TMI Tax Updates - e-Newsletter
July 30, 2014
Case Laws in this Newsletter:
Income Tax
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Notice u/s 226(3) Since the petitioner had appeared and participated in the proceedings, the order of the Tax Recovery Officer treating the petitioner as an assessee in default cannot continue any longer. - HC
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Income Tax:
Taxability u/s 45(5)(b) Transfer of capital asset - the compensation awarded in the first instance would continue to be chargeable as income under the head capital gains, in the previous year in which the transfer took place - HC
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Income Tax:
Allowability of depreciation on enhanced value Tribunal has not properly appreciated and considered the relevant provision of Section 43(1), more particularly, explanation 3 of Section 43(1) which was prevailing at the relevant time - HC
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Income Tax:
Existence of partnership firm - For the purpose of determining the value of property, which is allotted to the respective partners on dissolution, it is only the market value that becomes relevant; and that exactly was taken into account - HC
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Income Tax:
Rejection of expenses on obtention of Keyman Insurance Policy It is not a term Assurance Policy Plan as per IRDA guidelines - expenses rightly disallowed - AT
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Income Tax:
The income received by the assessee from employer of deceased wife of the assessee and when the country of source has deducted tax and assessee received amount after deduction of tax, then the same income cannot be taxed second time in the other contracting state i.e. India - AT
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Income Tax:
TDS u/s 194-I or u/s 194C - rental for the use of transmission line - Section 194 I has no application so far as the payments for transmission of electricity is concerned - AT
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Income Tax:
Exemption u/s 11 - whereas the aseesee has spent corpus donation for 35AC projects and the same cannot be the basis for denying the benefits of exemption as the latter is not prohibited by the provisions of the Act - AT
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Service Tax:
Classification - Works Contract service or erection, commissioning or installation service - nature of contract is pure labor contract or not - held that contract in question is of works contract - AT
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Service Tax:
Design, development of software, development of detailed engineering, procurement, fabrication of proto type of air craft. Prima facie, the activities did not appear to be covered by the Consulting Engineers Service - AT
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Service Tax:
Demand of service tax on reverse charge basis - Payment of pre deposit done from CENVAT Credit account - the pre-deposit made is not proper - AT
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Service Tax:
Valuation - Management, maintenance or repairs - The materials used for repair cannot be considered as spare parts - value of material to be included in the value of services - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (7) TMI 1005
Interest earned on Short term deposits Security for obtaining letters of credit Nature of expenses Capital receipt or not - Whether the interest earned on the short term deposits (FDRs) made for the purpose of providing security for obtaining the letters of credit (LC's) to be opened for import of plant and machinery was assessable as income under the head "income from other sources and whether it is liable to be adjusted against the pre-operative cost of the plant and machinery Held that:- Source of investment is not relevant, whether it has come from the share application money or from other sources, but certainly money has not come from the production as during the assessment year, the production had not started - assessee has kept the available funds in the FDRs for a short period and earned the interest the deposit was made under the compulsion for having the letter of credit - Without letter of credit/bank guarantee, plant and machinery cannot be imported and without plant and machinery, factory cannot be established - any income earned on such deposit is incidental acquisition of assets for setting up of the plant and machinery Relying upon CIT Vs. Karnal Co-operative Sugar Mills Ltd. [1999 (4) TMI 7 - SUPREME Cour] thus, the claim of the assessee is allowable - The interest earned on the short term deposit, felicitate the letter of credit/bank guarantee, is to be treated as pre-operative expenses Decided in favour of Assessee.
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2014 (7) TMI 1004
Notice u/s 226(3) Amount due from garnishee as tax arrears Held that:- The Tax Recovery Officer had issued a notice dated 17.3.2008 treating the assessee to be an assessee in default on account of non-payment of the amount as per the notice u/s 226(3) of the Act - revenue knew about the petitioner's address at Varanasi but chose to sent the notice at Kanpur's address - The initial notice sent u/s 226(3) of the Act was not served as it was not sent at the appropriate address and consequently the action taken by the revenue pursuant to the notice u/s 226(3) of the Act without ensuring service becomes bad in law - the irregularity, if any, in non-service of the notice u/s 226(3) of the Act is deemed to be cured upon the assessee's subsequently appearing on 15.4.2008 and participating in the proceedings by production of its books of account and filing an affidavit of denial on 17.4.2008. The assessee has contended that it had advanced certain sums of money to the petitioner and, therefore, the petitioner is its debtor, but, the petitioner has denied this assertion - no steps have been taken by the assessee, namely, M/s Rich Capital and Financial Services Ltd. initiating any proceeding for recovery of that amount before any forum or any appropriate court of law - Since the petitioner had appeared and participated in the proceedings, the order of the Tax Recovery Officer treating the petitioner as an assessee in default cannot continue any longer. The denial by the petitioner to pay any amount, the attachment made by the Tax Recovery Officer cannot continue any further, especially when the Court finds that till date no inquiry has been made by the revenue into the genuineness of the affidavits filed by the petitioner - the order treating the petitioner as an assessee in default cannot be sustained and is quashed there was no justification in continuing with the attachment order and it is also quashed - A writ of mandamus is issued commanding the Tax Recovery Officer to ensure that 1,70,000 equity shares of Jhunjhunwala Vanaspati Ltd. is transferred again in the Demat Account of the petitioner with Karvy Stock Broking Ltd. within two weeks from the date of the production of a certified copy of the order. If any dividend was received by the Tax Recovery Officer on these shares, the said amount shall also be transferred to the petitioner Decided in favour of Assessee.
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2014 (7) TMI 1003
Revision u/s 263 - Disallowance u/s 14A Held that:- Without pronouncing whether the figures given by the assessee were incorrect, the Commissioner recorded that this required verification from the records - This is impermissible and cannot be allowed u/s 263 as the Commissioner must reach the finding that the assessment order restricting disallowance under Section 14A to ₹ 45,07,413/- was erroneous and incorrect order of the Tribunal upheld Decided against Revenue. Loans/assets written off Held that:- Once inquiries were conducted and a decision was reached by the AO, it cannot be said that it was a case of no inquiry - the Commissioner must reach a finding that the finding of the AO was erroneous, not because no inquiries were conducted, but because the final finding was wrong and untenable - order of the Tribunal upheld Decided against Revenue. Sale of agricultural land Claim of exemption u/s 54B Held that:- Commissioner was not that the AO had not made any inquiries, but that the Assessing Officer had not properly applied his mind and deliberated upon the issue - This does not meet the statutory requirement that the order passed by the AO was erroneous - Once inquiries were held and the AO formed a belief, the finding/opinion formed can be set aside only when it is erroneous and not because no inquires or inadequate inquiries were conducted - order of the Tribunal upheld Decided against Revenue.
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2014 (7) TMI 1002
Taxability u/s 45(5)(b) Transfer of capital asset - Held that:- Section 45(5) is inserted to provide for taxation of additional compensation in the year of receipt instead of in the year of transfer of the capital asset - additional compensation is treated as deemed income in the hands of the recipient even if the actual recipient happens to be a person different from the original transferor by reason of death, etc. For this purpose, the cost of acquisition in the hands of the receiver of the additional compensation is deemed to be nil Section 45(5) was an overriding provision and took care of the situation where the capital gains arose from transfer of a capital asset being a transfer by way of compulsory acquisition and the compensation for such transfer was enhanced in stages by a court, tribunal or authority. Following the decision in Commissioner of Income Tax Vs. Ghanshyam (HUF), [2009 (7) TMI 12 - SUPREME COURT] - the Finance Act, 1987 inserted Section 45(5) to provide for taxation of additional compensation in the year of receipt instead of in the year of transfer of the capital asset. Accordingly, additional compensation is treated as deemed income in the hands of the recipient even if the actual recipient happens to be a person different from the original transferor by reason of death, etc. For this purpose, the cost of acquisition in the hands of the receiver of the additional compensation is deemed to be nil. However, the compensation awarded in the first instance would continue to be chargeable as income under the head capital gains, in the previous year in which the transfer took place - addition made by AO was in accordance with law i.e. Section 45(5) of the Act Decided in favour of Revenue.
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2014 (7) TMI 1001
Allowability of depreciation on enhanced value Approval of DCIT before application of Explanation 3 of section 43(1) Held that:- Tribunal has not considered the issue with respect to depreciation on enhanced value to the successor firm and not written down the value on merits and had held against the revenue solely on the ground that the AO had not obtained approval of the Deputy Commissioner before applying Explanation 3 of Section 43(1) of the Act - Tribunal has not properly appreciated and considered the relevant provision of Section 43(1), more particularly, explanation 3 of Section 43(1) which was prevailing at the relevant time the matter is remitted back to the Tribunal Decided in favour of Revenue. Whether the Tribunal is right in confirming the order passed by the CIT(A) directing the AO to make two assessments for the two periods Held that:- Mere change in the constitution of the firm within the meaning of section 187 was not correct and it must be held that this is a case of succession within the meaning of section 188 and the case did not fall under the provisions of section 187 of the Act - Following the decision in Commissioner of Income-Tax Versus Amritlal Nihalchand [992 (1) TMI 6 - SUPREME Court] - there was succession of the firm and is held against the revenue Decided against Revenue.
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2014 (7) TMI 1000
Deduction u/s 80IA Manufacturing unit set up at Daman - Whether cutting and polishing of Diamond is not a manufacturing activity or not Held that:- The assessee gave the details as to how the silver was acquired by him - assessee had carried on activity of manufacturing of Diamond Studded Silver Jewellery, he filed all the details by addressing various letters - That proved purchases, sales, consumption of silver in manufacturing of Diamond Studded Silver Jewellery, list of workers and that there were 10 workers in Diamond Division and 23 in Jewellery division - clarifications from the consultant, certificate from the Sales Tax Department, Daman, all this material remained uncontroverted - Diamond Studded Silver Jewellery, sold to M/s. Shukra Jewellery Ltd. was termed as 'manufacture' - the claim u/s 80IA was granted - Tribunal has referred to all the materials, thus, the order of the Tribunal is upheld Decided against Revenue.
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2014 (7) TMI 999
Imposition of penalty u/s 271(1)(c) Held that:- Merely because the Assessee raised a claim which was eventually disallowed, does not mean that ingredients of clause(c) are satisfied or fulfilled so as to justify imposition of penalty - Tribunal followed the decision in Commissioner of Income Tax v/s Reliance Petro products Pvt Ltd [2010 (3) TMI 80 - SUPREME COURT] - Revenue officers must realize that just like other powers an executive power conferred in them is in the nature of a Trust - They hold office as trustees of the public at large - They deal with public revenue and public money and that cannot be wasted in such frivolous litigation appeal dismissed with costs Decided against Revenue.
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2014 (7) TMI 998
Existence of partnership firm - Nature of the firm and legal consequences flowing from it - Intention to carry on business - Whether the firm was only a nominal entity - Held that:- The firm is brought into existence through a registered document and separate returns are field on behalf of the firm, posting profits and furnishing other ingredients of a typical return, one cannot expect the ITO to ignore the existence of the firm - as a result of dissolution of the firm, redistribution of the properties took place in a manner, different from the one, in which they were held before the constitution of the firm - the existence of firm is acknowledged, thus, the applicant cannot plead to the contrary Decided against Assessee. Nature of property - Whether the immovable properties are capital asset or stock in trade of partnership Held that:- The manner, in which the value of an asset, which forms part of stock in trade of a firm must be arrived at as explained in ALA Firm Versus Commissioner of Income-Tax [1991 (2) TMI 1 - SUPREME Court] the principle is that the value can be determined on the basis of cost or market value and the assessee will have option to choose between lesser of them, provided the business or trade is being continued; in case the firm is dissolved or the business activity is discontinued, the market value alone becomes relevant - whatever may have been the liberty of an assessee to choose between the cost and market value of an asset, whichever is beneficial to him; that liberty stands taken away when the firm is dissolved, or the business activity is discontinued - For the purpose of determining the value of property, which is allotted to the respective partners on dissolution, it is only the market value that becomes relevant; and that exactly was taken into account Decided against Assessee.
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2014 (7) TMI 997
Exemption u/s 10(23G) - precondition for issuing bonds introduced by Finance Act, 1997, w.e.f.01.04.1998 - applicability of such preconditions on purchase of bond which were isued as on 18.2.1998 - Held that:- Once the bonds which had been issued, in respect of which exemption is claimed by the asseesee, were so issued on 18th February 1998, then, requirement of a notification in the official gazette as a condition precedent for exemption u/s 10(23G) of the Act, was inapplicable - the Tribunal was in no error in reversing the concurrent findings of facts it was clearly vitiated by any error of law apparent on the face of the record Decided against revenue.
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2014 (7) TMI 996
Computation of disallowance u/s 14A r.w. Rule 8D Tax free income from dividend Held that:- Assessee had earned tax free income in the form of dividend - assessee has submitted that the interest free funds available with the Assessee are in excess of investments relying upon CIT vs. Amod Stamping P. Ltd.[ 2014 (7) TMI 753 - GUJARAT HIGH COURT] - when Assessee was having interest free funds far in excess of investment it can be said that the investments are made out of interest free funds - the provisions of Rule 8D are not applicable as per GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the Assessee has suo moto disallowed u/s. 14A - no further disallowance over and above then what is made by the Assessee u/s. 14A read with Rule 8D is called for Decided in favour of Assessee. Disallowance u/s 43B Employees contribution to ESIC paid beyond prescribed dates Held that:- The amount of employees contribution towards ESIC has been deposited beyond the due dates prescribed under the relevant Act Relying upon COMMISSIONER OF INCOME TAX II Versus GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] - employees share of contribution of ESIC was paid after the prescribed due date, there was no reason to interfere with the order of CIT(A) Decided against Assessee.
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2014 (7) TMI 995
Assessment of income from sale of land Benami property - Held that:- The AO made the addition in the hands of the assessee on protective basis - CIT(A) directed the AO to treat it in the hands of the assessee on substantive basis on the basis of the Shri Man Mohan Raj Singhvi C/o Dinesh Bhandari & Co. Tax Consultants Versus The DCIT, Udaipur [2013 (6) TMI 401 - ITAT JODHPUR] - CIT(A) rightly directed the AO to treat the income in the hands of the assessee from the sale of land on substantive basis. Profit and gains from business OR capital gain Whether the income earned by the assessee was a business income or capital gain - Held that:- The assessee was not having any funds and raised the loans for purchasing the land - The motive of purchase was to earn the profit - The property was also not purchased for a longer period - assessee got the land converted into non-agricultural land and sold it immediately after conversion, the activity carried by the assessee was a business activity Relying upon Sawandas Devram Vs. CIT [1983 (9) TMI 57 - MADHYA PRADESH High Court] - the real intention of the assessee in acquiring the land was not to retain it for himself but to resell it at profit and as such the transaction was an adventure in the nature of trade thus, order passed by the CIT(A) on does not require any interference Decided against Revenue.
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2014 (7) TMI 994
Rejection of expenses on obtention of Keyman Insurance Policy Redemption amount already offered for taxation investment plans with accompanying insurance benefits - AO was of the view that the assessee has invested in Unit Linked Insurance Plan under Keyman Insurance Plan and it is not Keyman Insurance Policy as per the meaning given in the Income Tax Act - Held that:- As per definition of Keyman Insurance Policy, a person purchasing life insurance can only do so to the extent of his insurable interest in the assured - Following the decision in M/s. FC. Sondhi & Company (India) Pvt. Limited Versus Dy. Commr. of Income Tax [2014 (6) TMI 39 - ITAT AMRITSAR] - the policies have been taken from Unit Linked Investment Plan is investment plan, premium of which has been put into growth fund and it is not a Pure Life Insurance Policy on the life of another person - the policy itself does not fall under the definition of Keyman Insurance Police as defined under explanation to clause (c) of section 10(10D) of the Act - Unit Linked Insurance Plan, an Investment Plan, the purpose of which is guaranteed returns on the premium amount through investment in Units and Unit Linked Insurance Plan for which the premium is paid though wrongly claimed as an expenditure, which is not allowable as an expenditure - The Circular of IRDA has clarified the position and the arguments made by the ld. counsel that it is prospective in nature, cannot be accepted since the circular is clarificatory in nature. It is not a term Assurance Policy Plan as per IRDA guidelines - A nominal amount is being charged for mortality charges for life cover and balance amount has been deployed to purchase Units as per assessees choice - only a fraction of the total premium is meant for risk premium, the balance is for the deployment of purchase of units i.e. Investment in Units which in fact, cannot be claimed as business expenditure, which query, has never been explained by the assessee - It does not fulfill the condition of policy taken by a person on the life of another person as per definition of explanation to clause (c) of section 10(10D) of the Act thus, there was no infirmity in the order of the CIT(A) who has rightly upheld the order of AO Decided against Assessee.
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2014 (7) TMI 993
Reopening of assessment No tangible material to suggest escapement of income Held that:- AO has got the reports from the news papers and then AO also mentioned in the assessment order the steps taken for obtaining the information from Lokayukta, various enquiries caused including statements recorded from the Officers involved in export of iron ore before reopening assessment - AO has prima facie belief to reopen the assessment u/s 147 - At the stage of reopening the assessment, it is not necessary to examine the quantum of escapement - What is required to be verified is whether there is any belief for coming to a decision whether income has escaped assessment - there is prima facie belief for reopening the assessment it cannot be held that AO has no reason to believe at the time of reopening the proceedings Decided against assessee. Addition on suppression of sale Held that:- AO has taken exports by NMDC during the year at ₹ 726,39,88,999/- whereas in table at page 38 while making the addition, the sale value of export declared by NMDC was taken at ₹ 469,55,65,037 - Relying upon Mysore Minerals Ltd. vs. ACIT [2013 (9) TMI 676 - ITAT BANGALORE] there was no reason to confirm the addition of the amount, as the assessee company had furnished all the details required by the A.O. and assessee has accounted for all the amounts it received - There is no iota of information that assessee or any agent received any amount over and above the amounts accounted in the books of accounts - I.T. Act does not permit making additions on hypothetical income particularly, as suppression of sales when there is no evidence at all - Additions cannot be made on presumptions and hypothesis Decided in favour of Assessee. Additional depreciation on machinery Held that:- CIT(A) wrongly confirmed the addition made by the AO holding that exploration and sale of iron ore does not involve activity of production of any article or thing, ignoring the fact that assessee do extract the iron ore and sell the iron ore after various processes Relying upon Commissioner of Income-Tax Versus Sesa Goa Ltd. [2004 (11) TMI 14 - SUPREME Court] - extraction and processing of iron ore amounts to production - activity of winning or extracting the coal from the mines can be aptly described as production activity - on both principles of law and also on fact that assessee was allowed the additional depreciation in all other years, there was no reason to confirm the order of the CIT(A) Decided in favour of Assessee. Disallowance u/s 40(a)(ia) Non-deduction of tax on commission paid to MMTC Held that:- There was no reason to interfere with the order of the CIT(A) - since the assessee is not entitled to export directly and export by the MMTC was on principal basis, there can be no commission payment to MMTC, as such the question of sustaining the order of the AO in estimating the commission and disallowing the same u/s 40(a)(ia) does not arise - there is no claim of commission by assessee - Decided against Revenue. Addition of stamp duty and registration charges Capital in nature or not Held that:- Following the decision in CIT Vs. Panyam Cements and Minerals Industries Ltd. [1996 (9) TMI 49 - ANDHRA PRADESH High Court] - stamp duty paid for renewal of mining lease is a revenue expenditure - if the expenditure incurred by the assessee for first time with respect to the assets claimed as capital asset - the AO is correct in treating the amounts as capital in nature - expenditure incurred by the assessee for the first time with respect to the assets claimed as capital asset, depreciation has to be granted and then this expenditure is also to be considered as capital eligible for depreciation Decided partly in favour of Assessee. Claim on corporate social responsibility Expenses incurred wholly and exclusively for the purpose of business Held that:- The contribution is only a welfare measure for the upliftment of the Adivasis in the locality where the mining unit was situated and also for the welfare of the employees of the assessee - Following the decision in NMDC Ltd. Hyderabad Versus Joint Commissioner of Income-tax [2014 (3) TMI 682 - ITAT HYDERABAD] - This contribution would definitely go a long way in conducting the assessee's mining business in a profitable manner - indirectly all the contribution made by the assessee takes care of the education of the employees' children - This would certainly be a welfare measure on the part of the assessee for carrying out the business in an effective and efficient manner thus, the contribution has to be treated as revenue expenditure for the purpose of the business thus, there is no justification in disallowing the amount Decided in favour of Assessee. Disallowance of mine closure obligation Expenses accrued bases on the quantity extracted - Whether the CIT(A) has erred in disallowing the mine closure obligation to the extent relating to the project under construction or not having any production during the year Held that:- Mine closure obligation is not a contingent liability but ascertain liability - it has to be verified that whether assessee has made the claim on the mines which are in working condition which are being operated or not - Following the decision in NMDC Ltd. Hyderabad Versus Joint Commissioner of Income-tax [2014 (3) TMI 682 - ITAT HYDERABAD] - If the assessee has made the claim on mines which have not started operations, the same cannot be allowed - ascertainability of liability is to be ascertained year-wise - the assessee is directed to furnish the relevant data to the AO towards the mines closure obligation and A.O. is directed to verify and allow the amount accordingly Decided in favour of Revenue.
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2014 (7) TMI 992
Family pension received from UK Pension received from the employer of deceased wife covered under Article 23(1) of Indo-UK DTAA or not - The "pension" is received from the ex-employer by the assessee in his life time while "family pension" is received by the spouse or family members or legal dependent of the deceased employee from the employer of that deceased employee - the assessee received "family pension" from employer of asesseee's deceased wife, thus, it is not related to the pension but it is a clear case of family pension - any pension other than a pension referred to in Article 19(2) of this Convention, or annuity paid to a resident of a Contracting State shall be taxable only in that State. Article 23(3) is related to the items of income which are not included in the foregoing articles to Article 23(3) of this Convention, then notwithstanding the provisions of paragraphs (1) and (2) of Article 23, the same arising in the other contracting state may be taxed in that other state. "Family pension" which was not within the ambit of foregoing articles to the article 23 (3) of Indo-UK Treaty and arose in the other contracting state, may be taxed in other state and the said receipt of the family pension is beyond the purview of Article 23 of Indo-UK DTAA and the same is covered by the residuary article 23(3) of this Convention and, therefore, it was rightly taxed in U.K. i.e. source country - CIT(A) rightly held that the family pension received by the assessee from the employer of deceased wife of the assessee was rightly taxed at source in UK and no amount of family pension is thus taxable in India. Following the decision in DCIT v. Mideast India Ltd. [2009 (1) TMI 311 - ITAT DELHI-G] the expression "may be taxed in that other state" mentioned in Article 23(3) authorizes only the contracting state of source to tax such income and by necessary implication, the contracting state of resident is precluded from taxing such income, specially when the tax has been deducted by the contracting state of source and contracting state of the residence cannot tax it again in the hands of resident assessee - the income received by the assessee from employer of deceased wife of the assessee and when the country of source has deducted tax and assessee received amount after deduction of tax, then the same income cannot be taxed second time in the other contracting state i.e. India the order of the CIT(A) is upheld Decided against Revenue.
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2014 (7) TMI 991
TDS u/s 194-I or u/s 194C - rental for the use of transmission line - Whether the present arrangement under the Bulk Power Transmission Agreement can be termed can be covered by the scope of expression any other agreement or arrangement 'for the use of' appearing in Explanation (i) to Section 194-I Held that:- The assessee has no control over the operations of the transmission lines, and all that he gets from the arrangements is that he can draw the electrical power purchased from PGCIL's transmission lines in an agreed manner - relying upon Lakshmi Audio Visual Inc. v. Asstt. Commr. of Commercial Taxes [2001 (7) TMI 1253 - KARNATAKA HIGH COURT] - in a situation in which the payment in made for the use of an asset simpliciter, whether with control and possession in its legal sense or not, the payment could be said to be for the use of an asset When control of the asset always remains with the PGCIL, any payment made to the PGCIL for transmission of power on the transmission lines and infrastructure owned controlled and in physical possession of PGCIL can be said to have been made for 'the use of ' these transmission lines or other related infrastructure - Section 194 I has no application so far as the payments for transmission of electricity is concerned Decided against Revenue. Penalty u/s 271(1)(c) Held that:- Addition in AY 2006-07 has been deleted by the tribunal - Therefore there is no liability upon the assessee to pay taxes on the additions made therefore, it cannot be asked to pay penalty equivalent to taxes sought to be evaded - once there are no taxes sought to be evaded then, there cannot be any penalty u/s 271 (1)(c) CIT(A) has rightly held that no penalty is imposable upon the assessee because additions have already been deleted Decided against Revenue.
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2014 (7) TMI 990
Exemption u/s 11 - Accumulation of income - Amount added being less that 15% of total income Specified funds u/s 35AC - Held that:- the copies of the past assessment orders reveal that the assessee has been treated as a public charitable trust in the earlier years there was no basis for arriving at a conclusion that the assessee is engaged in the business of setting up and running of vocational training so as to presume that the assessee as a business entity in the year - Following the decision in ASSTT DIRECTOR OF INCOME TAX Versus STERLITE FOUNDATION (FORMERLY KNOWN AS VEDANTA FOUNDATION)[2013 (12) TMI 1056 - ITAT MUMBAI] - the assessee has not diverted any specified funds of 35AC projects towards non specified projects whereas the aseesee has spent corpus donation for 35AC projects and the same cannot be the basis for denying the benefits of exemption as the latter is not prohibited by the provisions of the Act Decided in favour of Assessee. Donation made to another charitable trust Held that:- According to the CBDT circular No.1132 dated 5.1.1978, the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purposes in the hands of the done trust and the donor trust will not lose exemption u/s 11 of the Act - Following the decision in ASSTT DIRECTOR OF INCOME TAX Versus STERLITE FOUNDATION (FORMERLY KNOWN AS VEDANTA FOUNDATION) [2013 (12) TMI 1056 - ITAT MUMBAI] - the charitable trust will not lose its exemption u/s 11, if it passes some money to another charitable trust, for utilisation by the donee trust towards its charitable purposes thus, the order of the CIT(A) is set aside Decided in favour of Assessee.
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2014 (7) TMI 989
Additional disallowance u/s 14A r.w. Rule 8D Held that:- The available funds with the assessee are far more than the borrowed funds & that the borrowings of the company in the immediately preceding year which has substantially come down which means that the investments have been made out of interest free funds i.e. assessees own funds - Following the decision in The Assistant Commissioner of Income Tax, Cir. 4(2), Versus M/s. Intime Spectrum Securities Ltd. [2012 (8) TMI 303 - ITAT, MUMBAI] - Therefore no disallowance can be made u/s. 14A - Decided in favour of assessee. Disallowance of foreign travelling expenses Held that:- The CIT(A) has allowed entire travelling expenditure for trips to Dubai and 50% of expenditure for trips to other places considering the submission that assessee is also engaged in the business of financial activities including leasing financial and advisory services and that the Directors had visited Dubai to study real estate market - as the issue in the year under question is same the same order is to be followed Decided in favour of assessee. Disallowance of STT as capital expenses Held that:- The assessee in this case is neither the purchaser nor the seller - He is merely a collecting agent of STT on behalf of the Government - the assessee has both collected the amount and paid the same to the Government - assessee being a broker has neither purchased shares on its own nor sold shares on its own - It was only an intermediary - section 40(a)(ib) of the Act does not get attracted in this case nor section 88E benefit can be extended to the assessee - Following the decision in M/s A.K. Equities Pvt. Ltd. Vs. ITO [2010 (2) TMI 1115 - ITAT MUMBAI] - Only when the purchaser or the seller claims a deduction of STT paid, then only 40(a)(ib) is attracted Decided in favour of Assessee. Disallowance of bad debts Held that:- The AO has disallowed the part claim of the assessee on the ground that the claim should be after adjusting all receivables by the assessee against the clients by sale of holdings by the assessee belonging to the clients - assessee has made the claim that the amount written off by the assessee pertaining to the outstanding receivables after considering any sale of client's holding and this fact has been examined by the CIT(A) - the amount of ₹ 2.92 crores was the balance after recoveries from the margin money/shares of the debtors and nothing has been brought on record by the AO to rebut the said claim of the assessee Following CIT Vs. Shreyas S. Morakhia [2010 (7) TMI 455 - ITAT MUMBAI] Decided in favour of Assessee.
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2014 (7) TMI 988
Deduction u/s 54F Computation of total income Compensation of land building from National Highway Securities - Held that:- The AO has allowed deduction on account of cost of acquisition of land and no deduction u/s.54F was given on the amount invested in construction of residential house - The compensation money received by him along with the loan amount was invested in the same building and when he constructed the house, there was no provision of plant and estimate - assessee has constructed the house which is evident from the copy of certificate of valuation by Municipal Engineer and moreover, assessee has requested the AO to call for the Engineer, who has given the certificate - AO has not called any information from the Municipality and he has disallowed the claim - the burden was shifted upon the AO to verify the genuineness of the certificate, which he has not done - no further opportunity may be given to the AO and the claim of the assessee u/s.54F of the Act is allowed Decided in favour of Assessee.
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2014 (7) TMI 987
Accrual of income / cash system of accounting - difference between income booked and as per TDS certificate - Suppression receipt Held that:- CIT(A) was rightly of the view that it has been certified by the tax auditors that the assessee was having cash system of accounting - CIT(A) has observed that money has been retained by the principal there was no mistake in the order of the CIT(A), as the difference amount was retention money with the principal "HIL" and the assessee was following cash system of accounting, and that the CIT(A) has directed the AO to withdraw the credit of TDS granted to the assessee to the extent it pertains to the income not offered for tax - the order of the CIT(A) is upheld Decided against Revenue.
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2014 (7) TMI 986
Additional depreciation on windmill for generation of power and electricity u/s 32(1)(iia) Activity neither manufacture or production of any article or thing Held that:- Following the decision in CIT vs. Hi Tech Arai Ltd. [2009 (9) TMI 60 - MADRAS HIGH COURT] the provision does not state that the setting up of a new machinery or plant, which was acquired and installed up to 31st March, 2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee - the contention that the setting up of a wind mill has nothing to do with the industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in s. 32(1)(iia) Decided against Revenue.
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Service Tax
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2014 (7) TMI 1020
Classification of service - Works Contract service or erection, commissioning or installation service - nature of contract is pure labor contract or not - Held that:- The appellants have from their records show that almost 31% of the contract value is represented by material value. - The assumption appears to be that in the said Service contract entered into by appellants with Power Grid Corporation of India Ltd., there is no transfer of property in goods. This assumption is based on incorrect appreciation of facts. The records shown by appellants indicate that a significant percentage of the total contract work under the Service Contract' involves material component. Therefore we hold that there is transfer of property in goods involved in the execution of the Service Contract. - Decided in favor of assessee. The appellants pay Sales Tax/Vat on the transfer of property in the goods involved in execution of the Service contract. Copies of VAT returns have also been placed on record. Therefore, the second aspect that goods in the Service Contract are leviable to tax as sale of goods, is also fulfilled. Benefit of composition scheme - Held that:- it is quite clear that from 7.7.2009, the Composition Scheme was restricted to such Works Contracts where the value of goods used whether supplied under any other contract, is to be included. The change in Rules is not a mere clarification of the earlier Rules. There has been a clear amendment in law from 7.7.2009. The period of dispute in the case of appellant is from April 2008 to March 2012, and Revenue does not dispute that the contract had commenced before 7.7.2009. Therefore, the amended Rules would not apply in the case of appellant in accordance with the proviso to the Explanation in the amended Rules - appellants have correctly availed the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. - Decided in favor of assessee.
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2014 (7) TMI 1019
Management, Maintenance and Repair Services - Consulting Engineer service - activity of supply of spares, refurbishing and upgradation of air craft and other defence equipments for defence purposes - Held that:- In the case of Management, Maintenance and Repair Services, there are 5 agreements considered. Even in the reproduction of the findings of the Commissioner, it is mentioned that the agreement No. 4 is for upgradation of navigation and weapon system Maintenance Simulator and carrying out the related services according to suppliers Technical Proposal. Sl. No. 5 in paragraph 75 covers upgradation of Sea Harrier. We are unable to understand how upgradation of particular equipment or an air craft can amount to Management, Maintenance or Repair Service - in agreement No. 1 the details of which are not discussed by the Commissioner was for design, development of software, development of detailed engineering, procurement, fabrication of proto type of air craft, development of new aircrafts, training etc. Prima facie we do not find any basis for the conclusion reached by the Commissioner that this agreement is for Management, Maintenance or Repairs. Matter needs a more detailed consideration of the agreements, the activities undertaken by the appellants in terms of the agreement and the basis for conclusion to classify any of the services in the taxable category. At this juncture it will not the out of place to mention that when an offence case is registered, the burden to prove that a taxable service has been rendered is on the Revenue and it is not of the assessee and in our opinion this burden has not been discharged in respect of both the services in this case The scope of the service of consulting engineering service is to render any advice on consultancy or technical assistance in any manner. From the definition it appears that the service has to be related to consultancy or technical assistance whereas from the agreement and from the summary of the agreements as reproduced by the Commissioner himself, the appellants are engaged in design, development of software, development of detailed engineering, procurement, fabrication of proto type of air craft. Prima facie, the activities undertaken by the appellants did not appear to be covered by the Consulting Engineers Service - matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 1018
Waiver of pre deposit - Demand of service tax on reverse charge basis - Payment of pre deposit done from CENVAT Credit account - Whether pre-deposit of service tax by a recipient of service as per provisions of section 66A, utilizing Cenvat credit is legally proper - Held that:- credit and its utilization for payment of subsequent liability was making the entire levy of service tax on goods transport agency meaningless because no collection was accruing to the government. It appears that the amendments made in legal provisions were to plug this loop hole - The effect of amendment made in Rule 2(p) w.e.f 01-03-2008 to exclude service of goods transport agency and the effect of Explanation added w.e.f. 01-07-2012 in Rule 3(4) is the same. However, it appears that there is no decision with reference to Cenvat Credit Rules as amended in Rule 3(4) on 01-07-12 by adding Explanation as stated above. In this case Cenvat credit has been utilized for payment of duty liability arising under section 66A of Finance Act, 1994 on service receiver after a specific Explanation prohibiting such use was introduced in Rule 4(4) with effect from 01-07-2012. Therefore, the pre-deposit made is not proper - However, time period for making pre deposit is extended - applicant allowed to reverse the credit already made in Cenvat account for complying with stay order - Decided partly in favour of assessee.
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2014 (7) TMI 1017
Development of land activity - Construction of complex - Held that:- The development of land for township is not covered by the definition of construction of complex service as given in Section 65 (105) (zzzh) readwith Section 65 (39a) and 65 (91a) or by the definition of Works Contract Service in Section 65 (105) (zzzza) w.e.f. 01/06/2007. It is not even disputed that the construction of residential complexes was undertaken by other contractors and not by the appellant. In view of this, the service tax demand from the appellant firm by treating their activity as taxable under Section 65 (105) (zzzh) as construction of complex service upto 30/05/2007 and under Section 65 (105) (zzzza) as Works Contract Service w.e.f. 01/06/2007 is not sustainable - Decided in favour of assessee.
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2014 (7) TMI 1014
Denial of refund claim to SEZ unit - authorized operations - Denial on the ground that the appellant has received the Scientific and Technical Consultancy Services which are not related to the authorized operation of the appellant which is in the list - Held that:- as regards non-inclusion of services of Scientific and Technical Services, in the letter dated 20th May, 2010, office of the Development Commissioner, KASEZ, Ahmedabad, at Entry Nos. 37 and 84, of the list, specifically indicated the Scientific or Technical Consultancy Services and technical testing and analysis as services for authorized operation of appellant. It is un-disputed that these services which are rendered by Cadila was in respect of the products manufactured by the appellants, which need study as regards research and analysis and testing. These activities are must for pharmaceutical industry before marketing and/or exporting the final products - reasons given by the First Appellate Authority as well as the Adjudicating Authority for rejecting the refund claim seems to be misconstrued - Following decision of Cadila Health Care Ltd. [2009 (8) TMI 172 - CESTAT, AHMEDABAD] - Decided in favour of assessee.
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2014 (7) TMI 1013
Denial of CENVAT Credit - GTA Service - Whether in respect of clearances from the factory gate directly to the customers the appellant would be eligible for cenvat credit in respect of GTA services availed for transportation of cement upto the customers premises - Held that:- the prima facie the definition of place of removal in Section 4 of the Central Excise Act, 1944 can be adopted for the purpose of Cenvat Credit Rules, 2004 only in those cases where the final product is chargeable to duty at an ad valorem rate on the value determined under Section 4 i.e. when the provisions of Section 4 are applicable for determining the duty leviable on the goods and the definition of place of removal in Section 4 would not be applicable for the purpose of Cenvat Credit Rules, 2004 when the final product is chargeable to duty at a specific rate or of at ad valorem rate, on the value determined under Section 4A or on tariff value fixed under Section 3(2). Prima facie when the rate of duty on the final product is specific, the definition of place of removal, as given in Section 4, which is only for the purpose of this section, cannot be adopted for the purpose of Cenvat Credit Rules and in such cases, the place of removal would be the place on removal from which duty is payable on the goods, which in this case, would be the factory gate. Therefore, the Appellant cannot be said to be having prima facie case in their favour and some conditions have to be imposed for safeguarding the interests of Revenue. - stay granted partly.
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2014 (7) TMI 1012
Waiver of pre-deposit - Cargo handling service - whether by way of loading, unloading or transportation or stacking - within the factory premises of RINL these activities would not fall within the ambit of cargo handling service - Held that:- The demand under management, maintenance or repair service is to the tune of ₹ 98 lakhs, that under commercial or industrial construction service is to the tune of ₹ 38 lakhs and the rest of the demand (a little over ₹ 1 lakh) is under manpower recruitment or supply agency service - Prima facie, from the description of works, it appears that the first appellant was handling cargo of RINL. This activity was undertaken by way of loading, unloading, stacking etc. and, of course, incidental transportation of the goods also. We are not impressed with the argument that goods are different from cargo. Incidental transportation of any goods would not per se take out such activities from the purview of the definition of cargo handling service - It is not the case of the appellant that they voluntarily disclosed their activities to the department. The departmental knowledge referred to by the learned counsel might be related to visits by the Range Officer to the factory of RINL. But there is nothing on record to show that there was any positive act or gesture on the appellants part to disclose the material facts to the department or to communicate to the department that they had ever maintained a bona fide belief against service tax liability. The plea of financial hardships raised by the learned counsel has also been considered. The first appellant is a public sector undertaking and the balance sheet produced by them indicates some losses for the year ended 31-3-2011 - Appellant has no prima facie case on merits - stay granted partly. Demand of service tax from Sub-contractor - Held that:- There was a circular of the Board, issued in 1997, which also prompted the second appellant to believe that they would not be liable to pay service tax qua sub-contractor. It was only in 2007 that the Board changed the view and clarified that a sub-contractor would also be liable like the main contractor for payment of service tax in respect of a given work. The period of dispute in this case is October 2002 - March 2007. - Full stay granted in respect of sub-contractor.
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2014 (7) TMI 1008
Valuation - Management, maintenance or repairs - Inclusion of the value of material and consumables for the purpose of discharging the liability under the Service Tax - Notification 12/2003-ST - appellants were clearing the goods under a consolidated invoice and uniformly taking 80% of the value of material and consumables and 20% towards the service. - The appellants' contention is that the material and consumables were sold on payment of appropriate VAT hence the value of material and consumables are not to be taken into consideration for the purpose of service tax - Held that:- as per the provisions of the above Notification, there is a condition that there should be documentary proof specifically indicating the value of goods and material sold - There is no separate invoice regarding the sale of goods and material - The materials used for repair cannot be considered as spare parts, therefore the ratio of the above decision is not applicable on the facts of the present case. - Decision in the case of Wipro GE Medical System Pvt. Ltd (2008 (8) TMI 207 - CESTAT, BANGALORE) distinguished. The activity undertaken by the appellants is more akin to the activity under consideration in the case of Safety Retreading Co. (2012 (6) TMI 719 - CESTAT, CHENNAI (THIRD MEMBER)), therefore the ratio of the above decision is fully applicable on the facts of the present case - no merit in the contention of the appellants that the value of material is not to be taken into consideration for purpose of service tax. - Decided against the assessee. Extended period of limitation - Held that:- demand is for the period July 2003 to March 2008 and the show cause notice was issued on 7.10.2008 alleging suppression with intent to evade payment of tax. - in response to queries raised by the Revenue vide letter dated 25.10.2005, the appellants explained their position regarding payment of service tax. - audit raised an objection on 16.12.2006 - the allegation of suppression with intent to evade payment of tax is not sustainable. - the demand beyond the normal period of limitation is not sustainable and set aside. - penalties also waived - Decided partly in favour of assessee.
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Central Excise
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2014 (7) TMI 1027
Availment of wrongful credit - Goods not received but credit availed - Credit reversed befor issuance of SCN - Levy of penalty - Whether the appellants have availed the Cenvat credit on the basis of the Cenvatable invoices issued by M/s HSAL, without actually receiving the inputs - Held that:- The investigations conducted at the end of the manufacturer, transporter as also the appellant resulted in emergence of evidence clearly pointing out to the fact of wrong availment of credit. The manufacturers statement is not a general statement laying down in some cases the credit has been based on without the corresponding supply of goods. It is a specific statement laying down that only Cenvatable invoices were issued in the name of the appellant whereas the inputs were diverted to other manufacturer at Jodhpur and Ahmedabad. Revenue has conducted further investigations from the transporters as also from the owners of the truck mentioned in the invoices. The said investigations also resulted in establishing the fact that the trucks in question were never used for transportation of the goods from M/s HSAL to the appellants factory premises. All the representatives of the transporter as also the owners of the truck have clarified such position. Further the appellants authorised representative has clearly accepted the fact that no inputs were received by them and they had taken the credit on the basis only the Cenvatable invoices. Similarly the fact of payment of the Cenvat credit by reversing the entries in the Cenvat account before the issuance of the Show Cause Notice is not sufficient to accept the appellants contention that no penalty should be imposed upon them. In cases of fraud, mere deposit of the duty before the issuance of the Show Cause Notice is not sufficient for non-invocation of the penal provision. - Decided against assessee.
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2014 (7) TMI 1026
Clandestine removal - manufacture of aerated water - appellant was draining out the aerated water without entering it first in the R.G.-1 register - water was not fit for human consumption - not in conformity with the specifications provided under the Prevention of Food Adulteration Act and Weights and Measures Act, 1976 - Held that:- R.G.1 register only a finished product is required to be entered. - a finished product is a manufactured goods which is marketable. Under filled or over filled or badly crowned caps bottles cannot be treated as being fully manufactured nor could it be treated as finished goods and, consequently, there was no occasion for such goods to be entered in R.G.1 register. The finished goods after undergoing the screening test are only required to be accounted for in R.G.1 register having found that they are fit for sale. The authority had misdirected itself in holding that under filled, over filled, badly crowned cap bottles and even contaminated bottles were required to be entered in R.G.1 register. The authorities were wholly incorrect and misdirected itself in coming to the conclusion that since these under filled, overfilled, badly crowned bottles were not entered in R.G.1 register, it amounts to clandestine removal of goods without payment of excise duty, is patently erroneous. - Demand set aside - Decided in favor of assessee.
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2014 (7) TMI 1025
Waiver of pre-deposit - 50% stay order was already grated - review of order - Held that:- A perusal of the order passed by the Tribunal discloses that several contentions urged on behalf of the petitioner were taken into account, and they were dealt with extensively. From the order, it does not appear that the ground of financial incapacity or inability was not dealt with by the Tribunal, obviously because it was not pressed. The discussion was undertaken mostly on the contentions, touching upon the legality, or prima facie case. - order dated 09-01-2014, passed in C.E.A.No.48 of 2014 recalled - matter remanded to the Tribunal for fresh consideration and disposal only for the limited aspect.
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2014 (7) TMI 1024
Restoration of appeal - appeals were dismissed for non-prosecution - advocate was preoccupied before Sales Tax Authority, Bangalore and he informed his clerk to take instructions from this Tribunal who had not taken proper steps. Held that:- there is sufficient reason to recall order dt. 6.6.2012. - the ex-parte order dt. 6.6.2012 is recalled and the COD applications and the appeals are restored to its original numbers. Condonation of delay of 413 days - Held that:- the reason for delay is mainly for obtaining requisite departmental approval for filing the appeal from the higher authorities. It is seen that the delay is caused for taking approval from higher authorities for 413 days which cannot be accepted as sufficient reason for condonation of delay. Accordingly, the COD applications filed by the appellant are rejected. - Conononatin of delay dened - Decided against the assessee.
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2014 (7) TMI 1023
Classification of Polymer Modified Bitumen (PMB) and Crumbled Rubber Modified Bitumen (CRMB) - manufacturing from Petroleum Bitumen - classification under TSH No. 27150090 or under 27132000 of the CETA - Held that:- PMB or CRMB cannot be treated as bituminous mixtures falling under CSH 27150090 and was continued to be classified under CSH 27132000 pertaining to tariff for petroleum bitumen. - Decision in the case of Osnar Chemical Pvt. Ltd (2012 (1) TMI 27 - Supreme Court of India) followed - Decided in favor of assessee.
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2014 (7) TMI 1022
Failure to produce certificates as required under exemption Notification No. 6/2006-CE from the Project Implementing Authority - Held that:- the adjudicating authority has correctly confirmed the demands along with interest - since the appellant had always been informing the lower authorities about the intention of claiming benefit of Notification No. 6/2006, we are of the view that penalty which has been imposed on the appellant seems to be excessive. - penalty reduced to ₹ 1,00,000 lakh only.
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2014 (7) TMI 1021
Cenvat Credit - non receipt of inputs with invoice - fraudulent credit - revenue entertained a view that said manufacturing unit was only issuing cenvatable invoices to various manufacturers without actually sending the corresponding goods - Held that:- The manufacturers statement is not a general statement laying down in some cases the credit has been based on without the corresponding supply of goods. It is a specific statement laying down that only Cenvatable invoices were issued in the name of the appellant whereas the inputs were diverted to other manufacturer. The matter does not rest at this point only. Revenue has conducted further investigations from the transporters as also from the owners of the truck mentioned in the invoices. The said investigations also resulted in establishing the fact that the trucks in question were never used for transportation of the goods from M/s HSAL to the appellants factory premises. All the representatives of the transporter as also the owners of the truck have clarified such position. There is no justification for allowing the Cenvat credit - demand confirmed - appellants to pay the entire dues along with 25% of penalties within a period of 30 days from the date of receipt of order. - Decided against the assessee.
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2014 (7) TMI 1015
Waiver of pre deposit - 100% EOU - Determination of rate of duty - Goods cleared into DTA against advance DTA sole permission - Notification No. 23/2003-C.E. (Sl. No. 2) of the Table to the Notification prescribes a concessional rate of duty in respect of DTA clearances made by a 100% EOU, which is subject to certain conditions, as mentioned in this notification - Held that:- Since, the exemption Notification No. 23/2003-C.E. in terms of its condition in provides concessional rate of duty only to the goods cleared into domestic tariff area in accordance with sub-para (a), (d), (e) or (g) of para 6.8 of the Foreign Trade Policy and since it does not cover the goods cleared into DTA against advance DTA sale permission given under sub-para (k) of para 6.8 of the Foreign Trade Policy, it is very clear that the goods sold Into DTA against advance DTA sales permission granted under para 6.8(k) are not covered by this notification. While in terms of the conditions of this notification, the product being sold into DTA must be similar to the product being exported, in this case prima facie the product clear into DTA - O-Ring and the products exported - Striker bumpers and nut seals are not similar. The fact that the advance DTA clearances in terms of para 6.8(k) of the Foreign Trade Policy are not covered by this exemption notification is also clear from the Condition (II)(b) of the notification, according to which the total value of the goods cleared into DTA under sub-para (a), (d), (e) and (g) of para 6.8 does not exceed 50% of the FOB value of exports made during the financial year. Prima facie appellant were not entitled for concessional rate of duty under Notification No. 23/2003-C.E. in respect of advance DTA clearances made by them during the period from October 2006 to October 2007 - product being cleared into DTA and products being exported were not similar was never disclosed by the appellant to the department. Beside this, the appellant could not be unaware of the fact that while concessional rate of duty under Notification No. 23/2003-C.E. which they had erroneously availed, is available only when the DTA clearance are made under sub-para (a), (d), (e), (g) of the para 6.8 of the Foreign Trade Policy and the advance DTA clearances made under para 6.8(k) are not covered in this notification, they still availed of this notification - Prima facie case not in favour of assessee - Conditional stay granted.
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CST, VAT & Sales Tax
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2014 (7) TMI 1011
Denial of refund claim - tax paid on sale of bricks - Held that:- Court without going into the merits of the claim made by the petitioner, directs the respondent to consider the representation of the petitioner dated 02.05.2014, and pass appropriate orders on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order - Matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 1010
Restoration of input tax credit - Petitioner had reversed the entire input tax credit relating to transfer of goods, otherwise by way of sale outside the State of Tamil Nadu from the assessment year 2008-09, rather than retaining the Input Tax Credit in excess of 3% which caused a considerable loss to the petitioner company - Petitioner's request for restoration not considered - Held that:- without going into the merits of the averments raised in the writ petition as well as in the representation of the petitioner, dated 20.04.2012, directs the respondent to consider the representation of the petitioner, dated 20.04.2012 and to pass an appropriate order, on merits and in accordance with law, within a period of eight weeks from the date of receipt of a copy of this order - Decided in favour of assessee.
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2014 (7) TMI 1009
Exemption on sales in the course of import - Satisfactory document not filed - Assessee contends that that factual conclusions have been arrived at in the assessment orders and penalty orders without disclosing those facts to the petitioner - Held that:- exhibits P9 and P9(a) notices issued under sections 25(1) and 67(1) of the KVAT Act show that in both these notices, the petitioner was called upon to file objections and was also offered an opportunity of hearing. In response to these notices, the petitioner submitted the relevant bills of lading. On receipt of these bills, all that the first respondent has done is that he has gone through the documents produced by the petitioner, checked the transaction with the KAVATIS and has come to his conclusions which are stated in these orders. Similar is the case with the other factual conclusions stated in these orders - Thus, the conclusions arrived at in the impugned orders are based on the documents produced by the petitioner. For arriving at such conclusions, I do not think it was necessary for the respondent to have issued notice other than the notices issued under sections 25(1) and 67(1) of the KVAT Act - Hence, the remedy available to the petitioner is not in a proceeding under article 226 of the Constitution of India, but she has to seek statutory remedies available under the Act - Decided against assessee.
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2014 (7) TMI 1007
Penalty u/s 47 - Interception of vehicle - Held that:- The case was adjourned for the Government Pleader to obtain instructions. Accordingly, she has obtained instructions and it is submitted that the Department has decided to file revision against exhibit P1 order before this court and that it was therefore that exhibit P2 request of the petitioner was not considered - As already stated, exhibit P1 order was rendered by the Tribunal on November 30, 2012 and the petitioner obtained a copy of the order in the first week of January, 2013. It is thereafter that the petitioner sought release of the vehicle. Evidently therefore if the Department has taken efforts, they too would have got the copy of the order from the Tribunal so that revision can be filed without any further delay - reasonable time is granted to the Department to pursue the revisional remedy and in case they do not do so, it shall be the obligation of the Department to give effect to the Tribunal order and to release the excavator to the petitioner. Decided conditionally in favour of assessee.
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Indian Laws
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2014 (7) TMI 1006
Office under Section 34(1)(a) of the Chhattisgarh Excise Act, 1915 - illicit liquor - validity of conviction recorded by Judicial Magistrate First Class - sentence awarded to him is reduced to simple imprisonment for one month - Held that:- Chemical examination of illicit liquor is not mandatory, it can be proved in any other manner relying upon the other tests - test report submitted by Mukesh Agrawal, Excise Sub Inspector after holding the litmus and smell test identifying the liquor as intoxicant is clearly acceptable and Mr. Mukesh Agrawal, Excise Sub Inspector can be treated as an expert within the meaning of Section 45 of the Evidence Act and the trial Court and the appellate court have not committed any illegality in accepting the said report, identifying the liquor as intoxicant. It is well settled that scope of revision under Sections 397/401 of the Cr.P.C. is very limited. The trial Court as well as appellate Court have concurrently held that prosecution has succeeded in establishing the offence under Section 37(1)(a) of the Act of 1915 beyond reasonable doubt. After examining the said finding, this Court has reached to the conclusion that finding of fact recorded by both the courts below are based on evidence available on record. Once the finding of fact based on evidence available on record, this Court in excise of its revisional jurisdiction would not interfere with the finding of fact so arrived into. - revision petition dismissed - decided against the petitioner.
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