DEPUTATION POST
Vigilance Directorate in CBDT invites applications for post of Under Secretary
NOTIFICATION
stnot17_010
Exemption to services provided 'to' an educational institution restricted, w.e.f 01.04.2017, to institution providing pre-school and higher secondary school education or equivalent
PUBLIC NOTICES
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Harmonising MEIS Schedule in the Appendix 3B (Table-2) with ITC (HS), 2017
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Deletion of MEIS benefit on Flour, meal and powder of Guar seeds under Exim Code 11061000 - regd
CASE LAWS
2017-TIOL-283-ITAT-KOL
DEBJYOTI MISHRA Vs ITO: KOLKATA ITAT (Dated: January 31, 2017)
Income Tax - Sections 40(a)(ia), 194C & 194I
Keywords - non deduction of TDS - prescribed monetary limit - labour and advertisement charges
The assessee is an Individual and is a musician by profession declared a total income of Rs.2,09,770/-. The case was reopened and notice u/s. 148 was issued . The AO made four additions on account of Studio Hire Charges of Rs. 87,388/-, an amount of Rs. 1,13,700/- on account of instrument Hire Charges, Payment to the tune of Rs. 1,06,780/-under the head Artist Expenses and Payment to an assistant Mr. Sovan Dey amounting to Rs. 29,700/- under the head Assistant Fees.
On Appeal, the Tribunal held that,
Whether the addition can be made when the payment is below the prescribed monetary limit as required u/s 194I - NO: ITAT
++ on the issue of the payment of Rs. 87,388/- under the head Studio Hire Charges paid to three different studios Rs. 21,902/- to Prasad Recording Studio, Rs. 22,535/- to On Air Communication and Rs. 42,951/- to Solaris Studio Pvt. Ltd, the impugned addition as made by the AO is admittedly below the prescribed monetary limit as required u/s 194I, therefore, the addition made for violation of Section 194C is not maintainable and as such it is deleted;
Whether when the Assessee being an Individual not deducted TDS on payments made towards labour and advertisement charges for A.Y's.2006-07, Section 40(a)(ia) can be invoked in such cases - NO: ITAT
++ the payment to the tune of Rs. 2,31,736/- under the head Instrument Hire Charges which includes payments of Rs. 1,13,700/- paid to three parties of Rs. 22,400/-, Rs. 35,200/- and Rs. 31,400/- , the assessment order that the assessee is an individual and the AO effected disallowance towards instrument hire charges for violation of the provisions contemplated u/s 194C and made addition by invoking the section 40(a)(ia). The Coordinate Bench in Sri Pradip Saha in ITA No.1765/Kol/2011 for the AY 2006-07 held that the Assessee being an Individual is under no obligation to deduct tax and provisions u/s 194C(1) is not applicable to A.Y's.2006-07 and 2007-08 for an individual. In the present case, the year under consideration is 2006-07, therefore, the facts and the law laid down by the Coordinate Bench is applicable to the issue on hand. Thus, the disallowance as made for violation of section 194C and the addition therein by invoking Section 40(a)(ia) of the Act is not maintainable and, therefore, the impugned amount to an extent of Rs.1,13,700/- on account of Instrument Hire Charges is deleted;
Whether Section 40(a)(ia) can be invoked when the concerned payees has taken into account the relevant sum as received for computing income in their returns furnished u/s 139 and has paid taxes due on the income declared in such return - NO: ITAT
++ on the issue of the payments to Artists and addition made thereon for violation u/s 194C by invoking Section 40(a)(ia) ,. the concerned payee(s) has taken into account the relevant sum as received from Assessee for computing income in their returns of income furnished u/s. 139 and has paid tax due on the income declared in such return, The impugned order set aside to the extent confirming the disallowance made by the AO u/s. 40(a)(ia) and restore the matter to the file of the AO for deciding the same afresh in the light of the submissions of the assessee;
Whether in the absence of any charging section, the disallowance thereon is not permissible - YES: ITAT
++ on the issue of the payment to an assistant ,the AO did not specify the charging section as required to be made any disallowance under the Act, but, however, mentioned the only the chapter VIIB where the deduction at source commences to start from section 192. In the absence of any charging section the disallowance thereon is not permissible. The addition made account of payment to Assistant to an extent of Rs.29,700/- in the absence of any evidence is not maintainable.
Assessee's Appeal partly Allowed
2017-TIOL-282-ITAT-KOL
MISRILALL MINES PVT LTD Vs DDCIT: KOLKATA ITAT (Dated: February 8, 2017)
Income Tax - Section 14A, 45 & 73.
Keywords - activity of business - treatment of transactions - investment disallowance - composite expenditure - non-exempted income.
The assessee is engaged in the business of mining, processing and export of chrome ore & other mineral. In the year under consideration, assessee has filed its return of income declaring total income of Rs. 33,94,53,780/- which was processed u/s 143(1). Subsequently, case was selected under scrutiny and assessment was framed after making certain additions and disallowances to the total income of assessee at Rs. 34,57,40,170/- u/s. 143(3). The CIT(A) confirmed the order of the AO by treating the quantum capital loss of Rs. 60,83,332/- as speculation loss in terms of provision of Explanation to Section 73. The CIT(A) confirmed the order of AO by sustaining the disallowance of Rs. 60,53,495/- u/s 14A r.w.s. 8D.
On Appeal, the Tribunal held that,
Whether the sale-purchase of securities which is held for a period more than 12 months consistently, has to be treated as income under the head "capital gains" only - YES: ITAT
Whether transactions for the sale-purchase shares carried out through PMS, can be regarded as his business transactions - NO: ITAT
++ there is no dispute with regard to treatment of the aforesaid transactions in the books of account of assessee and aforesaid transactions were classified by assessee under the head "investment" and such practice was also followed by assessee in the earlier year also. The assessee in the earlier year has shown such transactions under the head "capital gains" and no disallowance was warranted by AO. In the Circular No. 6 of 2016 on 29.02.2016 , the CBDT has already curtailed the disputes by instructing to Income Tax Authorities for not disregarding treatment made by the assessee with regard to the share transactions. The assessee has shown LTCG and LTCL which indicates the period of holding more than 12 months and there is no dispute on the period of holding. So the stand taken by the assessee cannot be challenged. The similar analogy can also be applied to the STCL. The activities through PMS cannot be regarded as business activities on standalone basis. There are other factors which need to be considered. The assessee has been showing income under the head "capital gains" from the sale-purchase of securities which is held for a period more than 12 months consistently then the same has to be treated as income under the head "capital gains" only. Similarly, the transactions for the sale-purchase shares carried out through PMS cannot be regarded as business transactions;
Whether disallowance u/s 14A r.w.s. 8D is justified, when Assessee has failed to quantify the composite expenditure incurred in relation to non-exempted income - YES: ITAT.
++ on the issue of the CIT(A) confirmed the order of AO sustaining the disallowance of Rs. 60,53,495/- u/s 14A r.w.s. 8D ,the AO has derived his satisfaction for invoking the provisions of section 14A read with rule 8D of income tax rules by observing that it is for the assessee either to prepare separate accounts of expenditure for exempted income and non-exempted income, or alternatively, to substantiate as to how much of the composite expenditure incurred in relation to non-exempted income. If he fails to do so, they would have no option but to apportion the composite expenditure between exempted income and non-exempted income and disallow the expenditure in relation to exempted income in terms of provisions of Sec. 14A." There was no option available to the AO except to resort to the provisions of section 14A read with rule 8D. The disallowance envisaged in the section 14A extends to all the administrative expenses claimed by the assessee in profit and loss account. The assessee has claimed total expenditure of Rs.4,14,08,065/-. Out of the same a sum of Rs. 2 crores was donated to charitable trust which has no nexus with the dividend income. However the balance expenses of Rs.2,14,08,065/- has been incurred and claimed by the assessee under the head administrative and other expenses. In the instant case the disallowance has been worked out to Rs.60,53,495/- out of total administrative expenses of Rs.2,14,08,065/-. Hence, the disallowance is not exceeding the total administrative expenses incurred by the assessee.
Assessee's Appeal partly Allowed
2017-TIOL-281-ITAT-KOL
DCIT Vs MICROSEC FINANCIAL SERVICES LTD: KOLKATA ITAT (Dated: January 4, 2017)
Income Tax - Sections 14A & 37.
Keywords - Expenditure for raising additional shares - Revenue Expenditure - own surplus funds - investment.
The assessee, a NBFC, filed its original return of income declaring total income of Rs.1,46,66,807/- and revised return of income declaring total income of Rs.1,98,36,700/-. Thereafter the case of the assessee was selected for scrutiny and the AO framed the assessment u/s.143(3) by making various disallowances. The CIT(A), partly allowed the Appeal.
On Appeal, the Tribunal held that,
Whether expenditure for raising additional shares from market is a Revenue Expenditure, when IPO did not materialize due to bad market conditions - YES: ITAT
++ on the issue of the CIT(A) Expenditure for raising the additional shares from market amount to Rs.1,10,64,309/- as Revenue Expenditure, the company did not bring out the IPO due to bad market conditions/environmen and therefore the expenses was not towards IPO and the company did not get any benefit of enduring nature. Therefore, the expenditure is revenue in nature;
Whether disallowance u/s 14A can be made, when own funds of assessee were more than the investment made by him - NO: ITAT
++ the investment was made out of owned fund in the previous year. Own funds of the assessee were more than the investment. Besides, interest credited in the profit and loss account is more than interest debited in profit and loss account. After setting off interest debited with interest credited, the interest debited would become zero in the profit and loss account, and hence disallowance can not be made. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference.
Revenue's Appeal dismissed
2017-TIOL-762-CESTAT-MUM + Story
KINETIC COMMUNICATIONS LTD Vs CCE: MUMBAI CESTAT (Dated: February 1, 2017)
ST - Appellants had handed over the capital goods' possession to the lessee as also the right to use - capital goods are in the possession of the lessee and are being used by him for the intended purpose without any interference or hurdle from the appellants - activity does not come within the purview of "Supply of tangible goods services"- order set aside and appeal allowed: CESTAT [para 7, 8]
Appeal allowed
2017-TIOL-761-CESTAT-HYD
GITA ENTERPRISES Vs CC & CE: HYDERABAD CESTAT (Dated: October 28, 2016)
ST - Penalty impsed on assessee u/s 78 subsequenlty waived u/s 80 by adjudicating authority - On appeal by department, Commr. (A) overturned O-I-O and imposed penalty - Adjudicating authority had rightly found no intention to evade payment of duty - Assessee faced financial hardship and ill health and had merely defaulted on payment of duty - Penalty can be levied only if there is intention to evade payment of duty - Assessee had been paying duty before the period, as reflcted in Income Tax returns - No evidence provided to show mala fide intent to evade payment - Penalty imposed is unwarranted and unjustified: CESTAT (Para 6)
Appeal Allowed
2017-TIOL-758-CESTAT-DEL
SKSISPAT AND POWER LTD Vs CCE & ST: DELHI CESTAT (Dated: January 25, 2017)
CX - Duty demanded on alleged clandestine removal of Sponge Iron, penalties imposed - appeal to CESTAT. Held: No instance of any removal of goods has been adduced by the authority - No buyer of goods or evidence of removal such as, transportation of goods, receipt of consideration is appearing on record nor there seems to be any investigation on this account - In such scenario, only on the basis of acceptance of shortages by Shri R. S Tomar, who is employee of Appellant company, the duty demand cannot be upheld - duty demand cannot also be upheld merely on the grounds of shortages which have been reported to be in the range of less than 3% of the total quantity recorded in the books - Order set aside and appeals allowed: CESTAT [para 7]
CX - Confiscation of seized cash and appropriation thereof against the duty demand - Commissioner has confirmed confiscation merely on ground of preponderance of probabilities, stating that the amount is of sale proceeds of short found goods - No investigation has been done to link the said cash with any receipt of clandestine removal - Appellant had produced copies of their accounts to the authorities, showing the cash appearing in books - In such circumstances, when no evidence has been adduced to show the cash as pertaining to sale proceeds of any clandestine removal, cash seized from residence cannot be confiscated and adjusted against demand: CESTAT [para 8]
CX - Penalties - As duty demand against the main appellant does not survive, therefore, no case for penalty is made out against the said persons: CESTAT [para 8]
Appeals allowed
2017-TIOL-757-CESTAT-DEL
SECURITY SYSTEMS Vs CCE: DELHI CESTAT (Dated: December 27, 2016)
CX - Assessee engaged in manufacture of door locks and door fittings and availed cenvat credit of duty paid on inputs and capital goods received in its factory for use in or in relation to manufacture of such final product - CX officers have not visited the factory of assessee to ascertain whether disputed goods were actually received in factory and used for intended purpose - Since based on investigation carried out in premises of M/s. Arihanta Metal Company, proceedings were initiated against assessee for confirmation of Cenvat demand, such action by Department is not proper and justified - It cannot be held that disputed goods covered under invoices were not received for intended use by assessee: CESTAT
Appeal allowed
2017-TIOL-755-CESTAT-MAD
SIMPLEX CONCRETE PILES INDIA LTD Vs CC: CHENNAI CESTAT (Dated: September 30, 2016)
Customs - Exemption - Both the authorities have not allowed the benefit of Notification No.21/2002-Cus. dt. 1.3.2002 in respect of goods specified in List 43 at Sl.No.401 (Condition No.87) of the Table for setting up of any Nuclear Power Project; agitated herein.
Held: The notification is concerned with the goods required for setting up of nuclear project having a capacity of 440 MW or more as certified by an officer not below the rank of a Joint Secretary to the Government of India in the Department of Atomic Energy - Requirement of law is that described goods as specified in List 43 in the notification should be imported for the purpose of setting up of nuclear projects - the goods imported undisputedly satisfy the requirements, and was within the knowledge of the nuclear project authority, who were the essential party to the import since their name appears in the Bills of Entry - The sum and substance of the requirement of the notification is that the goods is subjected to exemption but not the person who imported, therefore, without any doubt as to the import of the goods and use thereof in the Nuclear Project as per certificate issued by the Notified Authority not disputed by Revenue, there cannot be denial of benefit of the notification to the appellant - so far as the project import benefit is concerned, in view of grant of benefit under the notification, that ipsofac to allows such benefit. [Para 6, 8]
Appeals allowed
