CX - S 35C(2A) - If main provision cannot be treated as mandatory, f
ALLAHABAD: AGGRIEVED by the orders of the CESTAT extending the stay beyond the period of 365 days, the CCE, Meerut is before the Allahabad High Court.
The High Court after hearing the submissions made by both sides extracted the provisions of s.35C(2A) of CEA, 1944 as it evolved, after being added by the Finance Act, 2002 and later being amended by the FA, 2013, omission of the three provisos by the FA, 2014 §ion 35F of the CEA, 1944 as substituted by the FA, 2014 w.e.f 06.08.2014.
The High Court, thereafter, inter alia observed thus -
+ Section 35C(2A) of the Act as amended in 2002 and 2013 makes it apparently clear that the Tribunal was mandated to hear every appeal within a period of three years "where it is possible to do so". These words indicate that though a mandate was given to the Tribunal to decide the appeal within three years, it was not a mandatory provision, but only a directory provision. Consequently, the first, second and third proviso directing the Tribunal to decide the appeal within 180 days in the first instance or within 365 days in the second instance, failing which, the stay order would stand vacated also has to be read as directory in nature. If the main provision cannot be treated as mandatory, the first, second and third proviso also cannot be treated as mandatory.
+ If the Tribunal would not dispose of the appeal within 365 days under the first, second and third proviso of Section 35C(2A) of the Act which was not attributable to the assessee, it would not mean that the Tribunal was divested with its incidental powers in not extending the interim order. The three provisos, in our view, cannot be read as mandatory in nature.
+ The use of the word "shall" was ordinarily indicative of the mandatory nature of the provision, but, having regard to the context in which it was used and having regard to the intention of the legislation, the same could be construed as directory.
+ In the instant case Section 35C(2A) gave a mandate to the Tribunal to decide the appeal within three years "where it was possible to do so". These words indicate the intention of the legislation, namely, that the appeal should be decided as far as possible within three years and therefore, the provision is not conclusive to be determined as mandatory in nature.
+ The use of the word "shall" in the first, second and third proviso though indicative of the mandatory nature of the proviso, has to be construed as directory in consonance with the main provision. The three provisos have to advance the cause of justice and not to defeat it. The rules of procedure are made to advance the cause of justice and not to defeat it.
+ The proviso has to be read in the aforesaid manner which will not only promote justice what would prevent miscarriage of justice, inasmuch as, if the stay order stands vacated after 365 days and the appeal is not decided, the appellant would be put to irreparable loss and harm especially where the fault in not disposing off the appeal was not attributable to him.
+ In any case, the three provisos in sub section (2A) of Section 35C of the Act has now been omitted w.e.f. 6.8.2014 and the bar which was upon the Tribunal to grant limited stay orders has now been removed even though the mandate to decide the appeal within three years, as far as possible, still continues to operate.
+ The omission of the first, second and third proviso to Section 35C(2A) of the Act in effect means that there is no provision for making any further application for extension of stay. The omission of the first, second and third proviso would mean that the appeal filed by an assessee needs to be disposed of within a period of three years and stay orders which have been passed by the Tribunal would continue to remain in force unless it is limited by the Tribunal itself.
+ The contention that the appeals filed before 6.8.2014 would continue to be governed by first, second and third proviso to Section 35C(2A) of the Act in view of the second proviso contained in Section 35F of the Act which came into effect from 6.8.2014 is patently erroneous.
+ The second proviso which was inserted in Section 35F of the Act w.e.f. 6.8.2014 provides that the provision of Section 35F of the Act would not apply to the stay applications and the appeals pending before any appellate authority prior to the commencement of Finance Act 2 of 2014. The second proviso indicates that the Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F(1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance Act (2) of 2014. The appeals which are filed on or after enforcement of the amended provision w.e.f. 6.8.2014 would be governed by the requirement of pre-deposit as indicated therein.
+ The provisos to Section 35C (2A) of the Act has no relevance to the pre-deposit of amount under Section 35F of the Act. Once the proviso to Section 35C(2A) of the Act has been omitted, the embargo upon the Tribunal to limit the stay order for a limited period has now been removed. Consequently, the incidental power of the Tribunal to grant interim relief pending disposal of the appeals is now not confined to a limited period.
Holding that no substantial question of law arises for consideration, all the appeals filed by the CCE, Meerut were dismissed.
CX - While arriving at AV for RSP, an amount of abatement specified
MUMBAI: THE appellant had entered into agreement with M/s ELCOT (A Govt. of Tamilnadu Enterprise) for supply of 14" CTVs during the period August 2006 to January 2009. The appellant had opted for payment of CE duty on MRP basis under the provisions of Section 4A of the CEA, 1944.
In the purchase order of ELCOT, it was indicated that unit price is inclusive of all accessories, taxes, duties and warranty charges, etc. However, the warranty charges of Rs. 75/- per TV will be paid to the supplier only after the end of 1st year and another Rs. 75/- at the end of 2 nd year. This unit price including the warranty charges is declared as MRP on all the package of TVs. However, while discharging the Excise duty liability, the appellant had worked out the assessable value as MRP minus warranty charges of Rs. 150/-.
A demand notice came to be issued on 25/2/2010 demanding differential excise duty of Rs. 3,87,14,771/ -.
This demand was upheld by the CCE, Aurangabad along with imposition of equivalent penalty and interest.
We had reported the stay order as 2012-TIOL-330- CESTAT-MUM.
The appeal was heard on 01.04.2015 and the final order was passed recently.
Before the CESTAT, the appellant made exhaustive submissions and the same were equally rebutted by the AR who justified the order passed.
The Bench after noting that the ratio of the judgments cited by the appellant related to sales tax and income tax &cannot be borrowed in the present case observed -
+ From the reading of section 4A in subsection (2) it is very clear that while arriving at the assessable value for the retail sale price, an amount of abatement is specified by notification can only be deducted.
+ As per the definition of retail sale price when all the elements are includible in the RSP no any deduction can be allowed. The objective of allowing the abatement is that all the elements which do not form part of the assessable value should stand deducted by way of abatement. Therefore in the case where valuation is done under Section 4A, except abatement no further deduction is allowed.
+ In the definition of 'retail sale price', under the inclusion charge, warranty charges are not specifically mentioned but all the charges even though not specifically mentioned shall stand included in the retail sale price, therefore the deduction on account of warranty charges cannot be allowed from maximum retail sale price. In the definition after mentioning the specific charges it is also mentioned "and the like" this clearly shows that not only the charges explicitly mentioned in the definition are includible but also other like charges are also includible. It clearly means that all the charges are includible in the retail sale price at which the good is sold to the consumer.
+ If the contention of appellant is accepted regarding the deduction of warranty charges then likewise there are many more heads of charges which can also be claimed for deduction.
+ To avoid any such sort of interpretation, the legislature had enacted section 4A whereunder the valuation of consumer goods was made simplified, according to which, at whatever price the goods are sold to the consumer that price minus abatement as specified under the notification shall be the assessable value therefore there is no scope for any deduction other than abatement for the purpose of valuation under Section 4A.
+ Therefore, there is no provision under the law to exclude warranty charges from the retail sale price while computing the assessable value.
+ From the definition of Transaction value (s.4 of CEA, 1944) the warranty charges is also includible in the assessable value, this shows that legislators have clear intention that for the purpose of charging excise duty the warranty charges should be included in the assessable value.
+ If we compare the valuation under Section 4 and 4A it can be seen that all the charges which are includible as per Section 4 in the transaction value all such charges plus the element such as dealer margin, retail margin, sales tax freight, etc are also included in the retail sale price and thereafter the only deduction which is permissible is the abatement as notified by the government from time to time therefore there seems to be no reason why a particular element out of many charges i.e. warranty charges should be allowed to be deducted.
+ We do not agree with the submission of the appellant [that on the warranty charges they have discharged the service tax for this reason also the warranty charges should be allowed to be deducted from retail sale price of CTVs] for the reason that the statutory provision under Section 4A cannot be altered or influenced merely because the appellant has chosen to discharge service tax on portion of the retail sale price.
+ Therefore merely because the service tax was paid, deduction of the said value cannot be allowed as no such option has been provided either under the Central Excise Act, or under the Finance Act, 1994.
Limitation:
+ The appellant during a particular period were including warranty charges in the RSP and discharging the excise duty accordingly, but on their own they changed the system and started deducting warranty charges from the RSP, however, this was done knowingly by the appellant which was neither declared to the department nor any opinion was sought for from the department, this act of the appellant is clearly amounts to suppression of fact.
+ It is also observed that as per the price bid for the TV set to M/s. ELCOT the MRP shown is Rs.2197/- which includes the basic cost of Rs.1682, warranty charges of Rs.150, Excise duty of Rs.235.84 and freight and handling charges of Rs.130/-.
+ This shows that the appellant was in full knowledge that the excise duty was required to be paid on full MRP minus abatement but they paid less duty intentionally, therefore, this is clear case of suppression of fact and the appellant' s submission that the demand being time barred is not tenable.
The order was sustained and the Appeals were dismissed.
In passing: Now, for the Revenue appeal, if any, in the matter of dropping of demand of Rs. 32,07,89,187/ -…the show continues…
2015-TIOL-1969- HC-P&H-IT + Story
Bikramjit Singh Gill Vs CIT
Whether when there is pro rata transfer of land to the developer, the assessee can be made liable to pay capital gains tax in respect of remaining land for which no consideration had been received, in the event of cancellation of the Development agreement due to various orders passed by the Apex court and High Court - NO: HC - Assessee' s appeal allowed : PUNJAB AND HARYANA HIGH COURT
2015-TIOL-1968- HC-DEL-IT
CIT Vs Birender Singh
Whether non-maintenance of stock registers cannot be a ground for rejection of books, as it depends upon the nature of the business - YES:HC
Whether when books of accounts maintained were duly audited, then the onus shifts on the Revenue to show that the accounts were incomplete or incorrect, in order to make any addition - YES:HC - Revenue' s appeal dismissed : DELHI HIGH COURT
2015-TIOL-1967- HC-MUM-IT
CIT Vs Shri Shriram Hiralal Soni
Whether when Revenue appeal has been dismissed in quantum proceedings, then the occasion to restore the issue for reconsideration of the Assessing Officer for imposing of penalty does not arise - YES: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-1966- HC-RAJ-IT
CIT Vs Bhawani Silicate Industries
Whether any addition cannot be made merely because there is some deficiency of quality wise record in the books - YES:HC
Whether merely because books of accounts are rejected, it does not mean that it must necessarily lead to addition in the return of income of the assessee - YES:HC - Revenue' s appeal dismissed : RAJASTHAN HIGH COURT
2015-TIOL-1965- HC-KERALA- IT
CIT Vs South Travancore Distilleries & Allied Products
Whether the High Court has power to ignore the circulars issued by the CBDT prescribing the minimum limit to file an appeal, proceed to decide the statutory appeals on merits, if the question involved is a substantial one - YES: HC - Case remanded : KERALA HIGH COURT
2015-TIOL-1338- ITAT-DEL
DCIT Vs Utkal Investments Ltd
Whether profits arising from purchase and sale of shares are liable to be treated as business income where the assessee was showing these shares in its investment portfolio in the books of accounts and the shares sold were shown in the balance sheet for the previous year and the same had been carried forward as investment in the beginning of the next financial year and in the earlier years - Whether assessee' s income can be treated as speculative profit where interest earned on the loans and advances granted by the assessee was the main source of Assessee' s income and the gross total income consists mainly of income which is chargeable under the head capital gains and income from other sources. - Revenue' s appeal dismissed : DELHI ITAT
2015-TIOL-1337- ITAT-MUM
DCIT Vs M/s Garware Polyester Ltd
Whether once the profit and loss account is prepared under Part-I & Part-II of Schedule-VI of the Companies Act; duly certified by the Auditors; placed before the shareholders and adopted/approved by the AGM, then the Revenue can not make any adjustments to the book profit except to the extent provided in Explanation 1 - YES : TRIBUNAL - Revenue' s appeal dismissed : MUMBAI ITAT
2015-TIOL-1336- ITAT-MUM
Mahindra And Mahindra Financial Services Ltd Vs Addl. CIT
Whether depreciation on leased assets be allowed when in past in assessee' s own case it has been allowed and no material chage since then has taken place - YES : ITAT
Whether issue of disallowance u/s 14A in respect of Interest expenditure and Administrative Expenses on exempted income can be reconsiderd and restored back to the file of AO, in light of ratio laid down by the Bombay High Court in the cases of Reliance Utilities and Godrej Agrovet - YES : ITAT
Whether issue of allowance of commission & brokerage be restored back to AO in view of the decision taken in past in assessee' s own case, to seek confirmations from the parties to whom commission & brokerage has been paid in excess of Rs. 3,00,000 - YES : ITAT - Case Remanded : MUMBAI ITAT
2015-TIOL-1335- ITAT-MAD
DDIT Vs Chennai Custom House
Whether after 01.04.2009, as per the second limb of section 2(15), any activity of rendering any services in relation to any trade, commerce and business for a cess or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity cannot come under the purview of charity? Whether the assessee having 12A registration and claiming as a charitable organization is eligible to be claimed again under principles of mutuality? - Revenue' s Appeal Allowed : CHENNAI ITAT
2015-TIOL-1334- ITAT-HYD
ACIT Vs Shri G Veera Sekhar Reddy
Whether the matter be restored to the file of the AO for deciding the same afresh after verifying the confirmation letter which is produced as evidence before appeallate authority but has not been produced before AO - YES : ITAT
Whether passing of order based on additional evidence without giving an opportunity to AO to examine the same is correct - NO : ITAT - Case Remanded : HYDERABAD ITAT
Indirect Tax Basket
SERVICE TAX SECTION
2015-TIOL-1974- HC-ALL-ST + Story
CCE Vs M/s Vodafone Essar South Ltd
ST/CE - S.35C(2A) of CEA, 1944 - If the main provision cannot be treated as mandatory, the first, second and third proviso also cannot be treated as mandatory but directory - The three provisos have to advance the cause of justice and not to defeat it - Tribunal is vested with the power to extend the stay order beyond the specified maximum time limit prescribed - Revenue appeals dismissed: High Court [para 18, 19, 22, 29] - Appeals dismissed : ALLAHABAD HIGH COURT
2015-TIOL-1973- HC-AP-ST
CC, CE & ST Vs M/s Tpsc India Pvt Ltd
Service Tax - Employees of parent company at Japan deputed to work in India - Demand under reverse charge under Supply of manpower service - Revenue in appeal against the order of Tribunal granting unconditional stay - Held: The Tribunal had taken into consideration of the fact that the issue with regard to similar circumstances was already the subject matter of two decisions of the Tribunal at Delhi. In that view of the matter, when the issue is squarely covered, there would be no justification for directing a pre-deposit - No illegality or infirmity in the impugned order - The appeal is dismissed. - Appeal dismissed : ANDHRA PRADESH HIGH COURT
2015-TIOL-1972- HC-AP-ST
M/s Phoenix Logistics Pvt Ltd Vs CC
Service Tax - Appeal against the order of Tribunal declining to condone the delay in filing the appeal and dismissing the same on the ground of delay - Held: The fact that order dated 26.03.2012 came to be served on the employee of a sister concern and the same came to the notice of the appellant belatedly, cannot be ignored. No motive as such can be attributed to the appellant for not filing appeal in time, especially in view of the fact that the appellant is diligently agitating the issue involved as against the assessment for the previous years and also for subsequent years - The Tribunal could have taken a lenient view and, by putting the appellant on terms, could have condoned the delay - Inasmuch as the Tribunal failed to exercise the discretion, considering the facts of the case, appeal is allowed on condition of the appellant depositing a sum of Rs.3,50,000/ - within a period of six weeks. ( Paras 7 & 8) - Appeal allowed : ANDHRA PRADESH HIGH COURT
2015-TIOL-1795- CESTAT-BANG
IJM (India) Infrastructure Ltd Vs CC, CE & ST
Service Tax - Service provided to Associate enterprise - Absent debit/credit entries in books of account, outstanding amount due from associated enterprise as of 10/5/2008 - Held cannot be treated as amounts paid for the purpose of levy of tax - Amendment to Section 67 of Finance Act, 1994 not retrospective - Following precedent decision, demand held unsustainable - Directed to hear appeal without insisting pre-deposit. (Para 4, 5) - Stay granted : BANGALORE CESTAT
CENTRAL EXCISE SECTION
2015-TIOL-1801- CESTAT-MUM + Story
Videocon Industries Ltd Vs CCE
CX - S.4A of CEA, 1944 - Valuation - While arriving at the assessable value for the retail sale price, an amount of abatement specified by notification can only be deducted - there is no provision under the law to exclude warranty charges from the RSP - statutory provision under Section 4A cannot be altered or influenced merely because the appellant has chosen to discharge service tax on portion of the retail sale price - Demand upheld and appeal dismissed: CESTAT [para 6] - Appeal dismissed : MUMBAI CESTAT
2015-TIOL-1800- CESTAT-MUM
M/s Balkrishna Industries Ltd Vs CCE
CX - Appellant selling six year old used forklift on discharge of CE duty at depreciated value - after department raised objection that appellant should have paid an amount equal to credit taken, appellant paying differential duty along with interest under protest - later refund claimed of amount paid which was rejected. Held: Machine (fork lift) cleared after putting into use cannot be treated as cleared 'as such' - insertion of proviso in rule 3(5) of CCR, 2004 w.e.f 13.11.2007 makes it clear that there is a difference between machine cleared without putting into use and cleared after use - in view of authoritative judicial pronouncement in case of Raghav Alloys Ltd. - 2010-TIOL-881- HC-P&H-CX , order rejecting refund set aside and appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed : MUMBAI CESTAT
2015-TIOL-1799- CESTAT-MUM
M/s Asiatic Gases Ltd Vs CCE
CX - Interest - Whether appellant is required to pay interest in a case where duty along with part interest was paid voluntarily - appellant submitted that interest on delayed payment of duty cannot be demanded unless duty is determined under s.11A(2) of CEA, 1944. Held: It is an admitted fact that there is substantial delay in payment of duty even though appellant has paid interest voluntarily - even though the duty was not determined u/s 11A(2) of CEA, 1944 but when there is admitted delay in payment of duty, interest is chargeable even prior to 11.05.2001 - in view of apex court decision in International Auto Ltd. 2010-TIOL-05- SC-CX interest is levied for loss of Revenue on any count - no infirmity in the order, hence sustained - appeal dismissed: CESTAT [para 5] - Appeal dismissed : MUMBAI CESTAT
2015-TIOL-1798- CESTAT-DEL
M/s Ambassador Coolers Pvt Ltd Vs CCE
CX - Assessee has placed purchase order to supply all goods to M/s. Nowrangroy Rameshwar with directions that goods are required to be delivered at job worker's place - Invoices were raised in name of assessee and goods were delivered to job worker, which were received by assessee after processing - Rates quoted are of job work charges only, although the job worker has paid VAT thereon - It cannot be concluded that goods have been sold by job worker to assessee - When assessee has filed reply to SCN, facts were required to be verified which Revenue has failed to do so - Under notfn 214/86, job worker is required to intimate the department that they are undertaking activity of job worker and not required to pay duty but that fact has also been not verified by department - Assessee is entitled to take Cenvat credit - Appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
2015-TIOL-1797- CESTAT-DEL
M/s Pepsico India Holdings (P) Ltd Vs CCE
CX - Assessee are manufacturers of Aerated Water, one of the inputs is glass bottles in respect of which input duty CENVAT Credit has been taken - Some glass bottles, during use get broken and same are cleared as glass scrap - During period of dispute there was no provision in CCR, 2001/2002 providing that when CENVAT Credit availed inputs are cleared as waste, some amount in respect of same is required to be paid - Impugned order set aside and appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
2015-TIOL-1796- CESTAT-BANG
M/s Hetero Labs Ltd Vs CCE
Central Excise - Bulk drug manufacture - Procurement of duty free imported and indigenous raw material - Cenvat credit utilization -Whether or not credit availed on duty paid inputs can be used for discharge of duty at the time clearance of the duty free imported inputs - Held in matters of CENVAT credit, there is no one-to-one correlation and where appellants have used such credit for payment of duty for clearance of imported raw materials, they would not be in a position to use the same at the time of clearance of the final product-Treating reversal as proper, pre-deposit dispensed with - Matter remanded to the Commissioner (A) for a decision on merits. (Para 4) - Remanded : BANGALORE CESTAT
CUSTOMS SECTION
2015-TIOL-1794- CESTAT-BANG
CC Vs M/s Dozco (India) Pvt Ltd
Customs - Refund claim of Special Additional Duty (SAD) - Limitation applicability - SAD refund claim filed beyond one year relating to the period prior to the date of issue of amending Notification No. 93/2008 dated 1.8.2008 - Following Delhi High Court ruling in Sony India Pvt Ltd , held is not barred by limitation - Revenue appeal has no merit hence was rejected. (Para 5, 6, 7) - Revenue appeal rejected : BANGALORE CESTAT
2015-TIOL-1793- CESTAT-MAD
CC Vs M/s Pioneer Power Corporation Ltd
Customs - Refund - respondents are registered for import of capital goods under project import and made a cash security deposit at the time of registration of the project - On finalisation of project imports, the adjudicating authoritysanctioned the refund, which was credited to the Consumer Welfare Fund by holding that it attracts bar of unjust enrichment - Commissioner (Appeals) has allowed the appeal with consequential relief, agitated by Revenue herein.
Held:Board&# 39;s circular dated 09.08.95 stipulates the requirement of cash security deposit of 2% when registering the project - Revenue' s only contention is that the cash security deposit made by the respondent under project imports is nothing but customs duty and pleaded the bar of unjust enrichment is applicable - case law relied upon by Revenue distinguished - Madras High Court examined identical issue in Cable Corporation case and held that the bar of unjust enrichment is inapplicable to security deposit - ratio squarely applicable to the instant dispute - appellants are eligible for refund of cash security deposit and there is no infirmity in the order of the Commissioner (Appeals) which is upheld [Para 5, 6] - Appeal rejected : CHENNAI CESTAT
2015-TIOL-195- SC-IT
CIT Vs Suman Dhamija
Income tax - CBDT Instruction dated 9/2/2011 - monetary limit.
Assessee' s appeal were disposed of by the High Court on the basis of the instructions issued by the Central Board of Direct Taxes dated 9.2.2011. - Case remanded : SUPREME COURT OF INDIA
2015-TIOL-1333- ITAT-AHM
DCIT Vs Amigo Brushes (P) Ltd
Whether the deposit received by the assessee is to be treated as deemed dividend where the assessee company did not hold a share in the lender company from which it had received deposit - Whether foreign travel expenses can be said to be incurred for the purpose of business wholly and exclusively where the expenditure was incurred for negotiating for spares and purchases of manufacturing machinery - Whether expenditure incurred on account of repairs for excavation of pond, purchase of wood shaft, ply, Burma teak wood, tiles, door, etc. is allowable as revenue expenditure - Whether deduction u/s 80IA is allowable where District Industries Commissioner regarded the industrial undertaking as a small industrial unit by issuing a provisional certificate, and the assessee had always been regarded as an SSI unit by all the departments, including excise department. - Revenue' s appeals dismissed : AHMEDABAD ITAT
2015-TIOL-1332- ITAT-PANAJI
ACIT Vs Anthony Jose Fernandes
Whether when assessee' s had purchased a land and plantations on such land, he would be would be entitled to the deduction u/s 54B to the extent of cost of land and plantation, both - NO: ITAT
Whether benefit of deduction u/s 54B would be to the amount as disclosed by the Assessee in the sale deed - YES: ITAT - Revenue' s appeal partly allowed : PANAJI ITAT
Indirect Tax Basket
CENTRAL EXCISE SECTION
2015-TIOL-1792- CESTAT-AHM
Shah Paper Mills Ltd Vs CCE & ST
CX - Assessee is manufacturer of kraft paper from waste paper - Whether main assessee was eligible to take credit on basis of cenvatable documents showing payment of duty - Assessee taking cenvat credit is not required to go beyond cenvatable document to know as to how it has arisen - What input recipient is required to verify is that supplier of raw material is genuine and proper duty is paid - Both the conditions are fulfilled - Duty paid on waste kraft paper was accepted by officer Incharge of supplier unit M/s SPPML - On merit assessee was eligible to take CENVAT credit - No evidence brought on record that main assessee and its Director were aware that inputs received was as a result of an activity not amounting to manufacture - Demand issued is clearly time barred as extended period is not imposable and no penalties can be imposed upon assessee: CESTAT - Appeals allowed : AHMEDABAD CESTAT
2015-TIOL-1791- CESTAT-DEL
Surya Roshni Ltd Vs CCE
CX - Refund - Assessee is manufacturer of electric bulbs and are procuring inputs and capital goods and also availing Cenvat Credit thereon - They opted to avail exemption under notfn 50/2003-CE i.e. area based exemption - At the time when assessee took Cenvat Credit on inputs/capital goods, their final product was dutiable and later on they opted for availing exemption under said notfn - As per Apco Pharma Ltd. 2011-TIOL-913- HC-UKHAND- CX , they are not required to reverse Cenvat Credit on input / inputs contained in work-in-progress / finished goods lying in their factory: CESTAT - Appeal allowed : DELHI CESTAT
CHANDIGARH: THE issue before the bench is - Whether when there is no pro rate transfer of land to developer, assessee can be made liable to pay capital gains tax with respect to remaining land for which no payment was received as development agreement was cancelled due to various court orders. NO is the answer.
Facts of the case
The assessee, an individual, is a member of M/s Defence Services Cooperative House Building Society Limited, Mohali consisting of various members. The society was owner of 27.3 acres of land. The members of the society had been allotted plots of various sizes. A resolution was passed by the Executive Committee of the society that all the members would surrender their rights in the property to the society and the society would enter into an agreement on behalf of the members with developers to develop 27.3 acres of land owned by the society. On 27.4.2007, the society entered into tripartite Joint development Agreement with HASH and THDC to develop the land and it was agreed that in lieu of grant of development rights, the developers will pay a monetary consideration of Rs. 80 lacs to be paid in installments and additionally one built up flat measuring 2250 square feet in the project to be given to each individual member of the society having plot size of 500 square yards in the land owned by the society. On 25.2.2007, assessee having plot of 500 square yards received part of the entire consideration. The members of the society issued an irrevocable power of attorney in favour of the developers to undertake various acts in furtherance of JDA. First sale deed was executed for registration of 3.08 acres of land by the society in favour of THDC. On 25.4.2007, second sale deed for transfer of 4.62 acres of land was registered by the society in favour of THDC against payment of second installment of Rs. 18 lacs received by each member having plot size of 500 square yards. Assessee declared an income of Rs. 2,72,496/- for AY 2008-09. The sources of income were shown as salary and business income. On 7.1.2010, revised computation of income was filed by assessee during the assessment proceedings declaring income of Rs. 22,50,730/- which included capital gains on the consideration of advances and part payment under the JDA. On 17.2.2010, notice u/s 148 was issued to the assessee who stated in reply that revised return already filed on 1.1.2010 be treated in response to the notice. On 5.5.2010, assessee filed computation of income before AO declaring income of Rs. 22,50,730/- from salary, business income and long term capital gain. AO passed an order and consideration receivable by the assessee under the JDA was brought to tax under the head 'capital gains'.
The assessee filed an appeal before CIT(A) on 9.6.2011. Pursuant to a PIL, HC stayed construction/ development of the project. On 28.1.2011, the society issued letter to HASH for payment of third installment in accordance with clauses of the JDA. On 4.2.2011, HASH stated that the third installment would become due only after obtaining permission to commence construction. On 11.5.2011, the society sent legal notice stating that time was the essence of the JDA and delay was attributable to the developers in obtaining necessary approval from the competent authority. The society gave 30 days time to the developers to make the payment of the third installment. On non receipt of the payment on 13.6.2011, the society passed a resolution to terminate the attorney issued in favour of the developers. On 31.10.2011, the society cancelled the power of attorney issued in favour of the developers. High Court directed the developers to obtain additional permission under the Punjab New Capital (Periphery) Control Act, 1952. High Court in a writ petition, ordered stay of construction in the entire catchment area of Sukhna Lake as per survey of India record which also covered the project under consideration. The court also ordered for demolition of any structure after 11.3.2011. Status quo was granted by SC, wherein the court directed that no construction should be undertaken in the area in question. Thus, CIT(A) dismissed the appeal filed. On further appeal, Tribunal also dismissed the appeal upholding the order passed by AO and affirmed by the CIT(A) bringing the entire consideration receivable to tax under the JDA.
Held that,
++ the Tribunal had adjudicated the appeals of the assessees relying upon the order dated 29.7.2013 passed by it in the case of Charanjit Singh Atwal vs. ITO, Ward No.VI(I) Ludhiana 2013-TIOL-1111- ITAT-CHD against which ITA No.200 of 2013 was filed in this Court. After considering the relevant statutory provisions and the case law, the conclusions arrived at by this Court were that perusal of the JDA dated 25.2.2007 read with sale deeds dated 2.3.007 and 25.4.2007 in respect of 3.08 acres and 4.62 acres respectively would reveal that the parties had agreed for pro-rata transfer of land. No possession had been given by the transferor to the transferee of the entire land in part performance of JDA dated 25.2.2007 so as to fall within the domain of Section 53A of 1882 Act. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In the absence of registration of JDA dated 25.2.2007 having been executed after 24.9.2001, the agreement does not fall u/s 53A of 1882 Act and consequently Section 2 (47)(v) does not apply. It was submitted by counsel for the assessee that whatever amount was received from the developer, capital gains tax has already been paid on that and sale deeds have also been executed. In view of cancellation of JDA dated 25.2.2007, no further amount has been received and no action thereon has been taken. It was urged that as and when any amount is received, capital gains tax shall be discharged thereon in accordance with law. In view of the aforesaid stand, while disposing of the appeals, we observe that the assessee shall remain bound by their said stand. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption u/s 54F would not survive any longer and has been rendered academic. The Tribunal and the authorities below were not right in holding the assessee to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by SC and the HC in PILs. Therefore, the appeals are allowed. The substantial questions of law were answered and appeals disposed of accordingly. It was not disputed between the counsel for the parties that the issue involved herein is squarely covered by the aforesaid judgment. Accordingly, the present appeals are disposed of in the same terms.
CL : It is not necessary that in every case consideration for transf
[2015] 60 taxmann.com 253 (Bombay)
HIGH COURT OF BOMBAY
Thomas Cook Insurance Services (India) Ltd., In re
Thu Aug 27, 2015 12:36 am (PDT) . Posted by:
ca.bhupendrashah
IT: Where Assessing Officer passed assessment order after cetain queries from assessee, mere non-discussion or non-mention thereof in assessment order could not lead to assumption that Assessing Officer did not apply his mind; invoking of revision proceeding under section 263 on said ground was unjustified
[2015] 60 taxmann.com 243 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax
v.
[2015] 60 taxmann.com 243 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax
v.
Krishna Capbox (P.) Ltd
IT/ILT : For treating any transaction as an international transaction, it is sine qua non that there should be two or more separate AEs
[2015] 59 taxmann.com 452 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I-1'
Aithent Technologies (P.) Ltd.
v.
Deputy Commissioner of Income-tax, Circle- 1(1), New Delhi
Transfer Pricing—Computation of Arm's Length Price
DELHI TRIBUNAL
Transfer Pricing—Computation of Arm's Length Price—TP adjustment—Selection of Comparables—Assessee company filed return of income declaring loss of Rs. 53,91,090—Reference u/s 92CA(1) was made for determining arm's length price (ALP) u/s 92CA(3) in respect of international transactions undertaken by assessee with its associated enterprises (AEs)—TPO considered comparables selected by assessee in TP report, which were 13 in number having arithmetic mean of 7.68% against NP margin of assessee being 5.79%—Final set of comparables for seven companies was accepted by TPO, arithmetic mean of which worked out to 11.15%—TPO, inter alia, rejected Capital Trust Ltd., having arithmetic mean of -9.18%, from set of comparables—Main dispute was regarding exclusion of this comparable, which assessee had taken as ground no. 4 of its grounds of appeal—This comparable was rejected by TPO on ground that it was functionally not comparable and was incurring persistent losses—Held, assessee was in business of repair services, computer hardware and software related services, erection, commissioning and installation services—Capital Trust Ltd. was, inter alia, imparting consultancy to foreign banks not having any branches or representative offices in India—Assessee's contention was that this consultancy segment was comparable to the services rendered by assessee—However the Tribunal was not inclined to accept assessee's contention on this ground because the consultancy service rendered to foreign banks in that case were in no way comparable with the assessee's business—Further Ld. counsel had relied on the decision of ITAT in the case of Nortel Networks India P Ltd and M/s Bobst India Pvt Ltd—Now, in case of Nortel Networks India P. Ltd., Tribunal did not accept TPO's analysis on ground of excluding comparable because total turnover of comparable was Rs. 13.92 crores—Tribunal specifically observed that analysis had to be carried out on basis of functional profile and not on arbitrary or ad-hoc criteria—While Nortel Networks India P. Ltd. was providing marketing and after sales support services to Nortel Group, assessee was not carrying out such activities but was carrying on computer hardware and software related services—Decision in the case of Nortel Networks India P. Ltd. was thus of no assistance to assessee—Further action of lower authorities was not confirmed on basis of loss being incurred in two years by Capital Trust Ltd., but on ground that functional profile was entirely different from that of assessee—Since consultancy segment was very meager as compared to overall activities carried on by assessee, therefore, it could not be held that merely because segmental details were provided, therefore, financial consultancy to foreign bank assumes significance—Assessment order of AO on issue in question was confirmed and ground nos. 1, 2 and 4 to 7 were rejected—Assessee's appeal dismissed
'Slide to unlock' patent claim by Apple rejected; Startups face valuation bumps; FIPB clears 16 FDI proposals
'Slide to unlock' patent claim by Apple rejected; Startups face valuation bumps; FIPB clears 16 FDI proposals
Govt. hunts for new SEBI Chairman; Draft Bankruptcy law by mid-October; Maggi ban hurts Govt.'s vision: DIPP
Govt. hunts for new SEBI Chairman; Draft Bankruptcy law by mid-October; Maggi ban hurts Govt.'s vision: DIPP
Registration of trust can't be cancelled due to non-filling of return of income
August 26, 2015[2015] 60 taxmann.com 183 (Chennai - Trib.)/[2015] 38 ITR(T) 634 (Chennai - Trib.)
IT : Since non-filing of a return did not find a mention as a cause for cancellation of registration under section 12AA, order of Commissioner was to be deleted
CHANDIGARH, AUG 27, 2015: THE issue before the bench is - Whether when there is no pro rate transfer of land to developer, assessee can be made liable to pay capital gains tax with respect to remaining land for which no payment was received as development agreement was cancelled due to various court orders. NO is the answer.
Facts of the case
The assessee, an individual, is a member of M/s Defence Services Cooperative House Building Society Limited, Mohali consisting of various members. The society was owner of 27.3 acres of land. The members of the society had been allotted plots of various sizes. A resolution was passed by the Executive Committee of the society that all the members would surrender their rights in the property to the society and the society would enter into an agreement on behalf of the members with developers to develop 27.3 acres of land owned by the society. On 27.4.2007, the society entered into tripartite Joint development Agreement with HASH and THDC to develop the land and it was agreed that in lieu of grant of development rights, the developers will pay a monetary consideration of Rs. 80 lacs to be paid in installments and additionally one built up flat measuring 2250 square feet in the project to be given to each individual member of the society having plot size of 500 square yards in the land owned by the society. On 25.2.2007, assessee having plot of 500 square yards received part of the entire consideration. The members of the society issued an irrevocable power of attorney in favour of the developers to undertake various acts in furtherance of JDA. First sale deed was executed for registration of 3.08 acres of land by the society in favour of THDC. On 25.4.2007, second sale deed for transfer of 4.62 acres of land was registered by the society in favour of THDC against payment of second installment of Rs. 18 lacs received by each member having plot size of 500 square yards. Assessee declared an income of Rs. 2,72,496/- for AY 2008-09. The sources of income were shown as salary and business income. On 7.1.2010, revised computation of income was filed by assessee during the assessment proceedings declaring income of Rs. 22,50,730/- which included capital gains on the consideration of advances and part payment under the JDA. On 17.2.2010, notice u/s 148 was issued to the assessee who stated in reply that revised return already filed on 1.1.2010 be treated in response to the notice. On 5.5.2010, assessee filed computation of income before AO declaring income of Rs. 22,50,730/- from salary, business income and long term capital gain. AO passed an order and consideration receivable by the assessee under the JDA was brought to tax under the head 'capital gains'.
The assessee filed an appeal before CIT(A) on 9.6.2011. Pursuant to a PIL, HC stayed construction/development of the project. On 28.1.2011, the society issued letter to HASH for payment of third installment in accordance with clauses of the JDA. On 4.2.2011, HASH stated that the third installment would become due only after obtaining permission to commence construction. On 11.5.2011, the society sent legal notice stating that time was the essence of the JDA and delay was attributable to the developers in obtaining necessary approval from the competent authority. The society gave 30 days time to the developers to make the payment of the third installment. On non receipt of the payment on 13.6.2011, the society passed a resolution to terminate the attorney issued in favour of the developers. On 31.10.2011, the society cancelled the power of attorney issued in favour of the developers. High Court directed the developers to obtain additional permission under the Punjab New Capital (Periphery) Control Act, 1952. High Court in a writ petition, ordered stay of construction in the entire catchment area of Sukhna Lake as per survey of India record which also covered the project under consideration. The court also ordered for demolition of any structure after 11.3.2011. Status quo was granted by SC, wherein the court directed that no construction should be undertaken in the area in question. Thus, CIT(A) dismissed the appeal filed. On further appeal, Tribunal also dismissed the appeal upholding the order passed by AO and affirmed by the CIT(A) bringing the entire consideration receivable to tax under the JDA.
Held that,
++ the Tribunal had adjudicated the appeals of the assessees relying upon the order dated 29.7.2013 passed by it in the case of Charanjit Singh Atwal vs. ITO, Ward No.VI(I) Ludhiana2013-TIOL-1111-ITAT-CHD against which ITA No.200 of 2013 was filed in this Court. After considering the relevant statutory provisions and the case law, the conclusions arrived at by this Court were that perusal of the JDA dated 25.2.2007 read with sale deeds dated 2.3.007 and 25.4.2007 in respect of 3.08 acres and 4.62 acres respectively would reveal that the parties had agreed for pro-rata transfer of land. No possession had been given by the transferor to the transferee of the entire land in part performance of JDA dated 25.2.2007 so as to fall within the domain of Section 53A of 1882 Act. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In the absence of registration of JDA dated 25.2.2007 having been executed after 24.9.2001, the agreement does not fall u/s 53A of 1882 Act and consequently Section 2 (47)(v) does not apply. It was submitted by counsel for the assessee that whatever amount was received from the developer, capital gains tax has already been paid on that and sale deeds have also been executed. In view of cancellation of JDA dated 25.2.2007, no further amount has been received and no action thereon has been taken. It was urged that as and when any amount is received, capital gains tax shall be discharged thereon in accordance with law. In view of the aforesaid stand, while disposing of the appeals, we observe that the assessee shall remain bound by their said stand. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption u/s 54F would not survive any longer and has been rendered academic. The Tribunal and the authorities below were not right in holding the assessee to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by SC and the HC in PILs. Therefore, the appeals are allowed. The substantial questions of law were answered and appeals disposed of accordingly. It was not disputed between the counsel for the parties that the issue involved herein is squarely covered by the aforesaid judgment. Accordingly, the present appeals are disposed of in the same terms.
Cabinet approves arbitration law amendments for expeditious case disposal, cost-effective arbitration
Union Cabinet approves amendments to arbitration law, with an aim to ensure neutrality of arbitrators, expeditious disposal of cases, making arbitration more user friendly & cost effective; Amendments include disqualification of arbitrator if he has any relationship or interest in the matter, insertion of a provision for fast track procedure for conducting arbitration; Also includes amendment to Section 34 relating to grounds for challenge of an arbitral award, to restrict the term "Public Policy of India" (as a ground for challenging the award) by explaining that only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against Public Policy of India; Amendments seek insertion of a new provision that Arbitral Tribunal shall make its award within a period of 12 months and if the award is made within a period of six months, arbitrator may get additional fees if the parties so agree; New provision inserted to provide that application to challenge the award is to be disposed of by the Court within 1 year, thereby ensuring speedy disposal of cases; New Section 31A to be added for providing comprehensive provisions for costs regime, applicable both to arbitrators as well as related litigation in Court, that will avoid frivolous and meritless litigation/arbitration; Amendments also empower Arbitral tribunal to grant all kinds of interim measures which the Court is empowered to grant : Govt. Press Release
The government will move an amendment Bill inParliament http://www.business-standard.com/search?type=news&q=Parliamentto make India a favourable place to settle disputes through arbitration.
The Cabinet on Wednesday cleared the Arbitration and Conciliation (Amendment) Bill, 2015 for this purpose, amid companies such as Vodafone http://www.business-standard.com/search?type=news&q=Vodafonechoosing overseas courts for this purpose.
Sources said the Union government has also decided to form a group of secretaries to deal with key issues related to the civil aviation policy including those related to tax relation. Some of the members would include secretaries from the civil aviation ministry, home ministry, finance ministry and defence ministry, sources added.
The amendments include specifying and restricting the term "Public Policy of India" on the ground of which an arbitral award could be challenged. An award would be construed as against the Public Policy of India if it is induced or affected by fraud or corruption, or is in contravention with the fundamental policy of Indian law or is in conflict with the most basic notions of morality or justice, an official statement said.
The amendments, based on the recommendations of the Law Commission, would insert a new provision that application to challenge the award is to be disposed of by the court within one year.
Then, there would be a change in the existing law to the effect that mere filing of an application for challenging the award would not automatically stay execution of the award. The award can only be stayed where the court passed any specific order on an application filed by the party.
To ensure neutrality of arbitrators, it is proposed to amend Section 12 of the existing Act to the effect that when a person is approached in connection with possible appointment of arbitrator, he shall disclose in writing about existence of any relationship or interest of any kind, which is likely to give rise to justifiable doubts. If a person has specified relationship, he will be ineligible to be appointed as an arbitrator.
Also a new provision would be inserted that the arbitral tribunal will make its award within a period of 12 months. Parties might extend such period up to six months.
Thereafter, it can only be extended by the court, on sufficient cause.
The court while extending the period might also order reduction of fees of arbitrator(s) not exceeding five per cent for each month of delay, if the court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal. If the award is made within six months, the arbitrator might get additional fees if the parties might agree.
Besides, a new provision would be inserted for a fast-track procedure for conducting arbitration. Parties to the dispute might agree that their dispute be resolved through the fast-track procedure. Award in such cases shall be given in six months period.
Again, a new sub-section in Section 11 would be added to ensure that an application for appointment of an arbitrator shall be disposed of by the high court or Supreme Court as expeditiously as possible and an endeavour should be made to dispose of the matter within 60 days.
A new section would be included for providing comprehensive provisions for costs regime. It will applicable both to arbitrators as well as related litigation in a court. It will avoid frivolous and meritless litigation and arbitration.
The existing Act would be amended for empowering the arbitral tribunal to grant all kinds of interim measures, which the court is empowered to grant and such order will be enforceable in the same manner as if it is an order of a court.
__._,_.___
No comments:
Post a Comment