IMG MEDIA LIMITED vs.DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)
BOMBAY TRIBUNAL
Taxability€ ¢â' '´Fee for Technical Services€ ¢â' '´Royalty or not€ ¢â' '´Assessee Company incorporated in United Kingdom (UK), was a tax resident of UK in terms of Article 4 of the India€ ¢â' '³UK Double Taxation Avoidance Agreement (DTAA)€ ¢â' '´Assessee was a world leader in field of multimedia coverage of sports events including cricket€ ¢â' '´BCCI engaged assessee for capturing and delivering live audio and visual coverage of cricket matches conducted under brand name IPL, 2008 and also IPL, 2009€ ¢â' '´AO took view that amount received by assessee was in nature of € ¢â' '¼Fee for Technical Services€ ¢â' '½ and also in nature of € ¢â' '¼Royalty€ ¢â' '½ and accordingly assessed entire amount of gross receipts€ ¢â' '´DRP held that € ¢â' '¼Service PE€ ¢â' '½ did not have application, once it held that gross receipts were taxable as € ¢â' '¼Fee for technical services€ ¢â' '½ or as € ¢â' '¼Royalty€ ¢â' '½â' '´Held, assessee possessed required expertise in live audio-visual coverage of matches (called € ¢â' '¼feed€ ¢â' '½) and hence, BCCI engaged assessee to produce and deliver live audio-visual coverage of IPL-2008 & IPL-2009 cricket Matches conducted by BCCI€ ¢â' '´According to agreement entered into by assessee with BCCI, assessee had to produce feed and deliver same to broadcasters, who were called licensees€ ¢â' '´Further, BCCI was to supply equipments like cameras, microphones etc. of required quality to assessee€ ¢â' '´What was delivered by assessee was a € ¢â' '¼final product in form of program content€ ¢â' '½ produced by it by using its technical expertise, i.e., assessee did not deliver or make available any technology/ knowhow to BCCI€ ¢â' '´There should not be any dispute that production of € ¢â' '¼program content€ ¢â' '½ by using technical expertise was altogether different from provision of technology itself€ ¢â' '´In former case, recipient would receive only product and he could use product according to his convenience, whereas in later case, recipient would get technology/knowhow and hence he would be able to use technology/knowhow on his own in order to produce any other program content of similar nature€ ¢â' '´Since amount received by assessee was held to be not in nature of € ¢â' '¼Fee for technical services€ ¢â' '½ as per definition of Article 13(4)(c) of the India-UK DTAA, there was no necessity to examine about its taxability u/s 9(1)(vii)€ ¢â' '´BCCI was owner of program content produced by assessee€ ¢â' '´Job of assessee ended upon production of program content and broadcasting was carried out by some other entity to which license was given by BCCI€ ¢â' '´Question of transfer of all or any right did not arise in facts and circumstances of instant case€ ¢â' '´Payment received by assessee could not be considered as € ¢â' '¸royalty€ ¢â' '¹ in terms of India-UK DTAA€ ¢â' '´It was not necessary to examine about applicability of provisions of s 9(1)(vi), as facts discussed above would show that payment received by assessee could not fall within its purview€ ¢â' '´Assessee' s Appeal allowed
RAJ HANS TOWERS PVT. LTD. vs.INCOME TAX OFFICER
DELHI TRIBUNAL
Reassessment€ ¢â' '´Income escaping assessment€ ¢â' '´Issuance of Notice€ ¢â' '´Validity€ ¢â' '´Assessee was private Ltd. Company that filed its return of income€ ¢â' '´Return of Income was processed u/s 143(1) and later notice u/s 148 was issued to Assessee€ ¢â' '´Assessee filed reply wherein it was stated that, return of income filed u/s 139, be treated as return filed in response to notice u/s 148€ ¢â' '´Assessment was completed u/s 147 and section 143(3) determining total income€ ¢â' '´Assessee carried matter in appeal, challenging both reopening of assessment as well as merits of addition€ ¢â' '´First Appellate Authority dismissed appeal€ ¢â' '´Question arose if reopening of assessment was valid in law€ ¢â' '´Held, AO had not referred to any tangible material, based on which, he came to conclusion that income of Assessee escaped assessment€ ¢â' '´When allegation of investigation wing was that Assessee was itself entry provider, to believe that Assessee received accommodation entries from its directions was not correct or cogent reason to believe that Assessee€ ¢â' '¹s own money had been routed through entry operator€ ¢â' '´Report of investigation wing, had been accepted by AO, without independent application of mind€ ¢â' '´No reference had been made to any material gathered by investigation wing, either by way of statements or by way of bank statement evidences etc.€ ¢â' '´Thus, there was no prima facie material, to take view that assesee€ ¢â' '¹s own money had been introduced by way of accommodation entries€ ¢â' '´When it was clear that Assessee was entry provider himself, allegation that, company controlled by himself and other family members had taken accommodation entries, in absence of any admission by Assessee or evidence brought on record was vague and unsubstantiated reason€ ¢â' '´In case where Assessee and his family members claimed to have invested money in company and under such circumstances, reasons recorded for reopening did not stand tests laid down for sustaining reopening€ ¢â' '´Assessee€ ¢â' '¹s appeal allowed
ASSISTANT COMMISSIONER OF INCOME TAX vs.G. S. ARORA
HYDERABAD TRIBUNAL
Penalty u/s 271(1)(c) ' '´Validity of levy '´Pursuant to a survey conducted in assesee€ ¢â' '¹s premises certain discrepancies were found€ ¢â' '´Assessee volunteered to pay additional taxes of Rs. 10 Lakhs€ ¢â' '´AO in the scrutiny assessment accepted the income returned€ ¢â' '´However, AO initiated proceedings u/s 271(1)(c) on grounds that the additional income was offered in the course of survey to cover up the discrepancies, attracted penalty proceedings€ ¢â' '´AO thereof levied penalty of Rs 10 Lakhs concluding that assessee had concealed particulars of income€ ¢â' '´CIT(A) cancelled the penalty€ ¢â' '´Held, Unlike in a search case there was no presumption that the amount unearthed during the course of survey would be automatically be considered as € ¢â' '¸concealed income€ ¢â' '¹â' '´AO had to establish the nature of income as € ¢â' '¸concealed income€ ¢â' '¹ before levy of penalty€ ¢â' '´Unless it was found that there was actually concealment or non-disclosure of the particulars of income, penalty could not be imposed€ ¢â' '´ Order of CIT(A) did indicate that there was no quantification of concealed income in the course of survey€ ¢â' '´In fact, there was no concealment of income as assessee had returned the correct income which was accepted by the AO in the scrutiny assessment€ ¢â' '´Question of furnishing inaccurate particulars did not arise on the facts of the case, which was accepted by revenue as well€ ¢â' '´Thus, the conditions specified u/s 271(1)(c) for levy of penalty was not satisfied€ ¢â' '´Revenue€ ¢â' '¹s appeal dismissed
CHAVA UPENDER KOTHAGUDEM vs.INCOME TAX OFFICER
HYDERABAD TRIBUNAL
Revision€ ¢â' '´Order prejudicial to interest of revenue€ ¢â' '´Assessee-individual , derived income from sale of liquor filed his return of income€ ¢â' '´AO called for various details and on examination of details alongwith books of accounts, AO observed that Assessee had shown his capital€ ¢â' '´AO examined sources of such capital€ ¢â' '´Assessee explained that Assessee€ ¢â' '¹s father was agriculturist having 18 acres of land and income of around Rs.6.00 lakhs per annum was derived therefrom as agricultural income€ ¢â' '´It was submitted that out of accumulated agricultural income, Assessee€ ¢â' '¹s father had given Rs.9.00 lakhs to Assessee, which was appearing as his capital in balance sheet€ ¢â' '´AO held that agricultural income of Rs.6.00 lakhs from 18 acres of land seemed to be on higher side€ ¢â' '´Balance of Rs.3.00 lakhs was treated as unexplained capital of Assessee€ ¢â' '´Assessee also agreed to such addition and it was accordingly added to income returned by Assessee€ ¢â' '´AO completed assessment determining taxable income at Rs.6,55,510€ ¢â' '´CIT held that assessment order was erroneous as well as prejudicial to interests of Revenue and directed AO to redo assessment de novo€ ¢â' '´Held, Bombay High Court in the case of CIT vs. Gabriel India Ltd (203 ITR 108) held that Commissioner could not initiate proceedings u/s 263 with view to starting fishing and rowing inquiries in matters or orders that were concluded, as such action would be against well accepted policy of law that there must be point and finality in all legal proceedings, so that stale issues should not be reactivated beyond particular stage€ ¢â' '´Inquiry and or fresh determination could be directed by Commissioner only after coming to conclusion that earlier finding of AO was erroneous and prejudicial to interests of Revenue€ ¢â' '´Thus, before directing fresh determination of income of Assessee, CIT u/s 263, must arrive at conclusion that order of AO was both erroneous and prejudicial to interests of Revenue€ ¢â' '´Apparently, CIT had sought to revise assessment order on two grounds, first being source for payment of licence fee and correctness of gross profit rate returned by assessee€ ¢â' '´Assessment order was not erroneous€ ¢â' '´Assessee€ ¢â' '¹s Appeal allowed.
SC dismisses assessee€ ¢â' '¹s SLP against Delhi HC judgment sustaining unexplained cash credit addition u/s 68 made by AO during reassessment proceedings; During AY 1993-94, assessee (a JV co. ) had received Rs. 10.65 cr as interest-free loan from its foreign JV partner which was unilaterally forfeited by assessee in later AY, AO reopened assessment for AY 1993-94 doubting such unilateral forfeiture and made addition u/s 68 for the loan amount received holding that there was no rationale for lending such huge amount; HC had rejected assessee€ ¢â' '¹s stand that genuineness of transaction was established based on clearances from statutory authorities, receipt of amount through normal banking channels etc, thus addition based on unrelated event, i.e forfeiture of the loan was not justified when no fresh material was used in reassessment proceedings; HC had also observed that assessee did not satisfactorily explain the identities of the foreign JV partners and whether it genuinely lent monies and remarked € ¢â' '¼the onus to prove that the amounts came from credible sources and creditworthiness of the entity or the source, was never discharged.€ ¢â' '½; Moreover, while upholding reassessment, HC had rejected assessee€ ¢â' '¹s stand of non-receipt of reasons for reopening and clarified that at the time when reassessment notice was issued in 2001 such condition did not exist, € ¢â' '¼this condition was superadded€ ¢â' ¦.by virtue of ..the Supreme Court in GKN Driveshafts (India) Limited v. ITO (2003) 1 SCC 72€ ¢â' '½ : SC
No denial of Cenvat credit availed on invoices issued in the name of unregistered premises
Dear Professional Colleagues,
No denial of Cenvat credit availed on invoices issued in the name of unregistered premises
We are sharing with you an important judgement of the Hon€ ¢â' '¹ble CESTAT, Delhi in the case of M/s. Allspheres Entertainment Pvt. Ltd. Vs. CCE, Meerut [2015 (8) TMI 953 € ¢â' '³ (CESTAT DELHI)] on the following issue:
Issue:
Whether the Department is justified in denying Cenvat credit availed by the Assessee on sole ground that the invoices were issued to the Branch office of the Assessee, which was unregistered?
Facts & Background:
Allspheres Entertainment Pvt. Ltd. (€ ¢â' '¼the Appellant€ ¢â' '½) is registered with the Service Tax Department in the category of € ¢â' '¸Event Management Services€ ¢â' '¹ (€ ¢â' '¼EMS Services€ ¢â' '½) with it€ ¢â' '¹s premise at Nainital (€ ¢â' '¼Nanital Office€ ¢â' '½) registered with the Service Tax Department. During 2011-12, the Appellant was, inter alia, engaged in rendering the EMS Services in Delhi € ¢â' '³ NCR, for which the Company maintains a temporary € ¢â' '¼Field office€ ¢â' '½ at Delhi (€ ¢â' '¼Delhi Office€ ¢â' '½) to facilitate rendering of the EMS Services.
The Appellant received various Input Services (€ ¢â' '¼the Impugned Services€ ¢â' '½) in Delhi, which were used by them for rendering taxable Output Services. Accordingly, the Appellant availed Cenvat credit of the Service tax paid on the Impugned Services used for rendering taxable Output Services at Delhi.
The Department raised the Show Cause Notice dated April 16, 2014 alleging that the Appellant had availed inadmissible Cenvat credit without having proper documents as prescribed under Rule 9 of the Cenvat Credit Rules, 2004 (€ ¢â' '¼the Credit Rules€ ¢â' '½) read with Rule 4A of the Service Tax Rules, 1994 (€ ¢â' '¼the Service Tax Rules€ ¢â' '½), since the invoices were containing address of Delhi Office instead of Nainital Office.
Later on, the Ld. Adjudicating Authority as well as the Ld. Commissioner (Appeals) upheld disallowance of Cenvat credit to the tune of € ¢â'¢¹ 1,87,391/- along with imposition of interest and penalty. In addition, penalty of € ¢â'¢¹ 20,000/- was imposed for late filing of ST-3 Returns under Section 70 of Finance Act, 1994 (€ ¢â' '¼the Finance Act€ ¢â' '½) read with Rule 7 of the Service Tax Rules. Further, penalty of € ¢â'¢¹ 10,000/- under Section 77 of the Finance Act, 1994 was also imposed. Being aggrieved, the Appellant preferred an appeal before the Hon€ ¢â' '¹ble CESTAT, Delhi.
We pleaded the matter on behalf of the Appellant and put forth the following submissions:
Eligibility of Cenvat credit availed on the Impugned Services under Rule 2(l) of the Credit Rules is not in dispute;
All the particulars as required under Rule 4A of the Service Tax Rules, 1994 are contained in the invoices issued by the Input Service Provider to the Appellant except that the invoices were containing address of Delhi field office instead of Nainital Office;
The Credit Rules per se nowhere restricts that the invoices for Input Services should be addressed in the name of registered premises only;
Even, if the allegation is accepted then in such a scenario, Service tax paid by the Appellant on account of the EMS Services rendered from Delhi office should also have been objected by the Department;
Cenvat credit cannot be denied on basis of minor procedural irregularities;
In the case of Manipal Advertising Services Pvt. Ltd. Vs. C.C.E., Mangalore [2009 (10) TMI 434 - CESTAT, BANGALORE], the Hon€ ¢â' '¹ble CESTAT, Bangalore held that if a person is discharging Service tax liability from his registered premises, the benefit of Cenvat credit on the Service tax paid by the service providers cannot be denied to the assessee only on the ground that the said invoices are in the name of branch offices.
The Hon€ ¢â' '¹ble High Court of Karnataka in the case of mPortal India Wireless Solutions P. Ltd. Vs. C.S.T., Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT ], has held that the Credit Rules does not mandate registration with Department for availing Cenvat credit and denial of benefit on the ground non-existent in law is unjustified.
Held:
The Hon€ ¢â' '¹ble CESTAT, Delhi accepted the contentions of the Appellant and held that in the absence of any such dispute regarding availment of Impugned Services and their utilization for payment of Service tax or proper accounting of the same, the denial of Cenvat Credit of Service tax paid on Impugned Services by Nainital office of the Appellant on the sole ground that the invoices issued are in the name of the Appellant€ ¢â' '¹s unregistered Delhi office is unjustified since the head office which is registered with the Department has discharged the Service tax liability of Delhi office. The defect in the invoices is only procedural lapse or rather a curable defect.
Further the Hon€ ¢â' '¹ble Tribunal also reduced the late fees under Section 70 of the Finance Act to € ¢â'¢¹ 5,000/-, and set aside the penalty under Section 77 of the Finance Act, 1994.
By: Bimal jain
LIABILITY OF A PERSON DRAWING CHEQUE UNDER NEGOTIABLE INSTRUMENTS ACT, 1881
Section 138 of the Negotiable Instruments Act, 1881 provides for the consequences of dishonor of cheque for insufficiency etc., of funds in the account. The said section provides that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-
the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
The Explanation to this section provides that € ¢â' '¼debt or other liability€ ¢â' '½ means a legally enforceable debt or other liability.
The main ingredient to attract Section 138 of the Act is that a cheque which is dishonored will have to be drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part of any debt or other liability.
In € ¢â' '¸P.J. Agro Tech Limited V. Water Base Limited€ ¢â' '¹ € ¢â' '³ 2010 (7) TMI 280 - SUPREME COURT OF INDIA the Supreme Court held that about the liability under Section 138 of the Act, where the cheque drawn by the employee of the appellant company on his person account, even if it be for discharging dues of the appellant company and directors, the appellant company and its directors cannot be made liable under Section 138. The personal liability was upheld in this case.
In Mainuddin Abdul Sattar Shaik V. Vijay D. Salvi€ ¢â' '¹ € ¢â' '³ 2015 (8) TMI 907 - SUPREME COURT the Supreme Court again confirmed the personal liability of the drawer of the cheque. In this case the appellant had booked a flat at Khargar Project to be developed by Salvi Infrastructure (P) Limited, through the accused respondent by paying him € ¢â'¢¹ 74,200/- during the year 1999. The respondent issued two receipts for the said amount one for a sum of € ¢â'¢¹ 59,000/- and the second for the remaining amount. In the year 2003 the said project has not been started the appellant sought for refund of the advance booked by him. The respondent drew cheque for € ¢â'¢¹ 74,200/- in favor of the appellant of an account maintained by him with his banker towards refund of the aforesaid booking amount. The cheque was drawn by the respondent in his individual capacity and not in the capacity as a Director of Salvi Infrastructure P Limited or as proprietor of Salvi Builders & Developers.
The appellants presented the above cheque on 01.08.2003 to his bank for realization. The same was retuned unpaid. The appellant issued a notice through his Advocate on 25.08.2003 under Section 138(b) of the Act to the respondent. Since the respondent failed to pay the said amount the appellant filed a complaint under Section 138 of the Act before the Metropolitan Magistrate. The Metropolitan Magistrate acquitted the respondent on the ground that the Company Salvi Infrastructure (P) Limited was not made the accused and instead the respondent was made accused in this case. The cheque could not be said to have been issued for the discharge of whole or part of the liability because it exceeded the liability. It had not been provide that the respondent was a person liable to make the payment for Salvi Infrastructure (P) Limited.
The appellant approached the Bombay High Court against the order of Metropolitan Magistrate. The High Court dismissed the application filed by the appellant upholding the views of Metropolitan Magistrate. Therefore he came before the Supreme Court. He submitted the following before the Supreme Court:
The Courts below failed to appreciate that under Section138 of the Act it is the drawer of the cheque who is punishable for offender under Section 138 of the Act;
The cheque in question was drawn by the respondent and not by the company of which the respondent is the Managing Director;
The cheque was drawn by the respondent in his personal capacity on account maintained by him with the banker;
The Courts below have wrongly concluded that notice under Section 138(b) of the Act was sent to all the directors of the company. Such a conclusion was not supported by any evidence inasmuch as there was only one acknowledgement card on record, showing receipt of notice under Section 138(b) of the Act;
The respondent in his statement under Section 313 Cr. PC had admitted that he was paid € ¢â'¢¹ 74,200/- as earnest money and he had issued receipt for the same. As such there is no substance in the argument that the cheque cannot be said to have been issued for discharge of whole or part of liability, because it exceeded the liability;
The respondent submitted the following:
The company had not been made an accused in this case;
If the person committing an offence under Section 138 is a company, every person who, at the time of the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company as well as the company shall be liable;
There was no averment that the accused was the person in charge of, and responsible for the affairs of the company;
In this case the respondent was made accused in his personal capacity.
The Supreme Court after hearing both sides analyzed the provisions of Section 138 of the Act. It held that from a bare reading of Section 138 of the Act it is clear that the essential requirement to be met to attract the liability under Section 138 is that the person who is to be made liable should be the drawer of the cheque and should have drawn the cheque on an account maintained by him with a Banker for payment of any amount of money to another person from out of that account for discharge in whole or part, of any debt or other liability. Thus the person who draws a cheque on an account maintained by him, for paying the payee, alone attracts liability.
The Supreme Court found that in the present case the drawer of the cheque was the respondent, who had drawn the cheque on a bank account maintained by him towards the refund of the booking amount. Therefore he was the drawer of the cheque. The Supreme Court relied on the judgment in another case € ¢â' '¸National Small Industries Corporation Limited v. Hameet Singh Paintal€ ¢â' '¹ € ¢â' '³ 2010 (2) TMI 590 - SUPREME COURT OF INDIA in which the Supreme Court held that if the accused is managing director or a joint managing director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. In the light of the above said decision the Supreme Court held that the respondent be made liable under Section138 of the Act even though the company had not been named to the notice or the complaint. There was no necessity for the appellant to prove that the said respondent was in charge of the affairs of the company by the virtue of the position he held. The respondent is liable for the offence under Section 138 of the Act. The Supreme Court sentenced the respondent to undergo simple imprisonment for a period of five months for the offence under Section 138 of the Act. The Supreme Court also directed the respondent to pay € ¢â'¢¹ 14,8,400/- as compensation with interest with simple interest thereon @ 9% per annum, to the appellant. In default of payment of compensation, the respondent will have to undergo simple imprisonment for a further period of six months.
By: Mr. M. GOVINDARAJAN
Registration in GST
REGISTRATION IN GST (Proposed)
Registration No can be PAN based followed by alphabets, numerals etc. (Eg. 10 digit PAN, 2 digit State code, 1 alphabet indicating nature of activities of an assessee and numerals indicating number of state registrations)
GST is a destination based tax and as a result of State code, revenue can be allocated between states easily.
There will be online Application form and it may provide link with the existing registrations.
Original/digital signature of authorised person.
Uniformity in documents throughout India.
Government is proposing to charge a fee for registration under GST.
Registration Number will be provided immediately to assessee on acceptance of online application form without any requirement of submission of hard copy as online application will most likely to be authenticated by assessee by his DSC.
In existing regime, there is possibility of having numerous registration linked with the same PAN. Under GST, the certificate of registration will display all the business names registered with the same PAN.
The existing registrations may be continued for the following purposes:
Completion of the assessment/appeals/ audit.
Filing of the periodic returns etc.
A reasonable time may be provided for completion of above requirements.
By: CA Akash Phophalia
Direct Tax Basket
2015-TIOL-1985- HC-AHM-IT + Story
Ramesh C Prajapati Vs DCIT
Whether income from sale of property acquired through inheritance can be claimed as capital gain, when the assessee is engaged in the business of development of housing project and has continuously failed to record such acquisition in his books of account which is audited every year - NO: HC - Assessee' s appeals dismissed : GUJARAT HIGH COURT
2015-TIOL-1984- HC-MAD-IT
D Ramya Vs CIT
Whether DCIT has to consider the representation of the assessee with regard to return of the jewellery on merits and in accordance with law, when no proceedings were initiated after the assessment and before such seizure of jewellery - YES: HC - Assessee' s petition allowed : MADRAS HIGH COURT
2015-TIOL-1983- HC-MUM-IT
Paras Shantilal Shah Vs DCIT
Whether addition on account of unaccounted jewellery and silver articles found during search is justified where a statement was made on oath under Section 132(4) whereby assessee admitted that they were not in a position to produce any evidence in respect of the gold and diamond jewellery found in their possession and undertook to pay tax thereon and these statements of oath had not been withdrawn and/or retracted by assessee at any point of time - Whether the interest income receivable on loan given by assessee would be payable on accrual basis where prior to the search, the revenue was unaware of the grant of loan and accrued interest thereon and assessees did not maintain regular books of account and had not established before the authorities that it was following the cash system of accounting. - Assessee€ ¢â' '¹s Appeals dismissed : BOMBAY HIGH COURT
2015-TIOL-1982- HC-MUM-IT
CIT Vs M/s Reliance Industrial Infrastructure Ltd
Whether an amount credited as lease equilization fund to the P&L A/c can be used for determining assessee' s income chargeable to tax, in case such entry is made in compliance with the Guidance Note issued by the ICAI so as to meet Accounting Standards - NO: HC
Whether stamp duty paid for lease of assets should be spread over the entire life of the lease as differed revenue expenditure - NO: HC
Whether expenditure on stamp duty incurred by assessee for securing leasehold property, is required to be allowed as revenue expenditure - YES: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-1981- HC-MUM-IT
M/s Prithvi Prakashan Pvt Ltd Vs DCIT
Whether the decision of the Tribunal to recall its order upon observing that the said order had been proceeded on a factual misunderstanding, requires any interference by the High Court under Article 226 of the Constitution - NO: HC
Whether such recall order can be said to have caused prejudice to the assessee, when the issue in question has not been decided by the same - NO: HC - Assessee' s petition dismissed : BOMBAY HIGH COURT
2015-TIOL-1980- HC-DEL-IT
CIT Vs Metso Minerals (India) Pvt Ltd
Whether when assessee is granted a license on non-exclusive basis and for a limited period, then the expenditure done on the same cannot be considered as a capital expenditure - YES: HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1979- HC-DEL-IT
CIT Vs Swanpnil Properties (P) Ltd
Whether it is sustainable for the Revenue to add any undisclosed income in the hands of an assessee for the subject A.Y, when the same undisclosed income was already added to the income of other assessee, for the same A.Y - NO: HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1978- HC-KAR-IT
CIT Vs Hewlett-Packard Globalsoft Pvt Ltd
Whether issuance of notice u/s 148 on ground of irregular claim of deduction u/s 10A can be sustained, in case the claim of the assessee u/s 10A was thoroughly scrutinized & claim of expenditure incurred in foreign currency for providing technical services was examined during original assessment - NO: HC
Whether reassessment u/s 147 can be sustained, when there is neither non-disclosure by the assessee nor the AO has obtained material subsequent to framing of assessment order so as to arrive at a conclusion that there is escapement of income from tax - NO: HC - Revenue' s appeal dismissed : KARNATAKA HIGH COURT
2015-TIOL-1977- HC-KERALA- IT
Grihalakshmi Vision Vs Addl CIT
Whether the Department can treat every receipt from a partner or a sister concern as a loan or deposit, when there is no material file by the assessee to prove it otherwise - YES: HC - Assessee' s appeal dismissed : KERALA HIGH COURT
2015-TIOL-1976- HC-JHARKHAND- IT
CIT Vs T N Malhotra
Whether if an assessee is relying upon exception mentioned under rule 6DD, in that case the burden of proof is upon the assessee to prove the existence of specified circumstances under such Rule, in the absence of the same, the assesee would be held liable - YES: HC - Revenue' s appeal allowed : JHARKHAND HIGH COURT
Indirect Tax Basket
SERVICE TAX SECTION
2015-TIOL-1987- HC-JHARKHAND- ST + Story
M/s Ramchandra Singh Vs UoI
ST - Chance taking petitioner - There is tendency of those persons who are liable to make payment of tax+interest+ penalty to take a chance before the Court - petitioner is lethargic, but certainly not an ignorant person and is knowing all fine niceties of law - Vigilant petitioner should have filed their appeal within the limitation period or at least within condonable delay period: HC [para 4 (v)] - Petition dismissed : JHARKHAND HIGH COURT
2015-TIOL-1811- CESTAT-BANG
Ness Technologies (India) Pvt Ltd Vs CC, CE & ST
Service Tax - Refund - Payment of duty in cash against DTA clearances instead of utilizing accumulated credit on final product cleared for domestic consumption - Per se does not disentitle claim of refund - Rejection of refund for failure to avail Cenvat credit, unjustified - Further, credit cannot also be denied merely because invoices were in the name of different person - Impugned order rejecting refund set aside and matter remanded to original adjudicating authority to decide refund claim afresh and sanction refund in accordance with law. (Para 4, 5, 6) - Remanded : BANGALORE CESTAT
2015-TIOL-1810- CESTAT-BANG
Vodafone Cellular Ltd Vs CC, CE & ST
Service Tax - Telecommunication services - Credit attributed to output services written off in books of accounts - If disqualifies Cenvat credit entitlement - Revenue contended that the output services in question are not taxable as such are not eligible to avail Cenvat credit in view of the prohibition contained in Rule 6 of Cenvat Credit Rules, 2004 - Nothing on record to suggest that said services when rendered were taxable or exempted - More over, during the relevant period service tax was payable only when the consideration was received and it is evident that the amount was not received - On facts, good prima-facie case made out by appellant - Pre-deposit is waived. (Para 2) - Stay granted : BANGALORE CESTAT
CENTRAL EXCISE SECTION
2015-TIOL-1809- CESTAT-BANG
West Coast Paper Mills Pvt Ltd Vs CCE & ST
Central Excise - Inputs used in the construction of chimney, a part of pollution control system, are capital goods - Cenvat credit is admissible - Since credit availed reflected in statutory documents and more so the issue was also a contentious and debatable one, malafides cannot be attributed - Penalty hence set aside. (Para 3, 4) - Assessee appeal allowed : BANGALORE CESTAT
2015-TIOL-1808- CESTAT-DEL
Young Steels Pvt Ltd Vs CCE
CX - Appellant manufactures M.S. Ingots - One of the buyers of M.S.ingots is M/s.Kamdhenu Ispat Ltd., (KIL) - During search of premises of M/s. KIL, certain pen drives, CPUs and Lap Tops, ingot purchase file recovered - Out of total duty demand of Rs. 74,06,356/-, Rs. 12.93 lakh is based on entries in purchase file recovered from premises of M/s.KIL - There is no dispute that Shri Devender Arora, MD of appellant company in his statement, when shown the above mentioned purchase file, admitted that entries in purchase file pertaining to his company are true, and that the goods had been supplied to KIL without payment of duty - Out of duty demand of Rs.12.93 lakh, appellant have already paid Rs.10 lakh - Remaining duty demand of Rs.61 lakh is based on data retrieved from pen drives and CPU - Duty demand of Rs.44 crores had been raised against M/s. KIL based on CPU data and Commissioner expressing doubt about genuineness of that data has dropped the demand - Commissioner while confirming duty demand based on data retrieved from pen drives has not gone into question as to whether the data is genuine or is tampered with, same can be examined in detail only at the time of final hearing - Appellant company is directed to deposit Rs.5 lakh within four weeks: CESTAT [Para 7, 8, 9, 10]- Appeal partly allowed : DELHI CESTAT
2015-TIOL-1807- CESTAT-MUM
CCE Vs M/s Garware Wall Ropes Ltd
CX - Refund, Interest - s.11B, 11BB of CEA, 1944 - Order of Tribunal was passed on 25.06.2007 holding that the credit of refund amount to Consumer Welfare fund is wrong and appeal was allowed with consequential relief - Revenue contention is that interest on refund is payable w.e.f 25.09.2007, that is after 3 months from the date of the CESTAT order. Held: Interest is payable from the date of expiry of 3 months from the date of receipt of application under s.11B(1) of the CEA, 1944 - Order passed by Commissioner( A) based on the ruling of the Bombay High Court in Ballarpur Industries - 2009-TIOL-34- HC-MUM-CX affirmed by apex court in Ranbaxy Laboratories - 2011-TIOL-105- SC-CX does not suffer from any illegality or impropriety - Revenue appeal dismissed: CESTAT [para 5, 6] - Appeal dismissed : MUMBAI CESTAT
2015-TIOL-1806- CESTAT-MUM
Ruby Mills Ltd Vs CCE
CX - s.35C(2A) of CEA, 1944 - Applicant seeking extension of stay on the ground that their appeal has not come up for disposal for no fault of theirs. Held: In the case of Venketeshwara Filaments Pvt. Ltd. - 2014-TIOL-2388- CESTAT-AHM it is held that consequent upon omission of 1 st , 2 nd and 3 rd proviso to section 35C(2A) of the CEA, 1944 by the FA, 2014 it is to be held that there is no provision for making further application for extension of stay and that the stay order passed by the Tribunal, if it is in force beyond 07.08.2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension of orders granting stay either fully or partially € ¢â' '³ since the stay in the present case was in force beyond 07.08.2014, same would continue till the disposal of the appeal - Application disposed of: CESTAT [para 2, 3] - Application disposed of : MUMBAI CESTAT
2015-TIOL-1805- CESTAT-KOL
CCE Vs M/s Texmaco Rail And Engg Ltd
CX - Assesse are manufacturer of excisable goods and cleared without payment of duty under 'Served from India Scheme' i.e. "SFIS" after availing benefit of exemption Notfn 34/2006-CE - Assessee contends that benefit of said Notfn cannot be equated to "exempted goods", and they not required to pay an amount equal to 10% of value of goods cleared by availing benefit of said notfn - Revenue has assailed impugned order of Commissioner on ground that he has allowed credit on duty free materials used in manufacture of impugned goods, which were exempt from payment of duty - At the time of passing order, case laws cited by assessee were not available to Commissioner and therefore, he had no occasion to examine facts in light of said case laws - Both sides agreed that these issues to be addressed afresh by adjudicating authority - Case remanded: CESTAT - Case remanded : KOLKATA CESTAT
CUSTOMS SECTION
2015-TIOL-1986- HC-KAR-CUS + Story
K Abdulla Kunhi Abdul Rahaman Vs Addl CC
Customs - Confiscation - Show Cause Notice under Section 124 received by the Petitioner after expiry of six months' time limit as prescribed under Section 110(2) - Petition seeking release of gold seized on the ground of delay in issue of Show Cause Notice.
Held: The High Court of Madhya Pradesh in Ram Kumar Aggarwal' s case while interpreting Sections 110(2) and 124 of the Act has held issuance of Show Cause Notice by registered post before the expiry of six months from the date of seizure would be sufficient compliance more particularly when the same is received by the addressee though after lapse of six months. It has been further held that neither Section 110(2) nor clause (a) of Section 124 of the Act contemplates service of notice in strict sense should be within a period of six months. Judgment rendered by the High Court of Madhya Pradesh has since been affirmed by the Apex Court - Following the same, it is held that the Petition has no merit. (para 15) - Petition dismissed : KARNATAKA HIGH COURT
2015-TIOL-1804- CESTAT-HYD
Divis Laboratories Ltd Vs CCE
Customs - Classification of imported coal - Bituminous or steam coal - Issue already referred to and pending decision on reference by Larger Bench before the Supreme Court - Matter remanded to original authority for the limited purpose of considering the eligibility of the appellant for the benefit of Notifications No.12/2012-Cus. , dated 17.3.2012 for import of coal from Indonesia. (Para 4) - Remanded : HYDERABAD CESTAT
Direct Tax Basket
DIRECTORATE OF INCOME TAX (SYSTEMS)
03
Procedure for registration and submission of report as per clause (k) of sub section (1) of section 285BA of Income tax Act, 1961 read with Sub rule (7) of Rule 114G of Income tax Rules, 1962
CASE LAWS
2015-TIOL-1988- HC-DEL-IT
PR CIT Vs Control And Switchgear Contractors Ltd
Whether when the assessee receives compensation from its JV partner in lieu of giving up its right and treats the same as capital gains as against business profits determined by the AO, this is not a fit case to attract Explanation 1 of Sec 271(1)(c) as the issue was debatable in nature - YES: HC
Whether when the assessee determines the character of the income based on legal advice, it does not warrant imposition of penalty - YES: HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1346- ITAT-DEL
Maruti Suzuki India Ltd Vs ADDL CIT
Whether if deduction for excise duty paid under protest is available in the year of payment under the exclusive method, the same amount can be allowed to get deducted once again on the finalization of the dispute with the Excise department on its transfer to Excise duty account - NO: ITAT
Whether for the purpose of allowing custom duty paid, under 'Inclusive method' the AO is required to recast Profit and loss account as per the mandate of section 145A, by increasing the purchase value with the customs duty and then allow separate deduction for the same - YES: ITAT
Whether if the object of subsidy received is in line with the Industrial Policy of Haryana Government, being 'attracting new investments and growth of existing industry' , the same can be characterized as a revenue receipt - NO: ITAT
Whether if the assessee has acquired right to use the 'Licensed Information&# 39; as per an agreement, there is no outright purchase of the 'Licensed Information&# 39;, the amount thus paid for such use can be treated as Capital expenditure - NO: ITAT
Whether for the purpose of determining ALP, availability of the transacted value of an international transaction is sine qua non and its non availability would render the entire exercise of ALP determination useless - YES : ITAT
Whether if an amount claimed as deduction by the assessee in the earlier year has not been allowed, on the assessee' s suo motu offering of it as an item of income for the current year on the strength of deduction claimed in the earlier year, which finally stands denied, can be charged to tax - NO: ITAT - Assessee' s appeal partly allowed : DELHI ITAT
2015-TIOL-1340- ITAT-MAD
DCIT Vs Ganapathy Media Pvt Ltd
Whether the right to telecast the cinematographic film through satellite and the transfer in favour of the assessee for a period of 99 years is sale and excluded from the definition of royalty. - Revenue' s Appeal dismissed : CHENNAI ITAT
2015-TIOL-1339- ITAT-PANAJI
ACIT Vs Goan Heritage Leisure House (P) Ltd
Whether the income of the Assessee from hotel can be treated as 'income from house property when the agreement does not provide for any rental income for the year, but provides for sharing of profit and the hotels which were given for management were fully furnished by the assessee with Air Conditioners, generators, crockery, computers, telephone etc. and also all incidental expenses such as insurance, repairs and maintenance were also borne by the assessee. - Revenue' s appeal dismissed : PANAJI ITAT
Indirect Tax Basket
CENTRAL EXCISE SECTION
2015-TIOL-1803- CESTAT-BANG
Bharat Heavy Electricals Ltd Vs CCE, C & ST
Central Excise - Refund claim - Limitation - Payment of duty pending disposal of the appeal - Eligibility to claim exemption under Notification No. 108/95-CE - Lodging of explicit claim of protest must precede payment of such duty - Neither the duty paid by manufacturer during the pendency of appeal for the disputed period was under protest - Nor was the CESTAT order relied on covers the entire period in question - Refund claim filed beyond prescribed period of limitation under section 11-B is hit by limitation as such was rightly rejected - Contention of appellant that as the issue was before the Tribunal by way of an appeal, the duty paid during the subsequent period must be deemed to be having been paid under protest held cannot be appreciated because statute provided a specific procedure to be followed which was not complied - Question of deemed fiction thus does not arise - No infirmity in the impugned orders - Assessee appeal has no merit hence is rejected. (Para 7) - Assessee appeal rejected : BANGALORE CESTAT
2015-TIOL-1802- CESTAT-MAD
CCE Vs Dharani Sugars And Chemicals Ltd
Central Excise - CENVAT credit - precise question raised by Revenue is whether the duty paid on the molasses generated by sugar plant of appellant and such molasses utilised for the purpose of manufacture of de-natured spirit, rectified spirit and extra neutral alcohol, shall allow the appellant to transfer the credit of the duty so paid on molasses for set off against the duty liability against the sugar cleared from the factory.
Held: The Chennai High Court in the Rajshree Sugars and Chemicals case, on similar facts, ruled that the transfer of credit between distillery and sugar units was permissible; same applicable to the instant case. [Para 2] - Appeal dismissed : CHENNAI CESTAT
I-T - Whether income from sale of property acquired in past can be claimed as capital gains when assessee, engaged in developing housing project, failed to declare same in books audited every year - NO: HC
AHMEDABAD: THE issue before the Bench is - Whether income from sale of property acquired in the past can be claimed as capital gain, when the assessee engaged in the business of development of housing project has continuously failed to record such acquisition in his books of account which is audited every year. NO is the verdict.
Facts of the case
The assessee is an individual. He filed his return for A.Y. 2007-2008 declaring total income at Rs.19,86,268/ -. The case was selected for scrutiny by issuing notice u/s 143(2). In computation of total income, the assessee stated to have earned income from business, other sources, agricultural, and Capital Gain. The assessee declared Rs.12,12,220/ - as net agricultural income. To substantiate the agricultural income, the assessee submitted the copy of the bills of M/s.Parshwa Trading Co. and M/s.Harsh Corporation. The assessee stated to have sold Drum Stick of Rs.97,500/-. The assessee also declared Long Term Capital Gain on sale of Revenue Survey and declared Rs.68,50,473/ - as Long Term Capital Gain. The assessee declared Long Term Capital Gain at Rs.NIL after claiming deduction u/s 54EC. The A.O. did not accept the claim of the assessee with respect to agricultural income as well as Long Term Capital Gain with respect to income from land transactions. Thus, while finalizing the assessment, the A.O. held income from land transaction as business income and not Capital Gain, as claimed by the assessee and therefore made addition of Rs.1,42,97,628/ - to the total income of the assessee, disallowing the Long Term Capital Gain being business income.
On appeal, the CIT(A) partly allowed the appeal and deleted the addition made by the AO with respect to the sale of Revenue Survey No.91 treating it as Capital Gain but confirmed the addition of Rs.32,55,053/ - made by the A.O. on sale of property bearing Revenue Survey No.287 by treating the income derived from the sale of Revenue Survey No.287 as income from business. The Tribunal quashed and set aside the orders passed by the CIT(A) and restored the respective assessment orders and treated the income from sale of Revenue Survey Nos.91 and 287 as business income and confirmed the addition made by the AO.
Having heard the parties, the HC held that,
++ it is noted that the assessee has treated the income received on sale of Revenue Survey No.91 as capital gain. It was the case on behalf of the assessee that he along with others acquired the said land by way of Will executed by the original owner. The said land was acquired through Will more than 20 years back and therefore, on its sale, the income derived therefrom is to be treated as capital gain. On appreciation of evidence and the material on record, the tribunal has not accepted the case on behalf of the assessee. The Tribunal also noted that the assessee has claimed deduction u/s 80IB for the development of Housing Project, meaning thereby he was engaged in the business of development of Housing Project in the year under consideration. The tribunal while confirming the findings recorded by the AO that profit from sale of land bearing Survey No.91 as business income, observed that the land was received by him more than 20 years back, but it is also a fact that the aforeasid land was not disclosed in the balance-sheet of the assessee after its acquisition. When the assessee is maintaining the Books of Accounts and had got the same audited, no valid justification has been offered for not showing the land acquired through inheritance from the F.Y 1997-98 onwards in the balance-sheet;
++ this court is in complete agreement with the view taken by the Tribunal holding the income from sale of land bearing Survey No.91 as business income and not as capital gain as claimed by the assessee. Further, cogent reasons have been assigned by the Tribunal in holding the income derived from sale of land bearing Survey No.91 as business income. With respect to land bearing Revenue Survey Nos.287 and 485 is concerned, at the outset it is required to be noted that the aforesaid parcels of land were held as "Stock- in-trade" by M/s.Satyanarayan Traders and even the same were also shown in the Balance-sheet of M/s.Satyanarayan Traders. It is a fact that the said parcels of land were not recorded in the individual balance-sheet of the assessee. It was assessee' s case that due to mistake in maintaining accounts, the same were not mentioned in his balance-sheet. However, as rightly observed by the CIT(A) as well as the Tribunal, the assessee did not demonstrate as to how the said mistake continued for so many years, more so when accounts of the firm and the assessee were audited year after year. Therefore, this court is in complete agreement with the view taken by the tribunal as well as CIT(A).
Cus - SCN u/s 124 - Petition seeking release of goods on ground that SCN was received after expiry of six months as stipulated u/s 110(2) - Petition dismissed as notice was despatched before expiry of six months: HC
BANGALORE: THE officers of DRI had seized gold from the Petitioner and issued Show Cause Notice under Section 124 of the Customs Act, 1962. It is the contention of the Petitioner that the gold was seized on 16.09.2013 and the Show Cause Notice dated 13.03.2014 was received by them on 17.03.2014, which is beyond six months period prescribed and therefore they are entitled for release of the gold.
The Petitioner relied on the Delhi High Court judgement in case of Purushottam Jajodia Vs . Dir. Of Revenue Intelligence, New Delhi 2014-TIOL-1303- HC-DEL-CUS wherein it was held that mere dispatch of notice would not amount to "giving" of notice and the words "giving" as found in sub-section (2) of Section 110 of the Act would be complete only when such notice has reached the person concerned or if such notice after being tendered had been refused.
After noting the fact that the Delhi High Court judgement is pending adjudication before the Supreme Court, the High Court held:
A perusal of the said judgment would indicate that judgment rendered by the High Court of Madhya Pradesh in the matter of Commissioner Vs. Ram Kumar Aggarwal (2012 (280) ELT 13 (M.P.) has been distinguished. The High Court of Madhya Pradesh in Ram Kumar Aggarwal' s case while interpreting Sections 110(2) and 124 of the Act has held issuance of Show Cause Notice by registered post before the expiry of six (6) months from the date of seizure would be sufficient compliance more particularly when the same is received by the addressee though after lapse of six (6) months. It has been further held that neither Section 110(2) nor clause (a) of Section 124 of the Act contemplates service of notice in strict sense should be within a period of six months. It is submitted that judgment rendered by the High Court of Madhya Pradesh has since been affirmed by the Hon'ble Apex Court in Special Leave Petition (Civil) No.28186/2011 by judgment dated 21.10.2011. Thus, judgment rendered by the Madhya Pradesh High Court in Ram Kumar's case has reached finality and in the judgment rendered by the Delhi High Court appeal is yet to be disposed of by the Hon'ble Apex Court. Hence, this Court is of the considered view that judgment rendered by the High Court of Madhya Pradesh in Ramkumar' s case referred to supra is more persuasive than the judgment rendered by the Delhi High Court and as such contention raised by learned counsel for petitioner to consider the case of Purshottam Jajodia rendered by Delhi High Court cannot be accepted.
The High Court further held:
A conspectus reading of Section 153 of the Act would clearly indicate that it does not contain the word "given" as found in Section 110(2) or 124 of the Act. It is well settled proposition of law that true meaning of the words and expressions used by the legislature must be given effect to and courts must have regard to the aim, object and scope of the object to be achieved while interpreting the words used in a statute.
When facts on hand are examined, it would clearly indicate that seizure was done on 16.9.2013 and Show Cause Notice for confiscating the goods seized came to be issued on 13.3.2014 i.e., before period of six months prescribed under sub-section (2) of Section 110 of the Act was to expire i.e., on or before 15.3.2014 and said Show Cause Notice dated 13.3.2014 came to be dispatched on the same day. However, it came to be delivered on the petitioner on 17.3.2014 i.e., after the expiry of two days of the period of six months prescribed under sub-section (2) of Section 110 of the Act. In that view of the matter, the date of service of notice cannot be held as one which entitles the petitioner to seek for return of the goods on the ground that six months period prescribed under Section 110(2) of the Act had expired.
ST - Chance taking petitioner - There is tendency of those persons who are liable to make payment of tax interest penalty to take chance before Court - Vigilant petitioner should have filed appeal within limitation period: HC
RANCHI: IN present matter concerning Service Tax an o-in-o was passed by the Additional Commissioner on 31.01.2013.The period of limitation u/s 85(3A) of the FA, 1994 is sixty days and delay could be condoned by Commissioner (Appeals) if there are reasonable reasons. However, the Commissioner (Appeals) has no power, jurisdiction and authority to condone the delay beyond thirty days.
Be that as it may, a writ petition (Tax) was preferred by the petitioner before the High Court on 17th December 2013 but the same was dismissed vide order dated 25th March 2014.
Thereafter, appeals were preferred by the petitioners before the Commissioner( A) against the order-in-original claiming benefit of Section 14 of the Limitation Act of 1963, to exclude the time consumed in disposal of the writ petition before the Court in computation of the delay of approximately fifteen months.
The Commissioner( A) vide his order dated 17.10.2014 dismissed the appeal mainly on the ground that the appeals had been preferred beyond the period of condonable delay.
The petitioner is again before the High Court and submits that Section 14(2) of the Limitation Act 1963 is applicable for condonation of delay by the Commissioner (Appeals) and which aspect had not been properly appreciated by the Commissioner (Appeals) and, therefore, the delay may be condoned and the matter may be remanded to the Commissioner (Appeals) for its decision on merits.
The High Court observed that there was no reason to entertain the Writ Petition on account of the following -
+ In view of the decision of the apex court in the case of Singh Enterprises - 2007-TIOL-231- SC-CX and Section 85(3A) of the Finance Act, 1994 no error has been committed by the Commissioner (Appeals) in not condoning the delay because it was beyond the period of condonable delay.
+ Looking to Section 14 of the Limitation Act 1963 the said Section is also not applicable in the facts of the present case because the writ petition (Tax) No. 7713 of 2013 was preferred before this Court on 17th December, 2013 which was dismissed vide order dated 25th March, 2014. Thus, writ petition which was also preferred after the limitation period was over for preferring appeal U/s 85(3A) of the Finance Act, 1994. The benefit of section 14 of the Limitation Act cannot be extended to this petitioner.
+ Looking to the order in original dated 31st December, 2013 passed by Additional Commissioner, Central Excise the demand notice issued upon this petitioner was affirmed, without any ambiguity. Order for interest was also passed and order for penalty was also imposed Under Section 77 of the Finance Act, 1994. Thus appeal should have been preferred by petitioner as provided in the Finance Act, 1994.
+ There is tendency of those persons who are liable to make payment of the tax+interest+ penalty to take a chance before this Court. This "chance taking petitioner" has filed a writ petition before this Court at his own peril and risk because some times it takes time for final adjudication of the writ and on another hand the period of limitation has already been started. It ought to be kept in mind by this type of "chance taking petitioner" that they should simultaneously prefer statutory appeals also so that whenever there are such type of clauses that limitation cannot be condoned beyond the period of thirty days the appeal may not be dismissed for want of condonation of delay. The petitioner is lethargic, but, certainly not an ignorant person and is knowing all fine niceties of law. Vigilant petitioner should have filed their appeal within the limitation period or at least within condonable delay period.
+ There is one more reason not to give benefit of Section 14 of the Limitation Act, 1963 to this petitioner as because Section 14 of the Limitation Act, 1963 is applicable only when the proceeding is bonafide in the court without jurisdiction. The provision of Section 14 has been enacted only for the reason when there is total lack of jurisdiction the benefit can be given to the party who is preferring appeal at the slightly belated stage.
The High Court while concluding that no error has been committed by the Commissioner (A) in passing the order dated 17.10.2014 expressed itsfull agreement with the ratio decidendi propounded by the Bombay High Court in the case of Flemingo (Duty Free Shop) Pvt. Ltd. - 2014-TIOL-2436- HC-MUM-CUS wherein the High Court had in a similar situation held that the Petitioner cannot be allowed to take advantage of its own wrong and get over the period of limitation with the aid of sub-section (2) of section 14 of the Limitation Act, 1963 .
The writ petition was dismissed.
IT : Where assessee owning terrace floor of a building, gave same on licence to a telecom company for installing tower/antenna, licence fee was to be taxed as income from house property
[2015] 60 taxmann.com 83 (Delhi)
HIGH COURT OF DELHI
Niagara Hotels & Builders (P.) Ltd.
v.
Commissioner of Income-tax
IT/ILT: In case of export commission paid by assessee to its AE, it is duty of Assessing Officer to determine whether assessee had derived any benefit from said payment and if any benefit had been derived, only thereupon TPO had to examine whether such payment was commensurate to comparable transaction
IT/ILT: Where assessee-company paid certain amount as royalty to its AE in respect of export, TPO could not disallow said payment holding that assessee was a contract manufacturer and benefit of producing components was reaped by AE
[2015] 60 taxmann.com 298 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Honda Motorcycle & Scooter India (P.) Ltd.
v.
Deputy Commissioner of Income-tax, Circle 1 (1), Gurgaon
