Search proceedings can't be initiated against an issuer of seized cheque
September 17, 2015[2015] 61 taxmann.com 60 (Ahmedabad - Trib.)
IT : When cheque issued by assessee to searched person was found from searched person, cheque did no more continue to belong to assessee; further where no satisfaction was recorded by Assessing Officer of person searched and cheque was also undated, conditions for issuing notice to assessee under section 153C were not satisfied
No denial of registration to trust just because its incidental activities were profitable in nature
September 17, 2015[2015] 61 taxmann.com 59 (Hyderabad - Trib.)/[2015] 38 ITR(T) 195 (Hyderabad - Trib.)
IT : Where assessee's primary purpose remained advancement of objects of general public utility, even if an incidental or ancillary activity for purpose of achieving main purpose was profitable in nature, denial of registration was unjustified
MUMBAI, SEPT 17, 2015: THE issue before the bench is - Whether the fact that the availability of the REC bonds was only for a limited period of time can prejudice the assessee's right to exercise the same up to last date, in case the bonds were admittedly not available during the said period. NO is the answer.
Facts of the case
The mother of assessee viz. Mrs. Kamlabai Moghe executed a Will on 17.12.1978 and she expired on 18.05.1988. By that Will she divided her residential bungalow in two parts. Ground floor, garage, garden and out house of her residential bungalow were given to her son – assessee while first floor with staircase of the residential bungalow was given to her other son Shri P.M. Moghe. Shri P.M. Moghe expired on 20.03.1996. He made a Will and bequeathed his share i.e. first floor premises mentioned supra excluding undivided share of land in the name of his sisters viz. Mrs. Wadekar, Mrs. Sinha and Mrs. Kale. The assessee then purchased construction of first floor for Rs.90,000/-. This sale price did not include value of undivided share of land on which bungalow was built. As per Clause No. 7 of said Will of Kamlabai Moghe, assessee did not receive property absolutely. Kamlabai Moghe had provided a share for her daughters i.e. sisters of assessee if assessee or his brother does not have a son alive at the relevant time. This clause was not in dispute. In that event she gave life interest to her two daughter in laws and it was thereafter to go to her daughters. Assessee had only one daughter while his brother P.M. Moghe had one son and three daughters. The said son of P.M. Moghe expired in the year 1985 i.e. before death of Kamlabai Moghe. The assessee, therefore, received property with clause providing overriding title in favour of his three sisters. In this situation, assessee decided to pay Rs.15 lakh each to his three sisters so that in future they should not claim any right in the property. He also paid an amount of Rs. Five lakh each to his three niece i.e. daughters of late brother P.M. Moghe. Thus, he paid an amount of Rs.60 lakh and a family settlement was accordingly reduced into writing. The assessee, after sale of said property claimed an amount of Rs.60 lakh u/s 49 and deducted it while working out Capital Gains. The assessee also invested an amount of Rs. 22 lakh in REC Bonds and sought its deduction u/s 54-EC. AO had not accepted these claims and the assessee, therefore, approached CIT in appeal. CIT partly allowed his appeal and claim towards amount of Rs. Five lakh each i.e. total Rs.15 lakh paid to three nieces was not accepted. Similarly, addition of Rs. 20 lakh made u/s 49 by AO was was sustained. However, the claim of the assessee for deducting amount of Rs.15 lakh each paid to three sisters u/s 48(i) and an amount of Rs.22 lakh towards REC Bonds in terms of Section 54EC was accepted. On further appeal, Tribunal dismissed both the appeals.
Held that,
++ the assessee has transferred the premises on 07.07.2006 and, therefore, was duty bound to invest within six months i.e. by 06.01.2007. Thus, statutorily, he had time of six months to make investment and the fact that he did not make this investment at any time during this period when bonds were available is, therefore, not relevant. The law gives assessee right to choose. Here, the assessee wanted to invest in REC Bonds and has in fact invested in those bonds on 24/27.01.2007. His specific stand that bonds were not available during this period, is not found to be incorrect or false by any of the authorities. A show cause notice dated 03.12.2009 was issued to the assessee in connection with this investment and to it assessee replied on 15.12.2009 stating that the issue No. VI of said Bonds was on top from 01.07.2006 to 02.08.2006. Issue No. VIA opened on 22.01.2007 and the assessee who was waiting for making investment in REC Bonds only, invested Rs.22 lakh on opening date i.e. on 22.01.2007. It is claimed that the assessee was thus prevented by reasonable cause from making investment within six months. Though the issue has been looked into by AO, he has not found the statement that the issue No. VIA opened on 22.01.2007 incorrect. The Division Bench of HC at Bombay, while deciding Incometax Appeal No. 3731 of 2010 has considered almost identical facts. Those facts are given in paragraph 9 of said judgment. The period of six months in said matter expired on 21.09.2006. Bonds were purchased by the assessee on 31.01.2007. As this investment was beyond the period of six months, the Assessing Officer disallowed it on 26.09.2008. CIT(A) by the order dated 05.02.2009 maintained this order. The ITAT on 19.06.2010 allowed the assessee's appeal. This order of ITAT was questioned before the High Court. In paragraph 17, this Court has observed "Thus, the availability of the bonds only for a limited period during this period cannot prejudice the assessee's right to exercise the same up to last date. The bonds were admittedly not available during the said period." More reasons are given in paragraph 21 by the Division Bench;
++ assessee's counsel has however argued that the Bonds issued by the National Highway Authority of India were available and hence the assessee ought to have invested in those bonds within the stipulated period of six months. We find this contention difficult to accept. Section 54-EC gives assessee an option to invest either in bonds of National Highway Authority of India or then in bonds of Rural Electrification Corporation Limited. The said provision does not stipulate that the investment has to be in any bond whichever is available. Both bonds carry different benefits and hence deliberately the Parliament has given option to the assessee to invest in any one out of two as per his choice. In a given case, the assessee may choose to invest in both. However, discretion is conferred upon the assessee, who is the best judge of his own needs and interests. He cannot be forced to invest in the bond whichever is available because period of six months is about to expire. This option or discretion given by the Parliament to the assessee needs to be honoured here. If said option was available when period of six months was to expire and could have been expressed by the assessee when said period was about to expire, the situation would have been otherwise. In present matter, the REC Bonds became available in VIA issue on 22.01.2007 and, therefore, investment made therein cannot be said to be after an undue or unreasonable delay. The investment has been made at the earliest possible opportunity. We, therefore, do not find that Question No. 2 sought to be raised also arises in the present mater as a substantial question of law. In the light of this discussion, we find no merit in this appeal. It is accordingly dismissed.
Faber-Castell's dotted crayons 'capricious', not merely 'functional'; Restrains Cello from passing-off
HC grants injunction to Faber-Castell ('plaintiff') against Cello ('defendant'), restrains defendant from passing off its crayons (stationery product) as that of plaintiff, by applying plaintiff's trade dress & design on its product; Observes that there was no distinguishing feature except absence of plaintiff's logo on defendant's crayons, and moreover defendant also applied plaintiff's 'capricious' design of twin series of dots on crayons; Rejects defendant's contention that twin series of dots was 'functional' in nature and not 'capricious', holds that "There is nothing to suggest that the functionality of a better grip is afforded by or only by this twin series of parallel lines of dots..There may be other functionalities that serve this purpose too.."; Further rejects defendant's contention that unless the features themselves were shown to be artistic embellishments bereft of any functional element, no protection could be granted, holds that, "The existence of function if combined with form does not disentitle it from all protection altogether"; Relies on Chancery Division ruling in Jones v. Hallworth and co-ordinate bench rulings in Whirlpool of India Ltd. v Videocon Industries Ltd and Gorbatschow Wodka KG v John Distilleries Ltd and holds that, "To adopt one feature may be happenstance; two might be coincidence; to replicate them all,... certainly deserving of an injunction" :Bombay HC
The ruling was delivered by Justice G. S. Patel.
Senior Advocate Venkatesh Dhond alongwith Advocates Rashmin Khandekar, Hemant Thadhani, Rahul Dhote & Minesh Andharia argued on behalf of Plaintiff. Defendant was represented by Advocates Himanshu Kane, N. Pendsey, Bhavin Shah & Bhavya Mohan.
IT : Sub-section (3A) of section 92CA provides that where a reference is made to TPO, an order may he made at any time before sixty days prior to the date on which limitation period referred to in section 153, or as the case may be, in section 153B, expires
€ ¢â' ¢ The use of the word 'may' in sub-section (3A) of section 92CA is to be construed as 'shall&# 39;, thereby making this time limit as mandatory and not directory. As such, the TPO is bound by the given time limit for passing of his order.
€ ¢â' ¢ Where AO passes a valid and timely drafted properly timed draft assessment order u/s 144C but TPO passes a time barred order in terms of sec 92CA(3) read with sec 153, the final assessment order would be saved but TP additions made by TPO would have to be deleted.
€ ¢â' ¢ The draft assessment order u/s 144C has to be passed by AO within reasonable time as it has got no relation with time limit given in section 153.
€ ¢â' ¢ When the position is such that the draft order has to be passed independent of the time limit given in section 153, there appears some logic in not continuing with the time limit for the passing of the order by the TPO tagged with the time limit given in section 153. It has led to incoherence in the provisions. This position can be set right only with a suitable legislative amendment.
Honda Trading Corporation, Japan
v.
Deputy Commissioner of Income-tax, International Taxation, Noida
€ ¢â' ¢ The use of the word 'may' in sub-section (3A) of section 92CA is to be construed as 'shall&# 39;, thereby making this time limit as mandatory and not directory. As such, the TPO is bound by the given time limit for passing of his order.
€ ¢â' ¢ Where AO passes a valid and timely drafted properly timed draft assessment order u/s 144C but TPO passes a time barred order in terms of sec 92CA(3) read with sec 153, the final assessment order would be saved but TP additions made by TPO would have to be deleted.
€ ¢â' ¢ The draft assessment order u/s 144C has to be passed by AO within reasonable time as it has got no relation with time limit given in section 153.
€ ¢â' ¢ When the position is such that the draft order has to be passed independent of the time limit given in section 153, there appears some logic in not continuing with the time limit for the passing of the order by the TPO tagged with the time limit given in section 153. It has led to incoherence in the provisions. This position can be set right only with a suitable legislative amendment.
[2015] 61 taxmann.com 233 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I-1'Honda Trading Corporation, Japan
v.
Deputy Commissioner of Income-tax, International Taxation, Noida
IT : When cheque issued by assessee to searched person was found from searched person, cheque did no more continue to belong to assessee; further where no satisfaction was recorded by Assessing Officer of person searched and cheque was also undated, conditions for issuing notice to assessee under section 153C were not satisfied
[2015] 61 taxmann.com 60 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'A'
Smt. Rekhaben Thakkar
v.
Assistant Commissioner of Income-tax, Central Circle-1, Baroda
[2015] 61 taxmann.com 60 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'A'
Smt. Rekhaben Thakkar
v.
Assistant Commissioner of Income-tax, Central Circle-1, Baroda
F.No 2016/2015-FT Government of India Ministry of Finance Department of Economic Affairs (Investment Division) OFFICE MEMORANDUM Subject: Introduction of .Gold Monetization Schemes' . The introduction of the .Gold Monetization Schemes' (GMS) has been approved. 2. The guidelines of the'Gold Monetization Schemes' (GMS) will be as under: I. Introduction The Gold Monetization Schemes provide different options to the people to monetize the gold, by modifying the aheady existing two schemes, namely, the Gold Deposit Scheme and the Gold Metal Loan Scheme, in light of past experience and fresh developments and feedback. Thus, the Gold Monetization Schemes comprise of the 'Revamped Gold Deposit Scheme' and the 'Revamped Gold Metal Loan' scheme, linked together. II. Objectives The objective of introducing the modifications in the schemes is to make the existing schemes more effective and to broaden the ambit of the existing schemes from merely mobilizing the gold held by households and institutions in the country to putting this gold into productive use. The long-term objective which is sought through this arrangement is to reduce the country' s reliance on the import of gold to meet the domestic demand. lII. Scheme The Gold Monetrzation Schemes consist of the 'Revamped Gold Deposit Scheme, and the 'Revamped Gold Metal Loan' scheme. The basic features of both the schemes are as follows: REVAMPED GOLD DEPOSIT SCI-IEME (R-GDS): The revamped GDS will provide the depositors of gold, improved infrastructure (in terms of ease of depositing, faster processing&# 39; transparency) and greater flexibility in the terms and tenure of deposits. i) collection&# 39; Purity veriJicntion and Deposit of Gord under trte revampetr GDS: The infrastructure for depositing the gold in the revamped scheme has been proposed to be improved considerably to make the process faster, easier and more transparent. .rhe followins will be the process for depositing gold: (a) : There are over 300 Assaying and Hallmarking centres that are certified by BIS and are spread across various parts of the country (The list of the number of centres in each State is at Attachment-A) . They are engaged in certifying the purity of the gold that the jewellers manufacture and for which they charge a fee from the jewellers. The Assaying and Hallmarking centres are well equipped to conduct a test of purity of the jewellery in a short span of time. out of these 331 Assaying and Hallmarking centres only those centres which will meet criteria as specified by BIS may act as collection and purity Testing centres for purity of gold forthe purpose of this scheme Q'.lecessary instructions to the banks to this effect will be given)' The number of such BIS approved centres is likely to increase over the period of time' The technology used in the collection and purity Testing centres would be able to handle all cartages of gold as mentioned in IS l4lT,thatis Standard gold, Fine gold and23,22,2r, 20, 19, lg, 17, r6,14, 9 carats of gold. Further, these centres would be given instructions to ensure that the XRF machines employed by them are able to detect the presence of Iridium and Ruthenium in the jewellery as specified in the relevant Indian Standard. (b) Conditions The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams, so that even small depositors are encouraged. Gold can be in any form (bullion or jewellery).There would be a BIS certified protocol of operations and processes at all stages of purity verification and deposit of gold and when anomalies, if any, arc observed there would be fines/penalty for offenders. (c) Preliminaryt Test: A preliminary test will be done at the authori zed, Collection and Purity Testing Centres through an XRF test as detailed below: (A) XRF machine-test and weighing of each article will be conducted to tell the customer the approximate purity of gold content in the article. (B) Weighing and XRF of all articles would be done in the presence of the customer and the entire process will preferably be recorded by CCTV Camera. Customers would be allowed to see the readings of the weighing balance and the XRF machine. (C) If the customer agrees, he/she will have to give his/her consent for melting of gold. Customers will be free to disagree for melting of any article after weighing and XRF test. The fee to be charged if any, at this stage may be informed to the customer before doins the XRF test. (D) All such articles for which the customer has siven his/her consent will be melted together. (d) Fire Assa:t Test: After receiving the customer' s consent for melting the gold for conducting a further test of purity, at the same collection centre, the gold ornament will then be cleaned of its dirt, studs, meena. etc. The studs. etc. will be handed-over to the customer there itself. The net weight of the jewellery will be taken after such removal and told to the customer. Arrangements for the jewellery to be melted and through a fire assay, its purity ascertained, in the presence of the customer would be made available. The time taken is expected not to exceed 4-5 hours. (e) Deposit o-f Gold: When the results of the fire assay are told to the customer, he has a choice of either refusing to accept, in which case he can take back the melted gold, after paying a nominal fee to that centre; or he may agree to deposit his gold (in which case the fee will be paid by the bank). (The details of the fees, as received from the Indian Association of Hallmarking Centres, are at Attachment-B. These are only indicative.) If the customer agrees to deposit the gold, then he will be given a certificate by the collection centre certifying the weight and purity of the deposited gold. ii) Gold Savings Account: In the revamped scheme, a Gold Savings Account will be opened by customers at any time, with the KYC nonns, as applicable, even prior to depositing gold at the Collection and Purity Testing Centres. This account would be denominated in grams of gold. When the customer produces the certificate of gold deposited at the Collection and Purity Testing Centres, the bank will credit the 'equivalent quantity of Standard gold of 995 fineness' of gold into the customer' s account. In any case, the Collection and purity Testing Centres will also inform the bank about the deposit made.' iii) Transfer of Gold to the Refiners: At present, there are about 32 refineries in the country. The laboratories of some of these refineries are NABL accredited which means that the process that they adopt is certified. BIS is developing protocols so that it can conduct accreditation of the products being produced in these refineries also. ' Transfer of Gold: The Collection and purity testing centres will send the gold to the refiners. The refiners will keep the gold in their waie-houses, unless the banks prefer to hold it themselves. For the services provided by the refiners, they will be paid a fee by the banks, as decided by them, mutually. The customer will not be charged. Centres: The banks will enter into a tripartite Legal Agreement with refiners and Collection and Purity Testing Centres, that are selected by them to be their partners in the scheme. The Agreement will clearly lay down the details regarding payment of fee, services to be provided, standards of service and the details of the arrangements between the banks, refiners and collection and Collection and puritv Testing Centres. iv) Tenure: The deposits under the revamped scheme can be made for a short-term period of l-3 years (with a roll out in multiples of one year); a medium-term period of 5-7 years and a long-term period of 12-15 years (as decided from time to time). Like a fixed deposit, breaking of lock-in period will be allowed in either of the options and there would be a penalty on premature redemption (including part withdrawal). v) Interest rate: The amount of interest rate payable for deposits made for the short-term period would be decided by the banks on the basis of the prevailing international lease rates, other costs, market conditions etc. and will be denominated in grams of gold. For the medium and long-term deposits, the rate of interest (and fees to be paid to the banks for their services) will be decided by the government, in consultation with the RBI from time-to-time. The interest rate for the medium and long-term deposits will be denominated and payable in rupees, based on the value of gold deposited. vi) Redemption: For short-term deposits, the customer will have the option of redemption, for the principal deposit and interest earned, either in cash (in equivalent rupees of the weight of deposited gold at the prices prevailing at the time of redemption) or in gold (of the same weight of gold as deposited), which will have to be exercised at the time of making the deposit. In case the customer will like to change the option, it will be allowed at the bank's discretion. Redemption of fractional quantity (for which a standard gold barlcoin is not available) would be paid in cash. For medium and long-term deposits, redemption will be only in cash, in equivalent rupees of the weight of the deposited gold at the prices prevailing at the time of redemption. The interest earned will however be based on the value of sold at the deposit on the interest rate as decided. vii) Utilization of deposited gold: o Under medium and long-term deposit: (a) AucljBuing: The gold deposited may be auctioned by RBI or MMTC or any other authorized agency by the Govt, at the earliest and amount realized will be used by GoI in lieu of government borrowing. (b) The deposited gold may be credited to RBI's reserves' (c) Coins" Banks may provide the mobilized gold to MMTC for minting the Indian Gold coins' (cl) Lending toiewellers; Banks may lend to jewellers under the GML. ' under short-term tleposit: (a) Coins; Banks may provide the mobilized gold to MMTC for minting the Indian Gold Coins . (b) Lending to jewellers,;Banks may lend to jewellers under the GML. viii) Tax Exemption.&# 39; Tax exemptions, same as those available under GDS, would be made available to the customers, in the revamped GDS, as applicable. Further, the depositors may be informed by the banks that as per CBDT instructions No. 1916 dated llth May, 1994 (Attachment- c), in course of IT Search u/s 132, gold jewellery to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family, need not be seized by tax authorities, but the tax penalties, as applicable will be levied. xi) Gold Reserve Fund: The difference between the current borrowing cost for the Government and the interest rate paid by the Government under the medium/long term deposit will be credited to the Gold Reserve Fund. This Fund will be used to absorb the price risk of the gold and pay back the amounts due to the depositor, based on the gold rates prevalent at the time of redemption. The modalities for payment of the redemption amount from 'Gold Reserve Fund' on the due date for maturity for onward payment to the depositor will be framed by RBI. The deposit of gold will not be hedged for the risks by the Govt. of India' All risks associated with gold price and currency will be borne by Gol through the 'Gold Reserve Fund'' The position may be reviewed in case the ,Gold Reserve Fund' becomes unsustainable. REVAMPED GOLD METAL LOAN SCHEME i) Gold Metal L,oan Account: A Gold Metal Loan Account, denominated in grams of gold will be opened by the bank for the jewellers. The gold mobilized through the revamped GDS, under the shorl-term option, will be provided to the jewellers on loan, iii) Interest received by banks.' The interest rate charged on the GML will be decided by the banks (depending upon the interest rate paid to the depositors of gold, fee paid to refiners and Collection and purity testing centres and the profit margin of the banks), with guidance from the RBI. iv) Tenor: The tenor of the GML earlier was 90 days, which was later extended to 1g0 days. Thus at present the limit stands at 180 days. Given that the minimum lock-in period for gold deposits will be I year, based on experience gained, this tenor of GML may be re-examined in future and appropriate modifications made, if required. 3. The diagrammatic representation of the GMS is given at annex. on the basis of the terms and conditions set-out by RBI. ii) Delivery of gold to jewellers.. When a gold loan receive physical delivery of gold from the refiners. requisite entry in the jewellers, Gold Loan Account. the banks under the euidance of is sanctioned, the jewellers will The banks will, in tum, make the to PM, South Block, New Delhi. Joint Secretary to the Govt. of India Tel:2309 2420 To, i) Cabinet Secretary ii) All Secretaries to the Govt. of India iii) All Divisions of DEA Copy to: Dr T.V.Somanathan, Joint Secretary Attachment-A List of Collection Centres B!tea_u__a l_-[]D_djj!- c*S.!e4j! , ..r. State wise Iist o1-IllS reco.v_nizecl Assity,irrg ar.rcl [jirllrrrarking C.entres in operation :rnd l..encling zlpprlic:ations trs orr -l I N,larch 20 l5 Attachment-B Schedule Of Fees l) Melting charges : a) Minimumcharges/ upto b) 100 gms to 200 gms c) 200 gms to 300 gms d) 300 gms to 400 gms e) 400 gms to 500 gms D 500 gms to 600 gms g) 600 gms to 700 gms h) 700 gms to 800 gms i) 800 gms to 900 gms j) 900 gms to 1000 gms Testing/fire assaying charges Stone removal charges Minimum charge Melting loss (lnformation as received from Indian indicative and is subject to change) 100 gms - Rs. 500 per lot - Rs. 600 - Rs.700 - Rs. 800 - Rs. 900 - Rs.1000 - Rs. 1100 - Rs.1200 - Rs.1300 - Rs.1400 - Rs.300 - at actuals - Rs. 100 - at actuals 2) 3) 4) Association of Hallmarking Centres-this is only Attachment-C Extracts from CBDT's Manual of Office Procedure, Vol-I[, February, 2003) 22.2 Jewellery, ornaments and other valuable articles or things can be seized only if these represent undisclosed income or property. The Board's Instruction No. 1916 dated 11.05.1994 lay down the following guidelines for seizure ofjewellery: - i. In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need be seized. ii. In the case of a person not assessed to wealth-tax, gold jewellery and ornaments to the extent of 500 gms. per manied lady,250 gms. per unmarried lady and 100 gms per male member of the family, need not be seized. iii. The Authorised Officer may, having regard to the status of the family and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director/Commission er authorising the search at the time of fumishing the search report. iv. In all cases, a detailed inventory of the jewellery and ornaments found must be prepared, to be used for assessment purposes. Annex Diagrammatic Flow Chart Gold Mobilization Operation j. rt' Verifies/Assays the Gold Brings Gold in any form Informs customer/ provides receipts for the rralue ? 'j u1&" Sends Gold for melting & nranrrrlinn af Informs bank of the value to be credited to customer {' !4 Stores Gold in vaults Tells refinery to send gold to the jeweller or Sends Gold based on Bank : -a- ---A: - - Repays Metal Loan in cash Flow of information/ equivalent money F.No 20l1012014-FT Government of India MinistrY of Finance Department of Economic Affairs (Investment Division) North Block, New Delhi Dated: 15th SePtember, 2015 OFFICE MEMORANDUM Subject: Introduction of 'sovereign Gold Bonds Scheme ' The introduction of the 'sovereign Gold Bonds Schemc' (sGB) has been approved' 2. The guidelines of the 'sovereign Gold Bonds schemes' (sGB) are as under: I. Introduction Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold. II. Objectivea) The main idea is to reduce the demand for physical gold' b) Shift part of the estimated 300 tons of physical bars and coins purchased every year for Investment into 'demat&# 39; gold bonds' III. Agency . Bonds will be issued on behalf of the Government of India by RBI' . Issuing agency will need to pay distribution costs and a sales commission to the intermediate channels' to be reimbursed by Government&# 39; IV. Sale to Indian entities The bond would be restricted for sale to resident Indian entities. The cap on bonds that may be bought by an entity would be, not more than 500 grams per person per year. V. Features . The Government will issue bonds with a rare of interest to be decided by the government. The rate of interest will take into account the domestic and intemational market conditions and may vary from one tranche to another. This rate of interest will be calculated on the value of the gold at the time of investment in rupee terms' The rate could be a floating or a fixed rate, as decided' a o These bonds will be issued in tranches to enable proper planning of Government borrowing. The bonds will be available both in demat and paper form. The bonds will be issued in denominations of 2,5,10,50,100 glams of gold or other denominations. . The price of gold may be taken from the reference rate, as decided, and the Rupee equivalent amount may be converted at the RBI Reference rate on issue and ption. This rate will be used for issuance, redemption and LTV purpose and disb rsement of loans. oB sAllBFCs/Post OfficesNSC agents and others, as specified, ffi?Y collect money / m bonds on behalf of government (for a fee, the amount would be as decided). The nor of the bond could be for a minimum of 5 to 7 years so that it would protect ln rs from medium term volatility in the gold prices. Since the bond will be a parl of sovereign borrowing, these would need to be within the fiscal deficit target for 201 -16 and onwards. Bo s can be used as collateral for loans. The Loan to Value ratio is to be set equal to ordi gold loan mandated by RBI from time to time. Bo ma s to be easily sold and traded on exchanges to allow early exits for investors who so desire. price of gold has fallen from the time that the investment was made, or for any reason, the depositor will be given an option to roll over the bond for 3 or more KY norrns to be the same as that for eold. Bo to have a sovereign guarantee. cap tal gains tax treatment will be the same as for physical gold for an 'individual&# 39; inv The amount received from the bonds will be used by GoI in lieu of government ins and the notional interest saved on this amount would be credited in an "Gold Reserve Fund" which will be created. The savings in the costs of ng compared with the existing rate on government borrowings will be ited in the Gold Reserve Fund to take care of the risk of increase in gold price that ill be borne by the government. Calculations show that, given the trends in gold pfl in the past and projections for the future, this risk is sustainable. Further, the Gol Reserve Fund will be continuously monitored for sustainability. VI. Redem tion On urity, the redemption will be in rupee amount only. The of interest on the bonds will be calculated on the value of the eold at the time ofi vestment. The principal amount of investment, which is denominated in grams of will be redeemed at the price of gold at that time. o a O a o gol VII. H 1f deposit will not be hedged and all risks associated with gold price and y will be borne by GoI. The position may be reviewed in case 'Gold rve Fund' becomes unsustainable. ide gains and downside risks will be with the investor and the investors will to be aware of the volatility in gold prices. order to ensure wide availability the bond will be marketed through post BFCs and by various brokers/agents (including National Saving ertificate (NSC) agents) who will be paid a commission. VIII. Ma ing ii) All iii) Alr To, i) Cabi Secretary ies to the Govt. of India visions of DEA Copy to: Dr .V.Somanathan, Joint Secretary to PM, South Block, New Delhi. ql, Joint Secretary to the Govt. of India Tel:2309 2420 t i t :
Direct Tax Basket
PROMOTION & TRANSFER ORDERS
ORDER
CBDT promotes 153 IRS officers as CITs
ORDER
CBDT issues local transfer order of 21 CITs
ORDER
CBDT issues transfer order of 6 CITs
INSTRUCTION
10
CBDT hikes threshold limit from Rs 10 lakh to Rs 30 lakh in Dossier cases
CASE LAWS
2015-TIOL-2140- HC-DEL-IT
CIT Vs Vijay Singh Kadan
Whether for the purpose of Section 2(14)(iii)(b) , the distance has to be measured from the agricultural land in question to the outer limit of the municipality by road and not by the straight line or the aerial route - YES: HC
Whether the distance of agricultural land in question has to be measured from the land in question itself and not from the village in which the land is situated - YES: HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1466- ITAT-PANAJI
Afsarali G Mujawar Vs ITO
Whether the matter has to be restored back to the AO, if the assessee has produced fresh evidences in the form of Record of Rights of some of the creditors who have been disbelieved and whose credits have been added in the hands of the Assessee - YES: ITAT - Assessee' s appeal partly allowed : PANAJI ITAT
2015-TIOL-1465- ITAT-MAD
V Dhanalakshmi Vs DCIT
Whether disallowance on account of interest on housing loan is justified where the assessee has diverted the sum borrowed for the purpose other than construction and there was no material to indicate the nexus between the utilization of funds for construction and repayment of donation by the assessee to various temples. - Revenue' s appeal partly allowed : CHENNAI ITAT
Indirect Tax Basket
SERVICE TAX SECTION
2015-TIOL-1950- CESTAT-DEL
M/s Shiva Utensils Industries Pvt Ltd Vs CCE
ST - Refund - Appellants are manufacturer of steel utensils and exporter of the same - Refund claims filed under Notification No.17/09-ST dt.7.7.2009 for the service tax paid in respect of specified services received and used for the export of their final products from their factory rejected by lower authorities on the ground that the suppliers of services are registered under CHA services, therefore, they are required to issue invoices for agency services and not on the reimbursable expenses such as port fees, landing and container charges, dock fees, examination charges, terminal handling charges etc. for which the suppliers of the services are not registered. Held: As per CBEC circular No.106/9/2008- ST dt. 11.12.2008 the only requirement is that the exporter actually should have paid service tax and services have been received by the exporter which are to be mentioned in the invoices issued by the service provider - It is immaterial that service provider is registered in some other category and he has provided some other services - In the case on hand the invoices issued by the service provider indicate in detail the services which have been provided - It is also not disputed that the appellant has received the services and paid service tax thereon - refund admissible - appeal allowed with consequential relief: CESTAT [para 6, 7, 12] - Appeal allowed : DELHI CESTAT
PROMOTION & TRANSFER ORDERS
ORDER
CBDT promotes 153 IRS officers as CITs
ORDER
CBDT issues local transfer order of 21 CITs
ORDER
CBDT issues transfer order of 6 CITs
INSTRUCTION
10
CBDT hikes threshold limit from Rs 10 lakh to Rs 30 lakh in Dossier cases
CASE LAWS
2015-TIOL-2140- HC-DEL-IT
CIT Vs Vijay Singh Kadan
Whether for the purpose of Section 2(14)(iii)(b) , the distance has to be measured from the agricultural land in question to the outer limit of the municipality by road and not by the straight line or the aerial route - YES: HC
Whether the distance of agricultural land in question has to be measured from the land in question itself and not from the village in which the land is situated - YES: HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1466- ITAT-PANAJI
Afsarali G Mujawar Vs ITO
Whether the matter has to be restored back to the AO, if the assessee has produced fresh evidences in the form of Record of Rights of some of the creditors who have been disbelieved and whose credits have been added in the hands of the Assessee - YES: ITAT - Assessee' s appeal partly allowed : PANAJI ITAT
2015-TIOL-1465- ITAT-MAD
V Dhanalakshmi Vs DCIT
Whether disallowance on account of interest on housing loan is justified where the assessee has diverted the sum borrowed for the purpose other than construction and there was no material to indicate the nexus between the utilization of funds for construction and repayment of donation by the assessee to various temples. - Revenue' s appeal partly allowed : CHENNAI ITAT
Indirect Tax Basket
SERVICE TAX SECTION
2015-TIOL-1950- CESTAT-DEL
M/s Shiva Utensils Industries Pvt Ltd Vs CCE
ST - Refund - Appellants are manufacturer of steel utensils and exporter of the same - Refund claims filed under Notification No.17/09-ST dt.7.7.2009 for the service tax paid in respect of specified services received and used for the export of their final products from their factory rejected by lower authorities on the ground that the suppliers of services are registered under CHA services, therefore, they are required to issue invoices for agency services and not on the reimbursable expenses such as port fees, landing and container charges, dock fees, examination charges, terminal handling charges etc. for which the suppliers of the services are not registered. Held: As per CBEC circular No.106/9/2008- ST dt. 11.12.2008 the only requirement is that the exporter actually should have paid service tax and services have been received by the exporter which are to be mentioned in the invoices issued by the service provider - It is immaterial that service provider is registered in some other category and he has provided some other services - In the case on hand the invoices issued by the service provider indicate in detail the services which have been provided - It is also not disputed that the appellant has received the services and paid service tax thereon - refund admissible - appeal allowed with consequential relief: CESTAT [para 6, 7, 12] - Appeal allowed : DELHI CESTAT
Direct Tax Basket
2015-TIOL-205- SC-IT
K Raveendranathan Nair Vs CIT
Whether a question regarding determination of court fees payable as per Kerala Court Fees & Suits Valuation Act requires consideration by the concerned State itself € ¢â' '³ YES: SC - Matter listed for final hearing : SUPREME COURT OF INDIA
2015-TIOL-2154- HC-MUM-IT + Story
ACIT Vs Kamlakar Moghe
Whether the fact that the availability of the REC bonds was only for a limited period of time can prejudice the assessee' s right to exercise the same up to last date, in case the bonds were admittedly not available during the said period - NO: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-2153- HC-AHM-IT
PCIT Vs Anchor Cargolines Pvt Ltd
Whether when the assessee has made payments to Indian shipping companies in the capacity as principal shipping lines and not as agent of non-resident shipping company, any payment to these companies requires deduction of TDS u/s 194C - NO: HC - Revenue' s appeal dismissed : GUJARAT HIGH COURT
2015-TIOL-2152- HC-P&H-IT
CIT Vs Rakesh Kumar Khosla
Whether the Tribunal needs to decide the matter afresh on merits in accordance with law, if it has shown no legally justifiable reasons for recording and arriving at the said conclusion - YES: HC - Case remanded : PUNJAB AND HARYANA HIGH COURT
2015-TIOL-2151- HC-HP-IT
CIT VS Rakesh Mahajan
Whether AO is justified in rejecting books of assessee where no separate accounts were maintained in respect of gross hiring receipts, diesel expenses and salaries of the drivers and helpers and the freight and carriage expenses debited in the profit and loss account were far too excessive and AO had found that it was impossible to verify the correctness of the expenses on freight debited in the contract account, and hence impossible to deduce the correct income from the accounts. - Revenue' s appeals allowed : HIMACHAL PRADESH HIGH COURT
2015-TIOL-2150- HC-AHM-IT
Principal CIT Vs Rishi Kiran Roadlines
Whether if there was no contract between the assessee and its sister concern for use of certain equipments by the assessee which were lying idle with the sister concern, the transaction of such use of assets in return of a payment being made by the assessee, can be said to be in the nature of contract - NO: HC - Revenue' s appeal dismissed : GUJARAT HIGH COURT
2015-TIOL-2149- HC-KAR-IT
Shri S Jagadeeshwara Reddy Vs DCIT
Whether a substantal question of law cannot be decided by the HC, when such question of law, raised before the Tribunal, has not been decided as it has been stated in the order of the Tribunal that the additional grounds filed by the assesseee were not traceable - YES: HC - Matter remanded : KARNATAKA HIGH COURT
2015-TIOL-2148- HC-MUM-IT
CIT Vs M/s Hindustan Organics Chemicals Ltd
Whether in case the fact that the valuation of closing stock includes direct expenses incurred on them and are duly supported by the material receipt vouchers, this finding of fact can be denied by the Revenue authorities on the observations made in the audit report - NO: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-1472- ITAT-MAD
M/s Saint Gobain Glass India Ltd Vs DCIT
Whether CIT has rightly invoked the provisions under section 263, when the AO has passed an order without examining commission paid to various agents, with regard to nature of services rendered by them, procurement of orders by them and agreements entered into with them -YES: ITAT - Assessee' s appeal dismissed : CHENNAI ITAT
2015-TIOL-1471- ITAT-JAIPUR
Sikar Sahkari Bhoomi Vikas Bank Ltd Vs ITO
Whether the AO cannot deny the deduction U/s 80P(2)(a)(i) in a relevant year, when it has allowed the same in previous AYs, which has not been reopened U/s 148 and no order U/s 263 was passed by the department - YES: ITAT - Assessee' s appeal allowed : JAIPUR ITAT
2015-TIOL-1470- ITAT-MAD
DCIT Vs Sundaram Clayton Ltd
Whether Tribunal had rightly upheld the order of the CIT(A), when Department had not rebut the findings of the CIT(A) with evidences - YES: ITAT - Revenue' s appeal dismissed : CHENNAI ITAT
Indirect Tax Basket
CBEC TRANSFER
CBEC issues transfer order of SIX Commissioners
SERVICE TAX SECTION
2015-TIOL-1961- CESTAT-MUM + Story
Divekar Associates Vs CCE
ST - Period 1999-2003 - Carpentry work involving different types of furniture items, modular partitions, fixation of false ceiling, painting of walls and ceilings etc. cannot be classified under Interior decorator services - Appeal allowed: CESTAT [para 6.2, 6.3] - Appeal allowed : MUMBAI CESTAT
2015-TIOL-1959- CESTAT-MAD
Saraswathy Agency Vs CCE
Service Tax - Penalty - Tax demand with interest and penalty adjudicated with concession of reduced penalty (25%) if paid within specified period - Case agitated before Commissioner (Appeals) who rejected the appeal, now agitated herein.
Held: The only controversy in this appeal is whether concession in penalty to the extent of 25% of the tax liability discharged before the appellate authority disposed the appeal is deniable when such concession was allowed by adjudication order - appellant contended that the adjudication order was received by it on 21.12.2009, that they discharged tax liability as well as concessional penalty by 31.12.2009 - the department alleges that the concessional penalty was not discharged by 17.4.2009 since the adjudication order was dispatched on 18.3.2009 - The Department has not verified as to on whom the adjudication order was served; mere dispatch of the order may not result in inference that it was served on the appellant - Had the department verified the address of the addressee from envelope containing the order and caused an inquiry - In absence of any inquiry, appellant gets benefit of doubt of the service of the order upon it not earlier to 21.12.2009 - When the order came to the knowledge of assessee, upon service, the crucial date for it to discharge penalty was 21.12.2009 and 30 days therefrom was to be reckoned - considering discharge of tax liability which is not in dispute by Revenue, penalty is reduced to 25% of tax liability which is also said to have been discharged by the appellant and not controverted by Revenue - appeal is allowed with consequential relief if any in accordance with law [Para 4, 6, 8] - Appeal allowed : CHENNAI CESTAT
2015-TIOL-1958- CESTAT-BANG
E M Mani Constructions Pvt Ltd Vs CCE & ST
Service Tax - Items supplied free of cost by service recipient for services of construction of commercial or industrial complex - Do not form value of service as such is excludible for the purpose of the notification No. 20/2004-S.T. and 1/2006-S.T - Consequently service tax demand is unsustainable. (Para 2) - Assessee appeal allowed : BANGALORE CESTAT
CENTRAL EXCISE SECTION
2015-TIOL-204- SC-CX
CCE Vs M/s Dalmia Cement (Bharat) Ltd
Central Excise - Refunds - Unjust Enrichment - Whether Section 11B of the Central Excise Act, as amended, applies to cases where though an order has been passed directing refund, implementation of the order is pending? The High Court has answered the question in favour of assessee holding that since the proceedings under the old Section 11B of the Act had attained finality, the amended provision of Section 11B of the Act, in particular, proviso to sub-section (1) shall not apply. In other words, the principle of 'unjust enrichment&# 39; which was introduced by way of amendment of Section 11B in the year 1991 shall not be attracted in the instant case as the proceedings under the unamended Section stood finalised with the direction in the application filed under unamended Section 11B of the Act to refund the excise duty that was paid by the respondent/assessee . The High Court has held that merely because implementation of the aforesaid order was pending, in the sense that direction to refund the amount had not been carried out, the authority could not go into the question of unjust enrichment by invoking the proviso to sub-section (1) of Section 11B of the Act that had been introduced by that time by way of amendment in Section 11B of the Act. Therefore, it was not open to the concerned officer, who was only supposed to carry out the implementation of the order, to go into the question as to whether there was any unjust enrichment on the part of the assessee or not.
High Court order upheld. - Revenue Appeal Dismissed : SUPREME COURT OF INDIA
2015-TIOL-2157- HC-ALL-CX
M/s Special Tools Pvt Ltd Vs CCE
Central Excise - CENVAT Credit on goods returned to the factory disallowed on the ground that the process undertaken on the returned goods did not amount to manufacture - Appeal against the order of Tribunal contending that the Tribunal was not justified in rejecting the alternative plea to consider the issue under Rule 173 H of the Central Excise Rules, 1994.
Held: The findings recorded in the order in original and the order of the Commissioner (Appeals ) that the process being carried out by the appellants on the defective goods for rectification was not the same which were adopted by them in their manufacturing of final products, has been accepted by the appellants before the Tribunal. The appellants accepted the final order of the Tribunal dated 30.1.2001, whereby the case was remanded to the Adjudicating authority for limited purpose as mentioned above. In their reply before Adjudicating Authority, the appellants took the stand that Rule 173-H is not applicable in their case. Thus, for the first time in second round of litigation they contended before the Tribunal that their claim under Rule 173-H should have been considered in alternative. Under the circumstances, it was not open for the appellants to raise the aforesaid plea before the Tribunal in the second round of litigation. (para 12) - Appeal dismissed : ALLAHABAD HIGH COURT
2015-TIOL-1957- CESTAT-AHM
Tipco Industries Ltd Vs CCE & ST
CX - Admissibility of cenvat credit with respect to rejected goods manufactured by assessee - Documents on basis of which CENVAT credit is taken is available with assessee - Records maintained by assessee is showing issue slips for remanufacture of goods and end products are duly entered in stock registered and cleared on payment of duty - No evidence on record to show that no process was carried out on rejected goods received by assessee where as, assessee has produced documentary evidence to show that certain process were done which amounts to manufacture and cleared on payment of duty - CENVAT credit on rejected and returned goods was correctly availed by assessee: CESTAT - Appeal allowed : AHMEDABAD CESTAT
2015-TIOL-1956- CESTAT-MUM
Tapasya Engineering Works Pvt Ltd Vs CCE
CX - CENVAT credit in respect of Input services availed by appellant during the course of job work manufacture in terms of notification 214/86-CE is correctly admissible - lower authorities have gravely erred in disallowing credit despite issue being settled by various judgments - orders set aside and appeals allowed with consequential relief: CESTAT [para 5.1] - Appeals allowed : MUMBAI CESTAT
2015-TIOL-1955- CESTAT-MAD
Tamilnadu Petroproducts Ltd Vs CCE
Central Excise - Interest - Consequent on Tribunal' s order upholding duty demand on merit, the appellants on their own discharged the duty on the higher value and subsequently worked out correct value as per CAS-4 for every quarter and paid differential duty in the following month - The adjudicating authority issued notice demanding interest on the differential duty paid during the above period and confirmed the demand of interest under Section 11AB in adjudication; agitated herein.
Held: There is no demand of central excise duty as it was paid by self-assessment under Section 11A (2B) - The adjudicating authority dealt the issue in detail and clearly held that assessee are covered under sub-section (2B) of Section 11A of Central Excise Act - when appellant could not quantify the value as per CAS, they ought to have opted for provisional assessment; instead they chose to pay differential duty for every quarter on self-assessment - Once the differential duty is paid it is covered under Section 11A (2B) and interest is automatic, in terms of the Apex Court ruling in the case of CCE Pune Vs SKF India Ltd. - the issue relating to demand of interest on the differential duty paid thus stands settled; appellants are liable to pay interest demanded in the impugned order, which is upheld [Para 6, 8] - Appeal dismissed : CHENNAI CESTAT
2015-TIOL-1954- CESTAT-AHM
Saurashtra Cement Ltd Vs CCE & ST
CX - CENVAT credit of ST paid on Services of Guest House and Colony maintenance service - Assessee is not contesting the issue on merits but has contested the issue on time bar - When an issue is disputable and a final view taken by this Bench was in favour of assessee then they had a bonafide belief that cenvat credit was admissible of these services - Favourable view taken by CESTAT was reversed by Gujarat High Court in case of GHCL 2011-TIOL-383- HC-AHM-ST - Extended period cannot be invoked and demand has to be restricted to period within one year from date of SCN - No intention to evade duty can be attributed to assessee - Penalty under Rule 15(2) of CCR, 2004 read with Section 111AC of CEA, 1944 is set-aside: CESTAT - Appeal allowed : AHMEDABAD CESTAT
2015-TIOL-1953- CESTAT-MAD
Packaging India Pvt Ltd Vs CCE
Central Excise - CENVAT credit - Removal of capital goods - appellants cleared used and worn out cylinders/printing rollers; Slitting Machine, Blown film plant, 3 Layer Blown Film Machine, Expert Lamination machine, Forklift truck which are old and used machineries on payment of duty on transaction value whereas the department demanded full reversal of credit as the capital goods are cleared as such - demand for recovery of capital goods credit adjudicated, upheld by Commissioner (Appeals), and agitated herein.
Held: Rule 3(4) of CCR 2002 has been amended by notification No.13/03-CE (NT) dt. 1.3.2003 where the provisions were inserted for removal of inputs and capital goods removed as such and stipulates that the amount equal to the credit availed on such inputs or capital goods is to be paid by the manufacturer - Rule 3 (5A) was also introduced w.e.f. 16.5.2005 wherein specific provisions have been inserted that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value - There is no dispute on the fact that these rollers are capital goods used and worn out - These goods were not cleared as such as held by the department but are used and worn out - On identical dispute, Tribunal held that in respect of removal of old and used goods, duty is payable after allowing depreciation on the value by relying on the Madras High Court order in the case of CCE Salem Vs Rogini Mills Ltd., and the Larger Bench decision in the case of CCE Hyderabad Vs Navodhaya Plastic Industries Ltd.. [Para 6, 7]
Demand of reversal of entire credit on used and worn out capital goods cleared is not sustainable as these goods are NOT cleared as such but used and worn out - the demand is restricted to the extent on the value arrived after allowing depreciation - since the appellants have discharged duty as per the transaction value on the goods declared it as scrap, the differential duty, if any, is demandable to the extent on the value of capital goods after allowing depreciation - if it results in excess payment, no amount is payable by appellant and the appellants are not entitled for any refund - Adjudicating authority is directed to re-quantify the amount after allowing depreciation value only to this extent; Appellants shall produce all the relevant details before the original authority; appeals are allowed subject to the re-quantification by the original authority [Para 8, 9] - Appeals allowed : CHENNAI CESTAT
2015-TIOL-1952- CESTAT-AHM
ICPA Health Products Ltd Vs CCE, C & ST
CE € ¢â' '³ CENVAT € ¢â' '³ Demand of 10% amount on the value of exempted goods under Rule 6 (3) of the CCR 2004 confirmed by lower authorities € ¢â' '³ Appellant submitting that they reversed the entire CENVAT credit taken on the common inputs used for the manufacture of dutiable and exempted goods; that as per s.73 of FA, 2010 giving retrospective effect, proportionate credit is required to be reversed along with interest € ¢â' '³ CA certificate produced by appellant to be verified by adjudicating authority for ascertaining whether needful has been done € ¢â' '³ Matter remanded: CESTAT [para 5, 6] - Matter remanded : AHMEDABAD CESTAT
CUSTOMS SECTION
2015-TIOL-203- SC-CUS
CC Vs M/s Seiko Brushware India
Customs - Exemption from SAD - Nil rate not applicable if the importer sells the goods from a place located in an area where no tax is chargeable on sale or purchase of goods. No sales tax payable on Pig hair bristles and paint brushes and so no exemption from SAD - CESTAT order set aside. - Revenue Appeal Allowed : SUPREME COURT OF INDIA
2015-TIOL-2158- HC-MAD-CUS
Elpe Labs Vs CC
Customs - Classification - Anti-dumping duty - Petitioner seeking re-classification of the goods imported consequent to demand of Anti-dumping duty at the time of clearance - Writ seeking release of goods on such terms and conditions prescribed by the court - Held: The issue relating to classification of items viz, whether the goods would attract Anti Dumping Duty or not, can be looked into by the authority concerned by adopting proper adjudication process followed by a speaking order, which is yet to be made - Such exercise shall be completed by the respondents within a period of four weeks from the date of receipt of a copy of this order - For the purpose of release of goods, 50% of the Anti Dumping Duty as determined shall be paid by the petitioner and for the balance amount, a bond as directed by the authority concerned is directed to be executed by the petitioner. On such compliance, the goods shall be released forthwith. (para 9) - Petition disposed of : MADRAS HIGH COURT
2015-TIOL-1951- CESTAT-MUM + Story
Bhargav B Patel Vs CC
Cus - Role of appellants in the smuggling of the diamonds under seizure is not established even on preponderance of probability, therefore, penalties set aside: CESTAT [para 10, 11, 12] - Appeal partly allowed : MUMBAI CESTAT
I-T - Whether fact that availability of REC bonds was only for limited period can prejudice assessee' s right to exercise same upto last date even as bonds were not available during the said period - NO: HC
MUMBAI : THE issue before the bench is - Whether the fact that the availability of the REC bonds was only for a limited period of time can prejudice the assessee' s right to exercise the same up to last date, in case the bonds were admittedly not available during the said period. NO is the answer.
Facts of the case
The mother of assessee viz. Mrs. Kamlabai Moghe executed a Will on 17.12.1978 and she expired on 18.05.1988. By that Will she divided her residential bungalow in two parts. Ground floor, garage, garden and out house of her residential bungalow were given to her son € ¢â' '³ assessee while first floor with staircase of the residential bungalow was given to her other son Shri P.M. Moghe. Shri P.M. Moghe expired on 20.03.1996. He made a Will and bequeathed his share i.e. first floor premises mentioned supra excluding undivided share of land in the name of his sisters viz. Mrs. Wadekar, Mrs. Sinha and Mrs. Kale. The assessee then purchased construction of first floor for Rs.90,000/-. This sale price did not include value of undivided share of land on which bungalow was built. As per Clause No. 7 of said Will of Kamlabai Moghe, assessee did not receive property absolutely. Kamlabai Moghe had provided a share for her daughters i.e. sisters of assessee if assessee or his brother does not have a son alive at the relevant time. This clause was not in dispute. In that event she gave life interest to her two daughter in laws and it was thereafter to go to her daughters. Assessee had only one daughter while his brother P.M. Moghe had one son and three daughters. The said son of P.M. Moghe expired in the year 1985 i.e. before death of Kamlabai Moghe. The assessee, therefore, received property with clause providing overriding title in favour of his three sisters. In this situation, assessee decided to pay Rs.15 lakh each to his three sisters so that in future they should not claim any right in the property. He also paid an amount of Rs. Five lakh each to his three niece i.e. daughters of late brother P.M. Moghe. Thus, he paid an amount of Rs.60 lakh and a family settlement was accordingly reduced into writing. The assessee, after sale of said property claimed an amount of Rs.60 lakh u/s 49 and deducted it while working out Capital Gains. The assessee also invested an amount of Rs. 22 lakh in REC Bonds and sought its deduction u/s 54-EC. AO had not accepted these claims and the assessee, therefore, approached CIT in appeal. CIT partly allowed his appeal and claim towards amount of Rs. Five lakh each i.e. total Rs.15 lakh paid to three nieces was not accepted. Similarly, addition of Rs. 20 lakh made u/s 49 by AO was was sustained. However, the claim of the assessee for deducting amount of Rs.15 lakh each paid to three sisters u/s 48(i) and an amount of Rs.22 lakh towards REC Bonds in terms of Section 54EC was accepted. On further appeal, Tribunal dismissed both the appeals.
Held that,
++ the assessee has transferred the premises on 07.07.2006 and, therefore, was duty bound to invest within six months i.e. by 06.01.2007. Thus, statutorily, he had time of six months to make investment and the fact that he did not make this investment at any time during this period when bonds were available is, therefore, not relevant. The law gives assessee right to choose. Here, the assessee wanted to invest in REC Bonds and has in fact invested in those bonds on 24/27.01.2007. His specific stand that bonds were not available during this period, is not found to be incorrect or false by any of the authorities. A show cause notice dated 03.12.2009 was issued to the assessee in connection with this investment and to it assessee replied on 15.12.2009 stating that the issue No. VI of said Bonds was on top from 01.07.2006 to 02.08.2006. Issue No. VIA opened on 22.01.2007 and the assessee who was waiting for making investment in REC Bonds only, invested Rs.22 lakh on opening date i.e. on 22.01.2007. It is claimed that the assessee was thus prevented by reasonable cause from making investment within six months. Though the issue has been looked into by AO, he has not found the statement that the issue No. VIA opened on 22.01.2007 incorrect. The Division Bench of HC at Bombay, while deciding Incometax Appeal No. 3731 of 2010 has considered almost identical facts. Those facts are given in paragraph 9 of said judgment. The period of six months in said matter expired on 21.09.2006. Bonds were purchased by the assessee on 31.01.2007. As this investment was beyond the period of six months, the Assessing Officer disallowed it on 26.09.2008. CIT(A) by the order dated 05.02.2009 maintained this order. The ITAT on 19.06.2010 allowed the assessee' s appeal. This order of ITAT was questioned before the High Court. In paragraph 17, this Court has observed "Thus, the availability of the bonds only for a limited period during this period cannot prejudice the assessee' s right to exercise the same up to last date. The bonds were admittedly not available during the said period." More reasons are given in paragraph 21 by the Division Bench;
++ assessee' s counsel has however argued that the Bonds issued by the National Highway Authority of India were available and hence the assessee ought to have invested in those bonds within the stipulated period of six months. We find this contention difficult to accept. Section 54-EC gives assessee an option to invest either in bonds of National Highway Authority of India or then in bonds of Rural Electrification Corporation Limited. The said provision does not stipulate that the investment has to be in any bond whichever is available. Both bonds carry different benefits and hence deliberately the Parliament has given option to the assessee to invest in any one out of two as per his choice. In a given case, the assessee may choose to invest in both. However, discretion is conferred upon the assessee, who is the best judge of his own needs and interests. He cannot be forced to invest in the bond whichever is available because period of six months is about to expire. This option or discretion given by the Parliament to the assessee needs to be honoured here. If said option was available when period of six months was to expire and could have been expressed by the assessee when said period was about to expire, the situation would have been otherwise. In present matter, the REC Bonds became available in VIA issue on 22.01.2007 and, therefore, investment made therein cannot be said to be after an undue or unreasonable delay. The investment has been made at the earliest possible opportunity. We, therefore, do not find that Question No. 2 sought to be raised also arises in the present mater as a substantial question of law. In the light of this discussion, we find no merit in this appeal. It is accordingly dismissed.
(See 2015-TIOL-2154- HC-MUM-IT)
MUMBAI : THE issue before the bench is - Whether the fact that the availability of the REC bonds was only for a limited period of time can prejudice the assessee' s right to exercise the same up to last date, in case the bonds were admittedly not available during the said period. NO is the answer.
Facts of the case
The mother of assessee viz. Mrs. Kamlabai Moghe executed a Will on 17.12.1978 and she expired on 18.05.1988. By that Will she divided her residential bungalow in two parts. Ground floor, garage, garden and out house of her residential bungalow were given to her son € ¢â' '³ assessee while first floor with staircase of the residential bungalow was given to her other son Shri P.M. Moghe. Shri P.M. Moghe expired on 20.03.1996. He made a Will and bequeathed his share i.e. first floor premises mentioned supra excluding undivided share of land in the name of his sisters viz. Mrs. Wadekar, Mrs. Sinha and Mrs. Kale. The assessee then purchased construction of first floor for Rs.90,000/-. This sale price did not include value of undivided share of land on which bungalow was built. As per Clause No. 7 of said Will of Kamlabai Moghe, assessee did not receive property absolutely. Kamlabai Moghe had provided a share for her daughters i.e. sisters of assessee if assessee or his brother does not have a son alive at the relevant time. This clause was not in dispute. In that event she gave life interest to her two daughter in laws and it was thereafter to go to her daughters. Assessee had only one daughter while his brother P.M. Moghe had one son and three daughters. The said son of P.M. Moghe expired in the year 1985 i.e. before death of Kamlabai Moghe. The assessee, therefore, received property with clause providing overriding title in favour of his three sisters. In this situation, assessee decided to pay Rs.15 lakh each to his three sisters so that in future they should not claim any right in the property. He also paid an amount of Rs. Five lakh each to his three niece i.e. daughters of late brother P.M. Moghe. Thus, he paid an amount of Rs.60 lakh and a family settlement was accordingly reduced into writing. The assessee, after sale of said property claimed an amount of Rs.60 lakh u/s 49 and deducted it while working out Capital Gains. The assessee also invested an amount of Rs. 22 lakh in REC Bonds and sought its deduction u/s 54-EC. AO had not accepted these claims and the assessee, therefore, approached CIT in appeal. CIT partly allowed his appeal and claim towards amount of Rs. Five lakh each i.e. total Rs.15 lakh paid to three nieces was not accepted. Similarly, addition of Rs. 20 lakh made u/s 49 by AO was was sustained. However, the claim of the assessee for deducting amount of Rs.15 lakh each paid to three sisters u/s 48(i) and an amount of Rs.22 lakh towards REC Bonds in terms of Section 54EC was accepted. On further appeal, Tribunal dismissed both the appeals.
Held that,
++ the assessee has transferred the premises on 07.07.2006 and, therefore, was duty bound to invest within six months i.e. by 06.01.2007. Thus, statutorily, he had time of six months to make investment and the fact that he did not make this investment at any time during this period when bonds were available is, therefore, not relevant. The law gives assessee right to choose. Here, the assessee wanted to invest in REC Bonds and has in fact invested in those bonds on 24/27.01.2007. His specific stand that bonds were not available during this period, is not found to be incorrect or false by any of the authorities. A show cause notice dated 03.12.2009 was issued to the assessee in connection with this investment and to it assessee replied on 15.12.2009 stating that the issue No. VI of said Bonds was on top from 01.07.2006 to 02.08.2006. Issue No. VIA opened on 22.01.2007 and the assessee who was waiting for making investment in REC Bonds only, invested Rs.22 lakh on opening date i.e. on 22.01.2007. It is claimed that the assessee was thus prevented by reasonable cause from making investment within six months. Though the issue has been looked into by AO, he has not found the statement that the issue No. VIA opened on 22.01.2007 incorrect. The Division Bench of HC at Bombay, while deciding Incometax Appeal No. 3731 of 2010 has considered almost identical facts. Those facts are given in paragraph 9 of said judgment. The period of six months in said matter expired on 21.09.2006. Bonds were purchased by the assessee on 31.01.2007. As this investment was beyond the period of six months, the Assessing Officer disallowed it on 26.09.2008. CIT(A) by the order dated 05.02.2009 maintained this order. The ITAT on 19.06.2010 allowed the assessee' s appeal. This order of ITAT was questioned before the High Court. In paragraph 17, this Court has observed "Thus, the availability of the bonds only for a limited period during this period cannot prejudice the assessee' s right to exercise the same up to last date. The bonds were admittedly not available during the said period." More reasons are given in paragraph 21 by the Division Bench;
++ assessee' s counsel has however argued that the Bonds issued by the National Highway Authority of India were available and hence the assessee ought to have invested in those bonds within the stipulated period of six months. We find this contention difficult to accept. Section 54-EC gives assessee an option to invest either in bonds of National Highway Authority of India or then in bonds of Rural Electrification Corporation Limited. The said provision does not stipulate that the investment has to be in any bond whichever is available. Both bonds carry different benefits and hence deliberately the Parliament has given option to the assessee to invest in any one out of two as per his choice. In a given case, the assessee may choose to invest in both. However, discretion is conferred upon the assessee, who is the best judge of his own needs and interests. He cannot be forced to invest in the bond whichever is available because period of six months is about to expire. This option or discretion given by the Parliament to the assessee needs to be honoured here. If said option was available when period of six months was to expire and could have been expressed by the assessee when said period was about to expire, the situation would have been otherwise. In present matter, the REC Bonds became available in VIA issue on 22.01.2007 and, therefore, investment made therein cannot be said to be after an undue or unreasonable delay. The investment has been made at the earliest possible opportunity. We, therefore, do not find that Question No. 2 sought to be raised also arises in the present mater as a substantial question of law. In the light of this discussion, we find no merit in this appeal. It is accordingly dismissed.
(See 2015-TIOL-2154- HC-MUM-IT)
POWERS TO REMAND CASES
Commissioner€ ¢â' '¹s Remand Powers
The power to order remand is indeed an invaluable power of an appellate court which goes a long way in enabling the court to serve the ends of justice. The primary objective of conferring power to remand on Tribunal is to widen its powers in the interests of justice.
Section 35A(3) of Central Excise Act, 1944 was amended w.e.f. 11.5.2001 to withdraw the power Commissioner (Appeals) to remand cases for fresh adjudication to the original adjudication authority. An such, the Commissioner (Appeals) shall after making such further enquiry, as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Supreme court in case of MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA while noting that the power of remand had been taken away, categorically stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the assessment matters and any order of Commissioner (Appeal) could also be treated as an order of assessment.
Any case is said to be remanded when an appellate court sends an appellate case back to the lower court for further action (http://www.lectlaw.com). This usually happens if an error occurs, which demands a new trial or hearing in the interest of justice. By passing an order of remand, an appellate authority directs the lower court to reopen and retry the case. On remand, the lower court will readmit the suit under its original number in its register and will proceed to determine it as per the directions issued by the appellate authority [CK Takwani, Civil Procedure (Lucknow: Eastern Book Company, 2000) at 286].
The Commissioner (Appeal) does not have power to remand cases. The Commissioner (Appeals) shall after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Punjab & Haryana High Court has held that Commissioner (Appeals) has been divested of the power to remand cases back to the adjudicating authority after deletion of that power in section 35A(3) of Central Excise Act, 1944 in 2001. [Enkay (India) Rubber Co. Pvt. Ltd; 2007 (3) TMI 276 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CCE Jallandhar v. B C Kataria 2007 (9) TMI 167 - HIGH COURT OF PUNJAB & HARYANA]. Supreme Court in MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA also held that power of remand by the Commissioner (Appeals) has been taken away by amending section 35A w.e.f. 11.5.2001. It also stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the matter of assessment and he can add or subtract certain items from the order of assessment made by the adjudicating authority and that the order of the Commissioner (Appeals) could also be treated as order of assessment
In CCE v. Karaikal Chlorates 2010 (9) TMI 362 - CESTAT, CHENNAI, it was held that since power of Commissioner (Appeal) to remand is taken away with amendment to section 35A of Central Excise Act, 1944, Commissioner does not have any power to remand. However, since grievance of contravention of the principle of natural justice still remained while setting aside the impugned order, case was to be remanded to adjudicating officer. [Also see in CCE, Madurai v. Kodai Automobile Ltd. 2010 (8) TMI 251 - CESTAT, CHENNAI, Commissioner of Service Tax, Delhi v. G.B. Professional Associates Pvt. Ltd. 2010 (12) TMI 405 - CESTAT, NEW DELHI; Commissioner of Service Tax, Kolkata v. Bahubali International Ltd. 2013 (5) TMI 644 - CESTAT KOLKATA]
In CCE, Bangalore v. Mavenir Systems (P) Ltd. 2012 (11) TMI 868 - CESTAT, BANGALORE, wherein Commissioner (Appeals) allowed assessee€ ¢â' '¹s appeal on merits but remanded case back to adjudicating authority for re-quantification of demand, for which Commissioner (Appeals) did not have authority to remand case back, it was held that remitting case back to adjudicating authority for re-quantification of demand does not amount to remand in view of Board€ ¢â' '¹s Circular No. 120/1/2010-ST dated 19/01/2010.
In Greenspan Agritech Pvt. Ltd. v. CCE Pune-I 2011 (7) TMI 748 - CESTAT, MUMBAI, it was held that there is no power in the statute book to the Commissioner (Appeals) to remand the case to the adjudicating authority [MIL India Ltd. v. CCE, Noida 2007 (3) TMI 8 - SUPREME COURT OF INDIA followed].
In CST, Kolkata v. Devansh Exports 2012 (8) TMI 470 - CESTAT, KOLKATA, in case of service tax, it was held that Commissioner (Appeals) has no power to remand matter and he has to decide matter by himself.
Remand by Tribunal
In Vah Auto(P.) Ltd. v. CCE&ST 2014 (1) TMI 1521 - ALLAHABAD HIGH COURT, it was held that Section 35C empowers Tribunal to remand case back with such directions as Tribunal
may think fit and said € ¢â' '¸directions€ ¢â' '¹ may, in an appropriate case and subject to reasons, include an order of pre-deposit to protect interest of revenue.
In Net Hawk Networks India (Pvt.) Ltd. v. Commissioner of Central Excise, BBSR-I 2013 (5) TMI 315 - CESTAT KOLKATA,it was held that where Commissioner (Appeals) had upheld orders passed by Adjudicating Authority rejecting refund claim of assessee, while for subsequent period, refund claim involving same input services was allowed by him, matter was required to be remanded back to Commissioner (Appeals).
In Competent Software Pvt. Ltd. v. CST, New Delhi (2013 (2) TMI 696 - CESTAT DELHI), where documents were not verified at adjudication stage and department agreed to grant an opportunity to assessee to reduce dispute at grass root level and in view of limited opportunity of rebuttals, matter was remanded back to re-examine issue of input credit admissibility after considering relevant documents.
In Oxford Processors Pvt. Ltd. v. CCE, Haldia 2013 (10) TMI 170 - Calcutta High Court, it was held that upsetting reasoned order of Commissioner (Appeals) was not permissible unless those reasons are absurd and perverse on facts/ circumstances of case. Hence, matter was remanded to Cestat to hear it and give reasons.
= = = = = = = = = = =
By: Dr. Sanjiv Agarwal
Commissioner€ ¢â' '¹s Remand Powers
The power to order remand is indeed an invaluable power of an appellate court which goes a long way in enabling the court to serve the ends of justice. The primary objective of conferring power to remand on Tribunal is to widen its powers in the interests of justice.
Section 35A(3) of Central Excise Act, 1944 was amended w.e.f. 11.5.2001 to withdraw the power Commissioner (Appeals) to remand cases for fresh adjudication to the original adjudication authority. An such, the Commissioner (Appeals) shall after making such further enquiry, as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Supreme court in case of MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA while noting that the power of remand had been taken away, categorically stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the assessment matters and any order of Commissioner (Appeal) could also be treated as an order of assessment.
Any case is said to be remanded when an appellate court sends an appellate case back to the lower court for further action (http://www.lectlaw.com). This usually happens if an error occurs, which demands a new trial or hearing in the interest of justice. By passing an order of remand, an appellate authority directs the lower court to reopen and retry the case. On remand, the lower court will readmit the suit under its original number in its register and will proceed to determine it as per the directions issued by the appellate authority [CK Takwani, Civil Procedure (Lucknow: Eastern Book Company, 2000) at 286].
The Commissioner (Appeal) does not have power to remand cases. The Commissioner (Appeals) shall after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Punjab & Haryana High Court has held that Commissioner (Appeals) has been divested of the power to remand cases back to the adjudicating authority after deletion of that power in section 35A(3) of Central Excise Act, 1944 in 2001. [Enkay (India) Rubber Co. Pvt. Ltd; 2007 (3) TMI 276 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CCE Jallandhar v. B C Kataria 2007 (9) TMI 167 - HIGH COURT OF PUNJAB & HARYANA]. Supreme Court in MIL India Ltd 2007 (3) TMI 8 - SUPREME COURT OF INDIA also held that power of remand by the Commissioner (Appeals) has been taken away by amending section 35A w.e.f. 11.5.2001. It also stated that the Commissioner (Appeals) continues to exercise the power of adjudicating authority in the matter of assessment and he can add or subtract certain items from the order of assessment made by the adjudicating authority and that the order of the Commissioner (Appeals) could also be treated as order of assessment
In CCE v. Karaikal Chlorates 2010 (9) TMI 362 - CESTAT, CHENNAI, it was held that since power of Commissioner (Appeal) to remand is taken away with amendment to section 35A of Central Excise Act, 1944, Commissioner does not have any power to remand. However, since grievance of contravention of the principle of natural justice still remained while setting aside the impugned order, case was to be remanded to adjudicating officer. [Also see in CCE, Madurai v. Kodai Automobile Ltd. 2010 (8) TMI 251 - CESTAT, CHENNAI, Commissioner of Service Tax, Delhi v. G.B. Professional Associates Pvt. Ltd. 2010 (12) TMI 405 - CESTAT, NEW DELHI; Commissioner of Service Tax, Kolkata v. Bahubali International Ltd. 2013 (5) TMI 644 - CESTAT KOLKATA]
In CCE, Bangalore v. Mavenir Systems (P) Ltd. 2012 (11) TMI 868 - CESTAT, BANGALORE, wherein Commissioner (Appeals) allowed assessee€ ¢â' '¹s appeal on merits but remanded case back to adjudicating authority for re-quantification of demand, for which Commissioner (Appeals) did not have authority to remand case back, it was held that remitting case back to adjudicating authority for re-quantification of demand does not amount to remand in view of Board€ ¢â' '¹s Circular No. 120/1/2010-ST dated 19/01/2010.
In Greenspan Agritech Pvt. Ltd. v. CCE Pune-I 2011 (7) TMI 748 - CESTAT, MUMBAI, it was held that there is no power in the statute book to the Commissioner (Appeals) to remand the case to the adjudicating authority [MIL India Ltd. v. CCE, Noida 2007 (3) TMI 8 - SUPREME COURT OF INDIA followed].
In CST, Kolkata v. Devansh Exports 2012 (8) TMI 470 - CESTAT, KOLKATA, in case of service tax, it was held that Commissioner (Appeals) has no power to remand matter and he has to decide matter by himself.
Remand by Tribunal
In Vah Auto(P.) Ltd. v. CCE&ST 2014 (1) TMI 1521 - ALLAHABAD HIGH COURT, it was held that Section 35C empowers Tribunal to remand case back with such directions as Tribunal
may think fit and said € ¢â' '¸directions€ ¢â' '¹ may, in an appropriate case and subject to reasons, include an order of pre-deposit to protect interest of revenue.
In Net Hawk Networks India (Pvt.) Ltd. v. Commissioner of Central Excise, BBSR-I 2013 (5) TMI 315 - CESTAT KOLKATA,it was held that where Commissioner (Appeals) had upheld orders passed by Adjudicating Authority rejecting refund claim of assessee, while for subsequent period, refund claim involving same input services was allowed by him, matter was required to be remanded back to Commissioner (Appeals).
In Competent Software Pvt. Ltd. v. CST, New Delhi (2013 (2) TMI 696 - CESTAT DELHI), where documents were not verified at adjudication stage and department agreed to grant an opportunity to assessee to reduce dispute at grass root level and in view of limited opportunity of rebuttals, matter was remanded back to re-examine issue of input credit admissibility after considering relevant documents.
In Oxford Processors Pvt. Ltd. v. CCE, Haldia 2013 (10) TMI 170 - Calcutta High Court, it was held that upsetting reasoned order of Commissioner (Appeals) was not permissible unless those reasons are absurd and perverse on facts/ circumstances of case. Hence, matter was remanded to Cestat to hear it and give reasons.
= = = = = = = = = = =
By: Dr. Sanjiv Agarwal
STATEMENT MADE BEFORE CUSTOMS OFFICERS - Powers of Customs Officers
Powers of Customs Officers
The Customs Officers are entrusted with the powers specifically relating to the collection of customs duties and prevention of smuggling. For this powers they are invested with the power to-
Search any person on reasonable suspicion;
Summon;
X-ray the body of the person for detecting secreted goods;
Arrest a person against whom a reasonable suspicion exists that he has been guilty of an offence under the Act;
Obtain a search warrant from a Magistrate;
Collect information by summon persons to give evidence; and
Produce documents and to adjudge confiscation.
Section 108 of the Customs Act, 1962 provides that the Customs officer is entitled to serve summons to collect the evidence to produce a document or other thing or to give evidence. The person so summoned in bound to attend either in person or by an authorized agent, as such officer may direct, is bound to state the truth upon any subject respecting which he is examined or makes a statement and to produce such documents and other things a may be required. Further the power to arrest, the power to detain, the power to search or obtain a search warrant and the power to collect evidence are vested in the Customs Act. He is empowered to investigate into the infringement of the provisions of the Act primarily for the purpose of adjudicating forfeiture and penalty.
Statement before Customs Officers
The Statement collected by the Customs Officer from any person may be used as a substantive evidence. In € ¢â' '¸Naresh J. Sukhawani V. Union of India€ ¢â' '¹ - 1995 (11) TMI 106 - SUPREME COURT OF INDIA the Supreme Court held that the statement made before the Customs officials is not a statement recorded under Section 161 of the Criminal Procedure Code, 1973. It is a material piece of evidence collected by Customs Officials under Section 108 of the Customs Act. That material incriminates the petitioner inculpating him in contravention of the provisions of the Customs Act. The material can certainly be used to connect the petitioner in the contravention as much as Mr. Dudani€ ¢â' '¹s statement clearly inculpates not only himself but also the petitioner. The SC held that therefore the statement can be used as substantive evidence connecting the petitioner with the contravention by exporting foreign currency out of India.
In € ¢â' '¸Collector of Customs V. D. Bhoormull€ ¢â' '¹ € ¢â' '³ 1974 (4) TMI 33 - SUPREME COURT OF INDIA the Supreme Court held that the Department is not required to prove the case with mathematical precision. All that is required is that the occurrence and complicit of individual should be established to such a degree of probability that a prudent may, on its basis, believe in the existence of the fact of issue.
In € ¢â' '¸Commissioner of Customs V. Ghanshyam Gupta€ ¢â' '¹ € ¢â' '³ 2010 (3) TMI 1067 - PATNA HIGH COURT the Division Bench of Patna High Court held that there is no doubt about the legal position that the statements in the scheme of the Act are admissible evidence in terms of Section 108 of the Act.
Confession under Evidence Act
Section 24 of Evidence Act deals with the confession caused by inducement, threat or promise, when irrelevant in criminal proceedings. The following are the ingredients that are required to be established:
the statement in question is a confession;
such confession has been made by an accused;
it has been made to a person in authority;
it was obtained by reason of any inducement, threat or promise proceeding from a person in authority;
such inducement, threat or promise must have reference to the charge against the accused person; and
the inducement, threat or promise must be, in the opinion of the Court sufficient to give an accused person grounds which would appear to him to be reasonable by supposing that by making it would gain any advantage or avoid any evil or a temporal nature in reference to the proceedings against him.
As per the above judgments discussed the provisions of Evidence Act would not apply strictly to the confessional statements obtained in the Customs Act by the Customs Officers in the course of their investigation.
The confessional statement given by a person may be retracted after recording the same. The onus on the part of the department is to discharge its primary onus by recording the voluntary statement of concerned person under Section 107/108 of the Act which is in the nature of substantive evidence, with which the onus passed on that person in terms of Section 123 of the Act.
In € ¢â' '¸MD. Akhtar V. Commissioner of Central Excise, Customs & Service Tax, Patna€ ¢â' '¹ € ¢â' '³ 2011 (9) TMI 968 - PATNA HIGH COURT the appellant was detained by the police and the police informed the Customs authorities that the appellant was found secreting 9 bars of € ¢â' '¸Suisse€ ¢â' '¹ gold, weighing 90 tolas, between the sole and the socks which he was wearing with shoes. His statement under Section 107 was recorded and his statement under Section 108 was also recorded and 9 bars of gold were seized. The authorities thereafter issued notice to the appellant to show cause as to why the gold in question be not confiscated and appropriate penalty in accordance with law not imposed on him. The appellant in his reply to the show cause notice informed that he was a mere carrier of contraband gold handed over to him at Raxaul by somebody, which in turn had to be handed over to another person in Benaras. On a consideration of the entire materials, the Commissioner of Customs rejected the reply of the appellant and orders for absolute confiscation of the said gold under Section 111 (d) of the Act and imposed penalty.
The appellant filed appeal before Commissioner (Appeals) who dismissed the appeal. The appellant next moved to the Tribunal which has also rejected appeal of the appellant. Therefore the present appeal before the High Court is filed by the appellant. The appellant contended the following:
the Statements under Section 107 and 108 of the Act have been taken under duress;
the cause shown by him was not considered;
the materials on record do not show that the gold which the appellant carrying was smuggled;
no person has come forward to claim ownership of the contraband goods, the same may be returned to him treating him to be the owner;
he was acquitted in the criminal case on the self same facts;
the entire onus in such a situation is on the Department that the seized goods are contraband goods;
he has no objection if the order of penalty is maintained, provided the gold is released particularly because none else has come to claim its ownership.
The Revenue contended the following:
the appellant has taken contradictory stand at various stages;
the stand taken by the appellant in the cause show by him has been found by the authorities to be false;
the later amounts to retraction which in the present case was quite belated;
the statement under Section 108 of the Act is substantive evidence;
in order to give any credence to the retracted statement, the same should above all satisfy the condition of having been made at the earlier opportunity;
the statements of the charged persons under the provisions of Section 107 and 108 are admissible in evidence and the conclusion of culpability can be based on such statement.
The High Court found in the statements given by the appellant he admitted that gold had been seized from his body which he was secreting between the sole and his stocks which he was wearing with shoes. He further said that the same belonged to one Rajeshwar Giri at Raxaul to be carried to Benaras. There is only material contradiction in these two statements the address. The addresses given in two statements are different from each other. He further stated that he is a petty carrier of contraband goods for remuneration of € ¢â'¢¹ 200/- only. But in the reply to the show cause notice he stated that the goods so recovered from his body belong to Prabhu Nath Singh, which had been purchased from Dhan Cholia Sons, a dealer in gold, silver and ornaments manufacturer an commission agent, Chandni Chowk, Delhi meant to be converted into jewellery.
The High Court considered the finding of the three lower authorities which they found that the appellant was admittedly carrying the 9 bars of gold on his body. Therefore, seizure and possession of the contraband goods from the possession of the appellant is admitted. On enquiry it has transpired that his permanent residential address is District of Begusarai. The money receipt allegedly issued by Dhan Cholia Sons was false and fabricated document. Nobody has come forward to stake ownership to the goods in question. In such a situation they correctly held that the appellant was the owner of the goods which he had smuggled from a country of third origin and brought into India surreptitiously. The appellant at each stage of the proceedings insisted for release of gold in his favor.
The High Court was of the view that the Department was able to discharge its primary onus by recording the appellant€ ¢â' '¹s voluntary statement under Section107 of the Act read with the appellant€ ¢â' '¹s statement under Section 108 of the Act which is in the nature of substantive evidence, with which the onus passed on to the appellant in terms of Section 123 of the Act. The appellant has not in the least discharged the onus of proof on him. He made different statements at different stages of the proceedings. The High Court did not find any merit in the appeal and dismissed the same.
By: Mr. M. GOVINDARAJAN
Powers of Customs Officers
The Customs Officers are entrusted with the powers specifically relating to the collection of customs duties and prevention of smuggling. For this powers they are invested with the power to-
Search any person on reasonable suspicion;
Summon;
X-ray the body of the person for detecting secreted goods;
Arrest a person against whom a reasonable suspicion exists that he has been guilty of an offence under the Act;
Obtain a search warrant from a Magistrate;
Collect information by summon persons to give evidence; and
Produce documents and to adjudge confiscation.
Section 108 of the Customs Act, 1962 provides that the Customs officer is entitled to serve summons to collect the evidence to produce a document or other thing or to give evidence. The person so summoned in bound to attend either in person or by an authorized agent, as such officer may direct, is bound to state the truth upon any subject respecting which he is examined or makes a statement and to produce such documents and other things a may be required. Further the power to arrest, the power to detain, the power to search or obtain a search warrant and the power to collect evidence are vested in the Customs Act. He is empowered to investigate into the infringement of the provisions of the Act primarily for the purpose of adjudicating forfeiture and penalty.
Statement before Customs Officers
The Statement collected by the Customs Officer from any person may be used as a substantive evidence. In € ¢â' '¸Naresh J. Sukhawani V. Union of India€ ¢â' '¹ - 1995 (11) TMI 106 - SUPREME COURT OF INDIA the Supreme Court held that the statement made before the Customs officials is not a statement recorded under Section 161 of the Criminal Procedure Code, 1973. It is a material piece of evidence collected by Customs Officials under Section 108 of the Customs Act. That material incriminates the petitioner inculpating him in contravention of the provisions of the Customs Act. The material can certainly be used to connect the petitioner in the contravention as much as Mr. Dudani€ ¢â' '¹s statement clearly inculpates not only himself but also the petitioner. The SC held that therefore the statement can be used as substantive evidence connecting the petitioner with the contravention by exporting foreign currency out of India.
In € ¢â' '¸Collector of Customs V. D. Bhoormull€ ¢â' '¹ € ¢â' '³ 1974 (4) TMI 33 - SUPREME COURT OF INDIA the Supreme Court held that the Department is not required to prove the case with mathematical precision. All that is required is that the occurrence and complicit of individual should be established to such a degree of probability that a prudent may, on its basis, believe in the existence of the fact of issue.
In € ¢â' '¸Commissioner of Customs V. Ghanshyam Gupta€ ¢â' '¹ € ¢â' '³ 2010 (3) TMI 1067 - PATNA HIGH COURT the Division Bench of Patna High Court held that there is no doubt about the legal position that the statements in the scheme of the Act are admissible evidence in terms of Section 108 of the Act.
Confession under Evidence Act
Section 24 of Evidence Act deals with the confession caused by inducement, threat or promise, when irrelevant in criminal proceedings. The following are the ingredients that are required to be established:
the statement in question is a confession;
such confession has been made by an accused;
it has been made to a person in authority;
it was obtained by reason of any inducement, threat or promise proceeding from a person in authority;
such inducement, threat or promise must have reference to the charge against the accused person; and
the inducement, threat or promise must be, in the opinion of the Court sufficient to give an accused person grounds which would appear to him to be reasonable by supposing that by making it would gain any advantage or avoid any evil or a temporal nature in reference to the proceedings against him.
As per the above judgments discussed the provisions of Evidence Act would not apply strictly to the confessional statements obtained in the Customs Act by the Customs Officers in the course of their investigation.
The confessional statement given by a person may be retracted after recording the same. The onus on the part of the department is to discharge its primary onus by recording the voluntary statement of concerned person under Section 107/108 of the Act which is in the nature of substantive evidence, with which the onus passed on that person in terms of Section 123 of the Act.
In € ¢â' '¸MD. Akhtar V. Commissioner of Central Excise, Customs & Service Tax, Patna€ ¢â' '¹ € ¢â' '³ 2011 (9) TMI 968 - PATNA HIGH COURT the appellant was detained by the police and the police informed the Customs authorities that the appellant was found secreting 9 bars of € ¢â' '¸Suisse€ ¢â' '¹ gold, weighing 90 tolas, between the sole and the socks which he was wearing with shoes. His statement under Section 107 was recorded and his statement under Section 108 was also recorded and 9 bars of gold were seized. The authorities thereafter issued notice to the appellant to show cause as to why the gold in question be not confiscated and appropriate penalty in accordance with law not imposed on him. The appellant in his reply to the show cause notice informed that he was a mere carrier of contraband gold handed over to him at Raxaul by somebody, which in turn had to be handed over to another person in Benaras. On a consideration of the entire materials, the Commissioner of Customs rejected the reply of the appellant and orders for absolute confiscation of the said gold under Section 111 (d) of the Act and imposed penalty.
The appellant filed appeal before Commissioner (Appeals) who dismissed the appeal. The appellant next moved to the Tribunal which has also rejected appeal of the appellant. Therefore the present appeal before the High Court is filed by the appellant. The appellant contended the following:
the Statements under Section 107 and 108 of the Act have been taken under duress;
the cause shown by him was not considered;
the materials on record do not show that the gold which the appellant carrying was smuggled;
no person has come forward to claim ownership of the contraband goods, the same may be returned to him treating him to be the owner;
he was acquitted in the criminal case on the self same facts;
the entire onus in such a situation is on the Department that the seized goods are contraband goods;
he has no objection if the order of penalty is maintained, provided the gold is released particularly because none else has come to claim its ownership.
The Revenue contended the following:
the appellant has taken contradictory stand at various stages;
the stand taken by the appellant in the cause show by him has been found by the authorities to be false;
the later amounts to retraction which in the present case was quite belated;
the statement under Section 108 of the Act is substantive evidence;
in order to give any credence to the retracted statement, the same should above all satisfy the condition of having been made at the earlier opportunity;
the statements of the charged persons under the provisions of Section 107 and 108 are admissible in evidence and the conclusion of culpability can be based on such statement.
The High Court found in the statements given by the appellant he admitted that gold had been seized from his body which he was secreting between the sole and his stocks which he was wearing with shoes. He further said that the same belonged to one Rajeshwar Giri at Raxaul to be carried to Benaras. There is only material contradiction in these two statements the address. The addresses given in two statements are different from each other. He further stated that he is a petty carrier of contraband goods for remuneration of € ¢â'¢¹ 200/- only. But in the reply to the show cause notice he stated that the goods so recovered from his body belong to Prabhu Nath Singh, which had been purchased from Dhan Cholia Sons, a dealer in gold, silver and ornaments manufacturer an commission agent, Chandni Chowk, Delhi meant to be converted into jewellery.
The High Court considered the finding of the three lower authorities which they found that the appellant was admittedly carrying the 9 bars of gold on his body. Therefore, seizure and possession of the contraband goods from the possession of the appellant is admitted. On enquiry it has transpired that his permanent residential address is District of Begusarai. The money receipt allegedly issued by Dhan Cholia Sons was false and fabricated document. Nobody has come forward to stake ownership to the goods in question. In such a situation they correctly held that the appellant was the owner of the goods which he had smuggled from a country of third origin and brought into India surreptitiously. The appellant at each stage of the proceedings insisted for release of gold in his favor.
The High Court was of the view that the Department was able to discharge its primary onus by recording the appellant€ ¢â' '¹s voluntary statement under Section107 of the Act read with the appellant€ ¢â' '¹s statement under Section 108 of the Act which is in the nature of substantive evidence, with which the onus passed on to the appellant in terms of Section 123 of the Act. The appellant has not in the least discharged the onus of proof on him. He made different statements at different stages of the proceedings. The High Court did not find any merit in the appeal and dismissed the same.
By: Mr. M. GOVINDARAJAN
CL : Where company petition for winding up of respondent company on its inability to pay debts filed by petitioner-company was barred by limitation, petition was to be dismissed
[2015] 61 taxmann.com 69 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Apple Credit Corporation Ltd.
v.
Prakash Industries Ltd.
[2015] 61 taxmann.com 69 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Apple Credit Corporation Ltd.
v.
Prakash Industries Ltd.
IT : Where assessee' s primary purpose remained advancement of objects of general public utility, even if an incidental or ancillary activity for purpose of achieving main purpose was profitable in nature, denial of registration was unjustified
[2015] 61 taxmann.com 59 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
IP India Foundation
v.
Director of Income-tax (Exemptions)
[2015] 61 taxmann.com 59 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
IP India Foundation
v.
Director of Income-tax (Exemptions)
VAT AND SERVICE TAX CASES (VST)
ONLINE EDITION
VOL. 5 : ISSUE DATED 18-9-2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
Construction of taxing statutes--Contract to be considered as a whole to determine object and content thereof.--Atwood Oceanics Pacific Limited v.Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Limitation-- See Service tax (CESTAT-Ahd) . . . 252
Mining of mineral, oil and gas service--Service tax--Taxable service--Limitation --Penalty- -Supply of tangible goods service--Survey and exploration of mineral, oil and gas service--Agreement to drill, complete or abandon wells identified by company' s drilling program--Not taxable under "survey and exploration of mineral, oil and gas service" prior to introduction of "mining of mineral, oil and gas"--Taxable as "mining of mineral, oil and gas service" from June 1, 2007 and thereafter under "supply of tangible goods service" --On facts extended period of limitation not invocable--Penaltie s not imposable--Finance Act (32 of 1994), ss. 65(105)(zzv) , (zzzy), (zzzzj), 73(1), (3), 75A, 76, 77, 78, 80.--Atwood Oceanics Pacific Limited v. Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Penalty--See Service tax (CESTAT-Ahd) . . . 252
Service tax--Taxable service--Limitation --Penalty- -Supply of tangible goods service --Survey and exploration of mineral, oil and gas service--Mining of mineral, oil and gas service--Agreement to drill, complete or abandon wells identified by company' s drilling program--Not taxable under "survey and exploration of mineral, oil and gas service" prior to introduction of "mining of mineral, oil and gas"--Taxable as "mining of mineral, oil and gas service" from June 1, 2007 and thereafter under "supply of tangible goods service" --On facts extended period of limitation not invocable--Penaltie s not imposable--Finance Act (32 of 1994), ss. 65(105)(zzv) , (zzzy), (zzzzj), 73(1), (3), 75A, 76, 77, 78, 80.--Atwood Oceanics Pacific Limited v. Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Supply of tangible goods service--See Service tax (CESTAT-Ahd) . . . 252
Survey and exploration of mineral, oil and gas service--See Service tax (CESTAT-Ahd) . . . 252
PRINT EDITION
VOLUME 84 : PART 1 : ISSUE DATED 18-9-2015
HIGH COURT
Exclusive Economic Zone--See Sale (Guj) . . . 1
Export or import--Sales tax--Liability to tax--Production sharing contracts for development and exploration of oil and gas fields in Exclusive Economic Zone falling outside territory of India--Natural gas and condensate sold under contract to be separated at offshore processing facility, measured separately, and recombined and delivered at delivery point upstream at underwater connection between seller's pipeline and ONGC's underwater gas transmission line--Goods appropriated to contract and delivered at delivery point outside State of Gujarat--That natural gas underwent process of sweetening did not mean goods appropriated to contract only post sweetening-- Exclusive Economic Zone notified to be within territory of India--Not a case of sale in course of import--Sale not taxable--Constituti on of India, art. 286(2)--Central Sales Tax Act (74 of 1956), s. 4(2)--Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 2(28), 87--Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act (80 of 1976).--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Jurisdiction- -Writs under Constitution- -Existence of alternative remedy--Not bar where jurisdiction of authority challenged and no dispute as to facts involved--Petitions admitted and interim relief granted after hearing parties--Petitioner not to be relegated to statutory remedy--Constitutio n of India, art. 226.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Reassessment- -Not permissible on mere change of opinion--Assessing officer, after applying mind to material and grounds and explanation of dealer passing nil assessment-- Issuing subsequent notice for reassessment on same grounds--Mere change of opinion--Notice not disclosing formation of opinion by Commissioner based on any new material on record--Reassessmen t not permissible- -Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 41B, 44.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Sale--Sales tax--Liability to tax--Production sharing contracts for development and exploration of oil and gas fields in Exclusive Economic Zone falling outside territory of India--Natural gas and condensate sold under contract to be separated at offshore processing facility, measured separately, and recombined and delivered at delivery point upstream at underwater connection between seller's pipeline and ONGC's underwater gas transmission line--Goods appropriated to contract and delivered at delivery point outside State of Gujarat--That natural gas underwent process of sweetening did not mean goods appropriated to contract only post sweetening-- Exclusive Economic Zone notified to be within territory of India--Not a case of sale in course of import--Sale not taxable--Constituti on of India, art. 286(2)--Central Sales Tax Act (74 of 1956), s. 4(2)--Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 2(28), 87--Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act (80 of 1976).--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Writs under Constitution- -Existence of alternative remedy--Not bar where jurisdiction of authority challenged and no dispute as to facts involved--Petitions admitted and interim relief granted after hearing parties--Petitioner not to be relegated to statutory remedy--Constitutio n of India, art. 226.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
ONLINE EDITION
VOL. 5 : ISSUE DATED 18-9-2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
Construction of taxing statutes--Contract to be considered as a whole to determine object and content thereof.--Atwood Oceanics Pacific Limited v.Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Limitation-- See Service tax (CESTAT-Ahd) . . . 252
Mining of mineral, oil and gas service--Service tax--Taxable service--Limitation --Penalty- -Supply of tangible goods service--Survey and exploration of mineral, oil and gas service--Agreement to drill, complete or abandon wells identified by company' s drilling program--Not taxable under "survey and exploration of mineral, oil and gas service" prior to introduction of "mining of mineral, oil and gas"--Taxable as "mining of mineral, oil and gas service" from June 1, 2007 and thereafter under "supply of tangible goods service" --On facts extended period of limitation not invocable--Penaltie s not imposable--Finance Act (32 of 1994), ss. 65(105)(zzv) , (zzzy), (zzzzj), 73(1), (3), 75A, 76, 77, 78, 80.--Atwood Oceanics Pacific Limited v. Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Penalty--See Service tax (CESTAT-Ahd) . . . 252
Service tax--Taxable service--Limitation --Penalty- -Supply of tangible goods service --Survey and exploration of mineral, oil and gas service--Mining of mineral, oil and gas service--Agreement to drill, complete or abandon wells identified by company' s drilling program--Not taxable under "survey and exploration of mineral, oil and gas service" prior to introduction of "mining of mineral, oil and gas"--Taxable as "mining of mineral, oil and gas service" from June 1, 2007 and thereafter under "supply of tangible goods service" --On facts extended period of limitation not invocable--Penaltie s not imposable--Finance Act (32 of 1994), ss. 65(105)(zzv) , (zzzy), (zzzzj), 73(1), (3), 75A, 76, 77, 78, 80.--Atwood Oceanics Pacific Limited v. Commissioner of Service Tax (CESTAT-Ahd) . . . 252
Supply of tangible goods service--See Service tax (CESTAT-Ahd) . . . 252
Survey and exploration of mineral, oil and gas service--See Service tax (CESTAT-Ahd) . . . 252
PRINT EDITION
VOLUME 84 : PART 1 : ISSUE DATED 18-9-2015
HIGH COURT
Exclusive Economic Zone--See Sale (Guj) . . . 1
Export or import--Sales tax--Liability to tax--Production sharing contracts for development and exploration of oil and gas fields in Exclusive Economic Zone falling outside territory of India--Natural gas and condensate sold under contract to be separated at offshore processing facility, measured separately, and recombined and delivered at delivery point upstream at underwater connection between seller's pipeline and ONGC's underwater gas transmission line--Goods appropriated to contract and delivered at delivery point outside State of Gujarat--That natural gas underwent process of sweetening did not mean goods appropriated to contract only post sweetening-- Exclusive Economic Zone notified to be within territory of India--Not a case of sale in course of import--Sale not taxable--Constituti on of India, art. 286(2)--Central Sales Tax Act (74 of 1956), s. 4(2)--Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 2(28), 87--Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act (80 of 1976).--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Jurisdiction- -Writs under Constitution- -Existence of alternative remedy--Not bar where jurisdiction of authority challenged and no dispute as to facts involved--Petitions admitted and interim relief granted after hearing parties--Petitioner not to be relegated to statutory remedy--Constitutio n of India, art. 226.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Reassessment- -Not permissible on mere change of opinion--Assessing officer, after applying mind to material and grounds and explanation of dealer passing nil assessment-- Issuing subsequent notice for reassessment on same grounds--Mere change of opinion--Notice not disclosing formation of opinion by Commissioner based on any new material on record--Reassessmen t not permissible- -Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 41B, 44.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Sale--Sales tax--Liability to tax--Production sharing contracts for development and exploration of oil and gas fields in Exclusive Economic Zone falling outside territory of India--Natural gas and condensate sold under contract to be separated at offshore processing facility, measured separately, and recombined and delivered at delivery point upstream at underwater connection between seller's pipeline and ONGC's underwater gas transmission line--Goods appropriated to contract and delivered at delivery point outside State of Gujarat--That natural gas underwent process of sweetening did not mean goods appropriated to contract only post sweetening-- Exclusive Economic Zone notified to be within territory of India--Not a case of sale in course of import--Sale not taxable--Constituti on of India, art. 286(2)--Central Sales Tax Act (74 of 1956), s. 4(2)--Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 2(28), 87--Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act (80 of 1976).--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
Writs under Constitution- -Existence of alternative remedy--Not bar where jurisdiction of authority challenged and no dispute as to facts involved--Petitions admitted and interim relief granted after hearing parties--Petitioner not to be relegated to statutory remedy--Constitutio n of India, art. 226.--B. G. Exploration and Production India Limited v. State of Gujarat (Guj) . . . 1
IT/ILT : Profit or loss arising out of foreign exchange fluctuations has to be taken into consideration while arriving at operating cost in transfer pricing matters
[2015] 61 taxmann.com 49 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'D'
Deputy Commissioner of Income-tax, Co. Circle-II (3),Chennai
v.
Infac India (P.) Ltd.
[2015] 61 taxmann.com 49 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'D'
Deputy Commissioner of Income-tax, Co. Circle-II (3),Chennai
v.
Infac India (P.) Ltd.
ST - Carpentry work involving different types of furniture items, modular partitions, fixation of false ceiling, painting of walls and ceilings cannot be classified under Interior decorator services: CESTAT
MUMBAI : REVENUE alleges that during the period 1999-2003 the appellant undertook various activities like carpentry work involving different types of furniture items, modular partitions, fixation of false ceiling, painting of walls and ceilings etc. and the same is chargeable to Service Tax under the ambit of "Interior decorator" .
The lower authorities confirmed the demand and hence an appeal came to be filed in the year 2010.
This appeal was decided recently.
The appellant submitted that activity conducted by them could not fall under "Interior decorator services" but may fall under the category of € ¢â' '¸Erection, Commissioning or Installation Services" which came into service tax net from 16 th June 2005. It is also submitted that an identical issue has been decided by the Tribunal in the case of Spandrel v. CCE Hyderabad/Kochi - 2010-TIOL-830- CESTAT-BANG in favour of the appellant therein.
The AR justified the demand and also submitted that since the appellant was enhancing the interior of the flat where they undertook the work of modular partition, the activity would definitely fall under the category of "interior decorator" .
The Bench, after narrating the facts, extracted the defiition of "Interior decorator" and observed that the activities which are undertaken by the appellant are not falling under the category of "interior decorator services" .
Noting that there is strong force in the submissions made by the appellant that the issue is finally settled by the decision of the Tribunal in the case of Spandrel (in which the present Member(J) was a Member), the Bench extracted paragraphs 7 & 8 and concluded that the order is unsustainable and liable to be set aside.
In fine, the impugned order was set aside and the appeal was allowed with consequential relief.
In passing: Perhaps a corrigendum is on its way for the extraction.
(See 2015-TIOL-1961- CESTAT-MUM)
MUMBAI : REVENUE alleges that during the period 1999-2003 the appellant undertook various activities like carpentry work involving different types of furniture items, modular partitions, fixation of false ceiling, painting of walls and ceilings etc. and the same is chargeable to Service Tax under the ambit of "Interior decorator" .
The lower authorities confirmed the demand and hence an appeal came to be filed in the year 2010.
This appeal was decided recently.
The appellant submitted that activity conducted by them could not fall under "Interior decorator services" but may fall under the category of € ¢â' '¸Erection, Commissioning or Installation Services" which came into service tax net from 16 th June 2005. It is also submitted that an identical issue has been decided by the Tribunal in the case of Spandrel v. CCE Hyderabad/Kochi - 2010-TIOL-830- CESTAT-BANG in favour of the appellant therein.
The AR justified the demand and also submitted that since the appellant was enhancing the interior of the flat where they undertook the work of modular partition, the activity would definitely fall under the category of "interior decorator" .
The Bench, after narrating the facts, extracted the defiition of "Interior decorator" and observed that the activities which are undertaken by the appellant are not falling under the category of "interior decorator services" .
Noting that there is strong force in the submissions made by the appellant that the issue is finally settled by the decision of the Tribunal in the case of Spandrel (in which the present Member(J) was a Member), the Bench extracted paragraphs 7 & 8 and concluded that the order is unsustainable and liable to be set aside.
In fine, the impugned order was set aside and the appeal was allowed with consequential relief.
In passing: Perhaps a corrigendum is on its way for the extraction.
(See 2015-TIOL-1961- CESTAT-MUM)
COMPANY CASES Volume 192 Part 3 (Issue dated 18-9-2015)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Share capital --Reduction of share capital--Closely held company--Commercial decision to reduce capital approved by majority shareholder- -Reduction not involving diminution of any liability--No outflow of funds or assets or reduction in amount payable to creditors--Reductio n not to affect normal operations of company or its ability to honour commitments and to pay its debts in ordinary course of business--Procedure stipulated in section 101(2) and (3) for settlement of list of creditors not to apply--Companies Act, 1956, ss. 100, 101--Companies Act, 2013, s. 52--Companies (Court) Rules, 1959, rr. 11(a)(3), 46-- Prashanth Textiles P. Ltd., In re (Mad) . . . 184
Winding up --Avoidance of transfers--Agreemen t entered into by company to ensure continuous supply of raw materials during pendency of its reference before Board for Industrial and Financial Reconstruction- -Agreement to pledge shares of company part of main agreement--Agreemen t in ordinary business and in interest of company--Not fraudulent preference or invalid transfer during pendency of pledge--Transaction s bona fide and interest of company--Companies Act, 1956, s. 536(2)-- Garware Marine Industries Ltd., In re(Bom) . . . 204
----Dissolution of company--Fast Track Exit Scheme--Registrar refusing to consider company€ ¢Ã¢â'¢¬â'¤¢s application under Fast Track Exit Scheme on ground its properties were encumbered-- Company paying off its dues but not able to lift charge on property as it was defunct--Creditor stating dues paid--Company€ ¢Ã¢â'¢¬â'¤¢s application to be considered and prosecution for failure to file returns stayed--Companies Act, 1956-- Reliant Marketing and Services P. Ltd. v. Registrar of Companies (Ker) . . . 188
----Grounds for winding up--Inability to pay debts--Bona fide dispute as debt--Dispute regarding quality of goods supplied raised prior to issuance of statutory notice--Company disputing liability to pay delayed payment charges--Substantia l dispute requiring adjudication- -Company offering to pay undisputed amount--Refusal by creditor to accept amount offered by company unless delayed payment charges paid--Petition dismissed with costs--Companies Act, 1956, s. 433(e)-- Nakshatra Steel Sales and Services Ltd. v. Radlay Metal Products P. Ltd. (Delhi) . . . 216
COMPANY LAW BOARD ORDERS
Meeting --Annual general meeting--Company Law Board--Cannot adjudicate on validity of meeting held within stipulated time--Shareholder participating in annual general meeting and losing in election cannot challenge validity of meeting before Company Law Board--Petition filed with ulterior motive, dismissed--Companie s Act, 1956, ss. 166, 167, 210-- Kaleidoscope Travel Consultants P. Ltd. v. Travel Agents Association of India (TAAI) . . . 190
Section 25 company --Can hold annual general meeting anywhere in India--Section 166(2) does not apply to such companies--Companie s Act, 1956, ss. 25, 166-- Kaleidoscope Travel Consultants P. Ltd. v. Travel Agents Association of India (TAAI) . . . 190
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Share capital --Reduction of share capital--Closely held company--Commercial decision to reduce capital approved by majority shareholder- -Reduction not involving diminution of any liability--No outflow of funds or assets or reduction in amount payable to creditors--Reductio n not to affect normal operations of company or its ability to honour commitments and to pay its debts in ordinary course of business--Procedure stipulated in section 101(2) and (3) for settlement of list of creditors not to apply--Companies Act, 1956, ss. 100, 101--Companies Act, 2013, s. 52--Companies (Court) Rules, 1959, rr. 11(a)(3), 46-- Prashanth Textiles P. Ltd., In re (Mad) . . . 184
Winding up --Avoidance of transfers--Agreemen t entered into by company to ensure continuous supply of raw materials during pendency of its reference before Board for Industrial and Financial Reconstruction- -Agreement to pledge shares of company part of main agreement--Agreemen t in ordinary business and in interest of company--Not fraudulent preference or invalid transfer during pendency of pledge--Transaction s bona fide and interest of company--Companies Act, 1956, s. 536(2)-- Garware Marine Industries Ltd., In re(Bom) . . . 204
----Dissolution of company--Fast Track Exit Scheme--Registrar refusing to consider company€ ¢Ã¢â'¢¬â'¤¢s application under Fast Track Exit Scheme on ground its properties were encumbered-- Company paying off its dues but not able to lift charge on property as it was defunct--Creditor stating dues paid--Company€ ¢Ã¢â'¢¬â'¤¢s application to be considered and prosecution for failure to file returns stayed--Companies Act, 1956-- Reliant Marketing and Services P. Ltd. v. Registrar of Companies (Ker) . . . 188
----Grounds for winding up--Inability to pay debts--Bona fide dispute as debt--Dispute regarding quality of goods supplied raised prior to issuance of statutory notice--Company disputing liability to pay delayed payment charges--Substantia l dispute requiring adjudication- -Company offering to pay undisputed amount--Refusal by creditor to accept amount offered by company unless delayed payment charges paid--Petition dismissed with costs--Companies Act, 1956, s. 433(e)-- Nakshatra Steel Sales and Services Ltd. v. Radlay Metal Products P. Ltd. (Delhi) . . . 216
COMPANY LAW BOARD ORDERS
Meeting --Annual general meeting--Company Law Board--Cannot adjudicate on validity of meeting held within stipulated time--Shareholder participating in annual general meeting and losing in election cannot challenge validity of meeting before Company Law Board--Petition filed with ulterior motive, dismissed--Companie s Act, 1956, ss. 166, 167, 210-- Kaleidoscope Travel Consultants P. Ltd. v. Travel Agents Association of India (TAAI) . . . 190
Section 25 company --Can hold annual general meeting anywhere in India--Section 166(2) does not apply to such companies--Companie s Act, 1956, ss. 25, 166-- Kaleidoscope Travel Consultants P. Ltd. v. Travel Agents Association of India (TAAI) . . . 190
PARSHWA CORPORATION JALDHARA APARTMENTS vs.DEPUTY COMMISSIONER OF INCOME TAX
AHMEDABAD TRIBUNAL
Search and seizure€ ¢â' '´New scheme of assessment in search cases€ ¢â' '´Recording of Satisfaction€ ¢â' '´Pursuant to search action u/s 132 in case of third party, the AO on the basis of information in his laptop regarding assessee, issued notice u/s 153C r.w.s. 153A for six A/Y€ ¢â' '¹s and took action u/s 153C in the case of the assessee€ ¢â' '´Held, recording of satisfaction by the AO of the person searched that any money, bullion, jewellery or other valuable article/thing or books of account/documents seized belonged to the person other than the person searched was a sine qua non for initiating action u/s 153C€ ¢â' '´However no satisfaction was recorded by the AO of person searched prior to issue of notice u/s 153C€ ¢â' '´The so-called satisfaction recorded in the notice u/s 153C was totally vague€ ¢â' '´It had not specified which valuable articles/things/ books of accounts/documents were found from third party which belonged to the assessee€ ¢â' '´Further in the notice u/s 153C, wherein the AO claimed to have recorded the satisfaction for issue of the notice, there was no mention about such laptop or alleged data in such laptop which was claimed to belonged to the assessee€ ¢â' '´Thus basic condition for issue of notice u/s 153C was not satisfied€ ¢â' '´Assessee€ ¢â' '¹s appeal allowed
AHMEDABAD TRIBUNAL
Search and seizure€ ¢â' '´New scheme of assessment in search cases€ ¢â' '´Recording of Satisfaction€ ¢â' '´Pursuant to search action u/s 132 in case of third party, the AO on the basis of information in his laptop regarding assessee, issued notice u/s 153C r.w.s. 153A for six A/Y€ ¢â' '¹s and took action u/s 153C in the case of the assessee€ ¢â' '´Held, recording of satisfaction by the AO of the person searched that any money, bullion, jewellery or other valuable article/thing or books of account/documents seized belonged to the person other than the person searched was a sine qua non for initiating action u/s 153C€ ¢â' '´However no satisfaction was recorded by the AO of person searched prior to issue of notice u/s 153C€ ¢â' '´The so-called satisfaction recorded in the notice u/s 153C was totally vague€ ¢â' '´It had not specified which valuable articles/things/ books of accounts/documents were found from third party which belonged to the assessee€ ¢â' '´Further in the notice u/s 153C, wherein the AO claimed to have recorded the satisfaction for issue of the notice, there was no mention about such laptop or alleged data in such laptop which was claimed to belonged to the assessee€ ¢â' '´Thus basic condition for issue of notice u/s 153C was not satisfied€ ¢â' '´Assessee€ ¢â' '¹s appeal allowed
Apple wins patent ruling against Samsung in US Court; Govt. hunts for next CCI Chairperson
Apple wins patent ruling against Samsung in US Court; Govt. hunts for next CCI Chairperson
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