TMI Tax Updates - e-Newsletter
July 31, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Payment made on account of royalty to State Govt - payment of royalty in excess of 20% - Section 6A(4) of the Oilfield (Exploration and Development Act), 1948 - Certainly, we cannot liken it to hafta or extortion money, which appears to have been the intention - the amounts, which were paid, would not incur the opprobrium of being in violation of Section 37 - expenditure allowed - HC
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Income Tax:
Disallowance of Prior Period Expenses - if the prior period expenditure is disallowed on the ground that it does not pertain to this year, the assessing officer cannot blow hot and cold and accept the prior period income as pertaining to this year. - AT
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Income Tax:
Remission of unsecured loans - Assessee was not carrying on the business of obtaining loans and therefore the remission of loan cannot be considered to be a benefit arising out from the business. - AT
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Income Tax:
Offerings at the temple received in donation boxes - it is generally not only difficult but also not possible to maintain records - cannot be taxed as Anonymous donations u/s 115BBC - AT
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Income Tax:
Re-compute the deduction u/s 10A - The increase in sale price as a result of currency fluctuation impacts the sale price on which the exemption is to be calculated. - AT
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Income Tax:
Diversion of income by overriding title - payment to expartners or spouses of deceased partners - amount was a prior and overriding charge on the receipts of the firm in terms of the partnership deed - no addition - AT
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Income Tax:
Tax Audit - Determination of turnover for the purpose of section 44AB - assessee was having bona fide belief that his case is not liable to audit of the books as the value of stamp is not his turnover and has a role of commission agent - No Penalty u/s 271B - AT
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Income Tax:
Capital gain - Valuation of property - stamp valuation u/s 50C - if any variation in valuation came on account of final decision of Additional Collector (Stamp), can be rectified U/s 155(15) within four years from the end of the previous year, in which the order revising the value was passed in appeal or revision or reference - AT
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Customs:
Classification of vessels - Offshore Hunter - the correct classification would be CSTH 89019000 which covers "Other vessels for transport of the goods and other vessels for transport of both persons and goods." - benefit of exemption allowed - AT
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Service Tax:
Cenvat Credit - Reversal in case of Job work availing Exemption under Notification No. 8/2005 ST dated 01.03.2005 - Rule 6(1) of the Cenvat Credit Rules, 2004 cannot be invoked for denying Cenvat credit of input services used by the appellant factory for manufacture of job-worked goods - AT
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Service Tax:
Valuation - deduction of value of material used in the retreading of tyres - Notification No. 12/2003-ST dated 20.6.2003 - Merely because no rules are framed for computation, it does not follow that no tax is leviable - AT
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Service Tax:
CENVAT Credit - Having held that the legal services were provided to the dealers located outside India, for which the company has paid service consideration as also discharged the service tax, it has to be held that they are entitled to Cenvat credit of service tax paid - AT
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Service Tax:
Manpower Recruitment or Supply Agency service - deputation of staff to subsidiaries/group companies for stipulated work for a limited period cannot be considered as manpower supply - stay granted - AT
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Central Excise:
CENVAT Credit - GTA - place of removal - Since the sale had concluded only after the delivery of the goods was made at the address of the buyer, assessee would be entitled to the benefit of CENVAT credit on Service Tax paid on outward transportation of goods even after 01.04.2008 - HC
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VAT:
Classification of sale - auction by the forest corporation is an intrastate sale and not inter-state sale - HC refused to issue mandamus to the revenue to accept Form-C from the petitioner - HC
Articles
Notifications
News
Case Laws:
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Income Tax
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2015 (7) TMI 997
Interest income on securities - whether has to be taxed on the due basis only, instead of accrual basis as per the mercantile system of accounting followed by the assessee? - Tribunal accepting the plea of the assessee that the interest income on the securities has to be taxed on the due basis - Held that:- Tribunal has allowed the assessee's appeal by placing reliance upon the decision of this Court in Commissioner of Income Tax v. Bank of Rajasthan Ltd., reported in (2010 (4) TMI 217 - BOMBAY HIGH COURT) as well as the Special Bench decision of the Tribunal in Deputy Commissioner of Income Tax v. Bank of Bahrain & Kuwait BSC [2011 (1) TMI 1206 - ITAT MUMBAI] - Decided against revenue.
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2015 (7) TMI 996
Development charges - revenue v/s capital expenditure - Held that:- The Court is satisfied with the explanation offered by the Assessee that it is incurring development charges on research and testing of components and that this does not result in a benefit to it of an enduring nature so as to characterise the development charges as capital expenditure. The Court is of the view that testing of products and components is essentially a continuous process which permeates different accounting years. It is an integral part of a routine manufacturing and monitoring activity. It cannot obviously be a one-time event. The Revenue has not been able to persuade the Court that an error has been committed in any of the previous AYs where the Assessee's explanation was accepted and the expenditure on development charges was treated as revenue expenditure. In the facts and circumstances of the case, the Court is additionally persuaded to adopt the rule of consistency as explained in Radhasoami Satsang v. CIT (1991 (11) TMI 2 - SUPREME Court ) and decline the plea of the Revenue to remand the matter to the AO for a fresh determination. - Decided in favour of assessee.
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2015 (7) TMI 995
Expenditure incurred on Dry Docking - revenue v/s capital expenditure - Held that:- Substantial question of law already answered against the Revenue as decided in [2015 (6) TMI 104 - UTTARAKHAND HIGH COURT] wherein held according to the accepted principles, capital expenditure is something which is spent once for all, while revenue expenditure is that which has to be incurred from year to year. If the expenditure is to bring into existence or advantage for the enduring profit of the business, then expenditure may be capital in the nature but where the expenditure has direct nexus, connection or relation to the carrying on or conducting the business of the assessee, it must be recorded as an integral part of profit making process and hence revenue in nature. The maintenance of these vessels and rigs is a sine-qua-non for carrying on its business of exploration and production of oil. In the case of the appellant, expenditure was claimed as revenue. Therefore, of the opinion that AO was not right in disallowing the expenditure as capital expenditure - Decided against revenue. Payment made on account of royalty to State Govt. - payment of royalty in excess of 20% - restriction under Section 6A(4) of the Oilfield (Exploration and Development Act), 1948 - to be calculated on international price instead of discounted sale price in the nature of allowable business expenditure? - Held that:- The case set up by the Revenue that it is a case, which involves violation of the mandate of Section 37 in its explanation may not hold good. In this context, we would think that Section 6A may not be read in isolation; instead, we must also view it in the context of the notification read with resolution read with communication. Certainly, we cannot liken it to hafta or extortion money, which appears to have been the intention. It is very fairly conceded by the learned counsel for the Revenue, there is no question of any offence being committed. In fact, the respondents were only faithfully abiding by the decision of the Government of India. In the circumstances of this case, we are therefore of the view that the amounts, which were paid, would not incur the opprobrium of being in violation of Section 37. There is no dispute that all the other ingredients required to sanction the expenditure as expenditure under Section 37 are present. - Decide against revenue.
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2015 (7) TMI 994
Addition under section 41(1) on account of cessation of liability - CIT(A) deleted the addition - Held that:- The addition was deleted by CIT(A) on the basis that if these additions are made, the net profit rate of the assessee will be 2.38% as against 1.46% from year to year exhibited in books of account duly audited u/s 44AB and accepted by the Department. We fail to understand this logic of learned CIT(A) that when addition is made u/s 41(1) in respect of cessation of old trading liability, it is not an addition on account of current year’s income but it is on this basis that the liability shown by the assessee in earlier years has ceased to exist in the present year and therefore, it amounts to income of the present year u/s 41(1) of the Act. Under these facts, we feel that the order of CIT(A) is not sustainable on this issue. We, therefore reverse the same and restore that of the Assessing Officer. - Decided in favour of revenue. Disallowance of conveyance and telephone expenditure - possibility of making personal/non business purposes', 'possibility leakages/ inflation', 'absence of supporting evidence', 'not properly vouched' are the reasons for these disallowances - Held that:- The disallowance made by the Assessing Officer is reasonable and not excessive and since the partners of the assessee firm are not having separate personal telephone and vehicles, it is reasonable to assume that the telephone and vehicles were partly used for personal purposes also and therefore, on this issue also, the order of CIT(A) is not sustainable. We reverse the order of CIT(A) and restore that of the Assessing Officer.- Decided in favour of revenue.
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2015 (7) TMI 993
Disallowance of Prior Period Expenses - CIT(A) deleted the addition made on account of demurrage charges - Held that:- These charges are in the nature of late payments/detention charges paid to freight forwarders and clearing agents for keeping the goods beyond prescribed time in the respective ports. None of these are penalties for violation of law of land. From the details of demurrage charges payments it is seen that none of these payments is made to any government agency and hence the same is in the nature of non fulfillment of contractual obligations to which the explanation to 37(1) does not apply. Thus demurrage charges claimed by the assessee is an allowable expenditure and hence Assessing Officer is directed to allow the same - Decided against revenue. Prior period expenditure cannot be claimed as deduction in the year under consideration - Held that:- alternative submission that both prior period income and prior period expenditure was shown in the annual reports and only the net figure was taken into consideration in the books of account; if the prior period expenditure is disallowed on the ground that it does not pertain to this year, the assessing officer cannot blow hot and cold and accept the prior period income as pertaining to this year. In short his contention is that even prior period income should be excluded if it is not crystalised in this year. Similar issue was considered by us in the appeal for the assessment year 2007-08. For the reasons given therein, we uphold the order of the CIT(A) with regard to prior period expenses but direct the assessing officer to consider the plea of the assessee with regard to the prior period income. - Decided partly in favour of assessee.
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2015 (7) TMI 992
Disallowance of deduction claimed u/s 80IB(10) - Held that:- Assessee has demonstrated with supportive documentary evidence that it is eligible for the claim of deduction u/s. 80IB(10) of the Act and the same is allowable not only on the profit disclosed in the pre-search returns of income filed u/s. 139(1) but also on the entire profit including the one disclosed additionally subsequent to the search proceeding u/s. 132 of the Act and disclosed in the return of income filed u/s. 153A of the Act. Even otherwise based on the rule of consistency if the eligible project undertaken remains the same and the conditions are satisfied and if deduction is allowable in the first assessment year (which is A.Y. 2006-07 in the assessee's case) then the same has to be allowed in the subsequent assessment years. - Decided in favour of assessee. Additional claim of deduction u/s. 80IB(10) claimed on the basis of seized document and statement u/s. 132(4) - Held that:- Assessee is entitled for claim of deduction in respect of additional income detected consequent to search is entitled to claim of deduction u/s. 80IB(10) of Act which is part of sale proceeds of flats of the project in question including cost of land totaling to ₹ 2.75 crore detected as result of search. This view is fortified by decision of Hon’ble Gujarat High Court in case of CIT Vs. Suman Paper Boards Ltd. [2009 (2) TMI 66 - GUJARAT HIGH COURT ] wherein held the assessee will be eligible for deduction u/s. 801/80IA of the Act in respect of undisclosed income under the block period, by holding that the assessee can't be denied the deduction u/s.80IA. As assessee firm has already submitted special audited report u/s. 80IB of the Act (Form No. 10 CCB) [P.B. 183] wherein at column 24 of the referred audited report, it is clearly stated that the assessee firm has no other business activities (i.e. other then developing a building housing projects as defined 80IB(10) of the Act). In the said report, the assessee has claimed special deductions u/s. 80IB(10) of the Act. Accordingly, assessee is eligible to claim deduction u/s.80IB(10) of the Act as discussed above.- Decided in favour of assessee.
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2015 (7) TMI 991
Remission of unsecured loans - Whether could not be subjected to tax by invoking section 28(iv) of the Act - CIT(A) deleting the addition made by the AO as income u/s.2(24) r.w.s. 28(iv) - Held that:- Similar issue in case of CIT(A) V/s. Jindal Equipments Leasing & Consultancy services Ltd. (2009 (12) TMI 364 - DELHI HIGH COURT) wherein it has been held that waiver / write off principal amount of loan is not taxable as benefit or perquisites u/s.28(iv) because the benefits or perquisites should be of the nature other than cash. This decision has followed the cases of Mahendra & Mehendra [2003 (1) TMI 71 - BOMBAY High Court] and Alembic P. Ltd. [1980 (8) TMI 42 - GUJARAT High Court] CIT(A) while granting relief to the Assessee has given a finding that the Assessee was not carrying on the business of obtaining loans and therefore the remission of loan cannot be considered to be a benefit arising out from the business. - Decided in favour of assessee.
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2015 (7) TMI 990
Addition on share of income from HUFs - CIT(A) deleted the addition - Held that:- Section 171 of the Income Tax Act provides assessment after partition of a Hindu undivided family. In the present case, the ld. Assessing Officer did not adhere to any proceedings. He simply observed that assessee failed to prove that HUFs were existing prior to 31st March, 1978. The Commissioner of Income Tax (Appeals) on other hand has observed that assessee has produced the copy of intimation u/s. 143(1) as old as for Assessment Year 1986-87. According to the assessee, he has filed the details of income tax return filed by the HUF and the intimation sent by the department, the assessee has been treating the existence of HUF in the past. In our opinion, the action of the Assessing Officer is only of denial of any fact. He himself did not bring any evidence on the record which could demonstrate the stand of the assessee as false. Therefore, after looking to the finding of Commissioner of Income Tax (Appeals) as well as the written submissions of the assessee reproduced by Commissioner of Income Tax (Appeals) we do not see any reason to interfere in this ground of appeal. - Decided in favour of assessee. Disallowance of 50% of labour charges - CIT(A) deleted the addition - Held that:- Assessing Officer, except, making a reference of payment of labour charges to family members did not collect any specific evidence falsifying the stand of the assessee. All the family members have recognized these labour charges as their income. They are also assessed to tax. The treatment of payment of 50% charges as bogus at the end of Ld. Assessing Officer is based upon his assumption only without making reference to any concrete material. On the other hand, ld. first appellate authority has appreciated the controversy in right perspective and recorded a finding of fact. Before us, except reiteration of the assessment order nothing has been brought to our notice by the department. - Decided in favour of assessee. Clubbing the income of the two daughters in law with the income of the assessee - CIT(A) deleted the addition - Held that:- The ld. Assessing Officer failed to bring any evidence on the record demonstrating the fact that assessee has transferred any income generating asset to the daughters in law. He simply harboured a belief that assessee has distributed his profit to his daughters in law. The Assessing Officer failed to collect any evidence for substantiating his belief. Ld. Commissioner of Income Tax (Appeals) has rightly held that unless it is proved that income earning asset were transferred by the assessee to the daughters in law, their income cannot be clubbed in the hands of the assessee.- Decided in favour of assessee. Rejection of books of accounts - G.P. addition - assessee has shown low GP, transport charges incurred by the assessee are being taken as a part of sales and vatav and kasar expenses are taken in profit and loss account - CIT(A) deleted the addition - Held that:- As far as the first reason is concerned, this is the first year of assessee’s business in this line. So, there is no comparative result available for the assessee. The result can be compared with any other similarly situated assessee. But ld. Assessing Officer has not made reference to any such similarly situated assessee in the impugned order. He also observed that profit margin in grey manufacturing activity remains between 5 to 15%. What is the basis of this reference not discernable. The Assessing Officer ought to have referred the cases of similarly situated assessee but he failed. The next reason assigned by him is of transport charges. In the understanding of the Assessing Officer, these charges are to be borne by the purchaser and not by the assessee as a seller. This is a factual question. The Assessing Officer has neither called for confirmation from a single purchaser of the assessee, nor identify, whether that purchaser has borne the expenses or not? This is such an issue which is dependent upon a person how to carry his business. We failed to understand the approach of Assessing Officer, without collecting any evidence, how he can assume that this expenditure ought not to have been incurred by the assessee. The third reason is also similar which is taken by the Assessing Officer on the basis of his experience of dealing with the assessees engaged in grey cloth marketing in Surat. In particular, he has not referred any detail or specific circumstances. Thus, the Assessing Officer could not bring any specific material which can point out a particular defect in the books of accounts of the assessee. He failed to make reference about specific defect in the accounts, which prohibits him to deduce the income from the accounts.- Decided in favour of assessee.
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2015 (7) TMI 989
Offerings at the Samadhi Shrine of Swami Muktanand and at the temple of Bhagwan Nityanand received in donation boxes- Taxing the amount invoking the provisions of section 115BBC - Held that:- Reverting to the definition of anonymous donations under sub section (3) of section 115BBC, we find that it has been mentioned that anonymous donations means voluntary contributions where the person receiving such contributions does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed. In the case of a religious or charitable trust as in the case of the assessee as we have observed above, it is generally not only difficult but also not possible to maintain such type of record. A perusal of the entire section 115BBC shows that the provisions of said section are not applicable to the institutions like that of assessee trust as the same are meant to check the inflow of unaccounted/black money into the system with a modus operandi to make out as a part of the accounts of the institutions like university, medical institutions where the problem relating to the receipt of capitation fees, etc. is generally highlighted. Under such circumstances, we do not find any justification on the part of the Ld. CIT(A) in taxing the offerings received in the hundis/donation boxes as income of the assessee under section 115BBC. - Decided in favour of assessee.
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2015 (7) TMI 988
Revision u/s 263 by CIT(A) - A.O. has completed the assessment without any verification or basis for arriving at the conclusion that the expenditure claimed by the assessee is allowable under sections 37(1) or not hit by section 195 - Held that:- We find merit in the contention of the learned D.R. It is observed that the assessment made by the A.O. under section 143(3) was held to be erroneous as well as prejudicial to the interest of the revenue by the Ld.CIT on the ground that the issue as to whether tax was deductible by the assessee from the payment of commission made to foreign parties, had not been enquired into by the A.O. As rightly contended by the Ld. CIT/DR, the exact nature of services rendered by the foreign agent was vital in this regard, but the A.O. failed to make any enquiry on this aspect. At the time of hearing before us, the Ld. Counsel for the assessee has failed to bring anything on record to show that any enquiry indeed was made by the A.O. on this aspect. In the absence of any such enquiry made by the A.O. on this vital aspect during the course of assessment proceedings, we find ourselves in agreement with the Ld.CIT that assessment made by the A.O. was erroneous as well as prejudicial to the interest of the Revenue calling for revision under section 263. We, therefore, uphold the impugned order passed by the Ld.CIT under section 263 and dismiss the appeal filed by the assessee. - Decided against assessee.
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2015 (7) TMI 987
Unexplained investment - assessee has taken a new stand at the time of hearing by stating that the amounts of investment made by the assessee during the years under consideration and treated as unexplained by the A.O. were actually sourced from the funds available with assessee’s HUF - Held that:- Find merit in the arguments of the learned D.R. that the new stand taken by the Ld. Counsel for the assessee by attempting to explain the source of investments made by the assessee in his individual capacity as the funds available with the HUF cannot be entertained at this stage. First of all, this explanation was not offered by the assessee either before the A.O. or before the Ld. CIT(A) and in the absence of any reasons given by Ld. Counsel for the assessee to show what prevented the assessee to offer this explanation before the authorities below, the same cannot be entertained at this stage during the course of proceedings before the Tribunal. Moreover, the documents filed by the Ld. Counsel for the assessee in support of the new stand taken by him constitute additional evidence and there is no application filed by him seeking admission thereof as required by Rule 29 of ITAT Rules, 1963. Furthermore, as rightly contended by the Ld. DR, these documents filed by the assessee for the first time before the Tribunal is not a reliable evidence inasmuch as the computation of total income of the HUF is filed for A.Y. 2011-2012 and in the absence of either the computation of total income for the relevant year or even the copy of balance sheet, the availability of funds with the HUF cannot be ascertained merely on the basis of bank statement showing some cash withdrawals. As a matter of fact, the HUF is stated to be in the business of sale of packaging wooden boxes and even if it is presumed for the sake of argument that the credits appearing in the bank account represent sale proceeds of the said business, the withdrawals are generally required to be utilized for making corresponding purchases. A copy of the bank account showing some withdrawals alone therefore cannot establish the availability of funds with the HUF at the relevant time unless it is supported by a balance sheet of the HUF. Therefore decline to entertain the new stand taken on behalf of the assessee for the first time before the Tribunal and since the same, in any case, is not acceptable even on merit on the basis of documents filed by the Ld. Counsel for the assessee in support, find no infirmity in the impugned orders of the Ld. CIT(A) confirming/sustaining the additions made by the A.O. in both the years under consideration to the total income of the assessee treating the corresponding investments as unexplained. - Decided against assessee.
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2015 (7) TMI 986
Validity of assessment u/s. 143(3) r.w.s. 153A - assessee’s claim has been disallowed u/s. 80IA - Held that:- Search was conducted at the premises of assessee on 24.09.2008, wherein assessee admitted undisclosed income in respect of its other activities for the years 2008-09 and 09-10, which is evident from the impugned assessment orders. There is nothing on record to suggest that any other evidence including any incriminating material was found during course of search for the relevant assessment years in respect of claim u/s. 80IA of the Act. In this background, in absence of any incriminating material found during search, no addition can be made in respect of unabated assessments and which have become final as on the date of search. The completed assessments for the years under appeal have become final and are not abated since they are not pending as on the date of search. Therefore, even though pursuant to issue of notice u/s. 153A, assessments for 6 years immediately prior to the date of search are to be framed u/s. 153A, but in respect of unabated assessments which have become final and no incriminating material is found during the course of search for those years, no addition could be made in respect of such unabated assessments.See case of Continental Warehousing Corporation [2015 (5) TMI 656 - BOMBAY HIGH COURT] Thus Revenue authorities were not justified in making disallowance claimed u/s. 80IA in respect of unabated assessments because there was no incriminating document found during search which could suggest that claim u/s. 80IA is not permissible even though assessment u/s. 153A can be made. - Decided in favour of assessee.
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2015 (7) TMI 985
Fees received under consulting agreement from Wokhard Hospitals and M/s Carol Info Services are taxable as “Fee for included services - The tax authorities have examined only the agreements and have drawn conclusion against the assessee. They have not examined about the nature of services actually provided or delivered by the assessee to the Indian entities. In our considered view, one may not be able to come to a conclusion about the nature of services provided unless the actual services/deliverables are examined. Then one shall be in a position to ascertain as to whether the services or techniques provided was mere commercial information or a technique made available to the assessee. We may elucidate this point with an example. Let us assume that a financial consultancy firm provides consultancy services for “Cash management system”. It may provide various techniques to be followed to achieve the objective of effective cash management. The said techniques may be followed by the recipient of services even in the absence of the financial consultancy firm. In that case, the question that requires to be examined is whether the financial consultancy firm has made available the technology related to Cash management system or not within the meaning of the provisions of Indo-USA DTAA. In the absence of such kind of examination from the side of tax authorities, we notice that the Tribunal also has proceeded to adjudicate the issue by considering the agreements only. In the absence of such kind of intricate details, we are also not in a position to examine the nature of services vis-à-vis the products/package, if any, delivered by the assessee. Since the Tribunal has consistently taken a particular view in the earlier years and since there was no deeper examination done by the tax authorities, we are inclined to follow the decision rendered by the Tribunal in the earlier years. Accordingly, by following the order passed by the Tribunal in the earlier years, we set aside the orders of Ld CIT(A) in AY 2006-07 and the assessment orders passed on the above said issues in AY 2007-08 to 2009-10 and direct the AO to delete the addition of all the receipts discussed above. - Decided in favour of assessee.
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2015 (7) TMI 984
Disallowance on account of provision for leave encashment under section 43B - Held that:- It will be proper to dispose of this appeal in the light of the order of the Hon'ble Supreme Court in the case of "CIT vs. Exide Industries Ltd." (2009 (5) TMI 894 - SUPREME COURT. We therefore dispose of the present appeal with a direction that the assessee will pay the tax as if section 43B(f) is on the statute book, however, till the decision of the Hon'ble Supreme Court in the case of "CIT vs. Exide Industries Ltd." (supra), the Revenue will not recover the penalty and interest which may accrue till the decision of the appeal by the Hon'ble Supreme Court in the case of "Exide Industries Ltd." It would be open to the Department to recover the outstanding interest demand in case the Civil Appeal of the Department in the case of "Exide Industries Ltd." (supra) is allowed by the Hon'ble Supreme Court. Subject to our above observations, the matter is restored to the file of the AO to be adjudicated afresh as per the decision of the Hon'ble Supreme Court in the case of "Exide Industries Ltd." (supra). - Decided partly in favour of assessee for statistical purposes.
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2015 (7) TMI 983
Re-compute the deduction u/s 10A - disallowance made by the AO was allowed ignoring the facts that the foreign exchange fluctuation gain received has not been earned by the assessee through export of software - Held that:- There is no dispute as the assessee engaged in the business of software development realized a higher sale price on account of foreign exchange fluctuation. The assessee by way of a revised return included this gain also in its claim of exemption u/s 10A. Considering the provision of section 10A(1) of the Act and the decisions referred to by the CIT(A) read along with the decision of the Madras High Court in the case of CIT vs Penatsoft (2010 (7) TMI 75 - MADRAS HIGH COURT ), we find that the Revenue’s challenge has to fail. The gain in the sale price as a result of fluctuation in the foreign currency has a direct nexus and is of the first degree and cannot be equated to situations where surplus funds are parked in Fixed Deposits yielding "interest income". The increase in sale price as a result of currency fluctuation impacts the sale price on which the exemption is to be calculated. The issue under consideration was whether on the ECB loan (external borrowings) which yielded a gain as a result of foreign exchange fluctuation was a capital receipt or a Revenue receipt. Considering the principle laid down by the Apex Court in Woodward Governor (2009 (4) TMI 4 - SUPREME COURT), it was held that it is a Revenue receipt on the principle that if a loss suffered on account of foreign exchange fluctuation is allowable as a Revenue expenditure then the gain on such a receipt would be a revenue receipt. The issue was in the content of utilization of the loan at the relevant point of time. In the facts of the present case, the gain due to foreign exchange fluctuation is in the sale price and not on account of external borrowing. The gain following the principle of FabIndia Overseas Ltd.(1979 (11) TMI 36 - DELHI High Court) can be considered to be arising on account of additional sale proceeds. The view is also supported by the decision of the Madras High Court. Decided against revenue.
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2015 (7) TMI 982
Carry forward depreciation to assessee disallowed u/s. 154/ rws 263 - CIT(A) allowed claim - Held that:- The restriction of eight years was removed. Even though Special Bench decision of the ITAT in the case of DCIT Vs. Times Guaranty Ltd., [2010 (6) TMI 516 - ITAT, MUMBAI ] was relied on by the CIT at the time of passing the order u/s. 263, subsequently, Hon'ble Gujarat High Court in the case of General Motors India Pvt. Ltd., Vs. DCIT (2012 (8) TMI 714 - GUJARAT HIGH COURT ) has held that restriction is not valid and unabsorbed depreciation could be set-off against the profits and gains of subsequent years. In view of this, I agree with the order of the CIT(A) and reiterate that assessee is entitled to set-off the carried forward depreciation of AY 1996-97 and 1997-98. In view of this, we direct the AO to modify the orders if not done so far and allow the set-off accordingly. - Decided against revenue.
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2015 (7) TMI 981
Addition made u/s. 68 - Held that:- The unsecured loans received during the year of ₹ 3,00,000/- have been held to be unexplained cash-credits within the meaning of section 68 of the Act. We find that in the impugned assessment, which has been affirmed by the CIT(A) also, there is no material referred by the Assessing Officer which came to his notice subsequent to the assessment order dated 28.03.2003(supra). Pertinently, in the assessment order dated 28.03.2003 (supra), the statement of Shri Nitin J. Rughani sought to be relied upon by the Assessing Officer in the impugned assessment, was very much available and it is not a new material. In fact, in the course of the assessment dated 28.03.2003 (supra), the Assessing Officer carried out detailed enquiries including examination of the concerned parties u/s 133(1) of the Act. An affidavit was also filed by Shri Nitin J. Rughani pointing out that so far as the transactions relating to the assessee were concerned, the same are genuine. All these assertions have been made before the CIT(A). So however, we find that the CIT(A) has glossed over the same and he has merely referred to the material with the Assessing Officer prior to the finalization of assessment order dated 28.03.2009(supra). Ostensibly, such material was put to verification by Assessing Officer and only thereafter, he has accepted the transactions as genuine in the assessment dated 28.03.2003 (supra). Considering the entirety of facts and circumstances of the present case, we are unable to uphold the assertions of the Assessing Officer that the unsecured loans of ₹ 3,00,000/- received by the assessee during the year under consideration were unexplained within the meaning of section 68 of the Act. As a consequence, we set aside the order of CIT(A) and direct the Assessing Officer to delete the addition of ₹ 3,00,000/-. - Decided in favour of assessee.
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2015 (7) TMI 980
Diversion of income by overriding title - payment to expartners or spouses of deceased partners - CIT(A) deleted addition - whether the aforesaid payment is nothing but diversion of income by overriding title? - plea of the assessee was that, the amount was a prior and overriding charge on the receipts of the firm in terms of the partnership deed and the actual income can be arrived at only after reducing the impugned payments from the gross receipts of the year - Held that:- Similar dispute for assessment years 2000-01, 2001-02 and 2003-04 was decided by the Tribunal in favour of the assessee. The CIT(A) noted that there was no material change in the relevant clause of the partnership deed when compared to year which were before the Tribunal. Therefore, following the precedents, he correctly allowed the claim of the assessee that the impugned payment to retired partners or spouses of the deceased partners under the terms of the partnership deed is diverted by overriding title.- Decided against revenue. Disallowance under section 14A - interest expenditure incurred for earning dividend income from the preference shares - Held that:- he ultimate conclusion of the CIT(A) in directing the Assessing Officer to recompute the disallowance u/s 14A of the Act in accordance with the decision of the Hon’ble High Court in the case of Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT ) is hereby affirmed - Decided against assessee.
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2015 (7) TMI 979
Reopening of assessment - Addition on account of negative cash balance as on 31.03.2002 - Unexplained receipts - CIT(A) deleted the addition - Held that:- The impugned order of reassessment passed by the AO without disposing off the objections raised by the assessee against the issuance of notice u/s 148 by a separate order is liable to be quashed. See ACIT, Cen.Cir.-2, Baroda vs. M/s Sagar Developers [2015 (7) TMI 718 - ITAT AHMEDABAD] and General Motors India P. Ltd. vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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2015 (7) TMI 978
Eligibility for exemption u/s. 194A(3)(v) from TDS on interest paid/credited on time deposits to its members - assessee is a cooperative bank - Held that:- Considering all the facts in totality in the light of the memorandum explaining the provisions in the Finance Bill 2015 and the clarification by the Board that the Circular has not been withdrawn, makes it ample clear that the impugned provisions relating to the liability of TDS would come with effect from 01/06/2015, we, therefore, set aside the findings of the Ld. CIT(A) and direct the Assessing Officer to delete the impugned additions made in the order u/s. 201(1) & 201(1A) of the Act. See case of Belgaum District Central Cooperative Bank Ltd. [2015 (7) TMI 719 - ITAT PANAJI] - Decided in favour of assessee.
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2015 (7) TMI 977
Valuation of land - fair market value of the land - cost of improvement of ₹ 1,00,000 being declined in the computation of capital gains by the revenue - Held that:- In the light of Hon’ble Supreme Court’s judgment in the case of Mehraban & Ors [1997 (4) TMI 497 - Supreme Court Of India], a copy of which was filed before us as well, there is indeed no error in rejecting in valuation @ ₹ 70 per square yard adopted by the a.o. However, learned CIT(A) was in error to the extent that solatium is required to be treated as a part of the compensation, for income tax purposes, in the light of Hon’ble Gujarat High Court’s judgment in the case of Vadilal Soda Ice Factory Vs CIT [1970 (9) TMI 12 - GUJARAT High Court], and, therefore, as against valuation at ₹ 85 per square yard, he should have taken the same as at ₹ 110 per square yard as claimed by the assessee. As regards the cost of improvement, there is no dispute about the fact of the levelling having been done but the claim is declined only for want of evidences. In the case of expenses of this nature, i .e on levelling etc, it is not always possible to have third party evidences of expenses. The assessee is an individual and not a corporate. Keeping in view all these factors, and smallness of amount, we see no reasons to decline the claim. - Decided against Revenue.
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2015 (7) TMI 976
Disallowance u/s 14A r.w. Rule 8D - Held that:- Every economic activity, particularly in today’s extremely competitive environment, entails some degree of cerebral activity. There is, however, no corresponding expenditure, or claim in its respect, while the issue at hand is the apportionment of such expenditure. Income, which may or may not arise on incurring expenditure, and again with no certainty as to its quantum, cannot by itself form the basis of either incurring or allocation of expenditure. - Revenue’s reading of r. 8D as equally misplaced. The estimate per r. 8D(2) is only qua expenditure relatable to tax exempt income/s. The expenditure claimed stands debited in the assessee’s accounts, which could be inquired in to as to their purpose. For all we know, the assessee may be managing his investments in instruments yielding tax exempt incomes, which are at a healthy sum of ₹ 21.71 cr., i.e., on an average for the year, on his own, or could also be assisted by personnel, who stand remunerated. No inquiry in this regard stands made, while the assessee has maintained proper accounts, duly audited and, further, bases his claim of having incurred a lower expenditure than that per the statutory prescription of r. 8D, thereon. - The ingredients of s. 14A(2) r/w r. 8D(1) are clearly not satisfied in the instant case. We, accordingly find no infirmity in the assessee’s claim of disallowance u/s. 14A(1) at ₹ 1,00,000 - Decided against assessee.
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2015 (7) TMI 975
Tax Audit - Determination of turnover for the purpose of section 44AB - Penalty u/s 271B - Held that:- The sale of stamp papers by licensed vendors is a government assigned function to facilitate the stamp sales at various locations. The government appoints licensed agents which are remunerated at a prescribed fee scale/commission, which is mentioned in the written submissions and the stamp rules. The stamps are sold by the assessee on behalf of the government, which is further reflected by the fact that if the license is cancelled for any reason, all the unsold stamp, stamp papers, seals etc. are to be returned to the treasury which are reimbursed, thus the government retains over all control over the stamps. - assessee was having bona fide belief that his case is not liable to audit of the books as the value of stamp is not his turnover and has a role of commission agent. Under these facts and circumstances, I hold that the assessee was under a bona fide belief of being not liable for audit of accounts u/s 44AB; therefore, the penalty imposed u/s 271B is deleted. - Decided in favour of assessee.
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2015 (7) TMI 974
Transfer pricing adjustment - Applicability of interest rate - Held that:- Assessee employed the CUP method for depicting that this international transaction was at arm’s length price. The applicability of the CUP as the most appropriate method or the selection of comparable uncontrolled transaction has not been disputed by the TPO. - assessee paid interest to Bank of Nova Scotia @ 9% per annum, which has not been disputed by the TPO. He simply picked up the above extracted clause from the Sanction letter indicating that in the event of any default or untimely repayment by the assessee, penal interest will be charged by the bank @ 18.5%. The assessee’s categorical statement before the TPO that there was no default committed by it in making repayment leading to payment of interest at such higher rate to the bank, has remained uncontroverted. It means that the assessee actually paid interest @ 9% during the year and no eventuality of paying interest @ 18.5% due to default or untimely repayment arose during the year. Since the CUP method talks of making a comparison of the international transaction with the actual ‘price charged or paid’ in a comparable uncontrolled transaction, which is 9% in the present case, we cannot accept the view point of the authorities below in substituting the hypothetical price of 18.5%, which would have been paid in the case of an eventuality, that never occured. Actual interest paid by the assessee to its bank @ 9% per annum constitutes a comparable uncontrolled transaction. Since the assessee itself charged interest from its AE @ 9% on the amounts due, the same makes up arm’s length price of the transaction not warranting any transfer pricing adjustment on this score - Decided partly in favour of assessee.
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2015 (7) TMI 973
Capital gain - Valuation of property - stamp valuation u/s 50C - Rectification of an order u/s 154 r.w.s. 155(15) - Held that:- D.R. has given detailed findings on page No. 5 and 6 of her order and concluded that even subsequent second sale was taken by the Stamp Authority @ 1650 per sq.mtr. whereas DLC rate revalued by the Stamp Authority in assessee’s case @ 2160 per sq.mtr., which has been challenged before the Additional Collector (Stamp), Jaipur and matter is pending before him. As per Section 50C(2), the DVO had estimated value of the concerned property at ₹ 8,10,000/-. Therefore, there is no justification in applying sale consideration at ₹ 33,35,000/. If the learned CIT(A)’s observation is that if any variation in valuation came on account of final decision of Additional Collector (Stamp), can be rectified U/s 155(15) within four years from the end of the previous year, in which the order revising the value was passed in appeal or revision or reference. - Decided against Revenue.
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2015 (7) TMI 972
Appeal admitted on following questions:- Whether on the facts and in the circumstances of the case and in law, the Tribunal correct in interpreting that on account of legisltion by incorporation , 'only' the unamended Insurance Act 1938 and the Regulations thereunder became part of Section 44 r.w. Rule 2 of the First Schedule of the I.T. Rules? 2) Whether on the facts and in the circumstances of the case and in law, the Tribunal correct in interpreting Section 44 r.w. Rule 2 of the First Schedule that the legislature consciously omitted incorporation of the provision of Insurance Regulatory and Development Authority Act 1999 and Regulations made thereunder in Rule 2 of the First Schedule which 'refers' only to unamended Insurance Act 1938 and Regulations made thereunder? 3) Whether on the facts and in the circumstances of the case in in law, the Tribunal is correct in allowing the relief to the assessee by holding that surplus available both in Policy Holders Account and Share Holder's Account is to be consolidated and only net surplus is to be taxed as income from Insurance Business? 4) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that provisions of Section 14A of the Act did not apply to Insurance business, even when the assessee has claimed exempted income u/s.10 of the I.T. Act and has also itself made some disallowance u/s 14A of the Act in the return?
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Customs
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2015 (7) TMI 998
Classification of vessels - Offshore Hunter - coastal tug offshore hunter with barge freight' - Denial of benefit of Notification No. 21/2002 and 20/2006 - Confiscation of goods - Imposition of redemption fine - Penalty u/s 114A and 112 - if the vessel is used for carrying persons and cargo as well as for towing operations, what is the primary purpose for which the vessel is designed - Held that:- Commissioner finds that rule 3a and rule 3b are not applicable and therefore he resorts to rule 3c which states that where goods cannot be classified by reference to 3a or 3b, they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. There is no doubt about the applicability of Rule 3A which states that the heading which provides the most specific description shall be preferred. In the present case, the vessel is designed as a supply vessel for transport of persons as per the Certificate of Indian Registry. - As the vessel in question is a supply vessel used for transport of persons and goods, the correct classification would be CSTH 89019000 which covers "Other vessels for transport of the goods and other vessels for transport of both persons and goods." And the goods falling under CTH 8901 are exempted under Not 21/2002 read with Notification No. 20/2006. Revenue has invoked the extended time period to demand duty be alleging that the appellant had mis-declared the capabilities of the vessel before the proper officer who did the first check examination. It is also alleged that the proper officer was clearly misguided by the Certificate of Registry. This allegation has no basis whatsoever. We have seen the examination report of the DC customs. It indicates inspection and examination of the vessel with respect to the Certificate of Indian registry. It also indicates that the vessel has a winch with steel wire, bollards at the sides. The Custom officers were free to examine the vessel with respect to any documents for the purpose of determination of classification. - There is no misdeclaration whatsoever. Consequently there is no question of confiscation and option to redeem on payment of redemption fine. We set aside the confiscation. - classification ordered by the Commissioner is set aside along with the demand of duty, interest and penalties on the appellant as well as the Directors. - Decided in favour of assessee.
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Service Tax
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2015 (7) TMI 1010
Cenvat Credit - Reversal in case of Job work availing Exemption under Notification No. 8/2005 dated 01.03.2005 - Rule 6 of Cenvat credit Rules 2004 - held that:- In various decision, it was observed that, Cenvat credit of input services was admissible to the job worker clearing goods to principal manufacturer under Notification Number 214/86-C.E. In view of the above, we hold that the provisions of Rule 6(1) of the Cenvat Credit Rules, 2004 cannot be invoked for denying Cenvat credit of input services used by the appellant factory for manufacture of job-worked goods under Notification No. 214/86-C.E. Issue stands settled in view of ordered passed by this bench in the case of JBF - Industries vs. C.C.E. & S.T., VAPI (2014 (2) TMI 769 - CESTAT AHMEDABAD), after relying upon larger bench judgment in the case of sterlite Industries Ltd. vs. cmmr. [2004 (12) TMI 108 - CESTAT, MUMBAI] Paras 6.1 and 6.3 of ordered dated 11.02.2014 passed by this bench in the case of JBF vs. C.C.E. & S.T, VAPI are relevant - Decided in favour of assessee.
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2015 (7) TMI 1009
Condonation of delay - Non receipt of order - Whether the appeal filed by the appellant was correctly rejected as time-barred by the first appellate authority - Held that:- Appeal filed by the appellant was received in the office of first appellate authority on 03.02.2014 against the OIO dated 13.02.2012. Appellant claimed to have not received the OIO dated 13.02.2012 and requested to supply another copy under letter dated 08.11.2013 which was supplied at the same address. It is observed from the case records that the show cause notice was issued at the known address of the appellant and the same was received by the appellant. The OIO was also sent by RPAD at the same address. No change in the address of the appellant was ever communicated to field formation/ adjudicating authority. In view of the above factual matrix, first appellate has correctly relied upon the case law of CCE, Ludhiana vs. Mohan Bottling Co (P) Limited (2010 (5) TMI 169 - PUNJAB & HARYANA HIGH COURT), that a letter sent by RPAF at the correct address was held to be proper deliver of communication. - No reason to interfere with the impugned order - Decided against assessee.
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2015 (7) TMI 1008
Renting of immovable property service - Invocation of extended period of limitation - Held that:- As said finding of the learned Commissioner (Appeals) has attained finality, wherein it has been held that there is no mens rea involved in the present case, therefore, relying on the decision of Bombay High Court in the case of Saswad Mali Sugar Factory Ltd.(2013 (11) TMI 1009 - BOMBAY HIGH COURT ), I hold that the extended period of limitation is not invokable. Therefore, demands confirmed by invoking the extended period are set aside - Decided partly in favour of assessee.
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2015 (7) TMI 1007
Valuation - deduction of value of material used in the retreading of tyres - Denial of benefit of Notification No. 12/2003-ST dated 20.6.2003 - Held that:- Service Tax can be levied on the service component of any contract involving service with sale of goods, etc. Computation of service component is a mater of detail and not a matter relating to validity of imposition of service tax. It is procedural and a matter of calculation. Merely because no rules are framed for computation, it does not follow that no tax is leviable. - Matter remanded back - Decision in the case of G.D. Builders vs. UOI [2013 (11) TMI 1004 - DELHI HIGH COURT] followed - Decided in favour of assessee.
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2015 (7) TMI 1006
CENVAT Credit - input services - legal services in respect of manufacture of “Battery Operated Electric Cars” - Held that:- Admittedly, the dealers who were appointed by the assessee outside India required legal assistance, which stands given to them by legal firm at the behest of the appellant. For grant of such legal assistance, invoices were raised by foreign legal firm to the appellant in India and the consideration stands paid by the appellant only. The service tax was also paid by the appellant on reverse charge basis. In such a scenario, it has to be held that the legal assistance provided to the appellant's dealers located in foreign country is to the appellant himself and has nexus with the appellant's activity of selling their motor vehicles outside India. The Tribunal in the case ofGolden Tobacco Ltd. Vs. CCE [2013 (6) TMI 617 - CESTAT MUMBAI] has held that ‘legal services' are input services on which Cenvat credit would be available. Having held that the legal services were provided to the dealers located outside India, for which the company has paid service consideration as also discharged the service tax, it has to be held that they are entitled to Cenvat credit of service tax paid. - Decided in favour of assessee.
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2015 (7) TMI 1005
Waiver of pre deposit - Online Information and Data Base Access or Retrieval service, Club or association service and Manpower Recruitment or Supply Agency service - Held that:- On going through the order, in our opinion, 50% payment was mentioned, primarily because the service of online information and data base access could not have been considered to have been rendered in the case of the appellant. As regards club or association service, it was basically a charge for utilization of library/learning research centre facilities and therefore it cannot be considered as a club or association service. As regards the last service, namely manpower supply, the service tax has been demanded on the costs incurred on the external facilities. The learned counsel relied upon the decision in the case of CST Vs Arvind Mills Ltd. [2008 (10) TMI 110 - PUNJAB & HARYANA HIGH COURT] where a view was taken that deputation of staff to subsidiaries/group companies for stipulated work for a limited period cannot be considered as manpower supply. - it is not necessary to require the appellant to make any pre-deposit and accordingly we waive the requirement of pre-deposit and grant stay against recovery of all the dues during the pendency of appeal - Stay granted.
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Central Excise
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2015 (7) TMI 1002
Manufacturing activity or not - whether the cutting of jumbo rolls into smaller sizes and printing on them by a job worker would amount to manufacture as defined under the Central Excise Act - Held that:- t the processes undertaken do not bring into existence a new commodity. - appeal filed by the Revenue against the order of the Tribunal in R.G.L. Convertors Vs. Commissioner of Central Excise, New Delhi [2003 (3) TMI 157 - CEGAT, NEW DELHI], came to be dismissed on the ground of delay and there is no further appeal, thereby the Order of the Tribunal had become final. The Tribunal in R.G.L. Convertors case [2003 (3) TMI 157 - CEGAT, NEW DELHI] had followed the order of the Tribunal in Lakshmi Packaging (P) Ltd., Vs. Commissioner of Central Excise, Trichy [1999 (12) TMI 190 - CEGAT, MADRAS]. In which case, the question involved was the activity of printing of papers inter alia cork tipping paper for cigarette corks. In other words, the facts are identical. - Decided against Revenue.
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2015 (7) TMI 1001
Denial of CENVAT Credit - Input service - Place of removal - Whether the Tribunal was correct in disallowing CENVAT credit of service tax paid on the GTA service which is availed by the manufacturer on outward transport from the place of removal for the period after 31.03.2008 subsequent to the amendment of definition of "input service" under Rule 2(l)(ii) of CENVAT Credit Rules - Held that:- As long as the sale of the goods is finalized at the destination, which is at the door step of the buyer, the change in definition of 'input service' which came into effect from 01.04.2008 would not make any difference. A perusal of invoices makes it clear that the goods were to be delivered and sale completed at the address of the buyer and no additional charge was levied by the assessee for such delivery. From these facts it is clear that the sale was completed only when the goods were received by the buyer. Since we are of the opinion that the sale had concluded only after the delivery of the goods was made at the address of the buyer, in the facts of the present case assessee would be entitled to the benefit of CENVAT credit on Service Tax paid on outward transportation of goods by the assessee even after 01.04.2008. The appellant-assessee would thus be entitled to such benefit for the period 01.04.2008 to 31.07.2008 which has been denied to it by the authorities below. - Decided in favour of assessee.
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2015 (7) TMI 1000
Denial of CENVAT Credit - Capital goods - Held that:- Department itself has conceded the matter before the Tribunal and, therefore, it is estopped from filing this appeal, this Court, however, is of the considered opinion that even in such a situation, the Tribunal should have given some brief facts of the case and also recorded its reasoning to support its order. The reasoning of the earlier order is not evident. As the order of the Tribunal, recorded above, is cryptic and bereft of any facts and reasoning, we do not want to go into the factual aspect of the case and the questions of law raised. In such view of the matter, this Court is of the considered view that the matter has to be remanded back to the Tribunal for passing a reasoned order on consideration of the facts in issue. - Matter remanded back - Decided in favour of assessee.
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2015 (7) TMI 999
Simultaneous availment of S.S.I. exemption for home consumption and modvat credit for export - Non maintenance of separate account - Held that:- respondents appear to have rejected the claim on the ground that the separate account books not having been maintained, it was difficult to ascertain as to whether the inputs in respect of which CENVAT Credit was claimed have actually been used for the purpose of the production of the goods which were exported. In other words, the mere fact that separate account books had not been maintained for the period April, 1998 to 27.10.1998 is not the ground for rejecting the claim. - appellant's invoices indicated the product to be alloys bars whereas the stock register refers to the goods as steel. It would be necessary initially at least for the appellant to establish that the goods were the same. - The impugned order and judgment is, therefore, set aside only to enable the appellant to establish its claim. The matter is remanded to the Adjudicating Authority to pass a fresh order - Decided in favour of assessee.
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2015 (7) TMI 971
Waiver of pre deposit - Misdeclaration of goods - Misdeclaration of value of goods - Wrongful availment of MODVAT Credit - Held that:- The Tribunal has examined whether the appellant had a strong prima facie case that would result in its exoneration from the imposition of duty. In this connection, the Tribunal has recorded a finding against the appellant on each of the three components of duty/modvat credit. In respect of the goods cleared by the appellant as OAS Billets during the relevant period from 5 August 1993 to February 1994 and thereafter from March 1994 upto July 1994, the Tribunal has concluded from the test reports of the samples drawn during this period that the goods that were cleared were SS billets and not OAS billets. In respect of the Modvat Credit, the Tribunal has observed that the appellant was unable to make out a prima facie case. The Tribunal, therefore, concluded that the appellant had failed to make out a case for total waiver of pre-deposit. - The effect of the application filed by the appellant before the BIFR was also examined. The Tribunal, after taking notice of the statement of learned counsel for the appellant that the application filed before the BIFR had subsequently been dismissed, concluded that this was also a reason for imposing the condition for safeguarding the interest of the Revenue. - no good reason to interfere with the direction issued by the Tribunal - Decided against Assessee.
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CST, VAT & Sales Tax
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2015 (7) TMI 1004
Classification of sale - Inter state sale or intra state sale - timber sold through auction by the forest corporation - validity of Circular No. 1251, dated 5.10.1993 issued by the Commissioner of Sales Tax , U.P. Lucknow - Held that:- A sale of goods can be said to have taken place in the course of inter-State Trade or commerce under Clause (a) of Section 3 of the Act if it can be shown that the sale has occasioned the movement of goods from one State to another. - The word "occasions" is used as a verb and means "to cause or to be the immediate cause of". A transaction of sale becomes subject to tax on completion of sale. For a sale to be exigible to tax under the Act, it must be shown to have occasioned the movement of goods from one State to another and the movement must be the result of a covenant or incident of the contract of sale. Thus, the sale of goods is in the course of inter-State Trade if the sale and movement of goods from one State to another are integral part of the same transaction. There must exist a direct nexus between the sale and movement of goods from one State to another. - A movement of goods which takes place independently of a contract of sale would not fall within the ambit of the above clause (a) of Section 3 of the Act Clause 3 of the approval specifically provides that if the timber is not removed by the auction purchaser within the specified time or within a further period of 15 days on payment of late fees then the amount deposited by the purchaser shall be forfeited and the Forest Corporation shall also become the owner of the timber of the lots, kept in the depot. This indicates that the delivery to the petitioner of the timber auctioned was complete at the depot of the Forest Corporation on payment of the agreed amount of consideration. - auction by the forest corporation is an intrastate sale and not inter-state sale - Decided against assessee.
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2015 (7) TMI 1003
Stay application - Interstate sale - Validity of Tribunal's order - Held that:- All that has influenced the Tribunal in this case is the fact that though the Petitioner/Appellant has filed 'C' and 'F' Forms but looking at the detailed order of the Assessing Officer it is prima facie clear that the transfer is not branch transfer but outside Maharashtra sale. The other fact that has influenced the Tribunal is the huge outstanding tax liability. However, we do not find the Tribunal having adverted to section 18A(5) of the CST Act. Pertinently, this is not a Appeal which the Petitioner Appellant preferred after having exhausted the remedy of Appeal before the Joint commissioner of Sales Tax, which is the first appellate authority. All records of assessment are before the Tribunal. The Tribunal will have to apply its independent mind and come to a conclusion as to whether as held by the Assessing Officer placing of orders in advance and dispatching goods in order to meet the same will not qualify for the transaction being termed as an intrastate sale but an interstate sale attracting the tax liability under the CST Act. That will have to be determined. One cannot proceed on the footing that the Assessing Officer's conclusion is the only one which can be ultimately reached. Merely because a detailed order of assessment has been passed on the basis of a purchase transaction directly by the customers with all specifications and details to the Head Office would not, to our mind, be enough. The Tribunal should not have expressed any opinion on this disputed issues. - there will be a stay of recovery of the amount assessed to tax under the assessment order and which is challenged in the Appeal before the Tribunal. Meaning thereby, the amount as directed need not be deposited. However, this order and direction does not mean that the Tribunal is precluded from passing appropriate orders and in accordance with law at the hearing of the Appeals. - matter remanded back - Decided in favour of assessee.
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Indian Laws
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2015 (7) TMI 1011
Gender discrimination and harassment of female employee - Arbitration petition filed for compensation - reference to solutions programme - demand for arbitration made by the petitioner was refused by the respondent on the ground that the "solutions programme" was not applicable to the petitioner and the same was meant only for employees of the first respondent in the United States of America - Held that:- there is no binding arbitration agreement between the petitioner and her employer so as to enable this Court to exercise its jurisdiction under Section 11(6) of the 1996 Act. The attempt of the petitioner to bring in the provision for arbitration contained in the "solutions programme" as a part of the terms of her employment with the respondent No.2 remains wholly unsubstantiated. Not only the employment contract signed by the petitioner does not contain any specific clause of arbitration or makes the provision for arbitration contained in the "solutions programme" applicable to her employment, the clause providing for exclusive jurisdiction of the courts in Bombay specifically negate the claim of the existence of an arbitration clause in the contract of employment of the petitioner. Under Section 7 of the 1996 Act the parties to an arbitration agreement must agree to submit their disputes to arbitration. What is contemplated under the "solutions programme" is a mere possibility of the employee seeking arbitration as opposed to an obligation to refer all disputes to arbitration. - petitioner is not entitled to invoke this Court's jurisdiction under Section 11(6) of the 1996 Act. - Decided against Petitioner.
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