TMI Tax Updates - e-Newsletter
September 22, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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Income Tax
Mere reconstitution of the partnership firm can hardly be said to amount to the splitting up, or the reconstruction, of the partnership business which was already in existence. - Exemption u/s 10B allowed - HC
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The award of compensation under motor accidents claims cannot be regarded as income. - the interest on such award also cannot be termed as income to the legal heirs of the deceased or the victim himself - HC
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A.O. can assess the undisclosed income as a result of search only on the basis of material or information as are available in the search. He is not authorised to refer the matter to the Valuation Officer under Section 55A (b) (ii) to asses the fair market value - HC
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Deduction u/s. 80IB(10) - The contention of the assessee that the project was started keeping in mind the pre amended provisions of Sec. 80IB(10) and therefore any subsequent changes should not change the project profile cannot be accepted - AT
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Capital gain – inheritance – the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset - AT
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Addition u/s 68 - Assessee himself routed his funds through these companies. - Assessee could not rebut the same by bringing any positive material on record to substantiate the identity and authenticity of investors. - AT
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Agricultural income - Only for the reason that the Basic Seeds are sown in leasehold land and the manpower required are arranged through contract farming, it does not mean that the operations carried out by the assessee are not agricultural operations. - AT
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TDS u/s 194C on sub-contractor - Construction of roads & bridges – subcontract of supply of labour - TDS rate @ 1.2% is correct - AT
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Deduction u/s 80IB – No material could be brought on record by the Revenue to show that the risk incidental to manufacturing was not of the assessee and was liability of any other person. - AT
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Validity of Notice issued u/s 143(2) – expiry of 6 months - circulars or general directions, issued by the CBDT would be binding u/s 119, on all officers and persons, employed in the execution of the Act. - AT
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Approval of loan agreements/ long term infrastructure bonds and rate of interest for the purpose of Section 194LC of the Income-tax Act, 1961- regarding. - Circular
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Transfer of PANs Of Non-Resident Assessees - Order-Instruction
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AMENDMENT IN NOTIFICATION NO. S.O. 709(E)-IT DATED-20-08-1998 - COST INFLATION INDEX - REGARDING - Notification
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Service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement - AT
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Penalty u/s 271D - share application money - Since there is nothing on record to suggest that the receipt of application money is in the nature of loan or deposit the provisions of section 269SS are not attracted. - AT
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Transfer of leasing rights of Films - considered to be 'goods' OR 'sale'? - Rule 9B(6), - "sale" of rights of exhibition of a feature film would include the "lease" of such rights - SC
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Claim of depreciation on property which was exchanged for another property in respect of which the assessee had forgone/surrender the tenancy rights - claim of depreciation allowed - HC
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Deduction u/s 80P (2)(d) - whether provision of section 14A are applicable to the deductions u/s 80P(2)(d) - Held yes - HC
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Since assessee was having substantial reserve funds with it and the AO had merely gone by a presumption that investments were made out of borrowed funds disallowance under Section 36(1)(iii) was not warranted - AT
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Reversal of interest - interest income which was taxed in the past by offering in the books of accounts forming part of the total income declared, however the same was a doubtful of recovery, therefore the assessee-company had justification to reverse that entry by charging the same in the P&L account - AT
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Interest u/s 244-A - as the amount in question was deposited as tax and not as interest, and also that even if a presumption could be drawn that the amount was deposited as interest, the interest under Section 244A (1) of the Act, was payable on interest - HC
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Payment of royalty - Revenue expenditure or capital expenditure - assessee never became the owner of such know-how but was merely granted a licence to use the same in manufacturing process. - held as revenue in nature - AT
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Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011 (regarding monetary limit of appeals by the Department), should not be applied ipso facto, particularly, when the matter has a cascading effect. - SC
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Reassessment - section 150 - it is clear that the order passed by the Hon'ble High Court in the assessee’s case for the said Assessment Year was not in the nature of a direction hence the provision of Sec. 150(1) of the Act will not be applicable. - AT
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Capital Gain – AO determine deemed consideration in respect of transfer of land as per sec. 50C. - Therefore addition on account of non-refundable deposit is not justifiable - AT
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Loan or deposit - Section 269SS - Penalty u/s 271D -transactions effected through journal entries - no penalty - HC
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Arrears of wages - the liabilities arising out of the Monesana Wage Board award were justifiably deductible as expenditure, and not covered by Section 43-B - HC
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Mere circumstance that common funding of the (proposed) business existed, and there was a management which conceived the start of the new business activity, did not make the proposed joint venture business an “existing business” for the expenditure to qualify as revenue expenditure - HC
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Customs
Rate of exchange of conversion of each of the foreign currency. - Notification
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Refund of excess fine and penalty - non production of original challan - The grievance of the department seems to be genuine, as later, if someone brings the original chalan and claims this money, the Department would be in difficulty - HC
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Classification - Import of Long Pepper - differential duty – description of 'Long Pepper' as 'Pippali' by these appellants in the Bills of Entry would not amount to ‘misdeclaration’ - no penalty - AT
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100% EOU - Duty cannot be demanded on the goods which have been destroyed due to unavoidable accident/natural causes on the ground that they have not been used for the intended purpose - HC
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FEMA
Policy on foreign investment in Power Exchanges - FDI GUIDELINES
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Review of the policy on Foreign Investment (FI) in companies operating in the Broadcasting Sector - FDI GUIDELINES
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Review of the policy on Foreign Direct Investment in the Civil Aviation sector - FDI GUIDELINES
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Review of the policy on Foreign Direct Investment- allowing FDI in Multi-Brand Retail Trading. - FDI GUIDELINES
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Amendment of the existing policy on Foreign Direct Investment in Single-Brand Product Retail Trading - FDI GUIDELINES
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Corporate Law
Whether SEBI has the power to investigate and adjudicate relating to issue and transfer of securities by listed public companies matter as per Sec 11, 11A, 11B of SEBI Act and under Sec 55A of the Companies Act Or is it the MCA which has the jurisdiction under Sec 55A (c) of the Companies Act ? - SC
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Indian Laws
Finance Minister approves the Operational Features of the Rajiv Gandhi Equity Savings Scheme (RGESS).
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10 States who gave their assent to FDI in retail
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Service Tax
Mere delay in payment of the Service Tax cannot be construed as suppression or misdeclaration of facts with intent to evade payment of Tax. - AT
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GTA service - Service Tax liability is on the person paying the freight - Service provider did not pay the freight and therefore there is no tax liability on their part - AT
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Central Excise
Cenvat credit - realising the mistake, the assesee took steps to withdraw the claim of depreciation and since that did not materialise, the assessee offered to pay the duty with interest. - No penalty u/s 11AC - HC
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Cenvat Credit - appellants have not reversed the credit taken on inputs/input service used for exempted products - benefit of amended Rule 6 by Section 73 of FA, 2010 is not available - AT
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Once under law the tax is not recoverable, it cannot be justified merely because the party has paid some amount to avoid penal action - HC
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Cost Inflation Index for the Financial Year 2012-13 - Notification
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SSI unit - Classification - ‘Microfined Red Oxide’ and ‘Microfined Jet Black Oxide’ - Burden to prove classification of the product is clearly on the department - department has not proved that the products cleared from other branches fall under Tariff Heading 3206.90 - AT
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Rebate claims - Unless and until duty paid character of exported goods is proved the rebate cannot granted - Once the supplier is proved non existent, it has to be held that goods have not been received. - no rebate - CGOVT
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Cenvat credit - merger of two units - No prior permission is required at the time of merger of one unit to another unit - appellants have correctly taken the credit subject to verification by the concerned officers - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (9) TMI 594
Addition on account of purchase of property - benami purchase of property in Seelampur - ITAT deleted the addition - Held that:- Tribunal overlooked that though Om Prakash, one of the property dealer filed an affidavit before the AO, Fakir Chand, the seller of property did not respond to the summons issued by the AO. There is no plausible explanation from the assessee why the documents relating to the property were found in his residence if he had nothing to do with it - The documents include the General Power of Attorney and an Agreement to Sell which bore the signature of Fakir Chand, seller. The fact that the name of the buyer was not mentioned in the documents is a fact which goes in favour of the revenue - neither Fakir Chand nor Om Prakash, the property dealer, came forward to claim the documents which is quite unusual if the intention of handing over the documents was only to enable the assessee to consider the proposal for buying the property. The Tribunal also overlooked that the name of the owner of the property was not mentioned in the affidavit of the property dealer - against assessee. Addition on account of FDRs based on dumb documents - ITAT deleted the addition - Held that:- Tribunal saw the seized paper as a “dumb document” which meant that nothing could be understood from it. The document, according to the Tribunal, merely noted a figure of Rs.27,50,000/- without any details whereas details of other fixed deposits made with Karnataka Bank were given including the interest figure. The Tribunal also felt difficulty in gathering the details of fixed deposits for Rs.27,50,000/- from the seized paper; there was no date or signature therein. On these facts the Tribunal has drawn the conclusion that the addition is without any basis - in favour of the assessee. Addition on account of investment in M/s Fair Deal Garments - ITAT deleted the addition - Held that:- The Tribunal has overlooked that the seized papers contained date-wise receipts of amounts from the assessee between 26.11.1993 and 10.2.1994. Sunil Gupta, the assessee‟s nephew had not started any business during this period. He started the business only on 26.12.1994. There was therefore no possibility or reason for him to make any investment in Fair Deal Garment before 26.12.1994. Sunil Gupta was for some time employed with Jai Pal Aggarwal and that was the reason why the documents were found in his possession. The assessee has not denied this. These crucial aspects have been overlooked by the Tribunal while deleting the addition against assessee. Addition on account of cash deposits made by the assessee - ITAT deleted the addition - Held that:- The Tribunal has not given any valid reason for deleting the addition as it has rested its decision on Annexure 3 in which the assessee had supposedly explained the cash deposits. This Annexure is not before thus court therefore, no means of knowing what the explanation is. Moreover, before the Assessing Officer the assessee does not appear to have submitted any explanation - we set aside the finding of the Tribunal and restore the matter to the file of the Assessing Officer, who shall consider the assessee‟s explanation given in Annexure 3 - in favour of revenue by way of remand.
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2012 (9) TMI 593
Addition on account of Peak credit - undisclosed income - ITAT deleted the addition made in block assessment - Held that:- Considering the gist of the statement of Hemant Shah, Director of the Company who advanced loans it is is seen therefrom that the assessee’s name was not mentioned by him at all as beneficiary of the accommodation entry business carried by him and merely stated that he did not deal with any ship-breaker and he had given only loan after taking cash and deducting commission. Even if the Revenue can be said to have successfully established that Mahendra Shah was carrying on the business of giving accommodation entries for commission, it does not follow that the loans taken by the assessee from the various companies allegedly belonging to the Madhupuri Group of Companies were accommodation loans. From the statement it is not possible to establish any link between Mahendra Shah and the creditor companies or that he was in a position to influence those companies into carrying on the accommodation entry business - The material on the basis of which the addition in the present case is sought to be made falls short of the requirement of the sub-section (1) of 158BB which says that computation of the undisclosed income of the block period has to be made on the basis of evidence found as a result of search as there is nothing to link the assessee with the accommodation entry business stated to be carried on by Mahendra Shah whose statement constituted the sole basis of the addition - in favour of the assessee
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2012 (9) TMI 592
Disallowance of exemption u/s 10B - CIT(A) allowed it approving the admission of the additional evidence - Held that:- As far as the first objection raised by the AO that the assessee was formed by the splitting up, or the reconstruction, of a business already in existence is not acceptable as mere reconstitution of the partnership firm can hardly be said to amount to the splitting up, or the reconstruction, of the partnership business which was already in existence. There is no dispute that after the partnership was reconstitued, the reconstituted firm had started a new business with an amendment to the partnership deed enabling the firm to carry on the manufacture and export of handicrafts items. Prior to the reconstitution the firm was authorized to merely carry on trading and exports of handicrafts etc. That apart the balance sheet as on 31st March, 2006 undisputedly shows that the assessee had acquired tools and the machinery, which were not with the firm prior to the reconstitution. Even the profit and loss accounts drawn up after the reconstitution showed manufacturing expenses and wages.Thus unable to appreciate how the Revenue can contend that the undertaking owned by the assessee was formed by the splitting up or reconstruction of the erstwhile partnership business. The contention is contrary to the facts on record - in favour of assessee. COU - Scope of term manufacture - One of the main objections of the AO was that the EOU was directed to be custom-bonded which was not complied with by the assessee. The CIT(Appeals) held that custom-bonding was required only where imports as per notification No.53/97 –customs dated 3rd June, 1997 are contemplated and since the assessee-firm did not plan to import any materials to be used in the manufacture of ingredients, the EOU was not custom-bonded - in favour of assessee. Disregard to Rule 46 A as no reasonable opportunity was given to the AO before approving the admission of the additional evidence by the CIT(A) - ITAT stated that AO took 15 months and more to submit the remand report - Held that:- The appeals before the CIT(Appeals) were filed by the assessee on 18.1.2010. It was in the course of the appeal proceedings that additional evidence had been produced and a remand report was called for by the CIT(Appeals). The appeals were eventually disposed of by the CIT(Appeals) by a common order dated 30.03.2010. Thus the entire appeal proceedings had taken less than three months for completion. In this background, it is not understandable as to how the Assessing Officer can be blamed to have delayed his remand report beyond 15 months - As the claim of the assessee based on the additional evidence had to be properly verified by the AO restore this issue to the file of the Assessing Officer to enable him to process the claim of the assessee afresh - in favour of revenue.
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2012 (9) TMI 591
Disallowance of Bad debts - ITAT delete the addition - Held that:- The assessee did not receive the payment from Delhi Vidyut Board as the said amount was deducted in lieu of penalty for late delivery of goods (repaired transformers and the matter is subjudice before the arbitrator. The amount may be taxed in the hands of the assessee in the financial year in which it is received by the assessee, if he succeeds in the arbitration - For the present, the amount stands deducted and thus the matter does not call for any interference by the High Court.
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2012 (9) TMI 590
Disallowance u/s 40A (3) - payments made to the butchers - ITAT deleted the addition - Held that:- As decided in The Commissioner Of Income Tax Versus M/S Milky Exports International [2010 (11) TMI 55 - ALLAHABAD HIGH COURT] payment has been made to the butchers whose genuineness has never been doubted - this is finding of fact and there is no illegality in the same can be pointed - against revenue. 'Building Repair & Maintenance' at Mumbai and Meerut - Held that:- Similar issue arise in M/S Milky Exports International [2010 (11) TMI 55 - ALLAHABAD HIGH COURT] case wherein the AO had earned in holding amount were not for 'Building Repair & Maintenance' at Mumbai and Meerut is revenue expenditure - AO had earned in holding that these were not capital expenditure ignoring the fact that the expenditure related to the capital works during the year and the definition of words "current repairs" under Section 31 of the Act - against revenue.
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2012 (9) TMI 589
Penalty u/s 271 (1) (C) - wrong description of the status of the assessee - CIT (A) deleted the levy - Held that:- Wrong description of the status of the assessee, which was corrected immediately by filing revised return, and in which the loss was reduced on account of a notification issued by the Ministry of Awas and Town Planning, could not be treated as furnishing inaccurate particulars to attract the penalty clause under Section 271 (1) (c) - The mistake was immediately accepted and did not result into any loss to the revenue. We may also observe here that when the Assessing Authority was fully aware that Hapur Pilkhuwa Development Authority, constituted under the U.P. Urban Planning and Development Act, 1973 is a local authority, a mere wrong description of the status should not have been a ground to award penalty. No error in the findings of CIT (A) and ITAT that there was no declaration of inaccurate particulars. Even if the mens rea may not be necessary, in attracting the penalty, the ratio of the judgment of the Supreme Court in CIT v. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT) wherein it is held that A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee supports the conclusions of the CIT (A) and ITAT that in this case the penalty under Section 271 (1) (c) of the Act was not attracted - in favour of assessee.
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2012 (9) TMI 588
TDS liability on the amount of interest paid on delayed payment of compensation - Proceedings regarding claim under Motor Vehicle Act - whether the interest paid does not come with in the ambit of section 2(28A)? - ITAT allowed the relief by canceling the liability - AY 1998-99 to 2002-03 - Held that:- The word "interest" as defined under Section 2(28A) has to be construed strictly as necessary ingredients of such interest are that it should be in respect of any money borrowed or debt incurred. The award under the Motor Vehicle Act is neither the money borrowed by the insurance company nor the debt incurred upon the insurance company. As far as the word "claim" is concerned, it should also be regarding a deposit or other similar right or obligation. The definition of Section 2(28A) of the IT Act again repeats the words "monies borrowed or debt incurred" which clearly shows the intention of the legislature is that if the assessee has received any interest in respect of monies borrowed or debt incurred including a deposit, claim or other similar right or obligation, or any service fee or other charge in respect of monies borrowed or debt incurred has been received then certainly it shall come within the definition of interest. Insertion of clause (ix) to Section 194A(3) by the Finance Act 2003 with effect from 1.6.2003 also goes to show that prior to 1.6.2003, the legislature had no intention to charge any tax on the interest received as compensation under the Motor Vehicle Act. Even under the amended Act, interest received in excess of Rs.50,000/- has been subjected to tax liability. Certainly such interest exceeding Rs.50,000/- has further to be split amongst all the claimants and has to be spread over for each of the assessment years. Accordingly there appears to be no justification to cast liability to deduct the tax at source on the amount of interest paid on compensation under Motor Vehicle Act prior to 1.6.2003. The award of compensation under motor accidents claims cannot be regarded as income. The award is in the form of compensation to the legal heirs for the loss of life of their bread earner. Hence the interest on such award also cannot be termed as income to the legal heirs of the deceased or the victim himself - The award under the Motor Vehicle Act is like a decree of the court. It do not come within the definition of income as mentioned in Section 194A(1) read with Section 2(28A) of the Income Tax Act, thus the interest paid on compensation under motor accident claims awards prior to 1.6.2003 cannot be treated as income from the interest - in favour of assessee.
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2012 (9) TMI 587
Determination to the cost of the construction - case referred to departmental Valuation Officer (DVO)- Held that:- As decided in Smt. Amiya Bala Paul Versus Commissioner of Income-Tax [2003 (7) TMI 4 - SUPREME COURT] having assessed the value on the basis of the seized material, the A.O. could not have referred the matter of estimation of value to the Valuation Officer. Section 55A falls in Chapter IV-Computation of Income From Capital Goods. The special procedure for assessment of search case, is provided in Chapter XIV-B. The assessment of undisclosed income as a result of search is made under Section 158BA for which procedure for block assessment is provided under Section 158BC. The A.O. can assess the undisclosed income as a result of search only on the basis of material or information as are available in the search. He is not authorised to refer the matter to the Valuation Officer under Section 55A (b) (ii) to asses the fair market value. Such an enquiry is not permissible in respect of search cases - in favour of assessee. Gift received from Nepal - Held that:- It is a settled preposition of law that the AO can examine the genuineness of gift, the capacity and identity of the donor. The assessees had informed the Assessing Authority that donors are their uncles and they reside in Nepal. It cannot be believed that the assessees did not know the full address of the donors. The address given by the assessees is Krishna Nagar, Nepal. Nepal is a country which has several districts. It was not sufficient on the part of the assessees merely to show that the donors are citizens of Nepal. Hence the identity of the donors was not established. As far as the capacity of the donors is concerned, it was also not proved - Merely because the assessees have shown the receipts by demand drafts from Nepal, it cannot be presumed that the gifts are genuine - against assessee.
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2012 (9) TMI 586
Disallowance of job work charges - no traces of manufacturing activities found - ITAT allowed the claim - Held that:- ITAT allowed the claim as evidence place on record amply affirms that M/s K.S.M. Exports Ltd. was having as much as 543 workers on its roll for whom contribution towards Employees Pension Scheme and Provident Fund etc. was being paid by it and when M/s K.S.M. Exports Ltd. was not carrying on any business of its own, then the only conclusion is that its workers were carrying on job work for and on behalf of the assessee. Thus no infirmity in the assessee's claim of having paid job work charges to M/s K.S.M. Exports Ltd. and the addition made by disallowing the assessee's claim need to be deleted - against revenue.
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2012 (9) TMI 585
Disallowance of deduction u/s. 80IB(10) - CIT(A) allowed the claim - Held that:- As amendment brought under the section w.e.f. 1.4.2005 i.e. A.Y. 2005-06. Clause (d) introduced new condition of claim of deduction u/s. 80IB(10) of the Act restricting maximum commercial built up area of 2000 Sq. ft or 5% of aggregate built up area of the housing project whichever is less. Those housing project having commercial built up area of more than 2000 Sq. ft are not eligible for deduction u/s 80IB(10) and as the assessee has exceeded maximum permissible limit provided in the Act having a commercial built up area of 6415 Sq. ft., hence assessee’s submissions cannot be accepted that prior to amendment there was no upper cap on construction of commercial area. As assessment year involved in the present case is 2006- 07 assessee claims is liable to be rejected - The contention of the assessee that the project was started keeping in mind the pre amended provisions of Sec. 80IB(10) and therefore any subsequent changes should not change the project profile cannot be accepted - findings of the CIT(A) are reversed and that of the AO are restored - against assessee.
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2012 (9) TMI 584
Reassessment proceedings - ITAT quashed the notice issued u/s 148 - Held that:- In view of the judgment in Rajesh Jhaveri Stock Brokers P. Ltd. (2007 (5) TMI 197 - SUPREME COURT ), after 1st April, 1989, in accepting the returns under Section 143 (1) (a) AO does not apply his mind and that the acknowledgment is received mostly by ministerial staff. In such case where any material is found and the notice u/s 148 has to be issued, the AO is competent to issue the notice except in a case, where more than 4 years have expired. In such cases the satisfaction has to be recorded by an officer higher in rank. The discretion in such a case cannot be left with the A.O. The satisfaction of the Joint Commissioner has to be recorded before the Assessing Officer, who may be an ITO, issues a notice under Section 148. In the present case we find that there is positive finding in the order of CIT (A) that in respect of assessment year 1995-96 the record shows that the Addl. Commissioner of Income Tax has given approval of issuance of notice under Section 148 on 20.3.2002. We, however, do not find any positive finding in this regard in Income Tax Appeal No.749 of 2007 relating to year 1996-97 and 1997-98 - decided in favour of the revenue and remand the matter to the Income Tax Appellate Tribunal to consider the appeal afresh and before considering the matter on merit with regard to assessment years 1996-97 and 1997-98 the Income Tax Appellate Tribunal will ascertain from the record, whether the satisfaction is recorded by the Joint Commissioner or Addl. Commissioner as the case may be or the officer, who was higher to the Income Tax Officer in the relevant year as it is only after he find that such satisfaction is recorded in accordance with Section 152 (2), that he may proceed to decide the appeals - against assessee.
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2012 (9) TMI 583
Transfer Pricing – Addition on account of computation of Arm’s length price - Assessee had imported raw materials, exported finished goods to associate enterprises - The most appropriate method adopted in the Transfer Pricing Report was Transaction Net Margin Method - Identify 5 comparable companies that engaged in same type of business – TPO rejects 4 comparable companies – Held that:- After analysis all the comparable companies by ITAT direct that TPO has to work out the arithmetic mean of these four companies for determining the arms length price of the assessee company for the international transactions. Therefore case remand back to AO.
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2012 (9) TMI 582
Capital gain – Asset inherited to assessee – Computation of Index cost of acquisition – Whether the year in which the previous owner first held the asset or the year in which the asset inherited to assessee used for indexation – Held that:- Following the decision of BOMBAY HIGH COURT in case of Manjula J. Shah (2011 (10) TMI 406) that while computing the capital gains arising on transfer of a capital asset acquired by the assessee under a gift/inheritance, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. Appeal decides in favour of assessee
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2012 (9) TMI 581
Addition made on account of unexplained cash credits u/s 68 as the assessee failed to prove the source of such deposits in his bank account - assessee claims it to be out of sale proceeds of retail business - return filed u/s 44AF - Held that:- Admittedly since the turnover of the assessee is below Rs. 40 lacs, therefore, as per the provisions of section 44AF, the assessee is not expected to maintain books of accounts. The assessee disclosed income of Rs.76,235/- in his return. The impugned amounts were found to be deposited out of the sale proceeds of retail business where the total turnover/sales are to the tune of Rs.13,91,425/-. What documentary evidence can be produced by the assessee from the retail business is always not possible. No other documentary evidence was brought on record by the AO except suspecting the deposits made by the assessee. Therefore, CIT(A) rightly deleted the addition - Decided against Revenue
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2012 (9) TMI 580
Addition u/s 68 - share application money - assessee contesting the assessment framed u/s 143(3) on ground of wrong assumption of jurisdiction - non-serving of notice u/s 143(2)(ii) - assessee also contesting non-admission of additional evidences by CIT(A) - Held that:- Finding recorded by the AO in his remand report and also by CIT(A) in his appellate order with regard to issue and dispatch of notices, on the said address given by the assessee in its PAN application has not been controverted by assessee by brining any positive material on record. Since assessee was in actual receipt of intimation u/s 143(1) and also refund order which was encashed by assessee in its bank account, there is no reason for accepting assessee’s contention for non-service of notice u/s 143(2) on the very same address. Ground taken by the assessee with regard to non service of notice is hereby dismissed. Additional evidences produced by the assessee before the CIT(A) goes to the root of the issue for deciding the identity, creditworthiness and genuineness of transaction in respect of share application money. In the interest of justice, we accept the additional evidence filed by the assessee and direct the AO to consider the issue afresh - Decided in favor of assessee for statistical purposes.
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2012 (9) TMI 579
Addition u/s 68 on account of Share application money – Investor's company invested money in assessee’s share at a premium - Same were bought back by the promoters/director of assessee in the very next year at a 90% discount – Detailed inquiry has been made by the AO – Sending letters u/s 133(6) and personally visited on given address of investors – AO come to conclusion that they were just paper companies and did not exist in reality - Held that:- As no sign board was hang on the premises , neighbor told that office is closed long back and not listen the name of investor company. On an enquiry made from investor’s bank reveals that cash was deposited immediately prior to issue of cheque to the assessee and the account of these companies was closed immediately after transfer of funds. It seems there was no genuine transaction of share capital, the companies were not existed at all. Assessee himself routed his funds through these companies. Assessee could not rebut the same by bringing any positive material on record to substantiate the identity and authenticity of investors. Therefore, confirm the action of AO & CIT (A) for applying provisions of Sec 68 in respect of share capital received from company as well as individual investors. Appeal decides in favour of revenue.
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2012 (9) TMI 578
Disallowance of salary paid to working partner u/s 40(b)(i) – Working partner is an agent of two insurance companies despite being a partner – As per partnership deed, partner without consent of other partners cannot engage in other business either directly or indirectly – No chamber provided to partner in office of assessee – Held that:- Since partners was working as a working partner since inception and regularly attended the work of the assessee’s firm. Assessee submits copy of many bank cheques, having signature of partner as ‘Managing Partner’ and supporting bank statements. Assessee also provides NOC given by another partner for carrying on her own insurance agency business. On remand, the AO examined those documents and found correct. Decision in favour of assessee Addition of Service Tax being debit in P&L – Assessee receive insurance commission from insurance companies – Assessee passes accounting entry by gross commission & debit the Service Tax in P&L – Held that:- As per agreement insurance company will pay net amount after deduction of Service Tax. As per Rule 2 (d)(iii) of Service Tax Rules, this service comes under reverse charge mechanism. Therefore, insurance company liable to pay Service Tax. As far as assessee concern, credited the entire gross commission and debited the service tax in its books. The net result would be the same. Appeal decides in favour of assessee
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2012 (9) TMI 577
Exemption u/s 10 of agricultural income - contract farming - Assessee produce basic seeds in its own lands and hybrid seeds on the lands leased by it – AO’s objection are that the germplasm is generated out of scientific research and, therefore, it is not agricultural activity – Held that:- Simply because the basic seeds are not fit for human consumption, it cannot be said that the produce is not agricultural produce. The assessee procures germplasm and sows in its own field, and carries on all agricultural operations and produces the basic seeds. The Basic Seeds so harvested are again put through agricultural operations intimately connected with leasehold land for finally bringing out the Hybrid Seeds. Only for the reason that the Basic Seeds are sown in leasehold land and the manpower required are arranged through contract farming, it does not mean that the operations carried out by the assessee are not agricultural operations. Assessee has carried out basic as well as secondary agricultural operations. Therefore, entire such income of the assessee is agricultural in nature. Appeal decides in favour of assessee Depreciation on technical know-how fees – Held that:- As the Tribunal for the previous assessment year has directed the AO to consider the alternate plea of the assessee for allowance of depreciation on technical know-how fees, if claim is in accordance with law. Subsequently, the depreciation on technical-know-how fees treated as capital expenditure has been allowed. Therefore, depreciation on technical-know-how fees should be treated as capital expenditure and depreciation allowed. Case remand back to AO
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2012 (9) TMI 576
Writ petition – Re-vesting of property in hand of transferor u/s 269UH - The order u/s 269UD came on April 28, 1993, pursuant to which the subject land stood vested in the Central Government - Writ petition filed by person who was already have an agreement with owner of land – No stay had been granted by the Bombay High Court till August, 1993 - Consideration was not tendered, upto the date of dismissal of Writ petition by HC on Sep 20, 2005 – Present Writ Petition was filed on Nov. 1, 2006 challenging on the basis of that CG had not tendered the amount of apparent consideration by the date fixed by section 269UG – HC did not provide any interim relief to respondent – Held that:- Sec. 269UG, the amount of consideration was required to be tendered within a period of one month from the end of the month in which order of such vesting took place i.e. by end of May, 1993. The writ petition file was dismissed on Sep 20, 2005, after which there was no reason for the CG not to tender the amount. The present petition came to be filed on or about November 1, 2006, and no interim relief has been granted therein. However, till date even in the year 2012, the consideration payable in accordance with the provisions of Sec 269UF has not been tendered to the petitioners. On account of failure on the part of the respondents to tender the amount of consideration payable u/s 269UF, the order dated April 28, 1993 stands abrogated in view of the mandatory provision of Sec 269UG(1) and the Central Government stands divested of the title which was vested in it as in accordance with Sec. 269UH. Decision in favour of assessee
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2012 (9) TMI 575
TDS u/s 194C on sub-contractor - Assessee get work contract for Construction of roads & bridges – Assessee deduct TDS on subcontract of supply of labour @ 1.2% - AO disallow the same because assessee fail to substantiate that work was sub contract – Held that:- As per Sec. 194C, sub-contractor would means a person who enters into a contract with the Contractor for carrying out or for supply of labour for carrying out whole or part of work undertaken by the contractor. Therefore it is clear from the above provision that person supplying the labour is a sub-contractor. And assessee applies TDS rates as per Law. Decision in favour of assessee TDS u/s 194C – Assessee is engage with person for supplying of Bitumen to hot mix plant assessee's site – Assessee consider the same as sub-contractor for the purpose TDS and deduct the TDS @ 1.2% - Held that:- As they are not involved in execution of any part of the contract which was taken by the assessee and accordingly the assessee should have deducted full tax @ 2% from this party. However, at the same time it is also required to be verified whether the payments were made to this party or they are still payable because the Special Bench of the Tribunal, in case of Merilyn Shipping & Transport (2012 (4) TMI 290) has already taken a view of Sec. 40(a)(ia) would be applicable only if the amount remains payable. Therefore case remand back to AO. Delay in deposit of Employees Provident Fund – AO disallows the amount on account of delay in deposit of EPF on due date as per Sec. 36(1)(va) - Held that:- Payment were made with in grace period of 5 days after due date. Therefore, the same would be allowable on the basis of decision given by Punjab & Haryana HC in case of V. Lakhani Rubber Works (2010 (3) TMI 471). Decision in favour of assessee Disallowance u/s 40(a)(ia) – Held that:- Following the decision of Tribunal in case of Merilyn Shipping & Transport(2012 (4) TMI 290) held that disallowance u/s 40(a)(ia) can be made only in respect of payments which remain payable at the end of the year. However, it is not clear from the record which payments have been made and which are payable, therefore, Case remand back to AO.
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2012 (9) TMI 574
Deduction u/s 80IB – Whether assessee can claim deduction u/s 80IB where manufacturing process carried out by an assessee on job work basis - Held that:- As it makes no difference in the manufacturing process carried out by an assessee whether the raw material belongs to the assessee himself or owned by some other person. In both the circumstances, manufacturing activities are carried out in the same process by using the similar plant and machinery and similar manpower. No material could be brought on record by the Revenue to show that the risk incidental to manufacturing was not of the assessee and was liability of any other person. Therefore, dismiss the grounds of appeal. Decision in favour of assessee
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2012 (9) TMI 573
Validity of Notice issued u/s 143(2) – Assessee files ROI 29/06/2007 for the AY 2003-04 & 2005-06 in response to notice u/s 147 – Notice issued u/s 143(2) on 15/07/2008 for the both of years - AO dismissed the same on the ground that Sec. 143(2) amended w.e.f. 1.4.2008 prescribed that notice shall not be issued after the expiry of 6 months from the end of the F.Y. in which the return was filed – Held that:- As per the explanatory note issued by CBDT vide circular no. 1 of 2009, reveals that the amended provision of Sec. 143(2) shall apply to all such returns (irrespective of the assessment year, to which the returns pertain) where notice u/s 143(2) can still be issued on 1.4.2008, under the pre-amended provision. Therefore, circulars or general directions, issued by the CBDT would be binding u/s 119, on all officers and persons, employed in the execution of the Act. Appeal decides in favour of revenue Disallowance due to change in accounting method – AO rejecting method of accounting employed by the assessee u/s 145(3) - Assessee accounting for the incomes on cash basis and the expenses were claimed on mercantile basis under the head PGBP - which is neither cash nor mercantile – Held that:- As the Tribunal direct the AO to consider the allowability of the expenses in question namely interest, salaries and rent in the year of their payment in accordance with law. Appeal decides in favour of revenue
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2012 (9) TMI 564
Computation of gross receipts for the purposes of taxation u/s 44BB - Whether service tax will be included ? - the assessee is an Australia Company - Held that:- Service tax which is a statutory liability, would not involve any element of profits and a service provider is collecting the same from its customers on behalf of the Government and, accordingly, same cannot be included in the total receipts for determining the presumptive income as decided in Islamic Republic of Iran Shipping Lines (2011 (4) TMI 637 - ITAT MUMBAI) - service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement - Decided against Revenue
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2012 (9) TMI 558
Penalties u/s. 271(1)(C) - disallowing the commission paid by the company - CIT(A) deleted the levy - Held that:- Addition in this case has been primarily made on the basis of statement given by Mr. Meattle and Jhunjhunwala, Directors of the company as during the course of penalty proceedings assessee company requested the AO to cross examine both the directors whose statement was relied upon by the AO in disallowing the commission paid by the company. As agreeing with the CIT(A)’s observation that penalty proceedings is separate proceedings and AO should have allowed cross examination of both the persons which has been denied due to time baring matter when the set aside order was passed on 25.3.1996. Thus, the whole assessment / reassessment is based upon the statement of two persons mentioned above and no opportunity was allowed in the penalty proceedings to cross examine them. Thus penalty levied without allowing opportunity to the company for cross examination of both the persons are liable to be cancelled As assessee company has given documents in support of the commission payments and the payments have been made by account payee cheques also & in the penalty proceedings assessee was not sought opportunity to cross examine those two persons, the same was not provided by the Assessing Officer no levy of penalty u/s. 271(1)(c) can be warranted - in favour of assessee
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2012 (9) TMI 557
Penalty u/s 271D - violation of provisions of sec. 269SS for accepting the deposits in cash - CIT(A) deleted the levy - Held that:- As is apparent from the order of Addl. CIT, there is nothing on record to show that these transactions were attached with certain conditions or stipulation as to period of repayment, rate of interest, manner of repayment, etc. so as to treat the said transactions as deposits. The Revenue have not placed before us any material suggesting that the transaction was actually in the nature of loans or deposit. Since there is nothing on record to suggest that the transaction is in the nature of loan or deposit, apparently, the provisions of section 269SS are not attracted. When the CIT(A) found as a fact that the amount of Rs.14,81,208/- was indeed received by the assessee from the aforesaid two directors as share application money, we are not inclined to interfere with the findings of the CIT(A)& as the AO did not even attempt to examine as to whether or not the share application money can be treated as “loan” or “deposit” within the meaning of provisions of sec. 269SS penalty cannot be imposed - Also there is nothing on record, suggesting any tax planning or infraction of relevant provisions with malafide intention. Moreover, transactions are between the directors and the company and that too towards share application money/capital - in favour of assessee.
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2012 (9) TMI 556
Transfer of leasing rights of Films - considered to be 'goods' OR 'sale'? - Held that:- As decided in CIT v. B. Suresh [2009 (3) TMI 4 - SUPREME COURT] Profits are embedded in the "income" earned. Earning of income depends on sale of goods and services - the word "sale" would also include "lease" as indicated in Rule 9A(7) which states that for the purposes of Rule 9A, the "sale" of the rights of exhibition of feature films would include the "lease" of such rights. Similarly, under Rule 9B(6), it has been, inter alia, provided that "sale" of rights of exhibition of a feature film would include the "lease" of such rights - in favour of assessee.
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2012 (9) TMI 555
Claim of depreciation on property which was exchanged for another property in respect of which the assessee had forgone the tenancy rights - surrender of tenancy rights - Held that:- The Revenue does not dispute the existence of such an agreement with the landlord, which showed the payment of consideration for the surrender of tenancy rights. It is also not disputed by the Revenue that the purchase of the premises by the assessee was from M/s.Harsaran Singh Constructions Pvt. Ltd., which had nothing to do with the landlord. Given the fact that tenancy right is a capital asset, as decided in CIT Vs. D.P.Sandhu Bros Chembur P. Ltd.(2005 (1) TMI 13 - SUPREME COURT ) that the surrender of tenancy rights amounted to transfer and hence, being a capital receipt, on the facts thus placed before this Court that the amount paid on account of surrender of tenancy rights being given by the assessee to the builder, there is no exchange of one property for the other. Hence no hesitation in accepting the plea of the assessee to hold that the assessee is entitled to depreciation - in favour of assessee.
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2012 (9) TMI 554
Deduction u/s 80P (2)(d) - whether provision of section 14A are applicable to the deductions u/s 80P(2)(d) - Held that:- As decided in The Punjab State Cooperative Milk Producers Federation Ltd. v. Commissioner of Income-Tax and another [2011 (3) TMI 615 - PUNJAB AND HARYANA HIGH COURT] that under Section 14A, any expenditure incurred by the assessee for earning income which does not form part of total income under the Act shall not be an allowable expenditure. The assessee is entitled to deduction under Section 80P(2)(d) after deducting the expenditure attributable to the earning of such income - against the assessee
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2012 (9) TMI 553
Claim of compensation paid as allowable business expenditure - the assessee allowed possession of the land to the intending purchaser only after payment of full consideration and registration of sale deed. In some cases, since the intending purchaser did not want to buy the land as per mutual agreement and advance received was refunded along with some excess amount as return on investment. This excess amount was termed as compensation. - AO did not accept the submissions of the assessee on the ground that compensation was nothing but consideration to reacquire the rights in plots. - CIT(A) deleted the addition. - Held that:- order passed by the CIT(A) is cryptic and grossly violative reflecting non application of mind by the concerned authority to the issues/points raised before it - set aside the order of the ld. CIT(A) and restore the matter to his file for deciding the aforesaid issues - in favour of revenue. Disallowance of repair and maintenance of building - no documentary evidence to be treated as revenue expenditure - CIT(A) deleted the addition - Held that:- The assessee did not produce all the bills and vouchers in relation to expenditure incurred on repairs to building and the CIT(A),without ascertaining the nature of construction or verifying the bills/vouchers or any other material concluded that expenditure was incurred on temporary structures. There is nothing to suggest that the assessee produced the relevant bills & vouchers before the ld. CIT(A) nor seems to have verified the genuineness of expenditure or even recorded any such findings - as CIT(A) without disclosing any basis or giving opportunity to the AO, concluded that expenditure was on temporary structure it is appropriate to vacate the findings of the CIT(A) and the matter is to be remanded to the AO to go into the matter afresh - in favour of revenue.
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2012 (9) TMI 552
Profits derived from export of granite - denial to claim deduction as per sub-section 1-B of Section 80HHC - AY 1988-1989 - Held that:- Answered against the assessee as decided in case of Gem Granites v. CIT [2004 (11) TMI 13 - SUPREME COURT] reading of the 1984 circular by holding that the circular expressly provided that polished and processed granite did not fall within the meaning of word "minerals" in 80HHC(2)(b) as it stood before 1991 - against assessee. Denial of Investment allowance on mining granite from quarries activities and exporting - cutting, polishing, etc. which does not tantamount to manufacture for the purpose of Section 32A - Held that:- Answered in favour of assessee as decided in case of Gem Granites v. CIT [2004 (11) TMI 13 - SUPREME COURT]
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2012 (9) TMI 551
Disallowance of interest and finance charges - Non business investments in UTI Money Market Fund & shares of M/s MPIPL out of borrowed funds - CIT(A) deleted the addition - Held that:- Considering total investments made by the assessee both UTI Money Market Fund and MPIPL came to only ₹ 48 lakhs. When viewed against the substantial reserves and surplus available with assessee, it cannot be said for definite that any loan funds were utilized for the purpose of investments. No doubt, assessee was unable to show a one-to-one matching between the investments and surplus funds. However, the Assessing Officer has also not been able to bring out any link between borrowed funds and investments. Share purchased by the assessee in M/s MPIPL was for having controlling interest therein and AO himself has noted that assessee had purchased 1216 out 2200 shares from the promoters of the said company. It is also not disputed that the said company was engaged in the same line of business - since assessee was having substantial reserve funds with it and the AO had merely gone by a presumption that investments were made out of borrowed funds disallowance under Section 36(1)(iii) was not warranted - against revenue. Disallowance u/s 14A - investments made by the assessee were not out of any surplus funds - CIT(A) deleted the addition - Held that:- There is no dispute that during these two years, Rule 8D of Income-tax Rules, 1962, was not applicable in view of the decision of Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd [2010 (8) TMI 77 - BOMBAY HIGH COURT] as Rule 8D applicable from Assessment Year 2008-09 and assessment years in question is 2006-07 and 2007- 08 thus the matter requires a re-visit by the A.O as disallowance for earlier period to be determined on reasonable basis - in favour of revenue for statistical purposes. Disallowance u/s 14A - CIT(A) partially deleted the disallowance to third limb of Rule 8D, i.e. 5% on the average value of investments - Held that:- As D.R. fairly admitted that Rule 8D was applicable from impugned assessment year and therefore, the A.O. was obliged to compute the deduction in accordance with the said rule & had not applied Rule 8D for making disallowance under Section 14A the matter has to go back to the A.O. for consideration afresh, in accordance with law - in favour of revenue for statistical
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2012 (9) TMI 550
Disallowance of reversal of interest - Held that:- The assessee is a Government Company engaged in the business of providing long-term finance for Industrial projects. The assessee has followed a system of accounting in respect of penal interest on accrual basis and as and when it was charged from the customer the same was shown as income of the assessee. Subsequently, on settlement with the parties the penal interest is either waived or reduced - Since the Board had taken the decision during the current year, therefore the amount of previous year’s expense had been charged to P&L account in the current year. On that basis, the decision taken by the Board cannot be held as an unsubstantiated decision and the interest income which was taxed in the past by offering in the books of accounts forming part of the total income declared, however the same was a doubtful of recovery, therefore the assessee-company had justification to reverse that entry by charging the same in the P&L account - in favour of assessee. Addition on account of interest waived - CIT(A) deleted the addition - Held that:- Facts have revealed that the amount in question pertained to penal interest which stood allowed therefore, following the directions of the Tribunal, the CIT(A) has directed that the waiver of penal interest is allowable. This findings of the CIT(A) being inconsistent with the order of the Tribunal is hereby allowed - against revenue. Addition of interest amount reverse pertaining to the earlier year - CIT(A) deleted the addition - Held that:- CIT(A) has found that the assessee has wrongly computed the higher income than the actual receivable, therefore rectification was correctly made. In the absence of any contrary material, this finding of ld.CIT(A) is hereby confirmed - against revenue. Addition being the interest waived pertaining to the earlier year - CIT(A) deleted the addition - Held that:- Facts have revealed a finding was given that there was an overlapping between the waiver of the penal interest and the amount pertaining to preceding year but the exact position of overlapping of the amount has not been placed on record, therefore we refer this item of waiver of penal interest back to AO to verify the same - in favour of Revenue by way of remand. Addition being the amount of interest waived pertaining to the earlier year - CIT(A) deleted the addition - Held that:- As that the amount was waived in terms of the settlement with the customer no fallacy in the deletion made by ld.CIT(A) - against revenue.
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2012 (9) TMI 549
Reopening of assessment u/s.147 - the return was processed u/s.143(1) - Held that:- As decided in ACIT Versus Rajesh Jhaveri Stock Brokers P. Limited [2007 (5) TMI 197 - SUPREME COURT] an intimation u/s.143(1) could not be treated to be an order of assessment. It was held that there being no assessment u/s.143(3), the question of change of opinion did not arise. The AO had jurisdiction to issue notice u/s.148 for bring to tax income escaping assessment in an intimation u/s.143(1) and did not render the AO powerless to initiate re-assessment proceedings - against assessee. Disallowance of deduction on “Gola” i.e. wastage income u/s.10B - Held that:- On questioning that what was the related expenditure which was having a direct nexus for production of this by-product, assessee has fairly expressed not to further argue this ground and let the issue to be decided after considering the facts as available on records. Thus the Revenue Authorities have rightly rejected the said claim of the assessee after considering the manufacturing process and the manner in which the said by-product was generated - against assessee. Disallowance of deduction u/s 10B on DEPB income - Held that:- As decided in Maral Overseas Ltd. vs. Addl.CIT [2012 (4) TMI 345 - ITAT INDORE] once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act. As per the computation made by the Assessing Officer himself, there is no dispute that both these incomes have been treated by the Assessing Officer as business income. - the undertaking is eligible for deduction on export incentive received by it in terms of provisions of Section 10B(1) read with Section 10B(4) of the Act - Decided in favor of assessee.
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2012 (9) TMI 548
Addition made on account of higher Gross Profit rate – The G.P. rate is on higher side as compare to earlier years in the assessee’s own case - GP rate also more than the comparable case quoted by AO for the same assessment year - Held that:- In AY 2005-06, in assessee’s own case, the GP rate of 2.37% was accepted by the Revenue. AO himself considered u/s 143(3) the GP rate of 2.65% in AY 2006-07 to be reasonable. Therefore, ITAT did not find any justification for applicability of GP rate of 4.90% by AO. The gross profit rate disclosed by the assessee at 3.63% is better as compared to earlier two years of assessee’s case and also better than the comparable case of Sat Paul & Sons quoted by the Assessing Officer for AY 2007-08. Appeal allowed in favor of assessee.
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2012 (9) TMI 547
Penalty u/s 271(1)(c) - Assessee has fulfilled all the conditions for eligibility of deduction u/s 10A and claim the same – AO disallow the same on the basis of CBDT Circular dated 6th January, 2005 stated that the deduction under Section 10A would be permissible only in respect of receipt after the date of registration with STPI – AO levy penalty u/s 271(1)(c) on basis of claim of the assessee under Section 10A was patently wrong and false – Held that:- As claim made for deduction u/s 10A was bona fide and merely because the Assessing Officer did not accept the same, it would not amount to either concealment of income or furnishing of inaccurate particulars following the decision of SC in Reliance Petro Products Pvt. Ltd. (2010 (3) TMI 80) & Delhi High Court in Zoom Communication Pvt. Ltd. (2010 (5) TMI 34). Decision in favour of assessee.
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2012 (9) TMI 546
Disallowance of Expenditure on ad-hoc basis - Held that:- As AO had given sufficient opportunities to assessee but assessee did not attend the proceedings and during remand proceedings also, verification of books of accounts along with various expenses could not be done. Assessee submits require documents with AO which AO has denied. Matter remanded back to revenue
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2012 (9) TMI 545
Dis-allowance u/s 80IC - interest on late payment of sale bills and miscellaneous income contended by Revenue as income from other sources - Held that:- Assessee is entitled to the relief with respect of deduction u/s 80IC in relation to interest on late payment of bills, but in the absence of details of miscellaneous income, such relief could not be granted to the assessee in this regard. Dis-allowance u/s 43B - belated payment of contribution towards employees provident fund - Held that:- Since same is paid before the due date for filing of the return hence allowed. Addition on account of repair and maintenance and labour charges - dis-allowance u/s 40(a)(ia) - assessee now placing reliance on decision in case of Merilyn Shipping & Transport - Held that:- Since issue raised in this ground does not arise from the order of CIT(A), hence, impugned order is not interfered with - Decided partly in favor of assessee
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2012 (9) TMI 544
Withdrawal of the interest allowed u/s 244-A - the total payment made by the assessee-company being less than the total interest payment - Held that:- Where valuable rights of refund and interest is involved, the Income Tax Authorities are not required to draw assumption on the quantum of the amounts. In this case there is no other material placed by the respondents to justify the inference other than the quantum of the amount being less than the interest payable, to support the assumption that the deposit was of interest and not of tax. To test the assumption, if we deduct the interest of Rs.1, 83, 53, 133/- out of the total amount of Rs. 3, 61, 46, 374/- liable to be paid by the petitioner, the amount of tax comes to Rs. 1, 77, 93, 241/-, which is more than the amount deposited by the petitioner. Thus as the amount in question was deposited as tax and not as interest, and also that even if a presumption could be drawn that the amount was deposited as interest, the interest under Section 244A (1) of the Act, was payable on interest - petitioner-company will also be entitled to interest on this amount from the date of deposits - in favour of assessee.
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2012 (9) TMI 543
Addition for expenditure incurred earning dividend income u/s 14A - CIT(A) deleted the addition - Held that:- In terms of decision of in Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax (2011 (11) TMI 267 - DELHI HIGH COURT ) even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income, the AO is required to verify the correctness of such claim but in the instant case the AO was handicapped, because of failure of the assessee to furnish relevant details/particulars and accounts while making the disallowance in terms of provisions of sec. 14A. - set aside the order of the ld. CIT(A) and restore the matter to the file of the AO for deciding the issue, afresh - in favour of revenue for statistical purposes. Payment of royalty - Revenue expenditure or capital expenditure - CIT(A) deleted the addition - Held that:- As the assessee was granted a licence for using the know-how to be applied in the manufacturing process. The assessee was required to pay royalty for using such know-how. However, the assessee never became the owner of such know-how but was merely granted a licence to use the same in manufacturing process. The know-how at all the time remains the property of the licensor. At the end of the licence period the assessee was to forthwith return all the plates and drawings, data material and other documents supplied by the licensor to it. Therefore, in view of the ratio laid down by the Hon’ble Supreme Court in the case of CIT Vs. 69 ITR 692 of India Ltd. [1967 (12) TMI 3 - SUPREME COURT] the payment is to be considered as revenue expenditure and no part thereof can be considered as capital expenditure - in favour of assessee.
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2012 (9) TMI 542
Application of Circular dated 9th February, 2011 - Held that:- Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011 (regarding monetary limit of appeals by the Department), should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income Tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto. See Surya Herbal Ltd (2011 (8) TMI 137 - SUPREME COURT OF INDIA)
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2012 (9) TMI 541
Bad debt u/s 36 – Whether assessee has to establish that debt has become irrecoverable to claim expense – Assessee is in business of money lending for many years - The debtor company is under the same management - Doing business from the same premises - Directors have substantial interest in it – Held that:- Following the decision of Supreme court in case of T.R.F.Ltd. (2010 (2) TMI 211) it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. AO has not examined whether, in fact, the bad debt or part thereof is written off in the accounts of the assessee. It is not the case of the revenue to disallow any part of such bad debt as has been written off by the lender in its books of accounts. Appeal decides in favour of assessee
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2012 (9) TMI 540
Reassessment - section 150 - assessment in pursuance of an order on appeal – AO added back amount written off by bank, which was payable by assessee by invoking Sec.41(1) – High court accepted the fact that amount was not eligible for tax in the year of appeal but for subsequent years – “Hon'ble Court held that "if the same is not disclosed by the assessee in the subsequent year, it is open to Revenue to take action in accordance with law” – Assessee did not file any return in subsequent year for said income – AO initiated proceedings u/s 147 to tax the said amount by issuing notice u/s 148 in accordance with Sec 150(1) – Held that:- Following the decision of Supreme Court in case of Rajinder Nath (1979 (8) TMI 3) in this case HC held (i) the High Court gives liberty to the assessee to show the said amount in the subsequent years, and (ii) If the same is not shown by the assessee in the subsequently years, it is open for the revenue to take action in accordance with law. Therefore, it is clear that the order passed by the Hon'ble High Court in the assessee’s case for the said Assessment Year was not in the nature of a direction hence the provision of Sec. 150(1) of the Act will not be applicable. Decision in favour of assessee.
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2012 (9) TMI 539
Capital Gain – Assessee enter into Joint Development Agreement with developer in respect of land – Assessee get 45% of the built up area in lieu of transfer of 55% of the undivided portion of the vacant land in favour of the developers for construction – AO treat it as transfer of 55% of the land in favour of the developer was a deemed transfer in year in which agreement enter into & deposit also – AO made addition on basis of value determined by sub- registrar as deemed consideration u/s 50C – Held that:- As the information obtained by AO u/s 133(b) from sub registrar regarding deemed consideration, could not use against the assessee before the same was put to the assessee. Violating of the principles of natural justice. Therefore issue remand back to AO. Non-refundable deposit in respect of enter into agreement for transfer of land - The assessee received a non-refundable deposit - Held that:- AO determine deemed consideration in respect of transfer of land as per sec. 50C. Therefore non-refundable deposit is not justifiable as the AO has estimated the amount of consideration chargeable to tax u/s. 50C. Decides in favour of assessee
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Customs
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2012 (9) TMI 572
Representation submitted by the petitioner - Held that:- As in assessee's own case [2010 (1) TMI 466 - MADRAS HIGH COURT ] assessee was denied of opportunity to represent his case, the respondent is directed to dispose of the representation dated 18.1.2012 made by the assessee on merits and in accordance with law within a period of eight weeks from the date of receipt of a copy of this order.
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2012 (9) TMI 571
Writ petition – Writ Petition was filed contending that the order passed by the Tribunal is without jurisdiction – Held that:- Tribunal has also gone into the question on merits including the process of valuation and incidence of tax and to characterize the nature of the order passed including the process of valuation, it is clear that the appeal would lie to the Supreme Court under Section 130E(b) of the Act - no error or illegality in the order so as to call for interference - appeal is dismissed
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2012 (9) TMI 570
Revision petitions - personal penalty - custom officers had intercepted one passenger Krishan Kumar Gupta with foreign currency - passenger Shri Krishan Kumar Gupta had stated that the seized foreign currency was handed over to him by Shri Rajeev Wadhwa Director M/s. Mahavir Forex (P) Ltd. The second applicant Shri Sanjeev Wadhwa is another Director of said company. Both the applicant failed to appear before Customs for tendering their statement despite repeated summons – Held that:- What extent the said statement is admissible against a third party when the said third party has not been given right to cross-examination - petitioners have been implicated only on the basis of the statement by the third person - order does not even refer to the submissions made on behalf of the petitioners, evidence/material relied upon by the petitioners and deal with them - matter is remanded to the Joint Secretary, Government of India, for fresh adjudication
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2012 (9) TMI 538
Denial of Refund of excess fine and penalty - non production of original challan for paying the penalty & photocopy was produced - Held that:- The grievance of the department seems to be genuine, as later, if someone brings the original chalan and claims this money, the Department would be in difficulty as there is no time limit fixed in Ext.P3 for refund. Accordingly the assessee is directed to produce the documents pertaining to the identity of the person with correct proof of address and also bank account number along with indemnity bond with an undertaking to the Department so that genuine apprehension expressed by the Department could be satisfied to a large extent - there cannot be award of 6% interest on the amount to be refunded.
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2012 (9) TMI 537
Classification - Import of Long Pepper - differential duty – misdeclaration - parties had evaded duty by deceptively describing the goods as “Pippali” and wrongly classifying it under SH 1211.90 with intent to pay duty at lesser rate than what was applicable to “Long Pepper” classifiable under SH 0904.11 – Held that:- Name of the commodity in Hindi is also seen as ‘Pippali’ in this book. It is, therefore, not deniable that what is known in English as “Long Pepper” is known as ‘Pippali’ in Sanskrit - description of Long Pepper as ‘Pippali’ by these appellants in the Bills of Entry would not amount to ‘misdeclaration’ to attract Section 111(m) of the Customs Act and, consequently, no penalty can be imposed on these appellants under Section 112 of the Act - demands of duty set aside - redemption fine set aside; Redemption fine – Held that:- Goods imported by the appellant were allowed to be cleared on payment of duty based on their declaration, without any bond or other undertaking - when the order-in-original was passed by the Jt. Commissioner, the goods were not physically available for confiscation - no redemption fine was liable to be imposed under Section 125 of the Act in lieu of confiscation of the goods
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2012 (9) TMI 536
100% EOU - loss of the capital goods/raw material/consumable - imported/procured indigenously duty free under the provisions of Notification No. 52/2003-Customs - Applicability of Explanation to Rule 6 of Central Excise - fire accident took place in the premises of the assessee – Held that:- Duty cannot be demanded on the goods which have been destroyed due to unavoidable accident/natural causes on the ground that they have not been used for the intended purpose - raw materials/capital goods which are in the premises of production would not be hit by the Explanation to Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 – in favor of assessee
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Corporate Laws
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2012 (9) TMI 559
Listing of Optionally Fully Convertible Debentures ('OFCDs') on any recognized stock exchange in India being Public Issue under Section 73 r.w.s. 60B - Whether SEBI has the power to investigate and adjudicate relating to issue and transfer of securities by listed public companies matter as per Sec 11, 11A, 11B of SEBI Act and under Sec 55A of the Companies Act Or is it the MCA which has the jurisdiction under Sec 55A (c) of the Companies Act ? - Held that:- SEBI Act is a special law, a complete code in itself containing elaborate provisions to protect interests of the investors - SEBI Act is a special legislation providing SEBI with special powers to investigate and adjudicate to protect the interests of the investors. It has special powers and its powers are not derogatory to any other provisions existing in any other law and is analogous to such other law and should be read harmoniously with such other provisions and there is no conflict of jurisdiction between the MCA and the SEBI in the matters where interests of the investors are at stake. The legislative intent and the statement of objectives for the enactment of SEBI Act and the insertion of Section 55A in the Companies Act to delegate special powers to SEBI in matters of issue, allotment and transfer of securities. The Court observed that as per provisions enumerated under Section 55A of the Companies Act, so far matters relate to issue and transfer of securities and non-payment of dividend, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India. The Supreme Court held that SEBI does have power to investigate and adjudicate in this matter. Hybrid OFCDs - Whether it falls within the definition of "Securities" within the meaning of Companies Act, SEBI Act and SCRA to grant SEBI jurisdiction to investigate and adjudicate ? - Held that:- Although the OFCDs issued by the two companies are in the nature of "hybrid" instruments, it does not cease to be a "Security" within the meaning of Companies Act, SEBI Act and SCRA. It mentions that although the definition of "Securities" under section 2(h) of SCRA does not contain the term "hybrid instruments" the definition of "securities" under Section 2(h) of the SCR Act is an inclusive one, and can accommodate a wide class of financial instruments. The OFCDs issued by the two Companies fall well within this definition. As in this case such OFCDs were offered to millions of persons there is no question about the marketability of such instrument. And since the name itself contains the term "Debenture", it is deemed to be a security as per the provisions of Companies Act, SEBI Act and SCRA. OFCDs to persons who subscribed to the issue is a Private Placement - Whether the issue not to fall within the purview of SEBI Regulations and various provisions of Companies Act ? - Held that:- Though the intention of the companies was to make the issue of OFCDs as private placement but it fails to be so when such securities are offered to more than 50 persons. Section 67(3) specifically mentions that when any security is offered to and subscribed by more than 50 persons it will be deemed to be a Public Offer and therefore SEBI will have jurisdiction in the matter and the issuer will have to comply with the various provisions of the guidelines issued for a public issue. Although the Sahara companies contended that they are exempted under the provisos to Sec 67 (3) since the Information memorandum specifically mentioned that the OFCDs were issued only to those related to the Sahara Group and there was no public offer, the Supreme Court however did not find enough strength in this submission. The invitation/offer of OFCDs, in the present controversy, was admittedly made to approximately 3 crore persons and was subscribed to by 66 lakh persons therefore, to accept the contention of the SEBI, that the OFCDs issued were by way of an invitation “to the public”. The Supreme Court also observed that issue of OFCDs through circulation of Information memorandum to public attracted provisions of Section 60B of the Companies Act, which required filing of prospectus under Section 60B(9) and since the companies did not come out with a final prospectus on the closing of the offer and failed to register it with SEBI, the Supreme Court held that there was violation of sec 60B of the Companies Act also. Listing provisions under Sec 73 - Whether it applies to all public issues or depends upon the intention of the company to get listed ? - Held that:- Any issue of securities is made to more than 49 persons as per Sec 67(3) of the Companies Act, the intention of the companies to get listed does not matter at all and Sec 73 (1) is a mandatory provision of law which companies are required to comply with. Section 73(1) of the Act levies an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. The Court observed that the contention that they did not want their securities listed does not stand. The duty of listing flows from the act of issuing securities to the pubic, provided such offer is made to fifty or more than fifty persons. Thus after the amendment to the Companies Act, 1956 on 13.12.2000, every private placement made to fifty or more persons becomes an offer intended for the public and attracts the listing requirements under Section 73(1). Public Unlisted Companies (Preferential Allotment Rules) 2003 - Whether it will apply in this case? - Held that:- And in the existence of Sec 67(3) it is implied that even the 2003 preferential allotment rules were required to comply with the requirement of Sec 67(3). The Supreme Court observed that even if armed with a special resolution for any further issue of capital to person other than shareholders, it can only be subjected to the provisions of Section 67 of the Company Act, that is if the offer is made to fifty persons or more, then it will have to be treated as public issue and not a private placement. The Court observed that 2003 Rules apply only in the context of preferential allotment of unlisted companies, however, if the preferential allotment is a public issue, then 2003 Rules would not apply. OFCDs as Convertible Bonds - Whether they are exempted from application of SCRA as per the provisions of sec 28(1)(b) - Held that:- As contemplated in Section 28(1)(b), is not to the convertible bonds, but to the person to whom such share, warrant or convertible bond has been issued, to have shares at his option. The Act is, therefore, inapplicable only to the options or rights that are attached to the bond/warrant and not to the bond/warrant itself. Thus as per section 28(1)(b) it is only the convertible bonds and share/warrant that are excluded from the applicability of the SCRA and not debentures which are separate category of securities in the definition contained in Section 2(h) of SCRA. No illegality in the proceedings initiated by SEBI as well as in the order passed by SEBI (WTM) and the entire amount will have to be refunded collected through RHPs by Saharas with 15% interest per annum to SEBI from the date of receipt of the subscription amount till the date of repayment, within a period of three months from date of this order which shall be deposited in a Nationalized Bank bearing maximum rate of interest - appoint Mr. Justice B.N. Agrawal, a retired Judge of this Court to oversee whether directions issued by this Court are properly and effectively complied with by the SEBI (WTM) from the date of this order.
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Service Tax
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2012 (9) TMI 597
Maintenance or Repairing Service - service tax demand & penalty u/s 78 - Held that:- The definition of Repairing and Maintenance Service has been changed with effect from 16.06.05 and the Appellant pursuant to the same, got registered on 04.08.2005. The reason for delay in payment of Service Tax, as explained by the Appellant, was due to a confusion with regard to determination of the taxable value of the services rendered by them and also on the eligibility of benefit provided to a small-scale service provider. The said explanation appears to be convincing, and nothing contrary to the said claim, has been brought on record by the Department. Mere delay in payment of the Service Tax cannot be construed as suppression or misdeclaration of facts with intent to evade payment of Tax. As the bonafideness of the Appellant is evident from the fact of their getting registered with the Department soon after change in the scope of definition on repairing and maintenance service and also from the fact that the entire receipt relating to the repair and retreading of Tyres during the relevant period, had been duly reflected in their audited Balance Sheet he penalty imposed on the Appellant under Section 78 of the Act, is not maintainable - in favour of assessee.
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2012 (9) TMI 596
Maintainability of appeal - appeal filed against an order passed by the Commissioner as revisionary authority under Section 84 of the Finance Act, 1994 – Held that:- Appeal filed against the Commissioner's "Review Adjudication Order" dated 24.3.2011 is not maintainable under Section 86 of the Act - appellate remedy under Section 86 against such an order was taken away with effect from 19.8.2009 - order passed by the Commissioner of Central Excise under the erstwhile provision of Section 84 on 24.3.2011 on the strength of the aforesaid "explanation" is not appealable to this Appellate Tribunal under Section 86 as this provision stands from 19.8.2009 - appeal is dismissed as not maintainable.
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2012 (9) TMI 563
Refund of Service Tax claimed by the service providers - Held that:- The refund of duty or any other sum due to an assessee should not be denied for mere technical or procedural lapses if it is otherwise due to substantially on merits - as no reasoning has been given by the Revisionary authority as to how the refunds are denied only for technical or procedural lapses the impugned orders is set aside with direction to the authorities to come to a conclusion after recording reasoning, on following the principles of natural justice.
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2012 (9) TMI 562
Waiver of pre-deposit - stay order was received by the appellant on 21/08/2010 wherein a direction was given to make pre-deposit within 5 days of the receipt of the order – Held that:- Appellant failed to make the pre-deposit till 26/08/2010, therefore, the first appellate authority has dismissed their appeal for non-compliance of the order of pre-deposit - appellant has made pre-deposit of the entire amount of service tax. Therefore, considering the same is sufficient and the first appellate authority has not passed the order on merits, we remand the matter back to the first appellate authority to decide the issue on merits
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2012 (9) TMI 561
Waiver of pre-deposit – demand on freight amount mentioned in the invoices under which the inputs were supplied to the appellant - demand is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994 - lower authorities have held that the appellant was liable to pay Service Tax on GTA Service which was used for supply of their inputs by M/s. RIL – Held that:- Sub-clause (v) was inserted in Rule 2(1)(d) only on 3.12.2004 and the same cast Service Tax liability on the person paying the freight - Appellant did not pay the freight and therefore there is no tax liability on their part - waiver of pre-deposit and stay granted
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Central Excise
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2012 (9) TMI 569
Wrongful availment of the credit - interest and penalty equivalent to the amount of duty under section 11AC - Tribunal could not have, on remand, reconsidered the issue relating the duty earlier as proceedings related to the reduction of penalty by this Court has restored - Held that:- The assessee had paid the entire duty amounting to ₹ 17,96,685/- with interest amounting to ₹ 1,80,439/-. Moreover, with a view to put an end to the controversy relating to the modvat credit amounting to ₹ 58,915/- and ₹ 41,600/- which is remanded by the Tribunal, the assessee through its counsel agreed to forgo the amount of ₹ 4,50,000/- already deposited with the revenue. Thus, the duty demand confirmed at ₹ 17,96,685/- as per the original order of the Tribunal stands discharged on account of payment of the said amount with interest. Hence, the first question does not survive. Suppression of facts claiming depreciation on capital goods - Held that:- realising the mistake, the assesee took steps to withdraw the claim of depreciation and since that did not materialise, the assessee offered to pay the duty with interest. In these circumstances, the decision of the Tribunal that Section 11AC is not attracted, cannot be faulted - against revenue.
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2012 (9) TMI 568
Penalty under Rule 25 of Central Excise Rules, 2002 - assessee stated that as no clandestine removal hence no penalty - Held that:- Shortage detected by physical inventory investigation was possible outcome of clandestine removal of the finished goods in absence of any evidence surfaced contradicting investigation story - once the physical inventory resulted in shortage, onus of proof was discharged by investigation, thus burden of proof was discharged by Revenue bringing home the appellant to the shortage found. AS Revenue is not in appeal against reduction in penalty by first appellate authority it is settled law that appellant should not be put to adversity when other side does not challenge the impugned order for restoration of adjudication result. Therefore, penalty imposed under Rule 25 of Central Excise Rules, 2002 does not call for intervention.
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2012 (9) TMI 567
Application for restoration of appeal – Held that:- Only ground in support of the appeal taken in the grounds of appeal is that the opinion of the Committee of Commissioner of Customs was available on the file notings and the appeal was filed under the signatures of the Commissioner who was a Member of the Committee. It has been suggested that the aforesaid fact was not placed before the Tribunal and the only defect was that no formal authorisation order was made - there was not properly maintainable appeal filed at the original stage, there cannot be any repair to be done to the lapse of Revenue by this MA (ROM). Accordingly that is rejected.
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2012 (9) TMI 566
Demand alongwith and equivalent amount of penalty for not reversing the amount equal to 10% of the value of goods cleared without payment of duty by claiming exemption under Notification No. 33/05 – Held that:- As per Rule 6 of Cenvat Credit Rules if the assessee is manufacturing both dutiable as well as exempted goods claiming exemption under a notification, the assessee is required to maintain separate account for inputs/inputs service which has gone into manufacture of dutiable as well as final exempted products - appellants have not done so - appellants have not still reversed the credit taken on inputs/input service alongwith interest which has gone into the manufacture of final exempted products - benefit of this amended Rule 6 by Section 73 of Finance Act, 2010 is not available
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2012 (9) TMI 565
Demand of interest on delayed payment of duty - demand has been raised after coming into force of Section 11-A and 11-B of the Central Excise Act – Held that:- Once the assessment was completed on 22-7-1994, the provision brought in force by the Act, 1996 will have no application to already adjudicated assessments - Once under law the tax is not recoverable, it cannot be justified merely because the party has paid some amount to avoid penal action – in favor of assessee
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2012 (9) TMI 535
Rejection of appeal for non-compliance of pre-deposit - Held that:- The appellant has taken various defenses before the first appellate authority including the question of limitation, an issue not considered while passing the interim order of pre-deposit the issue needs to be reconsidered by first appellate authority without insisting any pre-deposit.
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2012 (9) TMI 534
Availment of CENVAT Credit on fake invoices - disposal of appeal on non deposit of amount to hear and dispose the appeal - Held that:- As in this kind of issues assessee is directed to deposit 20% of the amount of CENVAT Credit sought to be reversed, the case is remitted back to he first appellate authority to consider the issue on merit subject to the condition that the main appellant will deposits an amount of Rs.4 lakhs within a period of twelve weeks from date of order.
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2012 (9) TMI 533
Unauthorized clearance - suppressing of actual production and engaged in clandestine removal without payment of duty - Held that:- As nothing submitted to contradict concurrent finding of both the Authorities below against suppression of clearances which was outcome of suppressed production, this calls for confirmation of duty element - against assessee. Penalty imposed under Rule 25 of Central Excise Rules, 2002 - Held that:- As penalty imposition by adjudication is without finding the element of section 11AC & there was no confiscation done therefore, the present case certainly falls under Rule 25 of Central Excise Rules, 2002, thus order to reducing the penalty to Rs. 10,000/- under Rule 25 may not be improper.
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2012 (9) TMI 532
SSI unit - Classification - ‘Microfined Red Oxide’ and ‘Microfined Jet Black Oxide’ - confiscating land, building, plant and machinery - redemption on payment of fine - classification - appellant had bought various colour oxides and sold them either as such or after repacking them in small packings in their premises – Held that:- Burden to prove classification of the product is clearly on the department - department has not proved that the products cleared from other branches fall under Tariff Heading 3206.90, the question of shifting the burden to the appellants for the purpose of extending the benefit of exemption does not arise - values of clearances of the impugned products by the appellant are within the exemption limit as provided under Notification No. 1/93 - classification as per the order of the Commissioner - demand of duty, order of confiscation and imposition of penalties set aside
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2012 (9) TMI 531
Rebate claims - goods were exported - Alleged that Applicant is the supplier of the grey fabrics and has endorsed a fraudulent invoice - applicant is also an exporter who has claimed rebate of such duty reflected on the fraudulent invoices endorsed by him but routed through the processor - Applicant had been pleading that goods are exported and duty was paid and he made the payment to the suppliers of grey fabrics – Held that:- Unless and until duty paid character of exported goods is proved the rebate cannot granted - Once the supplier is proved non existent, it has to be held that goods have not been received. However, the applicant’s claim that they have received goods but how they have received goods from a non-existent supplier is not known - duty paid character of exported goods was not proved which is a fundamental requirement for claiming rebate under Rule 18 of Central Excise Rules, 2002 – rebate claim rejected
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2012 (9) TMI 530
Cenvat credit - Cenvat credit has been denied on the ground that the appellant has not intimated to the department prior to the merger in respect of the unit of M/s. Pankaj Glass Works with the appellant - Held that:- No prior permission is required at the time of merger of one unit to another unit - Therefore, the appellants have correctly taken the credit subject to verification by the concerned officers and there is no violation of any rule by the appellants – in favor of assessee
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Indian Laws
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2012 (9) TMI 560
Suggestions made by the Implementation Committee for elections of SCBA - Held that:- Considering the principle of ONE BAR ONE VOTE that persons who had contested elections to the Executive Committee of any Court annexed Bar Association, other than the SCBA, during any of the years from 2007 to 2012, could not be allowed to vote to elect the Office Bearers of the SCBA or to attend the General Body meetings of the SCBA. It was further mentioned that the same would also include a person who had cast his vote in any election to the Executive Committee of any Court annexed Bar Association, other than the SCBA, for the above-mentioned years. Through inadvertence, the Supreme Court Advocate-on-Record Association(SCAORA) had not been excluded, although, it formed an integral part of the SCBA. Thus judgment is need to be modified including the words “AND THE SCAORA” after the words “OTHER THAN THE SCBA”.
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