is ₹ 0.32 crores and the amount in default is ₹ 0.04 crores. In view of the aforesaid discussion, the instant petition deserves to be admitted. It is, however, observed that the applicant company save some sketchy particulars has not given any roadmap as to how it is going to keep itself afloat as a going concern. However, keeping in perspective the objects tor which the 'Code' has been brought into force and to balance the interest of all stakeholders, we are satisfied that the instant application warrants to be admitted to prevent further erosion of capital and to safeguard the assets of the Applicant Company/Corporate Debtor. Also declare a moratorium in relation to the required matters as contemplated under Section 14 of the 'Code'
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Service Tax
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2017 (7) TMI 968
100% EOU - refund of unutilized CENVAT credit - scope of input services - consultancy services - maintenance and repair services - labour contract services - clearing services - Rule 5 of the CCR, 2004 - Held that: - the disputed services herein fall in the definition of input services and therefore the appellant is entitled to refund of CENVAT credit under Rule 5 of the CCR 2004 - reliance placed in the case of M/s. Coca Cola India Pvt. Ltd. Versus The Commissioner of Central Excise, Pune-III [2009 (8) TMI 50 - BOMBAY HIGH COURT], CST, DELHI Versus CONVERGYS INDIA PVT. LTD. [2009 (5) TMI 50 - CESTAT, NEW DELHI] and Circular No 120/01/2010-ST dated 19.1.2010 F.No 354/268/2009-TRU - refund allowed - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 947
Business Auxiliary Services - activity of providing Multi Level Marketing by the appellant to its principal - penalty - Held that: - there was ambiguity in interpretation of the statutory definition of Business Auxiliary Service, we are of the view that the demand for extended period of limitation cannot be sustained. There is no sustainable ground for invoking fraud, misstatement etc., on the part of the appellant for defrauding the Government Revenue - considering the fact that the appellant has not involved in the fraudulent activities concerning suppression fraud etc, we are of the view that the penalty imposed under Section 77 & 78 ibid can be set aside by invoking Section 80 in the interest of justice. We remand the matter back to the original authority for quantification of service tax liability payable by the appellant within the normal period of limitation - appeal allowed by way of remand.
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2017 (7) TMI 946
Valuation - abatement in the value of taxable service - N/N. 1/2006-ST dated 01.03.2006 - Held that: - the assessee-Appellants have reversed the entire disputed input service credit which acted as a bar for their claim of abatement under Notification No.01/2006-ST. We also note that such reversal, even later, will satisfy the condition of the Notification - It is also held in various decisions of the Tribunal that subsequent reversal of credit will remove the bar in availing such exemptions. Valuation - inclusion of free supplied material by the recipient of service in the valuation of taxable service - Held that: - similar issue decided in the case of Bhayana Builders Pvt. Ltd. [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] wherein the Larger Bench of the Tribunal held that the items supplied free of cost by the recipient of service have no relevance to consider the gross valuation of the taxable service for the purpose of N/N. 01/2006-ST. Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 945
Refund of service tax - unjust enrichment - Section 11B(2) of Central Excise Act 1944 - denial on the ground of non-production of evidence to establish that the burden of tax payment has not been passed on to the Customer - Held that: - The learned Commissioner (Appeals) has rightly held that the principles of unjust enrichment is not applicable in the present case and further I also find that the adjudicating authority while crediting the refund claim to the Consumer Welfare Fund has travelled beyond the order of the Tribunal - there is no infirmity in the findings of the impugned order which needs to be interfered with - appeal dismissed - decided against Revenue.
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2017 (7) TMI 944
Penalties - revision under section 84 - Held that: - the issue is squarely covered in favour of the appellant by the Division Bench of this Tribunal in the case of Sneha Minerals [2010 (7) TMI 387 - CESTAT, BANGALORE] wherein in identical facts, this Tribunal set aside the penalties imposed under Sections 76, 77 and 78, and it was held that in relation to the issue pertaining to tax liability of the assessee, there was no merger between the Dy. Commissioner’s decision and the Commissioner’s order and consequently it is not open to the assessee to agitate the issue before this Tribunal - the imposing penalty on the appellant in exercise to the power of revision under Section 84 is not sustainable in law - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 943
Refund of input services - denial on the ground of lack of nexus and some of the services are not covered by the definition of ‘input service’ - Held that: - all the input services viz., Parking, Cafeteria, Fitouts, Building, Housekeeping, Management Consultant Services, Custom House Agent Service, Supply of Tangible Goods Service, Event Management Service fall in the definition of ‘input service' as provided under Rule 2(l) of the CCR - with regard to Outdoor Catering and Rent-a-Cab Service both these services are related to the period after the amendment of ‘input service' definition w.e.f. 01.04.2011 and the learned consultant has also agreed not to press the refund of these two input services - appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 942
CENVAT credit - duty paying invoices - it is alleged that the appellants have availed CENVAT credit based on input credit documents addressed to their Head Office situated in Thane, Maharashtra for the period October 2008 to March 2010 which appear to be irregular as the service provider of taxable service is not eligible to avail the credit when the said documents are in the name of the Head Office - Held that: - the issue is squarely covered in favour of the appellant by various decisions wherein it has been consistently held that credit taken on the basis of invoices raised on the Head Office is admissible and the substantive right of the assessee with regard to the CENVAT credit should not be taken away on procedural infractions - appeal allowed - decided in favor of appellant.
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Central Excise
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2017 (7) TMI 941
Classification of goods - wrist bands - The appellant sought classification of the product under 49119990 of the Central Excise Tariff as products of printing industry - the Department ordered the classification under 63079090 as made up textile article - N/N. 30/2004-CE dated 09.07.2004 - Held that: - It is reported that such wrist bands are used in places like music festivals, amusement parks etc. Even though the items are made out of non woven fabric, the essential use and character of the items is based on the matter printed on such wrist band - without the printing as required by the customers, the un-printed roll will be of no use for the purpose. Hence printing is not merely incidental to but is for the primarily use of the product. Accordingly the goods are rightly classifiable under 4911 9990 and will be eligible for clearance at ‘Nil’ rate of duty - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 940
Clandestine removal - evidence - burden to prove - Held that: - Since, the onus lies with the Department to prove clandestine removal of the goods has not been substantiated with any iota of evidence, I am of the view that the duty demand confirmed and penalty imposed on the appellant cannot be sustained and the same are liable to be set aside - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 939
N/N. 333/86-CE - denial on the ground that the appellants did not make such claim in terms of Rule 173B during the relevant timewhether or not the appellant can be extended with benefit of exemption N/N. 333/86-CE for the AR bricks found un-accounted and lying in stock? - Held that: - the said exemption N/N. 333/1986- CE is without any condition - The exemption is granted to clay bricks manufactured in mechanized brick plants. As the appellants fulfill the requirements of the said notification, we find no reason for denial of the same. Apparently they had no occasion to claim such exemption earlier as they have claimed the general small scale exemption under N/N. 175/1986 - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 938
CENVAT credit - various steel items, such as, angles, channels, beam, joists, flats, plates etc. which was for the support structures on which various capital goods - Held that: - the identical issue has been put up before the Tribunal in the case of Singhal Enterprises Pvt. Ltd. Vs. CCE, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the CENVAT Credit - appeal allowed - decided in favor of assessee.
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2017 (7) TMI 937
SSI exemption - crossing of exemption limit - it was alleged that the appellant was clearing the goods without payment of duty even after the turnover of the appellant's unit at Bangalore and Hosur put together had exceeded the exemption limit of one crore rendering themselves ineligible for SSI exemption under N/N. 08/03-CE dated 01.03.2003 - Held that: - According to the appellant they have cancelled the two invoices No.18 & 19 and therefore the clearances shown therein are not to be considered for the purpose of value of clearances - appeal dismissed - decided against appellant.
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2017 (7) TMI 936
CENVAT credit - clearance of Capital goods without payment/reversal of CENVAT credit - extended period of limitation - Held that: - the factum of clearance of the used machinery was informed to the Department by the appellant vide its letter dated 29.01.2008 and this fact has been considered by the original authority - the assessee has correctly followed the provisions of law and informed the Department and during the relevant time, there was conflicting judgments of the High Court and the Tribunal and therefore there cannot be any allegation of suppression. When there are conflicting judgments on the issue, the extended period is not invokable and that the show-cause notice was beyond the limitation period. The SCN is clearly time barred - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 935
Refund claim - time limitation - Section 11B of the Central Excise Act, 1944 - Held that: - the appellant had paid the duty twice once by cenvat account and secondly by way of cash and by this appeal, the appellant only wants to take recredit of the amount of duty paid twice amounting to ₹ 2,52,605/- which has wrongly been denied by the Department - the appellant is entitled to take re-credit of the amount of ₹ 2,52,605/- and the question of limitation does not arise as retaking of credit is simple and book adjustment - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 934
Clearance of Sulphuric Acid to the captive power plant without payment of Central Excise duty or reversal of CENVAT credit - Non-payment of Central Excise duty was objected to by the Central Excise Department on the ground that the goods were supplied to a separate legal entity - Held that: - in an entirely identical matter in the appellant s own case for the earlier period, in the case of M/s Steel Authority of India Ltd. Versus CCE, Raipur [2016 (3) TMI 153 - CESTAT NEW DELHI], this Tribunal has held that the power plant even after its transfer, remains part of the same factory, and thus, it cannot be said that any excisable goods is removed from the factory - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 933
Benefit of N/N. 6/2006-CE dated 01/03/2006 - manufacture of Hydel gates and parts thereof - The benefit under the said notification was claimed by the appellant on the ground that the goods were cleared to NTPC under International Competitive Bidding - Held that: - condition No. 86 (b) (entry No.400) is required to be fulfilled in case of import of goods by the Central Public Sector Undertaking. The said condition does not have been any application with regard to manufacture of excisable goods within the factory. Thus, reliance placed by the learned Commissioner (Appeals) on the said condition in order to deny the benefit of exemption is not correct and proper. As regards non-registration under the project import regulation, the Department had not proposed for the said aspect in the show cause notice - the Tribunal in the case of appellant itself [2013 (11) TMI 1361 - CESTAT NEW DELHI] has also held that project import registration is not required for obtaining duty exemption contained in notification dated 01/03/2006. Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 932
CENVAT credit - It was observed that the assessee had availed cenvat credit on input services on the invoices issued by these consignment agents and the same appeared to be not correct as per Rule 2(l) of the CCR, 2004 - Held that: - the issue of entitlement of cenvat credit on input services provided by commission agent was pointed out by the audit on 08.12.2009 and thereafter a show-cause notice was issued on 18.04.2013 after the expiry of four years from the date of audit which is clearly barred by limitation - even on merit the issue is covered in favor of the assessee because the sales promotion has been specifically included in the definition of ‘input service' and vide N/N. 2/2016 CE dated 03.02.2016 it has been clarified that the sales promotion includes services by way of sale of dutiable goods on commission basis and this notification is made applicable retrospectively as held in the Essar Steels India Ltd. [2016 (4) TMI 232 - CESTAT AHMEDABAD] - appeal dismissed - decided against Revenue.
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2017 (7) TMI 931
CENVAT credit - MS angles, plates, channels, joists, beams, etc., used for fabrication of supporting structures for the capital goods - Held that: - the impugned order passed by the Commissioner (A) mainly relying upon the judgment of the Karnataka High Court in the case of CCE Vs. SLR Steels Ltd. [2012 (9) TMI 169 - KARNATAKA HIGH COURT] is in accordance with law - it was held that in the case of SLR Steels Ltd., that appellate authority committed a serious error firstly in holding that the storage tank is an immovable property and secondly, on the ground that it cannot be bought and sold in the market, the criteria which is totally unwarranted - appeal dismissed - decided against Revenue.
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2017 (7) TMI 930
Large Taxpayer Unit - Suo moto availment of CENVAT credit - Held that: - it is not the CENVAT credit which was availed by the appellant suo moto rather the appellant made adjustment for the excess duty which was paid by him for the month of November 2006 to February 2007 and by clerical mistake he has paid the duty twice and made the self-adjustment after realizing his mistake which is permitted in terms of Rule 12BB applicable to LTU - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (7) TMI 928
Attachment of the petitioner’s stock of footwear - validity of the action of the State authority in attaching the petitioner’s accounts - Held that: - we may continue the attachment but would permit the petitioner to rotate the stock. This on one hand would safeguard the interest of the revenue and at the same time would enable the petitioner to sell the product without the possibility of the market value of the footwear diminishing due to passage of time. Insofar as the attachment of accounts and other documents is concerned, the authorities have not demonstrated any reason for exercising powers under subsection (4) of Section 67 nor any reasons have been recorded before exercising such powers. The powers being drastic, the authorities must demonstrate satisfaction of pre conditions before exercise of such powers. However, we would permit the department to retain xerox copies duly authenticated of the documents already seized before returning them to the petitioner. Petition allowed - decided partly in favor of petitioner.
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2017 (7) TMI 927
Recovery of tax arrears - attachment of the petitioner’s residential-cum-office premises - collection of post dated cheques from the petitioner - Held that: - we find that the powers under section 45(1) of the Act have been delegated to the Commercial Tax Officer. We may record that sub-section (6) of Section 16 authorizes the Commissioner to delegate his powers under the Act into the Deputy Commissioner, Assistant Commissioner, Commercial Tax Officer or other officer within his jurisdiction. The first challenge of the petitioner to the attachment of the immovable property, therefore, cannot be accepted. Collection of post dated cheques - Held that: - There is no authority in law in which the tax authorities can forcibly collect post dated cheques. Under the circumstances, the respondents are directed to not present the post dated cheques collected from the petitioner for realisation and return the said cheques. We make it clear that in present case, the raid was carried out on 02.05.2017, when the cheques were collected and the petition was filed promptly on 08.05.2017 without any loss of time. This would, therefore, demonstrate the petitioner’s bona fides. Petition allowed - decided in favor of petitioner.
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Indian Laws
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2017 (7) TMI 924
Offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - Held that:- As during the pendency of the revision case before the High Court the matter was compromised. Learned counsel for the appellant submits that the entire amount has been paid to the first respondent. Learned counsel for the first respondent submits that the first respondent has received the entire amount. Therefore, he has no objection if the conviction already recorded under Section 138 of the NI Act is set aside. Since the parties have settled their disputes, we allow the parties to compound the offence, set aside the judgment of the courts below and acquit the appellant of the charges against her.
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