CIRCULARS

cuscir40_016

Guidelines on safety and security of premises where imported or export goods are loaded, unloaded, handled or stored-reg

it16cir30

Streamlining the process of No Objection Certificate (NOC), Port Clearance Certificate (PCC), voyage return and voyage assessment in the case of Foreign Shipping Companies (FSCs).

CASE LAWS

CIT Vs HISSARIA BROTHERS : SUPREME COURT OF INDIA (Dated: August 22, 2016)

Income Tax - Sections 269SS, 269T, 271-D & 271-E .

Keywords - Barred by limitation- Deposits - Penalty - Repayment .

Whether penalty survives even if provisions under Sections 271D & 271E are invoked after six months of limitation - NO: SC

The assessee is a firm doing business of kachcha adhatiya by acting as an agent for its farmer constituents. In its return, the AO found use of money received from sale of crops owned by farmers constituents to be in the nature of deposits and invoked the provisions of section 269SS as applicable to the amount received by a person as deposit from the depositors and the amount utilised by the farmers as withdrawal from the deposits by way of repayment inviting operation of section 269T. Finding that such transactions of deposit and repayment were not through the bank, penalty proceedings u/s 271D and 271E were initiated and imposed penalties in each case.

On appeal, the CIT(A) cancelled the penalties. The Tribunal held that since all the penalty orders were passed beyond 6 months from the end of the month in which assessments were completed the penalty orders were barred by time. On appeal, the HC concurred with the view of the Tribunal.

On appeal, the SC held that,

++ on perusing the judgment of the High Court, it is found that penalty imposed on the assessee herein was also set aside on the ground that the provisions of Section 271-D and 271-E of the Income Tax Act were invoked after six months of limitation and, therefore, such penalty could not have been imposed. Since the outcome of the judgment of the High Court can be sustained on this aspect alone, it is not even necessary to go into other aspects. Leaving the other questions of law open, the appeal is dismissed.

Revenue's appeal dismissed

2016-TIOL-140-SC-IT + Story

CIT Vs PREETAM SINGH LUTHRA : SUPREME COURT OF INDIA (Dated: July 29, 2016)

Income tax - business loss & forfieture of licence

Whether a licencee can claim entitlement to business loss on account of forfieture of the licence fee, where the loss, if any, on account of forfeiture was sustained not by the said licencee but by the tranferee - NO: SC

The Revenue had preferred the present appeal challenging the order, whereby the High Court had upheld that order of ITAT in deleting the addition of the licence fee paid by the assessee, on the ground that since forfeiture of the amount of the licence fee had taken place, the said amount had to be set off as loss for the assessment year in question.

Having heard the parties, the Supreme Court held that,

++ if the licence fee stands forfeited, the licencee i.e., the assessee may be entitled to claim the forfeited amount as a business loss. However in the present case, from the grounds urged before the High Court which facts have not been controverted by the assessee, it appears that the assessee had transferred the licence on 25th June 2005 to one Shankarlal Patidar and the forfeiture of the said licence took thereafter on 1st Aug, 2005. If that be so, the loss, if any, on account of forfeiture was sustained not by the assessee but by the tranferee-Shankarlal Patidar. In view of the above and as the Tribunal and the High Court have overlooked the aforesaid vital fact, we are of the view that the orders passed by the ITAT & High Court will require to be reversed.

Revenue's appeal allowed

2016-TIOL-139-SC-IT

SHIBU SOREN Vs CIT : SUPREME COURT OF INDIA (Dated: July 26, 2016)

Income tax - Whether an application for permission to list Review Petition can be entertained, when the order against which such review has been sought, does not suffer from an apparent error - NO: SC

Having heard the parties, the Supreme Court held that,

++ after having perused the Review Petition and record of the Special Leave Petition, this court is convinced that the order of which review has been sought does not suffer from any error apparent warranting its reconsideration.

Assessee's reveiw petition dismissed

2016-TIOL-138-SC-CX

SATYAM TECHNOCAST Vs CCE : SUPREME COURT OF INDIA (Dated: June 30, 2016)

Central Excise - maintainability of review petition & tax effect

Whether a review petition filed against the order of the Commissioner deserves acceptance, where he has included the value of job work done from the outsider parties merely on the ground that the assessee firm has failed to produce any document to show particulars of the jobs that were got done from the said parties, and the tax effect of the litigation is not minimal - YES: SC

Having heard the parties, the Supreme Court held that,

++ it is seen that the Commissioner has included the value of job work which is got done from such outsiders only on the ground that the assessee firms could not produce any document which could not give any particulars of the jobs that were got done from the said parties. On the aforesaid basis, normal order could have been to remand the case back to the Commissioner. However, immediately after the afore quoted portion, this Court did not do so only on the ground that the tax effect was minimal. In this review petition, the assessee has successfully demonstrated that the tax effect is not minimal. In fact, it is in the neighbourhood of Rs. 27 lacs and with interest and penalty the amount may be much large. Having regard to the above, this review petition is allowed for the limited purpose of deducting the job work got done from outside parties from total clearances and for redetermining the liabilities on that basis, the matter is remanded back to the Commissioner of Central Excise, Rajkot.

Assessee's review petition allowed

2016-TIOL-137-SC-CX

CCE & ST Vs T D POWER SYSTEMS PVT LTD : SUPREME COURT OF INDIA (Dated: July 1, 2016)

Central Excise - imposition of penalty & levy of duty

Whether it is open to the High Court to reject an appeal against the order of CESTAT in respect of imposition of penalty, merely on the ground that its correctness thereof was the subject matter of appeal before the Apex Court - NO: SC

Having heard the parties, the Supreme Court held that,

++ it is noted that the High Court has not entertained the appeal against the order of the CESTAT in respect of imposition of penalty, on the ground that the duty itself was not leviable and the correctness thereof was the subject matter of appeal in this Court. This Court has since decided that the duty was leviable vide its earlier order. Therefore, the order of the High Court is set aside and the matter is remitted to the High Court for deciding the issue of penalty.

Case remanded

2016-TIOL-136-SC-CX

YATHARTHA YANTRA UDYOG Vs CCE: SUPREME COURT OF INDIA (Dated: June 30, 2016)

CX - Appellant in Civil Appeal submitting that due to inadvertence the counsel for the assessee could not remain present before the CESTAT and resultantly the necessary points could not be urged and a decision came to be rendered in favour of revenue.

Held: It appears that none was present before the Tribunal despite notice - Duty involved is approximately Rs.10 lakhs with penalty u/s 11AC and interest u/s 11AB of CEA, 1944 - Court is of the considered opinion that the cause of justice would be best sub-served if the judgment and order passed by the Tribunal is set aside and the matter is remitted to the tribunal, subject to the appellant-assessee depositing a sum of Rs.10,00,000/- with the respondent-revenue within a period of eight weeks - Tribunal to dispose of appeal within three months - Appeal disposed of: Supreme Court [para 5, 6]

Appeal disposed of