TMI Tax Updates - e-Newsletter
August 22, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Income-tax ( 22nd Amendment), Rules, 2017 - Substitution of Form no. 29B - Report u/s 115JB of the Income-tax Act, 1961 for computing the book profits of the company - Notification
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Income Tax:
Accrued or a contingent liability - the liability of the Assessee to pay enhanced licence fees for the AYs in question was an accrued liability which arose in the year in which demand was raised - HC
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Income Tax:
Nature of payment of compensation in lieu of the non-compete agreement after retirement - whether non taxable in the hands of the assessee being a capital receipt - Non-Competition Agreement is genuine and the payment made thereunder is indeed a non-compete fee. - HC
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Income Tax:
Provisional attachment of NDTV’s assets - validity of attachment and permissible u/s 281B - the impugned order u/s 281B does not suffer from any infirmities and is valid - HC
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Income Tax:
Taxation on actual income received - assessee had received only 95% of the invoice price - despite the contentions raised regarding the doubtful existence of the agent, the assessee having received only 95% of the gross value, could have been taxed, only for what it had actually received. - HC
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Income Tax:
Penalty u/s 273-D - violation of Section 269-SS - The contention that the said entries are not in the nature of the loan or deposit on the face of it are not acceptable for the reason that once any amount has been received by the assessee and the same is shown to have been received in its books of accounts, it partakes the nature of the deposit - HC
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Income Tax:
Reopening of assessment - omission to mention Section 143(2) - the assessee had ample notice of the case it had to answer and the assessee availed of those opportunities by answering the case against it. In such a situation, we are not prepared to think that there was absence of notice u/s 143(2) or that any prejudice was caused to the assessee in defending the case against it - HC
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Income Tax:
Set off of losses with the surrendered income - the restriction shall apply to assessment year 2017-18 onwards. Accordingly, for the year under consideration, there is no restriction to set off of business losses against income brought to tax u/s 69B -In the absence of any provisions in section 71 falling under Chapter-VI which restrict such set off, in the instant case, set off of business losses against income brought to tax u/s 69B cannot be denied.
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Income Tax:
TDS u/s 194J OR 194I - Applicability of Tax Deduction at Source on payments towards internet & communication charges - lease line charges - No TDS liability
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Customs:
Waiver of rent/demurrage charges for import of Particle Board - The petitioner seeks for waiver of the detention charges on the ground that the detention was not on account of their fault, as the Department had detained the goods - Waiver allowed - HC
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Customs:
Import of gold and diamond jewellery items - Baggage Rules - passing through the Green Channel - In the absence of any facts on record about the nature and mode of concealment and also any finding of the lower authority that jewellery was kept in a way to evade detection on examination of the baggage, it has to be held that there was no concealment as such. - SC
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State GST:
GST Registration - Guidelines to complete proceedings for grant of Registration Certificate including verification under HGST Act, 2017
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Service Tax:
Penalty u/s 76 and 78 - Business Auxiliary Services - as there was contrary decision of this Tribunal on the issues, no penalty can be imposed - also, when there was divergent view on the issue, the extended period of limitation cannot be invoked
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Service Tax:
Levy of penalty - Tax collected but not paid - The appellants were aware of their service tax liability but they have taken the excuse of financial difficulty which is not a reasonable ground for not paying the service tax - penalty confirmed.
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Central Excise:
Refund of untilised CENVAT credit - drawback - respondent had availed duty drawback in respect of Customs duty - the availment of Cenvat credit will prevail over disbursement of drawback - refund allowed.
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Central Excise:
Excisability/marketability - ducts - fabrication of Ducts during the process of execution - air-conditioning plant was in the nature of a system and not machinery or goods - demand set aside.
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VAT:
Principle of Promissory Estoppel - grant of refund on CST paid - Undoubtedly, fraudulent refund claims obtained, would be contrary to the financial interests of the State, thereby affecting the larger public interest. The policy wisdom of the State that the grant of refund was eroding non-plan resources is a matter exclusively in the executive domain. - SC
TMI Short Notes
Articles
Notifications
DGFT-
22/2015-2020 - dated
21-8-2017
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FTP
Amendment in import policy of Beans of the species Vigna mungo (L.) Hepper or Vigna radiata (L.) Wilczek under Chapter 7 of the ITC (HS) 2017, Schedule - I (Import Policy)
GST - States-
(GHN-53)/GST-2017-S.9(1)(3)-TH - dated
30-6-2017
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Gujarat SGST
Corrigendum - Notification No (GHN-31)GST-2017S.9(1)-TH dated the 30th June, 2017 Notification
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65/ST-2 - dated
2-8-2017
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Haryana SGST
Notification under Section 68(1) under the HGST Act, 2017 regarding the 'value of goods' during movement.
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64/ST-2 - dated
2-8-2017
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Haryana SGST
Amendment in Notification No.44ST-2 dated 30.06.2017.
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63/ST-2 - dated
2-8-2017
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Haryana SGST
Amendment in Notification No.36ST-2 dated 30.06.2017 regarding exempted goods.
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62/ST-2 - dated
2-8-2017
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Haryana SGST
Amendment in Notification No.35ST-2 Dated 30.06.2017 regarding rate of tax on supply of goods.
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61/ST-2 - dated
2-8-2017
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Haryana SGST
The Haryana Goods and Services Tax (Fourth Amendment) Rules, 2017.
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EXN-F(10)-25/2017 - dated
11-8-2017
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Himachal Pradesh SGST
The Himachal Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2017.
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EXN-F(10)-23/2017 - dated
11-8-2017
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Himachal Pradesh SGST
Notify that the Notification No.11/2017-Central Tax, dated 28th June, 2017
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EXN-F(10)-23/2017 - dated
11-8-2017
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Himachal Pradesh SGST
Corrigendum - Himachal Pradesh Goods and Services Tax Rules, 2017 & notification No.7/2017-State Tax, dated 30-6-2017
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LLR-D(6)-8/2017-Leg - dated
3-8-2017
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Himachal Pradesh SGST
Corrigendum - "inter-State” may be read as "intra-State".
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12-4/78-EXN-Tax-(278/15) - dated
22-7-2017
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Himachal Pradesh SGST
Extension of time limit for filing intimation for composition levy under sub-rule (1) of rule 3 of the HP GST Rules, 2017.
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SRO-04 - dated
28-7-2017
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Jammu & Kashmir SGST
Corrigendum to SRO-GST-2 of 2017 Dated 08.07.2017
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SRO-03 - dated
28-7-2017
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Jammu & Kashmir SGST
Corrigendum to SRO-GST-1 of 2017 Dated 08.07.2017
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SRO-309 - dated
27-7-2017
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Jammu & Kashmir SGST
The Jammu and Kashmir Goods and Services Tax Rules, 2017 (Fourth Amendment Rules)
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SRO-05 - dated
19-7-2017
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Jammu & Kashmir SGST
Corrigendum to SRO-GST-1 of 2017 Dated 08.07.2017
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SRO-300 - dated
18-7-2017
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Jammu & Kashmir SGST
State Government, on the recommendation of council hereby fixes the rate of interest per annum for various sections.
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SRO-298 - dated
18-7-2017
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Jammu & Kashmir SGST
State Government, on the recommendation of council hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such.
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SRO-02 - dated
17-7-2017
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Jammu & Kashmir SGST
Corrigendum to SRO-GST-2 of 2017 Dated 08.07.2017
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SRO-01 - dated
17-7-2017
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Jammu & Kashmir SGST
Corrigendum to SRO-GST-1 of 2017 Dated 08.07.2017
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Va Kar/GST/4/2017-S.O. 063 - dated
18-8-2017
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Jharkhand SGST
Amendment in the notification No.1/2017-State Tax (Rate), dated the 29th June, 2017 - Notification relating to Tractors Parts.
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Va Kar/GST/07/2017-S.O. 062 - dated
18-8-2017
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Jharkhand SGST
Last date for furnishing of return in FORM GSTR-3B.
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Va Kar/GST/07/2017-S.O. 061 - dated
18-8-2017
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Jharkhand SGST
Date for filing of GSTR-3B
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Va Kar/GST/12/2017-2640 - dated
18-7-2017
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Jharkhand SGST
Corrigendum - Notification No. 1/2017 State Tax (Rate) S.O. No. 31 dated 29.06 2017
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Va Kar/GST/12/2017-2639 - dated
18-7-2017
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Jharkhand SGST
Corrigendum - Notification No. 2/2017 State Tax (Rate) S.O. No. 32 dated 29.06.2017
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G.O. (P) No. 94/2017/TAXES - dated
29-7-2017
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Kerala SGST
Officers under Goods and Services Tax
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G.O. (P) No. 93/2017/TAXES - dated
27-7-2017
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Kerala SGST
The Kerala Goods and Services Tax (Amendment) Rules, 2017 - Lottery Distribution/Selling Agent-Furnish Information return-procedure
Income Tax-
80/2017 - dated
18-8-2017
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IT
Income-tax ( 22nd Amendment), Rules, 2017 - Substitution of Form no. 29B - Report u/s 115JB of the Income-tax Act, 1961 for computing the book profits of the company
Indian Laws-
A-12023(1)/15/2016-Admn.III(LA) - dated
18-8-2017
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Indian Law
Central Government extends tenure of G.D. Agrawal, President of Income Tax Appellate Tribunal
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (8) TMI 734
Accrued or a contingent liability - liability of the Assessee to pay enhanced licence fee - Revisions of licence fees - Tax treatment of claim of licence fee as deduction - whether licence fee payable to the Railways to be an accrued liability? - Held that:- The undisputed fact is that the Assessee is following the mercantile system of accounting. It has to book the liability in the year in which it arises irrespective of whether it in fact discharges the liability in that year. In that sense, the liability to pay the enhanced licence fee would arise in the year in which demand is made or to which it relates irrespective of when the enhanced fee is actually paid by the Assessee. In the present case, the liability of the Assessee to pay the enhanced licence fee has, far from being excused, sought to be enforced by the Northern Railway by repeated demands notwithstanding the EO's order dated 28th March 1990. As noted earlier, the Northern Railway has preferred claim for arrears of enhanced licence fees and damages to the tune of over ₹ 45 crores against the Assessee before the sole Arbitrator appointed by it. The demand is therefore very much alive and is subject matter of adjudication in arbitration proceedings. The order dated 29th March, 1990 of the EO no doubt holds the termination notice dated 23rd March, 1988 and the claim for enhanced licence fee to be bad in law. However, it does not hold that there is no liability on the Assessee to pay the enhanced licence fees as and when that is determined in accordance with law. The facts of the present case are more or less similar to the facts in Aggarwal and Modi Enterprises (Cinema Project) Co. Pvt. Ltd. v. CIT (2016 (1) TMI 790 - DELHI HIGH COURT) where it was held that the fact that there may have been a stay of the enhanced demand by a judicial order as an interim measure pending the final decision in the proceedings challenging the revision. That, however, would not amount to wiping out the liability itself. As already noted the Railways has already filed its claim before the Arbitrator for the arrears of licence fees and 'damages'. As rightly held by the CIT (A), and concurred with by the ITAT in its order dated 31st July 2009, the mere characterisation by the Northern Railway of the amount claimed by it from the Assessee as 'damages' will not, in the context of the present case, make it any less an accrued liability. It is an expenditure incurred by the Assessee corresponding to the income he derives from using the land for the purposes of his business. The Court is also not able to agree that the ITAT made a grievous error, in the order passed by it on 22nd November 2004, regarding the claim for enhanced licence fee as a deduction being allowable not in AY 1995-96 but in AY 1996-97. The argument that the ITAT may have exceeded its jurisdiction done not hold since the Revenue has, apart from not challenging the said order, implemented it fully by the consequent appeal effect order. For all of the above reasons the first issue is decided in favour of the assessee and against the Revenue by holding that the liability of the Assessee to pay enhanced licence fees for the AYs in question was an accrued liability which arose in the year in which demand was raised. Reopening of assessment - Held that:- The fact is that in some of the AYs after the date of the EO’s order, the assessments were completed under Section 143 (3) of the Act accepting the claim for enhanced licence fee on the basis of accrued liability. This has been already adverted to earlier in this order. There was therefore no fresh tangible material that came to light for the first time for the AO to form reasons to believe that income had escaped assessment. This Court has, therefore, no hesitation in coming to the conclusion that the assumption of jurisdiction under Section 147 of the Act seeking to reopen the assessment for the aforementioned AYs was not legally sustainable. - Decided in favour of assessee.
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2017 (8) TMI 733
Assessment u/s 153C in the case of the 'other person' - satisfaction note by the AO of the searched party - Held that:- Referring to the recent amendment made in Section 153 C of the Act by the Finance Act, 2017 with effect from 1st April 2017. This amendment in effect states that the block period for the searched person as well as the 'other person' would be the same six AYs immediately preceding the year of search. This amendment is prospective. Since in the case of the 'other person' the AO issues notice only subsequent to the notices issued under Section 153 A to the searched person, the starting point for computation of the block period would be the date on which, based on the seized documents, notice is issued to the 'other person' under Section 153 C of the Act. Thus in the present case, the six year period prior to AY 2012-13 i.e. AY 2007-08 to AY 2012-13. Thus no notice could be issued under Section 153 C of the Act to reopen the Assessee's assessment for AY 2006-07. - Decided in favour of assessee.
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2017 (8) TMI 732
Addition u/s 14A r.w.r. 8D - real income - exempt income necessarily be earned in the AY in question for the applicability of the said provision - whether the disallowance of the expenditure will be made even where the investment has not resulted in any exempt income during the AY in question but where potential exists for exempt income being earned in later AYs? - ITAT allowed claim Held that:- The words “in relation to income which does not form part of the total income under the Act for such previous year” in the above Rule 8 D (1) indicates a correlation between the exempt income earned in the AY and the expenditure incurred to earn it. In other words, the expenditure as claimed by the Assessee has to be in relation to the income earned in ‘such previous year’. This implies that if there is no exempt income earned in the AY in question, the question of disallowance of the expenditure incurred to earn exempt income in terms of Section 14A read with Rule 8D would not arise. The CBDT Circular No. 5/2014 dated 11th May 2014 upon which extensive reliance is placed by Mr. Hossain does not refer to Rule 8D (1) of the Rules at all but only refers to the word “includible” occurring in the title to Rule 8D as well as the title to Section 14A. The Circular concludes that it is not necessary that exempt income should necessarily be included in a particular year’s income for the disallowance to be triggered. In the considered view of the Court, this will be a truncated reading of Section 14 A and Rule 8D particularly when Rule 8D (1) uses the expression ‘such previous year’. Further, it does not account for the concept of ‘real income’. It does not note that under Section 5 of the Act, the question of taxation of ‘notional income’ does not arise The mere fact that in the audit report for the AY in question, the auditors may have suggested that there should be a disallowance cannot be determinative of the legal position. That would not preclude the Assessee from taking a stand that no disallowance under Section 14 A of the Act was called for in the AY in question because no exempt income was earned. For all of the aforementioned reasons, this Court is of the view that the CBDT Circular dated 11th May 2014 cannot override the expressed provisions of Section 14A read with Rule 8D. - Decided in favour of assessee.
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2017 (8) TMI 731
Payment of non-compete fee - real nature of the transaction - genuine Non-Competition Agreement - payment of compensation in lieu of the non-compete agreement after retirement - whether not taxable in the hands of the assessee being a capital receipt - Held that:- The AO, incorrectly, interprets Clauses 2, 3 & 4 in holding that they actually contradict each other. The AO was clearly wrong in holding that the agreement was structured in a manner so as to give the Assessee “adequate loopholes” to bypass the restrictions with the “consent of MEW”. He termed the agreement as being non-serious. The AO also appears to have wrongly construed the fact that the payment was received prior to the signing of the agreement and hence it is nothing but a terminal benefit. In the statement of the Assessee, which was recorded by the AO on 9th December, 1997, she had explained to the AO that it was due to her personal efforts that the business of the company had grown and expanded from one office in Delhi to offices in several cities including Mumbai, Bangalore, Calcutta, Chennai and Kathmandu. She has explained the reason to leave TSME, as MEW wanted to drop her name from TSME in order to have a competitive advantage in India. She further explained that the money being paid to her as a non-compete fee was not directly related to the remuneration she was receiving from TSME, thus subsequent conclusion of the AO that the money paid to her was not a non-compete fee but a terminal benefit is wholly unsustainable. The Assessee, as clearly ascertainable from the record, was a lady who enjoyed a stature in the advertising industry and the Non-Competition Agreement, by which she agreed not to compete in India with MEW, was clearly not a sham. She is now 82 years of age and considering that the Revenue’s appeal challenges concurrent findings of the CIT (A) and ITAT, we do not find any cause to interfere. In the facts of the present case, this Court is persuaded to follow the decisions in Guffic Chemical Pvt. Ltd (2011 (3) TMI 6 - Supreme Court), Khanna and Annadhanam (2013 (1) TMI 681 - DELHI HIGH COURT) and Rohitasava Chand (2008 (3) TMI 16 - HIGH COURT OF DELHI ) to hold that the Non-Competition Agreement is genuine and the payment made thereunder is indeed a non-compete fee. - Decided in favour of the Assessee
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2017 (8) TMI 730
Reopening of assessment - claim of deduction u/s. 80IC not allowable - delay of 46 days in filing the return - Held that:- In the present case, since the entitlement of the Petitioner to the deduction under Section 80 IC of the Act even for AY 2010-11 has not been questioned by the Department on merits, there is no justification for not viewing the delay of 46 days in filing the return to be bona fide. It is not one of those cases where the delay is so extraordinary so as to not be condoned. Consequently, the Court sets aside the order dated 9th August, 2017 passed by the CBDT under Section 119 (2) (b) of the Act. The result is that the claim of the Petitioner for deduction under Section 80IC of the Act cannot be defeated on the ground of delay in filing the return. Since this was the principal reason for reopening of the assessment, the notice dated 25th March 2014 issued by the AO under Section 148 of the Act and the order dated 25th February 2015 passed by the AO rejecting the Petitioner's objections to the reopening of the assessment are set aside. The consequential impugned assessment order dated 17th March, 2015 passed by the AO under Section 147 of the Act is also therefore set aside. Any order by the CIT (A) in the further appeal filed against the said order by the Assessee will also therefore not survive. If any further appeal has been filed before the ITAT, then appropriate orders will accordingly be passed in the said appeal. - Decided in favour of assessee.
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2017 (8) TMI 729
Re-opening of assessment - issuance of the Step Up Coupon Bonds by NNPLC and guaranteed by NDTV - Held that:- The complex and circuitous structure of subsidiaries and the transactions entered therein are closely connected and provide a live link for the formation of the belief of the AO that there has been escapement of income in AY 2009-10 and for the previous assessment year, AY 2008-09 as well because the investments continued that year. Mere disclosure of a transaction at the time of the original assessment proceedings does not protect the assessee from a re-assessment under Section 147 if the AO has information that indicates that the transaction is sham or bogus. In the present case, NDTV has alleged that the details of the corporate guarantee issued by NDTV to NNPLC regarding the Step Up Coupon Bonds was intimated to the Revenue during the original assessment proceeding. This argument of NDTV falls flat considering that the AO has reason to believe that this transaction is bogus. For these reasons, this Court is of the view that the impugned reassessment notice is valid in law and can be sustained. Provisional attachment of NDTV’s assets - validity of attachment and permissible under Section 281B - Held that:- In terms of Para 10 of the provisional attachment order dated 14.09.2015, NDTV issued unconditional and irrevocable guarantee to the extent of ₹ 3.5 crore and ₹ 5 crore for obtaining a term loan from Yes Bank by its subsidiary NDTV Convergence Limited. However, while pledging these assets, NDTV failed to seek permission from the Department as per the provisions of section 281 of the Act read with CBDT's Circular No. 4 of 2011 dated 19.07.2011. It is submitted that NDTV is aware of the Circular, because the AO had issued an advisory to the petitioner by letter no. 529 dated 01.08.2014. This Court is of the view that a reasonable apprehension that NDTV may liquidate the assets thwarting the recovery of tax liability is not unwarranted. This court further notes the AO’s decision not to attach the bank accounts and other trade receivables of NDTV so as to ensure unhampered operation of its business. This decision is in line with the judgment of the Bombay High Court in Gandhi Trading v. Assistant Commissioner of Income Tax and Others [1999 (7) TMI 59 - BOMBAY High Court] wherein the Court held that the action taken under Section 281B must not hamper the business activities of the assessee and accordingly, attachment of bank accounts must be the last resort. This Court is of the opinion that the impugned order under Section 281B does not suffer from any infirmities and is valid under the Act. Assessee appeal dismissed.
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2017 (8) TMI 728
Taxation on actual income received - assessee had received only 95% of the invoice price and that the assessee could not have been taxed for an income which they have not received - Held that:- There are circumstances which are capable of creating a reasonable suspicion about the existence of the Agency, M/s. Lovely Enterprises, fact remains such a concern had CST Registration. There were transactions between the assessee and the said concern and the invoices which were raised by the assessee in the name of the Agent also contained the gross sale price and the net amount payable, after recovery of 5% towards commission and other expenses due. Based on such transactions, the amounts were realised by the assessee through banking channels and F forms under the CST Act were also obtained by them from the Agent. These admitted facts, therefore, shows that the assessee had received only 95% of the gross price and the Revenue has no material before it that the assessee had received anything in excess thereof either directly or otherwise. The principles laid down by the Apex Court in Godhra Electricity's case (1997 (4) TMI 4 - SUPREME Court) clearly indicate that the assessee could be taxed only for the income that it has derived. If that be so, despite the contentions raised regarding the doubtful existence of the agent, the assessee having received only 95% of the gross value, could have been taxed, only for what it had actually received. We are inclined to think that in the facts of this case, the Tribunal was justified in coming to the factual conclusion that the assessee could not have been taxed anything more than what it had received. No substantial question of law.
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2017 (8) TMI 727
Reopening of assessment - change of opinion by the Assessing Officer - reasons to believe - audit objection for the reopening of Assessment was resorted to - claim for set-of of loss incurred on selling of housing loan portfolio - Held that:- After the scrutiny, notice under Section 143(2) of the Act was issued. The explanation was given by the Assessee. In the explanation, the Assessee explained about the claim for setof of loss incurred on selling of housing loan portfolio. The Assessing Officer accepted the explanation given by the Assessee and allowed set-of of loss arising on sell of housing loan portfolio. Merely because the another Assessing Officer has a different opinion cannot be a ground to reopen assessment and so also on the reason of audit object remedial action by initiating reopening proceeding cannot be resorted to as held by the Apex Court in case of Indian and Eastern Newspaper Society vs. CIT, reported in (1979 (8) TMI 1 - SUPREME Court ). The Commissioner (Appeals) and the Tribunal on considering the explanation given by the Assessee and the facts on record had arrived at a concurrent conclusion that reopening of assessment is merely on account of change of opinion of the Assessing Officer and there was no omission or failure on the part of the Assessee to disclose truly and fully all the material facts. - Decided in favour of assessee.
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2017 (8) TMI 726
Penalty under Section 271-D - violation of Section 269-SS - Held that:- Finding of the Assessing Officer that it is fact that the assessee had accepted deposits, which are otherwise than by account payee cheque /draft stands undisturbed. The ITAT has also not touched the above finding in any manner. In view of the aforesaid facts and circumstances, the finding as recorded by the Assessing Officer that the respondent-assessee received deposits otherwise than by cheque or draft stand confirmed. Once the aforesaid finding remains undisturbed, a clear breach of Section 269-SS of the Act occur inasmuch as the aforesaid receipt of deposit is after 30th June, 1984 and is not in the manner provided under the aforesaid provision. The contention that the said entries are not in the nature of the loan or deposit on the face of it are not acceptable for the reason that once any amount has been received by the respondent-assessee and the same is shown to have been received in its books of accounts, it partakes the nature of the deposit. Accordingly, the panel provision of Section 271-D gets attracted, leaving no scope for the respondent-assessee to escape from the liability of the penalty. The breach of Section 269-SS of the Act is apparent making the respondent-assessee liable for penalty under Section 271-D of the Act. - Decided against assessee.
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2017 (8) TMI 725
Interest free loan given to Andhra Pradesh Rayons Limited - commercial expediency - deduction of royalty on bamboo exploited be allowed at rates other than those specified in the 1968 and 1947 agreements - Held that:- Decided in favour of assessee as relying on The Commissioner of Income Tax, Nagpur Versus M/s. Ballarpur Industries Ltd. [2017 (8) TMI 610 - BOMBAY HIGH COURT ] . Addition in respect of income from gross fees for management and technical services - Held that:- Issue raised herein is concluded against the Revenue in view of decisions of this Court in Reliance Infrastructure Ltd. vs. Commissioner of Income Tax, City VI, Mumbai (2016 (12) TMI 1293 - BOMBAY HIGH COURT) and in Commissioner of Income Tax vs. Ambalal Kilachand, (1994 (4) TMI 67 - BOMBAY High Court). Addition on rent guest house/staff house - Held that:- This issue stands concluded against respondent/assessee by the decision of the Apex Court in Britannia Industries Ltd. vs. C.I.T.(2005 (10) TMI 30 - SUPREME Court).
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2017 (8) TMI 724
Reopening of assessment - omission to mention Section 143(2) literally in any one of the notices issued to the assessee - invalidation of the assessment order - Held that:- The procedure under Section 143(2) is intended to ensure that an adverse order is passed against the assessee only after affording the assessee a proper opportunity. Therefore, the question to be considered is whether the assessee in this case had such an opportunity. It is in this context, the notices that were issued to the assessee assumes importance. Reading of the reasons recorded and communicated to the assessee, Annexure E notice posting the case, and Annexure I notice, show that the assessee was put on notice the inadmissibility of the reduction from the total income made by it and the assessee by its Annexure C objections, F reply and the reply filed by it to Annexure I notice had justified the deduction made by it. Further before Annexure K assessment order was passed, the assessee was afforded an opportunity of hearing also. Evidently, therefore, the assessee had ample notice of the case it had to answer and the assessee availed of those opportunities by answering the case against it. In such a situation, we are not prepared to think that there was absence of notice under Section 143(2) or that any prejudice was caused to the assessee in defending the case against it. We are not, therefore, prepared to think that the assessment order is invalid on the ground contended by the assessee. - Decided in favour of the Revenue and against the assessee
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2017 (8) TMI 723
Registration u/s 12AA(I)(b) denied - not carrying out activities wholly for religious and charitable purposes as per provisions of Section 2(15) - non commencement of trust activities - Held that:- At the time of registration under section 12AA of the Income-tax Act, which is necessary for claiming exemption under sections 11 and 12 of the Act, the Commissioner of Income-tax is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of establishing educational institution, is in the process of establishing such institutions, and receives donations, the registration under section 12AA cannot be refused, on the ground that the trust has not yet commenced the charitable or religious activity. Any enquiry of the nature would amount to putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have not commenced. The enquiry of the Commissioner of Income-tax at such preliminary stage should be restricted to the genuineness of the objects and not the activities unless such activities have commenced. The trust or society cannot claim exemption, unless it is registered under section 12AA of the Act and thus at that such initial stage the test of the genuineness of the activity cannot be a ground on which the registration may be refused. - Decided against Revenue.
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2017 (8) TMI 722
Levy of penalty u/s.271(1)(c)- Booking bogus purchases - CIT(A) observed that, no addition was made by the AO while computing assessment, that the returned income and assessed income remained same, that the assessee was found to be debiting bogus expenditure in his books of account, that closing WIP was akin to the loss incurred by assessee during the year - Held that:- Penalty can be imposed only on the ground on which proceedings were initiated. Similar views have been expressed in the case of Baisetty Revathi(2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT). Considering the above, we reverse the order of the FAA and decide the effective ground of appeal in favour of the assessee.
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2017 (8) TMI 721
Income on account excess stock u/s 69B - set off of losses with the surrendered income - tax at normal rate on surrender income on account of undisclosed investment in stock assessed as deemed income u/s 69B OR tax charged at special rate u/s 115BBE - under which head of income the excess stock/investment found in search and offered by the assessee for tax is to be assessed? - No deduction or set off of business loss will be allowable as referred to the provisions of section 115BBE - Held that:- In the present case the excess stock offered in survey is part of the business income. The excess stock is determined by valuing the business stock at current price instead of the purchase price. Nothing was brought to suggest that this was not a regular item of the stock dealt by the assessee. The provisions of section 115BBE says that no deduction in respect of any expenditure or allowance shall be allowed. It nowhere says that set off of the loss with any other income will not be allowed. In the memorandum explaining the provisions of amendment, the amendment to Section 115BBE is explained and has been stated that this amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent years. Given the fact that the AO has invoked the provisions of section 11BBE in the instant case, the provisions of sub-section (2) to section 11BBE are equally applicable. The amendment brought in by the Finance Act, 2016 whereby set off of losses against income referred to in section 69B has been denied is stated clearly to be effective from 1 April 2017 and will accordingly, apply to assessment year 2017-18 onwards. Accordingly, for the year under consideration, there is no restriction to set off of business losses against income brought to tax under section 69B of the Act. Further, the provisions relating to set off of losses are contained in Chapter-VI relating to aggregation of income and set off of losses. Whenever legislature desires to restrict set-off of loss or allowance of loss, in a particular manner, usually, the provisions are made in Chapter-VI such as non-allowance of business loss against salary income as provided in section 71(2A), and treatment of short-term or long-term capital losses. There is no specific provision which restrict set off of business losses against income brought to tax under section 69B. Interestingly, both section 69B and section 71 falls under the same chapter VI. In the absence of any provisions in section 71 falling under Chapter-VI which restrict such set off, in the instant case, set off of business losses against income brought to tax under section 69B cannot be denied. Thus the assessee deserve to succeed in the subject appeal and will be eligible for set off business loss of ₹ 86,96,733 against the income of ₹ 2,31,41,217 which has been brought to tax under section 69B read with section 115BBE of the Act. In the result, grounds taken by Revenue are dismissed.
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2017 (8) TMI 720
Revision u/s 263 - addition on protective basis - amount already been assessed in the hands of Estate of Late Mr. Vrajlal C. Mehta - Held that:- The amount which has been shown in the order of 263 of the Act has already been assessed in the hands of Late Shri. V.C. Mehta. Since, this amount has already been assessed in the hands of late Shri V.C. Mehta therefore, the same is not required to be assessed on protective basis in the hands of the Smt. Devaunshi Anoop Mehta as well as in the hands of the assessee Anoop Vrajlal Mehta.
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2017 (8) TMI 719
Penalty u/s. 271(1)(c) - addition u/s 68 - proof of genuineness of the gift transactions - Held that:- the A.O had hardly afforded a period of 5 days to the assessee for producing the aforesaid parties for examination, and on account of failure on the part of the assessee to do the needful within the said short period, therefore added the aforesaid amount to the income of the assessee. Assessee had came forth with an explanation as regards the aforesaid amounts so received by him by way of bank transactions from the duly identified parties, and it is neither the case of the department, nor so evidenced by the material available on record, that the said explanation of the assessee had been found to be false, therefore there can be no escape from the fact that the assessee to some extent had also substantiated his aforesaid explanation (which though not being to the satisfaction of the A.O, would though justify an addition in the hands of the assessee during the course of the quantum proceedings), therefore, the case of the assessee falls beyond the scope and gamut of the Explanation 1 of Sec. 271(1)(c). We find that our aforesaid view that in respect of a transaction which is found to be unproved but not disproved, no penalty u/s. 271(1)(c) is liable to be imposed, stands fortified by the judgment of the Hon’ble High Court of Bombay in the case of CIT 8 Vs. Upendra V. Mithani (2009 (8) TMI 1159 - BOMBAY HIGH COURT). - Decided in favour of assessee.
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2017 (8) TMI 718
Validity of reopening of assessment u/s. 147 - assets transferred to UPS SCS (India) P. Ltd. - Held that:- A.O. having examined the issue in the original assessment proceeding and formed an opinion that the amount received by the assessee on account of transfer of human resource and customer relationship, is not taxable, the reopening of the assessment on the issue by revisiting the very same material which were considered at the time of original assessment, amounts to review of the earlier order on a mere change of opinion, which is impermissible. In this context, we rely upon the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA), wherein held that reopening of assessment cannot be made on the basis of mere change of opinion. The Hon’ble Supreme Court observed, once an opinion was formed by the A.O. while completing the original assessment, it cannot be reviewed by taking recourse of section 147 of the Act. The issue relating to the amount received by the assessee’s transfer of various assets including human resources and customer relationship was not only examined by the A.O. during the original assessment proceeding, but the A.O. also formed an opinion while accepting the assessee’s claim of non taxability of the said amount. Therefore, the A.O. having formed an opinion during the original assessment proceeding, it cannot be a subject matter of review in the garb of reassessment proceeding u/s. 147 of the Act. Therefore, we hold that the initiation of proceeding u/s. 147 of the Act in the present case is invalid. Accordingly, we quash the impugned assessment order passed u/s. 143(3) r/w s. 147 of the Act - Decided in favour of assessee.
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2017 (8) TMI 717
Addition u/s 14A - applying the formula contained in Rule 8D - satisfaction contemplated u/s 14A(2) to make the addition - Held that:- There is no reference to any of the fact-situation or any credible reasoning or material by the Assessing Officer before rejecting the plea of the assessee and proceeding to determine the disallowance by applying the formula contained in Rule 8D of the Rules. In fact, the phraseology of Sec. 14A itself specifies that the satisfaction contemplated is required to be arrived at “having regard to the accounts”, an approach which is conspicuous by its absence in the present case. In view of such an inadequacy in the action of the Assessing Officer, it has to be held that the satisfaction contemplated u/s 14A(2) of the Act has not been recorded by the Assessing Officer and thus, he has failed to comply with the condition precedent before embarking on applying the formula contained in Rule 8D of the Rules in order to compute the disallowance u/s 14A of the Act. Thus, in our considered opinion, on this aspect itself, the determination of disallowance made by the Assessing Officer is untenable. We find that in its written submissions made to the Assessing Officer during the assessment proceedings, copies of which are placed in the Paper Book, assessee had explained the manner and justification for estimating such expenditure at ₹ 57,790/- and there is nothing on record to suggest as to why the same has been disregarded by the Assessing Officer. Therefore, in consequence, it has to be held that the disallowance of ₹ 9,95,080/- made by the Assessing Officer over and above the suo motu disallowance made by the assessee is unjustified and is directed to be deleted. - Decided in favour of assessee.
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2017 (8) TMI 716
Scope of revision proceedings initiated under section 263 - disallow the claim made under the head “Provision for redelivery of aircraft” - Held that:- It is the case of the revenue that the provision made by the assessee is required to be disallowed. If it is considered to be correct for a moment, then the reversal of the provision is not taxable. During the year under consideration, the total provision made is ₹ 7.08 crores and the amount reversed is ₹ 7.52 crores. Hence, disallowance of the provision amount of ₹ 7.08 crores and removal of the reversal amount of ₹ 7.52 crores offered by the assessee would result in removal of the net amount of ₹ 0.44 crore, in which case, there would be no prejudice caused to the revenue. Under this reasoning also, it cannot be held that the assessment order was prejudicial to the interest of the revenue. If the provision is allowed, then the actual expenditure equal to the amount of the provision, if it has not been debited to Profit and loss account should be allowable as deduction. Hence, on this count also it would result in tax neutral position. We notice that the learned Principal CIT has failed to properly appreciate the facts surrounding the issue from these angles, which demonstrates that no prejudice is caused to the revenue. We are unable to sustain the order passed by learned Principal CIT on this issue. - Decided in favour of assessee.
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2017 (8) TMI 715
Addition u/s 68 - unexplained ‘Cash deposits’ and ‘Cash withdrawals’ - peak credit theory - Held that:- We find force in the contention of the ld. A.R that even if the explanation as regards the source of cash deposits does not merit acceptance, still the addition in the hands of the assessee was liable to be restricted by telescoping the cash deposits made in the bank accounts as against the respective cash withdrawals made from the same on the respective dates during the year under consideration. The Ld. A.R had drawn our attention to a chart reflecting the respective ‘Cash deposits’ and ‘Cash withdrawals’ made by the assessee during the year under consideration, as per which the peak credit addition in the hands of the assessee would stand restricted to ₹ 3,52,110/-. We are of the considered view that though the ‘Peak credit’ theory is not a proposition of law, however the fact as regards availability of funds out of the cash withdrawals made by the assessee from his bank account, which might have been utilised for redepositing on a subsequent date, cannot be ruled out in the absence of any evidence proving to the contrary that the said funds had been utilised/exhausted by the assessee by way of an investment or expenditure. We find that the Ld. A.R in order to drive home his aforesaid contention had relied on a host of judicial pronouncements and orders of coordinate benches of the Tribunal. We have deliberated on the facts of the present case and finding substantial force in the contentions raised by the ld. A.R before us, therefore in all fairness and in the interest of justice set aside the matter to the file of the A.O, who is directed to work out the peak credit in terms of our aforesaid observations and restrict the addition to the amount of such peak credit. That for the removal of doubts, it may be clarified that the A.O while working out the peak credit shall allow credit only as regards the availability of such respective cash withdrawals made by the assessee during the year under consideration, which can safely be held to be available with the latter for redepositing on a subsequent date. Appeal of the assessee allowed for statistical purposes.
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2017 (8) TMI 714
TDS u/s 194J OR 194I - Applicability of Tax Deduction at Source on payments towards internet & communication charges - Held that:- We find that the internet and communication charges are not liable for deduction of any tax at source, as the same are merely in the nature of payments which cannot be characterized as having been made for availing of any special, exclusive or customized services rendered to the user or consumer who may approach the service provider for such service. We find that the issue involved in the present case is squarely covered by the Judgment of the Hon’ble Supreme Court in the case of CIT Vs. Kotak Securities Ltd. (2016 (3) TMI 1026 - SUPREME COURT). We therefore set aside the order of the CIT(A) holding the assessee as being in default u/ss. 201(1)/201(1A) for failing to deduct tax at source on payments made towards internet and communication charges. The Ground of appeal No. 1 raised by the assessee before us is allowed. Liability to deduct tax at source on payments towards lease line charges - Held that:- VSAT and lease line charges paid by the assessee to stock exchange are merely in the nature of reimbursement of the charges paid/payable by the stock exchange to the department of the telecommunication, and thus in the absence of any element of income involved in the said payments, the issue as regards deduction of tax at source on the same does not arise at all. We are of the considered view that in the backdrop of the aforesaid judgment of the Hon’ble Jurisdictional High Court in Income Tax Commissioner, Mumbai City-4 Vs. Angel Capital & Debit Market Ltd. [2014 (5) TMI 584 - BOMBAY HIGH COURT] the order of the CIT(A) treating the assessee as being in default u/s. 201(1)/201(1A) in respect of failure to deduct tax at source as regards the payments made towards lease line charges, cannot be sustained, and is thus set aside Assessee appeal allowed.
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2017 (8) TMI 713
Addition u/s 68 - unexplained cash credit - prove the identity, credit worthiness and genuineness of the transaction - Held that:- Where the assessee has discharged its burden of proving the nature and the source of cash credit, the Assessing Officer shall make the addition u/s. 68 in the income of the assessee. We have already held that the explanation given by the assessee, in our opinion duly prove the identity, credit worthiness and genuineness of the transaction. It is not the case of the assessee that it has not offered any explanation. It is a case where the assessee has duly offered explanation, explaining the nature of source of the amount borrowed by it.In view of these facts, we set aside the order of the CIT(A) and delete the addition made u/s. 68 of the I.T.Act. - Decided against revenue. Addition u/s. 37 on repairs and maintenance account - Held that:- Revenue not able to bring to our knowledge any cogent material or evidence which may prove that the Assessing Officer has called for details of the bills/vouchers from the assessee, therefore, we are of the opinion, that the CIT(A) has rightly deleted the addition. - Decided against revenue. Addition of travelling, conveyance and telephone expenses - Held that:- We do agree assessee that the disallowance made by the Assessing Officer are merely adhoc disallowance. The assessee is a private limited company. There cannot be personal expenses in case of an incorporated company. Our aforesaid view is duly supported by the decision of Hon’ble Gujarat High Court in the case of Sayaji Iron And Engg. Co. vs CIT [2001 (7) TMI 70 - GUJARAT High Court]. Even otherwise, we noted that the assessee has submitted before the Assessing Officer copy of the ledger account showing details of these expenses. The Assessing Officer never asked for bills/vouchers from the assessee. No cogent material or evidence was brought to our knowledge by the learned DR to prove that the Assessing Officer has given opportunity to the assessee to produce bills/vouchers in respect of the aforesaid expenses. We, therefore, confirm the order of the CT(A) and delete the disallowance.- Decided against revenue. Disallowance u/s. 14A read with Rule 8D - no satisfaction being recorded by the Assessing Officer as required/s. 14A(2) before rejecting the claim of the assessee - Held that:- Assessing Officer can determine the amount of the amount of the expenditure incurred in relation to the income which does not form part of the total income in accordance with the method as may be prescribed. Rule 8D has been prescribed in this regard but the Assessing Officer can made such disallowance only if he is not satisfied with the correctness of the claim of the assessee having regard to the account of the assessee in respect of such expenditure in relation to the income which does not form part of the total income. Therefore, it is necessary on the part of the AO to record the satisfaction that the claim made by the assessee is not correct or incorrect and the satisfaction must be recorded having regard to the account of the assessee. In the instant case, we noted that the Assessing Officer without recording any satisfaction just rejected the claim of the assessee. We noted that the Assessing Officer has not recorded any dissatisfaction while disagreeing with the assessee in respect of the expenditure incurred by the assessee relating to the income not forming part of the total income. - Decided against revenue.
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2017 (8) TMI 712
Bogus purchases - estimation of income - CIT(A) reduced the addition to 12.5% - Held that:- Where all the purchases are bogus and since the assessee failed to prove the genuineness it cannot be allowed, but could not adduce any evidence or cogent material which may prove that the purchases and sales made by the assessee were not reconciled. This fact proves that the assessee would have made purchases as the assessee could make the sales only if purchases are made. Without making purchases it would not be possible that the assessee could have made the sales. The Revenue has duly accepted the sales made by the assessee. The natural inference will be that the assessee might not have made the purchases from these parties, but to save tax might have made the purchases from some other parties and procured the bills these parties. This does not prove that there had not been actual purchases made by the assessee. By making purchases from some other parties the assessee might have saves tax. To that extent the assessee may have earned income. Therefore, we do not find any illegality or infirmity in the order of the CIT(A) in reducing the addition to 12.5%. Appeal filed by the Revenue is dismissed
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Customs
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2017 (8) TMI 686
Waiver of rent/demurrage charges for import of Particle Board - The petitioner seeks for waiver of the detention charges on the ground that the detention was not on account of their fault, as the Department had detained the goods - Held that: - this is unreasonable because after the order was passed on 28.12.2016, effective steps have been taken by the petitioner to clear the cargo and it has been done in the shortest possible time on 06.01.2017. Therefore, the third respondent should waive the rent or demurrage on the goods for the entire period i.e., from 02.12.2016 till it was cleared on 06.01.2017. The question of now interpreting the order are extending partial relief is not permissible as the Regulation uses the expression shall not charge any rent or demurrage. This, mandates that the third respondent is prohibited from charging any rent or demurrage during the period of detention. This having been certified by the second respondent, there is no escape from the rigour of Regulation No.6(1)(l). Thus, the matter is not contractual, but it involves the implementation of a statutory regulation. Therefore, the Writ Petition filed by the petitioner is maintainable. The rent/demurrage on the goods which were detained at the instance of second respondent is waived - petition allowed - decided in favor of petitioner.
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2017 (8) TMI 685
Provisional Release of goods - petitioner seeks appropriate direction, so that the goods can be exported - Held that: - as finished leather, as per the extent policy, is freely exportable, while, generally, unfinished leather i.e. hides, skins, leather - tanned and untanned, are subject to export duty at the rate of 60%. It was made clear that the other conditions contained in Clauses 6, 7 and 8 of the order dated 23.11.2016 passed by the Commissioner remain unaltered - that part of the order dated 10.1.2017 requiring furnishing of security in the form of bank guarantee was directed to be stayed. Further, the communication requiring the petitioners therein to describe the subject goods as 'unfinished goods' was also stayed and the respondents were also directed to release the goods forthwith upon fulfillment of the conditions stipulated in the order dated 22.12.2016. Subsequently, the matter was listed for reporting compliance and by order dated 30.1.2017, the writ petitions were closed. The writ petition is disposed of by directing the respondents to grant provisional release of the goods subject to the petitioner complying with the conditions imposed by this Court - petition allowed - decided in favor of petitioner.
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2017 (8) TMI 684
Import of gold and diamond jewellery items - Baggage Rules - passing through the Green Channel - Smuggling - Whether the items are personal effects and no duty is leviable on the same - whether in the present facts and circumstances of the case, the show-cause notice dated 12.12.2002 and order dated 14.08.2003 are liable to be quashed or not? - Held that: - the respondent herein did not violate the provisions of Section 77 of the Act since the necessary declaration was made by the respondent while passing through the Green Channel. Such declarations are deemed to be implicit and devised with a view to facilitate expeditious and smooth clearance of the passenger. Further, as per the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto 18.05.1973), a passenger going through the green channel is itself a declaration that he has no dutiable or prohibited articles. A harmonious reading of Rule 7 of the Baggage Rules, 1998 read with Appendix E (2), the respondent was not carrying any dutiable goods because the goods were the bona fide jewellery of the respondent for her personal use and was intended to be taken out of India. Also, with regard to the proximity of purchase of jewellery, all the jewellery was not purchased a few days before the departure of the respondent from UK, a large number of items had been in use for a long period. It did not make any difference whether the jewellery is new or used. There is also no relevance of the argument that since all the jewellery is to be taken out of India, it was, therefore, deliberately brought to India for taking it to Singapore. Foreign tourists are allowed to bring into India jewellery even of substantial value provided it is meant to be taken out of India with them and it is a pre-requisite at the time of making endorsements on the passport. Therefore, bringing jewellery into India for taking it out with the passenger is permissible and is not liable to any import duty. Also, from the present facts and circumstances of the case, it cannot be inferred that the jewellery was meant for import into India on the basis of return ticket which was found to be in the possession of the respondent. Moreover, we cannot ignore the contention of the respondent that her parents at the relevant time were in Indonesia and she had plans of proceeding to Indonesia. Some of the jewellery items purchased by the respondent were for her personal use and some were intended to be left with her parents in Indonesia. In the absence of any facts on record about the nature and mode of concealment and also any finding of the lower authority that jewellery was kept in a way to evade detection on examination of the baggage, it has to be held that there was no concealment as such. It is seen that the respondent chose the Green Channel for clearance of her baggage. She committed no violation of law or infraction of any instruction for clearance of the baggage through the green channel as she being a tourist had no dutiable goods to declare under the Baggage Rules - appeal dismissed - decided against appellant-Revenue.
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2017 (8) TMI 683
Quantum of paltry amount involved in the appeal - Import - Re-import of exported goods - the decision in the case of COMMISSIONER OF CUSTOMS (APPEALS), BANGALORE Versus ACE DESIGNERS LTD. [2006 (1) TMI 424 - CESTAT, BANGALORE], contested - Held that: - In view of the paltry amount involved in the matter, we decline to entertain the civil appeal. Accordingly, the civil appeal is dismissed
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2017 (8) TMI 682
Enhancement of Anti Dumping Duty - rubber chemicals known as PX13 (6 PPD) - Mid Term Review - Notification No. 92/2011-Cus. dated 20.09.2011 - imports of subject goods from PR China and Korea RP - Rule 23 of Anti Dumping Rules indicate the powers of the DA to review the need for continued imposition of any AD duty on its own initiative or upon request by any interested party - the decision in the case of M/s Rishiroop Polymers Pvt. Ltd., M/s Kumho Petrochemicals Limited and M/s National Organic Chemical Industries Ltd. Versus Designated Authority, DGAD Respondent Ministry of Finance [2016 (9) TMI 1166 - CESTAT NEW DELHI] contested, where it was held that there is significant change in the facts and circumstances that it is considered necessary either to withdraw or modify appropriately the AD duty which has been imposed the DA can act accordingly - Held that: - the decision in the above case upheld - SLP dismissed - decided against petitioner.
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2017 (8) TMI 681
Condonation of delay - Entitlement of exemption - benefit of N/N. 21/02-Cus., dated 1-3-02 - concessional rate of duty - the decision in the case of Giavudan Indian Pvt. Ltd. Versus Commissioner [2016 (2) TMI 947 - SUPREME COURT], contested - Held that: - The review petitions are dismissed on the ground of delay as well as on merits in terms of the signed order.
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2017 (8) TMI 680
Failure to make pre-deposit of 7.5% to entertain appeal - SCN issued for non-fulfilment of export obligation - the decision in the case of Anjani Technoplast Ltd. Versus The Commissioner of Customs [2015 (10) TMI 2446 - DELHI HIGH COURT], contested, where it was held that Section 35 F indicated that on and after the date of its enforcement an Assessee in appeal was required to deposit the stipulated percentage of duty and if it failed to do so, CESTAT shall not entertain the appeal, Appellant deposited a sum of ₹ 4,95,532 on 8th May 2015 which was admittedly not 7.5% of the demanded duty as confirmed by Commissioner of Customs (Export) - Held that: - the decision in the above case upheld - present appeal dismissed - decided against appellant.
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2017 (8) TMI 679
Duty demand - Import of Cocoa powder in the name of flour - the decision in the case of Commr. of Customs Mangalore Versus M/s Kushalchand & Co. [2015 (12) TMI 246 - SUPREME COURT] contested - Held that: - Since the impugned notice is withdrawn albeit on the ground that it is barred by limitation, the present application has become infructuous and is dismissed as such.
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Corporate Laws
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2017 (8) TMI 673
Transfer of Preference Shares - corporate debt restructuring - Held that:- Having perused the materials on record, it is observed that the appellant’s side could not show from the records that the assignment deed, which contained a list of securities, contained those RCCP and CCP (i.e. preference shares). The learned CLB has also arrived at the same finding. The appellant’s side has also not been able to successfully demonstrate that the said 30,00,000 (thirty lakh shares) were pledged as security for the loan availed from the ICICI. Unless it is satisfactorily shown that the said shares formed a part of security, only then the plea of the appellant that the said shares was a part of ‘corporate debt restructuring’ i.e. CDR can be entertained, and not otherwise. There is no infirmity in the opinion of the learned CLB that the respondent No.1 had exit from the CDR way back in 2006 by assigning the debt to the Standard Chartered Bank and thereafter, it was no t concerned with the CDR. Therefore, having retained the 30,00,000 (thirty lakh) preference shares, the ICICI was within its right to sell the same to the respondent No.1. This court does not find any infirmity in the sale. There is no material on record to show that the 30,00,000 (thirty lakh) preference shares (RCCP and CCP) were not subscribed by ICICI and that those preference shares were offered as security for the loan. Therefore, if the shares had been purchased for value in the first place, either as a source of finance or by any other means of finance, there is no provision in the Companies Act, 1956 or in the Contract Act, 1872 to prohibit the owner of such shares to deal with the same and/or to sell it. Therefore, the inevitable conclusion of this Court is that the validity of the sale of those 30,00,000 (thirty lakh) Preference shares (i.e. RCCP and CCP) is not impeachable on the basis of materials on record. Moreover, this court cannot be influenced by the value in which the said preference's hares were sold because in a sale transaction, only the contracting parties may at all be the one aggrieved and it was certainly not open to the appellant to challenge the sale on account of low value.
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Insolvency & Bankruptcy
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2017 (8) TMI 674
Insolvency and Bankruptcy Code - Held that:- On an application preferred by the financial creditor, namely, State Bank of India, under Section 7 of the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal (NCLT), Ahmedabad Bench has passed an order dated 18.07.2017 under Section 14 of the said Code. In view thereof, the present petition is adjourned sine die. The parties herein are granted liberty to mention the petitions either after the proceedings before the NCLT are over or the NCLT vacates/modifies the said order. The respondent is hereby directed to communicate to the petitioner the outcome of the said proceedings.
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FEMA
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2017 (8) TMI 671
Illegally acquired property within the meaning of Section 3(1)(c) of SAFEMA - whether tenancy of a property, ownership of which is acquired by a person to whom the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) applies, will be treated as “illegally acquired property” within the meaning of Section 3(1)(c) of SAFEMA and can be subjected to forfeiture under the provisions thereof? - Held that:- In the present case, it is undisputed that only adjudication which has taken place by the competent authority is that the property was owned by the person to whom the Act applied i.e. against whom the order of detention had been confirmed. The rights of the appellants, who claim to be bona fide tenants even prior to purchase of the property by the person to whom the Act applied, have not been adjudicated upon on the assumption that their rights will stand automatically terminated. In view of above, we are of the view that rights of a bona fide tenant will not stand automatically terminated by forfeiture of property and vesting thereof in the Central Government. Such forfeiture will extinguish the rights of the person to whom the Act applies in the present case Krishna Budha Gawde, who was the owner of the property in question or his relative or associate having nexus with him in relation to the said property. However, we do not express any opinion whether the appellants are the bona fide tenants and had no nexus with the acquisition of the property by the person to whom the Act applied as claimed by them. This question needs to be determined independently by the competent authority as defined in Section 3(b) of the Act. Accordingly, we allow this appeal, set aside the order of the High Court and remit the matter to the competent authority for passing an appropriate order in accordance with law. The parties are directed to appear before the competent authority for further proceedings on 9th October, 2017.
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PMLA
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2017 (8) TMI 670
Prevention of Money Laundering - legality of provisional attachment orders - Held that:- The provisional attachment itself is bad in law and it is not a Provisional Attachment as envisaged in the Act. The said presumptive attachment is also in violation of express proviso 2 of Section 5(1) of PMLA, 2002. Here the Respondent failed to record in writing his reasons for believing that the immediate non-attachment of properties will frustrate the proceedings of the crime. The Complaint filed by the Respondent before the Adjudicating Authority under Sec. 5(5) of PMLA, 2002 is for a presumptive Attachment order and not for actual Attachment order as contemplated under Section 5(1) of PMLA, 2002. The entire process right from the Provisional attachment under Sec. 5(1) by the respondent dated 10.03.2014, subsequently filing complaint under Sec. 5(5) before the Adjudicating Authority, issuance of notice to the parties concerned by the Adjudicating Authority under Sec. 8(1) and passing of the Confirmation Order under Sect. 8(3) and attachment of the properties under Sec. 8(4) of PML, 2002 and Rule 7 of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties confirmed by the Adjudicating Authority) Rules, 2013 are not according to the above provisions and cannot be sustained. The Respondent without following the above (correct) procedure directly took possession of the property from the concerned Banks and even without producing the original fixed deposit receipts, which were in the name of the Principal Special Judges for CBI Cases, Chennai, had transferred the same in the name of the Directorate of Enforcement.
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2017 (8) TMI 669
Prevention of Money Laundering -period of limitation - whether entire proceedings vitiated as the impugned order has not been passed within 180 days from the date of passing the provisional attachment order? - Held that:- It is undisputed fact that provisional attachment order was passed on 10th March, 2015. The case in earlier appeal filed by the same appellants was that the sufficient time was not granted to file the reply issuing the notice under section 8(1) of Prevention of Money Laundering Act and to defend the case, therefore, the impugned order in that appeal was not sustainable. It is not denied by the counsel for the appellants that the said order was not challenged and infact the appellants have denied the benefit of the said order. The said order was not challenged by the appellant in review petition. It is also not denied by the appellant that due process has not been followed in view of the direction issued on 11th August, 2015 and the confirmation order under appeal was passed on merits. Under these circumstances the objection of the learned counsel for the appellant on this issue is rejected and we are of the considered view that the appeal is to be heard on merits.
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Service Tax
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2017 (8) TMI 711
Voluntary Compliance Entitlement Scheme - while appellant had explained the alleged violation of Rule 6(3B) of the CENVAT Credit Rules, 2004, they had sought more time to reconcile the inconsistency between the declaration and ST-3 returns - Held that: - when a mistake in the returns filed by the appellant is pointed out and on that basis, the application made by the appellant was proposed to be rejected, the respondent ought to have considered the request of the appellant for more time for reconciliation and on that basis, should have afforded the appellant an opportunity to explain the inconsistency so pointed out. Having not done so, the matter needs to be re-considered by the respondent - appeal allowed by way of remand.
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2017 (8) TMI 710
Rectification of Mistake - review of order - Held that: - It is fairly well settled that in the garb of rectification, review of the order already passed is not permissible - The normal principle of law is that once a judgment is pronounced or order is made by the court, Tribunal or adjudicating authority, it becomes functus officio and hence cannot re-decide the matter in the light of fresh arguments. The points advanced in the ROM are those which require re-appraisal of the evidence and law which is not allowed by way of rectification of mistake - ROM application dismissed.
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2017 (8) TMI 709
Banking and Other Financial Services - activity of leasing ATM - Department was of the view that such leasing rental charges collected would fall under the category of Banking and Other Financial Services and that appellants are liable to pay service tax on such charges, for the period from 16.8.2002 to 31.10.2004 - Held that: - The issue has been analysed by the coordinate Bench of the Tribunal in the case of India Switch Co. Pvt. Ltd. [2014 (12) TMI 597 - CESTAT CHENNAI], where the Tribunal has specifically stated that ATM related services have been introduced with effect from 1.5.2006 only and the activities relating to ATM do not fall within the bank and other financial services prior to 1.5.2006 - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 708
Penalty u/s 76 and 78 - Business Auxiliary Services - commission received from the banks/non-banking financial institutions - payment of tax with interest before issuance of SCN - Section 73 (3) of the Act - extended period of limitation - Held that: - the appellant has paid service tax along with interest on pointing out by the department, during the course of investigation, therefore, the SCN was not required to be issued in terms of section 73 (3) of the Act - Further, as there was contrary decision of this Tribunal on the issues, no penalty can be imposed - also, when there was divergent view on the issue, the extended period of limitation cannot be invoked - penlaties set aside - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 707
EOU - stay of order of Refund of unutilised CENVAT credit - input services - Outward Catering Services - Rent-a-Cab Services - Parking Charges - Air Travel Agency Services - Restaurant Service - Photography Service - Held that: - The issue whether assessee is eligible for refund/credit on input services like Outward Catering Services, Rent-a-Cab Services, Parking Charges, Air Travel Agency Services, Restaurant Service and Photography Service prior to the period 01.04.2011 has been settled by various judgments - The definition of "Input Services" prior to the period had a wide ambit as it included the words "activities related to business" - there is no ground to grant stay of the impugned order - appeal dismissed - decided against Revenue.
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2017 (8) TMI 706
Restoration of appeal - delay in filing appeal - Held that: - It is apparent from the conduct of the applicant as explained by the AR that the applicant has no interest in prosecuting the matter. Further, the demand involved in this appeal is more than ₹ 3, Crores. It is presumed that the application is filed to buy time and to protract the proceedings by being absent repeatedly. It shows that there is no seriousness of litigation and total abuse of process of law - delay not condoned - appeal cannot be restored.
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2017 (8) TMI 705
CENVAT credit - input services - civil and structural services - architectural services - maintenance and repair service used for civil work like compound wall roofing, false ceiling, canopy work - Held that: - all the services used by the appellant are in the nature of repair and maintenance of various machinery installed at the factory of the appellant used in or in relation to the manufacture of finished goods as per the requirement of Drugs Act - all these services are an ‘input service’ and therefore, the appellant is entitled to CENVAT credit of the same. Outdoor Catering Services - Held that: - as the period of dispute is October 2012 to September 2013, which is after the amendment in the definition of ‘input service’ as contained in Rule 2(l) whereby the ‘outdoor catering service’ has been excluded from the definition of ‘input service’. Appeal allowed - decided partly in favor of appellant.
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2017 (8) TMI 704
Penalty - Section 80A - Consideration for renting of immovable property during the period June 2007 to March 2009 - Held that: - Section 80A has specifically provides that, if service tax liability along with interest is discharged on the renting of immovable property services within six months from the assent of bill by the President, then the penal provisions need not be invoked - It is on record that the appellant has discharged service tax liability and interest thereof before assent of the Finance Bill 2012 by the President of India. In view of this, the provisions of Section 80A are applicable and accordingly penalties imposed on the appellant are liable to be set aside - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 703
Levy of penalty - Tax collected but not paid - entire tax with interest not paid before issuance of SCN - financial difficulty - Held that: - once appellant have collected the service tax, then there was no justification for not paying the same to the Government - The appellants were aware of their service tax liability but they have taken the excuse of financial difficulty which is not a reasonable ground for not paying the service tax - impugned order upheld - appeal dismissed - decided against appellant.
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2017 (8) TMI 702
Maintainability of appeal before High Court - Classification of taxable service - Section 65A(2)(b) of Finance Act, 1994 - the decision in the case of The Commissioner of Central Excise Versus Customs, Excise and Service Tax Appellate Tribunal, M/s. CMS (India) Operations & Maintenance Company P. Ltd [2016 (6) TMI 876 - MADRAS HIGH COURT] contested, where it was held that While adverting to the contentious issues raised and answered and testing the same with reference to the statutory provisions, viz., 35-G and 35-L of the Central Excise Act, 1944, we are in agreement with the submissions advanced by the learned counsel for the respondent that the revenue has to file an appeal directly to the Hon'ble Supreme Court, under Section 35-L of the CEA, 1944 - Held that: - SLP dismissed as withdrawn.
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Central Excise
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2017 (8) TMI 701
Clandestine removal - while remanding the matter back to the adjudicating authority, there was clear-cut directions to the adjudicating authority to decide the issue of clandestine removal in the light of guidelines in Para-14, in the case of Arya Fibers Limited [2013 (11) TMI 626 - CESTAT AHMEDABAD] - Held that: - none of those guidelines have been followed in this case while alleging the clandestine removal against the appellant - the manufacturing unit of the appellant has never been searched and the case has been made out against the appellant on the basis of documents and laptop recovered from the premises of M/s. Shyam Salona Plywood and M/s. Shiv Shankar Plywood, a third party and the same cannot be relied upon - Admittedly, the Revenue has failed to establish the clandestine manufacture and clearance of the goods by the appellant. Therefore, the demand of duty is not sustainable - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 700
Clandestine removal - while remanding the matter back to the adjudicating authority, there was clear-cut directions to the adjudicating authority to decide the issue of clandestine removal in the light of guidelines in Para-14, in the case of Arya Fibers Limited [2013 (11) TMI 626 - CESTAT AHMEDABAD] - Held that: - none of those guidelines have been followed in this case while alleging the clandestine removal against the appellant - the manufacturing unit of the appellant has never been searched and the case has been made out against the appellant on the basis of documents and laptop recovered from the premises of M/s. Shyam Salona Plywood and M/s. Shiv Shankar Plywood, a third party and the same cannot be relied upon - Admittedly, the Revenue has failed to establish the clandestine manufacture and clearance of the goods by the appellant. Therefore, the demand of duty is not sustainable - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 699
Claiming concessional rate of duty - N/N. 4/97-CE dated 1.3.1997 - manufacturing of paper - It appeared to the department that the actual weight of pulp of materials other than excluded category was below the percentage stipulated - Held that: - No doubt, the related SCN did invoke the entire demand on the ground of manipulation of records and there remains suppression of facts. However, in the previous Order of this Tribunal dated 24.5.2007, it has been held that findings of manipulation of records by the appellants is unwarranted in this case. This finding of the Tribunal has not been challenged by Revenue. Hence, in the denovo adjudication, the adjudicating authority cannot once again fall back on the very same allegation of manipulation of records to justify invocation of extended period - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 698
Clandestine removal of goods - Principles of Natural Justice - Held that: - the statements of the appellants were recorded, no investigation was conducted at the end of the appellants and the transporters were also not investigated to reveal the truth whether the clandestine removal of goods from M/s IFL and M/s IAPL were transported up to the place of appellants. Moreover, no cross examination of the persons whose statement was relied upon and sought by the appellant was granted - As the cross examination is required for proper adjudication, which was not granted to the appellant, therefore, there is violation of principle of natural justice The matter is remanded back to the adjudicating authority to grant cross examination of the witnesses sought by the appellant as per Section 9D of the Act - appeal allowed by way of remand.
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2017 (8) TMI 697
Refund of untilised CENVAT credit - drawback - respondent had availed duty drawback in respect of Customs duty - Held that: - On plain reading of Rule-3, it is clear that the availment of Cenvat credit will prevail over disbursement of drawback. Therefore, on the ground that drawback of Customs duty has been paid to the respondent, refund of Cenvat credit of Central Excise duty paid on inputs and service tax paid on input service under said Rule-5 cannot be denied - refund allowed - appeal dismissed - decided in favor of Respondent-assessee.
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2017 (8) TMI 696
Valuation - valves supplied by the oil companies - Revenue entertained a view that the value of valves is to be added in the value of domestic gas cylinders in which case the assessable value of cylinder would go high - whether the appellant is entitled to benefit of credit of duty paid on the valves or not? - Held that: - the issue no more res integra and stands settled by various decisions of the Supreme Court followed by the Tribunal and as such the benefit has to be extended, subject to verification of the records - the credit of duty paid on valves used in the cylinders is required to be extended to the appellant and the duty on final product would get reduced by that amount - the matter remanded to the adjudicating authority for verification of documents, for the purpose of extending the credit to the appellant - the adjudicating authority would also examine and would re-quantify appellant's duty liability by extending the benefit of cum-duty. Penalty - Held that: - The assessee is under bonafide belief that the value of valves supplied by the oil companies free of cost, is not required to be taken into consideration. There is no malafide on the part of the assessee pointed out by the Revenue. The dispute relates to bonafide interpretation of the provisions of law - penalty not imposable. Appeal allowed in part and part matter allowed by way of remand.
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2017 (8) TMI 695
Remission of duty - Rule 21 of the Central Excise Rules, 2002 - denied on the ground that the intimation to the proper officer was sent only on 18/02/2006, after a delay of 11 days. Normally, such intimations are to be given within 24 hours - Held that: - there has been no action by the jurisdictional officer with reference to this mishap. No survey was conducted. No samples were drawn. In such situation, it is not correct for the Original Authority to reject the remission application without any legal basis for the same - the accident was duly reported and recognized by the Police and State Excise Authorities who had followed up the matter for further action. The Central Excise officers did not follow up for any action. When the remission application was filed the same was rejected on the grounds which are not at all sustainable - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 694
CENVAT credit - inputs - whether the appellant manufacturer of V. P. Sugar and molasses have rightly availed Cenvat credit of ₹ 99,94,125/- during the period 2005-06 to August 2008 on goods like M.S. Plates, M.S. Channels, H. R. Coils, M.S. Angles, etc. by treating these goods as inputs? - Held that: - the appellant is entitled to Cenvat credit on items of iron and steel in question as the same have been used for fabrication of capital goods, for repair and maintenance of capital goods, for fabrication of staging structures and supporting structures etc., as no excisable products can be manufactured without the same - the amended definition of ‘inputs’ under CENVAT credit Rules provides for availability of CENVAT credit to a manufacturer on all items utilized by the manufacturer in the factory for or of production - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 693
Classification of goods - HDPE stitching yarn - Held that: - the issue is squarely covered by the decision of the Tribunal in the case of Commissioner of Central Excise, Ahmedabad Vs. Damodar Poly-Fab (P) Ltd. [1999 (11) TMI 732 - CEGAT, NEW DELHI] - the classification of HDPE stitching yarn is not in consonance with Circular No.54/12/91-CX dated 24.9.1992 wherein the Board has categorically held that HDPE strips are rightly classifiable under Chapter 39 - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 692
Excisability/marketability - ducts - fabrication of Ducts during the process of execution - Held that: - air-conditioning plant was in the nature of a system and not machinery or goods. - reliance placed in the appellant's own case M/s ETA Engineering Pvt. Ltd. Mr. V. Seshadri Versus Commissioner of Central Excise, Bangalore [2016 (10) TMI 33 - CESTAT BANGALORE], where it was held that the demands are not sustainable and the same are set aside - appeal dismissed - decided against Revenue.
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2017 (8) TMI 691
Clearance to SEZ - CENVAT credit - non-maintenance of separate records for dutiable and non-dutiable goods - Held that: - the issue is no more res integra and has been settled in favor of the appellant by the decision of Division Bench in the case of Sujana Metal Products Vs. CCE [2011 (9) TMI 724 - CESTAT, BANGALORE], wherein the Division Bench has come to the conclusion that supplies made to SEZ from DTA are deemed exports and the assessee is entitled to the benefit of CENVAT credit and is not required to maintain separate account for dutiable and non-dutiable goods - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 690
Valuation - Discount - allowability - the appellant offered quantity discount of 20% to distributors/stockist - Held that: - From the contract, it is clear that the so-called 20% quantity discount is not a quantity discount but a commission offered to the stockist. It is not a discount which is given to the buyer but it is given only to the stockist - Further, it is noted that these facts were not brought to the notice of the Tribunal - appeal dismissed - decided against appellant.
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2017 (8) TMI 689
Clandestine manufacture - molasses more than recorded balances - it was presumed that unaccounted and proportionate sugar was manufactured and cleared without payment of duty - validity of SCN - Held that: - there are many contradictory statements made in the SCN - The SCN has failed to substantiate the procurement of raw material for presumed quantity of sugar having manufactured which was not accounted for nor the Investigating Officers took stock of the balance quantity of sugar available in the factory nor they verified the production record in respect of sugar - the SCN is presumptive - appeal allowed - decided in favor of appellant.
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2017 (8) TMI 688
Valuation - Guarantee charges - includibility - Period of limitation - Held that: - the appellants are liable to pay tax on the entire value of the goods recovered by them as per the contract. It is not open to apportion a part of the value to the guarantee and exclude that from the assessable value - it is apparent that the same are not extra charges but are included in the value initiated with MSEB. This clearly amounts to misdeclaration - appeal dismissed - decided against appellant.
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2017 (8) TMI 687
MRP based duty or transaction value - N/N. 4/2006, dated 1-3-2006 - manufacture of Cement and Clicker - requirement of declaration of RSP - Revenue entertained a view that the respondent cleared goods in packaged form but claimed concessional rate of duty wrongly - Held that: - RSP of the goods are not required to be declared in terms of Packaged Commodities Rules, 1977, the duty shall be determined as if the goods were cleared in other than packaged form. Rule 2A of the said Rules stipulates that Chapter II of the Rules will not apply in case of institutional/industrial consumers - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2017 (8) TMI 678
Principle of Promissory Estoppel - grant of refund on CST paid - Validity of Notification dated 01.10.1993 - it was the case of respondent that having held forth a promise for grant of exemption from CST on raw materials purchased from outside the State for five years from the date of production, the appellant could not have withdrawn or modified the benefit before that time period - Held that: - The grant of refund on CST paid, to boost entrepreneur investment was primarily an executive economic policy decision. The scope for judicial scrutiny and interference with the same, has to be restricted to arbitrariness and unreasonableness as observed in Ugar Sugar Works Ltd. vs. Delhi Admn. [2001 (3) TMI 1008 - SUPREME COURT]. The respondents had no legal or indefeasible right to claim refund of CST paid by them. The policy rested on an executive decision to encourage entrepreneur investment. It naturally includes the power of the State to review the policy from time to time, including on considerations for the manner in which the policy was proving beneficial or detrimental to the larger public interest, and the State exchequer. The policy could therefore well be withdrawn or modified at any time for just, valid and cogent reasons. Judicial review of a policy decision, especially an economic policy decision, shall have to be restricted to the presence of just and valid reasons eschewing arbitrariness, so as not to fall foul of Article 14 of the Constitution. But, in the garb of judicial review, the Court will not examine the sufficiency or adequacy of the reasons or materials, in the manner of an appellate authority, to substitute its own wisdom for that of the government. That would tantamount to taking over of the executive decision making process. There has been much passage of time since the issue originated and the litigation that followed. The mere fact that ample documentary evidence may not be available with the State today, for valid reasons as mentioned in the additional affidavit, it cannot be held that what was valid when done, must be pronounced as illegal today, merely because the evidence may have been lost with passage of time for unavoidable reasons. Undoubtedly, fraudulent refund claims obtained, would be contrary to the financial interests of the State, thereby affecting the larger public interest. The policy wisdom of the State that the grant of refund was eroding non-plan resources is a matter exclusively in the executive domain. Appeal allowed - decided in favor of appellant.
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2017 (8) TMI 677
Detention of goods - non-production of Transit Declaration Form (TDF) - presumption that goods were intended to be sold within the State only - Held that: - Pursuant to Section 52 read with Rule 55(5) of the Rules, Commissioner prescribed TDF to be downloaded from the website vide circular dated 3 September 2013 for the purpose of carrying goods through the State of Uttar Pradesh. It provides that at the time of entry of the goods in the State, TDF is to be downloaded and duly filled, inter alia, giving the route through which the vehicle carrying the goods into the State of Uttar Pradesh mentioning two important place through which the goods would pass, the entry and exit points, the time of entry and the proposed time of exit which should not be exceed four days from the entry. Any deviation or any default in carrying the TDF would attract the presumption provided in Section 52 read with Rule 58. There were conflicting decisions with regard to the issue - in some decisions it was held that downloading TDF as mandated by the circular is impracticable, therefore, in absence of TDF the goods cannot be seized, whereas in other decisions it was held that under the Act it is mandatorilly required that TDF must accompany the consignment on entry into the State - In view of the conflicting decisions rendered with regard to the scope of Section 52 read with Rule 58 requires to be clarified by a Larger Bench. Matter referred to Larger Bench to decide the issue whether the Transit Declaration Form (TDF) is mandatory requirement in view to the circular issued by the Commissioner read with Section 52 of the Act and Rule 58 of the Rules or in the alternative upon non-production of the TDF on interception of the goods whether a presumption that the goods are meant for sale within the State can mandatorily be drawn in view of Section 52 read with Rule 58 and the circular dated 3 September 2013 issued by the Commissioner.
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2017 (8) TMI 676
Levy of tax - works contract - Section 3-F(2)(b) of the Act - Whether the goods brought from outside the State of U.P. and used in the execution of works contract can be subjected to tax despite the fact that the turnover pertaining to the works contract is exempted from payment of tax in view of Section 3-F(2)(b) of the Act read with Section 3 of the Central Sales Tax Act, 1956? - Held that: - Section 3-F(2)(b) clearly exempts from the applicability of trade tax the amount representing sales value of goods covered by Section 3, 4 and 5 of the Central Sales Tax Act, 1956. In order to enable the revisionist to claim benefit of the provision, it would have to be shown that the amount representing the sales value of goods brought from outside the State of U.P. was for the works contract - The assessee appears to have proceeded on the premise that as for the previous years, in similar circumstances, the import of goods for works contract was accepted by the department, as such, the facts need not be established all over again. An opportunity to establish such facts ought to have been given more specifically, if the department intended to take a view different from the previous years. In the opinion of this Court, the Tribunal ought to have given an opportunity if assessee's case was being non-suited on facts - The Tribunal shall examine that aspect of the matter afresh. Whether the learned Tribunal was justified in levying tax on road marking plastic powder used in the marking of central line on the National Highways/Roads as Paint being an unclassified items, since it is a pigment and used in the execution off works contract? - Held that: - the Tribunal has observed that even if such material is not treated to be paint, yet it would be treated as an unclassified item. The finding in that regard of the Tribunal appears to be vague. Specific case of the assessee was of import of thermo plastic materials, used for the purposes of laying lines on the highways. The process had also been substantiated before the Tribunal. Tribunal, therefore, was required to return a finding as to whether the material utilized for the contract was paint or thermo plastic road marking material. The Tribunal appears to have lost sight of the fact that assessing authority had acknowledged the product as thermo plastic road marking material. Appeal allowed by way of remand.
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2017 (8) TMI 675
Entertainment tax - Section 14 (1) (d) of the Tamil Nadu Cinemas (Regulation Act 1955) - exemption from Entertainment Tax - Held that: - Collection of un-issued tickets by the Tahsildar, the Investigating Officer and the report submitted are acts done in exercise of official acts and no malafide has been attributed to the Inspecting Officer. Though the writ petitioner has denied collection of excess amount and also contended that the statements of consumers, were furnished and therefore, there is a violation of principles of natural justice, this Court is not inclined to accept the same. Theatre has been given an opportunity to explain. But, there is no fruitful answer, in the explanation, dated 30/12/2016, as to the tickets found in the office of the theatre. Writ Court has properly adverted to the grounds urged and while setting aside the penalty portion, has rightly directed the theatre to pay the excess amount. Appeal dismissed - decided against appellant.
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Indian Laws
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2017 (8) TMI 672
Declining to issue license to the petitioner for running a FL-11 Hotel - conduct of EOGM - authorisation to Managing Director to seek licence - Held that:- There was an interim order, Ext. P7, passed by the Tribunal, appointing Justice M. Ramachandran, former Judge of this Court to conduct the EOGM. It is also not in dispute that the EOGM was convened in accordance with the directives issued by the Tribunal and several decisions were taken. One among the resolutions adopted in the EOGM is in respect of the renewal of FL-11 Bar license, and has apparently authorized the 2nd petitioner as the Managing Director of the 1st petitioner company to seek issuance of license. May be true, the subject disputes are pending by and between the parties before the Tribunal. But, at the same time, the Hotel is run by the 1st petitioner company and any income generated to the account of the company will not in any manner prejudice the Directors. The apprehension voiced by the learned counsel appearing for the additional 3rd respondent is that, if the license is renewed in favour of the 2nd petitioner, it will cause irreparable injury to the additional 3rd respondent, since it will be treated as a right conferred on the 2nd petitioner. However, the said apprehension may not have much bearing since the subject matter is ultimately pending before the Tribunal, which is at liberty to take appropriate decisions. Therefore, in the interregnum, in order to protect the interests of the company and its shareholders, I think it is only appropriate and fair to make a provision to run the hotel, with FL-11 license, if the petitioners are legally entitled to run the same in accordance with the Rules. There will be a direction to the 2nd respondent to re-consider the application submitted by the 2nd petitioner to renew FL-11 license of Hotel Windsor Castle, Kodimatha, Kottayam, as a properly constituted application, and if otherwise the application is in order and in accordance with law, I see no reason to decline the license.
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