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2018-TIOL-NEWS-033 | Thursday February 08, 2018
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
For assistance please call us at +91-78385-94748 or email us at helpdesk@tiol.in. |
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TIOL TUBE VIDEO |
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DIRECT TAX |
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2018-TIOL-224-HC-MAD-IT
Daimler India Commercial Vehicles Pvt Ltd Vs DCIT
Whether an assessment can be reopened, without there being discovery of new material evidence or new insight after completion of original assessment - NO: HC
Whether reopening of assessment based on materials placed on record during original assessment, and inspite of a full & true disclosure by the assessee, is tantamount to change of opinion - YES: HC
Whether the AO can transfer the onus of making a conclusion after considering material on record, upon the assessee - NO: HC - Assessee's Writ Petitions Allowed
: MADRAS HIGH COURT
2018-TIOL-218-HC-MAD-IT
Tamil Nadu Pollution Control Board Vs CIT
Whether when demand notice is issued before the prescribed time limit for preferring an appeal before the ITAT, same reserves to be kept till the expiry of such period - YES: HC - Assessee's Writ allowed : MADRAS HIGH COURT
2018-TIOL-217-HC-AHM-IT
Pr.CIT Vs Swapna Enterprise
Whether penalty u/s 271AAA deserves to be sustained, if the entire amount of tax and penalty had been paid prior to making of assessment order - NO: HC - Revenue's appeal dismissed : GUJARAT HIGH COURT
2018-TIOL-224-ITAT-KOL + Story
Tata Global Beverages Ltd Vs ACIT
Whether expenditure incurred by the employer towards medical reimbursement of its employees constitutes fringe benefit as defined in section 115WB of the Act - NO: ITAT
Whether such expenditure is fully attributable to the employee and hence, will be taxed in their hand under the provision of section 17(2) of the Act - YES: ITAT
Whether composite fee paid by the employer for participation of employee in a conference can be considered as fringe benefit - NO: ITAT - Assessee's appeal allowed: KOLKATA ITAT
2018-TIOL-220-ITAT-MUM
Ketan S Vakharia Vs Addl.CIT
Whether penalty u/s 272A(2)(k) can be imposed for not filing the quarterly TDS statements within the stipulated time u/s 206 / 206A r.w. Rule 37, even if the reasons given by the assessee appears to be bona fide one - NO: ITAT -
Assessee's appeal allowed
: MUMBAI ITAT
2018-TIOL-219-ITAT-KOL
Amitava Banerjee Vs DCIT
Whether assessee can claim exemption arising from the sale of the land in consideration u/s 54 even if there is no documentary evidence showing the agricultural purpose of such land for at least 2 years immediately prior to transfer - NO: ITAT
Whether therefore, the profit arising from the sale of such land, can be brought to tax under the head of "long term capital gain" - YES: ITAT
Whether in absence of supporting evidence, AO can make adhoc additions on the entire expenditure incurred by the assessee on staff training - NO: ITAT
Whether the written down value after claiming the depreciation is relevant to consider the reasonableness of the expenditure incurred on maintenance by the assessee - NO: ITAT -
Assessee's appeal partly allowed
: KOLKATA ITAT
2018-TIOL-218-ITAT-KOL
City Holdings Ltd Vs DCIT
Whether is it open to AO to disallow all the expenditure incurred by assessee by applying Rule 8D without even verifying its linkage with earning of exempt income and without recording any satisfaction u/s 14A - NO: ITAT -
Assessee's appeal allowed
: KOLKATA ITAT
2018-TIOL-217-ITAT-KOL
ITO Vs Kolkata Reserve Bank Employees Co-Operative Credit Society Ltd
Whether when issue on account of deduction claimed by assessee u/s 80P(2)(a)(i) for interest on investment towards credit facilities is already settled, rule of consistency will prevail in absence of any distinguishable view - YES: ITAT
Whether deduction claimed by a co-operative credit society towards income earned on maintenance of holiday homes for members is allowable even if, deduction from business of providing credit facilities to the members is available u/s 80P(2)(a)(i) to such society - NO: ITAT -
Revenue's appeal partly allowed
: KOLKATA ITAT
2018-TIOL-216-ITAT-MUM
DCIT Vs Kotak Mahindra Bank Ltd
Whether when matter decided by Special Bench of the Tribunal in favour of assessee still holds the ground, the AO is statutorily obliged to follow the same going by the principle of judicial discipline - YES: ITAT -
Revenue's appeal dismissed
: MUMBAI ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
ST - Whole of the income shown in the books of accounts of the appellant, though the same is accrued to LIL, Canada has suffered tax under the category of consultancy engineering service - An expenditure, which is part of the same accounting for income, cannot be taxed for the same service, even under reverse charge tax - Secondly, the appellant has no agreement or arrangement with LIL, Canada to receive any consultancy service - This is expenditure for LIL, Canada, which is also reflected in the appellant's accounts as per the requirement - The full income on consultancy service, as already noted, has suffered Service Tax – demand unsustainable: CESTAT [para 7.1]
ST - Deputation of employee for executing work cannot be considered as a manpower supply - employer cannot be considered as a manpower supply agency - neither the appellant nor LIL, Canada can be considered as a manpower supply agency – tax liability cannot be sustained: CESTAT [para 7.2 - Appeal allowed : DELHI CESTAT
ST - On audit of the assessee's group of companies, it was found that the assessee was liable to pay service tax along with interest & penalty, for default in payment of tax, u/s 73(4A) of the Finance Act, 1994 - Subsequently, the amount already paid by the assessee was appropriated and further penalty u/s 78 was imposed - On appeal, the Commr.(A) gave the benefit of Section 73(4A) & dropped the proceedings against the assessee -
Held - The assessee did not mention the receipt of money at the relevant time in the books of accounts - Instead the assessee prepared trail balance sheet, profit & loss a/c at later dates - Hence it cannot be said that it was true and correct details of transfers in the specified records - Therefore, Section 73(4A) is inapplicable here - Considered the provisions of Section 73(4A) - If during investigation it is found that the assessee has first paid service tax, in that circumstance, if the amount is short paid has been paid by the assessee along with interest and penalty equal to 1% of such tax for each month for the period default continues, then no SCN is required to be issued - Presently the assessee paid service tax during the period of default - Therefore, provisions of Section 73(4A) are squarely applicable - Revenue's appeal filed without application of mind: CESTAT (Para 2,3,4) - Appeal Dismissed : AHMEDABAD CESTAT
CENTRAL EXCISE SECTION
CX - This is second round of litigation - In earlier round of litigation, the matter was remanded back to adjudicating authority - In remand proceedings, demand proposed in SCN was confirmed along with interest and penalties were also imposed - In this case, although panchnama was drawn and panch witnesses signed the panchnama, later on the panch witnesses filed affidavits saying that they were not part of the proceedings, they were only called to sign the panchnama - The authorities below have merely given the finding that these affidavits are an afterthought - In fact a person stating on oath is admissible evidence, however, that should be rebutted with positive evidence and no positive evidence has been produced by authorities below to discard the contents of affidavits - In that circumstance, the panchnama drawn during course of investigation has no evidentiary value - As demand sought to confirm on the basis of shortage found as per panchnama drawn during course of investigation, said panchnama has been held not admissible, in that circumstance, the SCN issued to assessee is not sustainable - Moreover, Commissioner (A) in initial proceedings, has held that there is no positive evidence of clandestine removal, in that case, the proceedings against assessee is not sustainable at all - Therefore, impugned order is set aside: CESTAT - Appeal allowed : CHANDIGARH CESTAT
CX - Revenue is in appeal against impugned order of Commissioner (A) in which he has allowed the refund in respect of clearing and forwarding agent and custom house agent service under Notfn 41/12-ST - Under Rule 12 (1) (ii) of Drawback Rules referred to by revenue, a declaration is required to be made in respect of input services used in manufacture of export goods on which drawback has been claimed - As the services in question, namely, C&F agent service and CHA service are used at the port of export and after the goods have been manufactured, the provisions of Drawback Rule 12 (1) (a) (ii) are clearly not applicable to these services - As for the contention that notfn is not admissible when assessee have claimed drawback under Part-A of drawback schedule, revenue agrees that said clause does not exist in present Notfn 41/2012-ST - Accordingly, reasoning given by Commissioner (A) that there is no restriction under Notfn 41/12-ST to deny refund claim on availment of drawback under Part-A of drawback schedule cannot be faulted with - In this context, it is also relevant to mention that Central Government has amended Notfn 41/2012-ST by way of Notfn 1/2016-ST in which the clause relating to place of removal has been deleted and input credit on these services beyond the factory of production has been allowed the facility of refund under this notification: CESTAT - Appeal Dismissed : CHANDIGARH CESTAT
CX - A case was booked against assessee for taking inadmissible Cenvat credit on certain inputs which were later paid by assessee along with interest and penalty under Section 11AC of Act has been imposed on the main assessee and personal penalty under Rule 26 of CER, 2002 has also been imposed on other assessee - By filing these appeals, assessee is only challenging part of the penalty - Admittedly, no option has been given to assessee to pay 25% of duty as penalty within 30 days of adjudication order, in that circumstance, relying on decision of Supreme Court in case of Gohil Packaging Pvt. Limited, penalty on the main assessee M/s. Star Industries reduced to 25% of duty paid by them which admittedly has been paid by assessee along with interest even before issuance of SCN - Therefore, penalty on the main assessee is reduced to 25% of the duty involved, subject to payment by assessee within 30 days of receipt of this order, failing which the assessee is liable to pay 100% of duty as penalty, in terms of proviso to Section 11AC of the Act -
A penalty on Shri Bhavesh P. Bansali has been imposed under Rule 26 of CER, 2002, being a partner of main assessee - As in a partnership firm, if penalty has been imposed on main assessee, then no penalty can be imposed on partner of the firm, in terms of the decision of Gujarat High Court in case of Pravin N. Shah - Thus, penalty imposed on Shri Bhavesh P. Bhansali is set-aside: CESTAT - Appeal allowed : AHMEDABAD CESTAT
CX - During course of audit, it was observed that assessee had availed credit on 'Scrap Alternator' and 'Scrap Engine' purchased from their sister concern - The department was of the view that assessees are not entitled to cenvat credit as goods were not inputs and that assessee unit did not have melting facility or processing such scrap - Statement of second assessee Shri Ramesh P Prajapati was recorded on 06.01.2014, who admitted to the facts of availing cenvat credit on scrap - Accordingly, SCN was issued - Demand confirmed for recovery of incorrectly availed cenvat credit alongwith interest and equal penalty with an option of reduced penalty (@25%) if all the dues are paid within 30 days of said order - Personal penalty on second assessee was also imposed - From the entire findings and from records, it is noticed the capability of assessee for repairing, refurbishing these alternators and engines is not doubted, only failure to explain the same is being considered on presumptive ground they may not have undertaken the activity which would enable them to use the said alternator and engines in DG sets manufactured and cleared by assessee - First Appellate Authority has totally misconstrued the factual position, in as much as Shri Ramesh R Prajapati Authorised Signatory had in the statement recorded by authorities specifically stated that 'scrap alternator' and 'scrap engines' are to be used in manufacture of final product after repair and rectification - This is categorically averment in a statement recorded under Sec. 14 of CEA, 1944, has not been dispelled by Revenue by adducing any contrary evidence, which is in itself is enough proof in support of the point of assessee that they had utilised the scrap engines and alternators in manufacturing of DG sets after undertaking repairing and refurbishing of scrap alternators and engines - Impugned order is unsustainable and liable to set aside: CESTAT - Appeal allowed : AHMEDABAD CESTAT
CX - M/s AEPL is a trading firm but were the owners of brand names 'Eyeline' as well as 'Televista' - The documentary evidence recovered clearly show that M/s AEPL had sold goods with both the brand names - It is further on record that only M/s BE and M/s SI were allowed to manufacture goods bearing these two brand names - All the three firms viz M/s SI, M/s BE and M/s AEPL belonged to the same family and are controlled and run by Shri Vinod Kumar Garg as well as Shri K. M. Garg - Both of them are partners in M/s BE as well as M/s SI and are also directors in M/s AEPL - It is not difficult to see that all the three firms are managed and run as one single enterprise - Raw materials such as CPTs, sub assemblies have been shown as procured by M/s AEPL and also M/s BE through four fictitious firms who had their own bank accounts but did not have any physical presence - All the addresses were found fictitious - This clearly evidences the fact that the raw materials have been procured clandestinely by M/s AEPL - It stands admitted by Shri K.M. Garg, Director, M/s AEPL that these fictitious firms did not have any manufacturing facility and that the raw materials procured by M/s AEPL were only to make CTVs and further that the goods made by M/s BE and M/s SI were sold through M/s AEPL - The documentary evidences further reveal that such raw materials as well as CTVs were not properly accounted - The claim made by assessee that M/s BE was only manufacturing black and white TVs but were repairing colour television is not borne out by documents recovered during search - The documentary as well as oral evidences of case support the allegation of clandestine manufacture and clearance by M/s SI and M/s BE - No reasons found to interfere with impugned order which is sustained: CESTAT - Appeal Dismissed : DELHI CESTAT
CUSTOMS SECTION
Cus - One container was loaded with glass tumblers in factory of assessee - The container was stuffed under supervision of Central Excise officers and also sealed - The container after export was recalled by DRI and examined and it was found to contain 9.34 mt of red sander wood which is prohibited for export - Along with the contraband a part of declared goods i.e. glass tumblers was also found - Present appeals have been filed by assessee and their employees challenging the penalties imposed on them - The authorities below have imposed penalties on assessee by holding that they have failed to check genuineness of remittance received from overseas buyer - Further, the adjudicating authority held that this was a case of purchase order through email with 100% advance payments and assessee failed to check the antecedents of the new buyer and their act of omission and commission rendered the goods liable for confiscation. Statements have been recorded from Shri K.P. Singh and P.K. Tripathi, superintendents who supervised the loading of the export goods at assessees factory - They have confirmed that goods were loaded in their presence into the container and sealed with the custom seal - Further, from the statements recorded from Shri Anil Kumar, it is seen that he has clearly stated as to how the goods which were stuffed in the container were exchanged with red sander wood - In their statements, the superintendent and the inspector from Central Excise Department who were present at the time of supervision of loading of the container at the assessee 's factory have confirmed that export goods were stuffed in their presence and sealed - It is evident that none of assessees had any role to play in the fraudulent export of red sander wood - No justification found to impose penalty on any of assessees: CESTAT - Appeal allowed : DELHI CESTAT
Cus - During search conducted by Revenue, certain petroleum products were found, which were sent for testing to CRCL - Based on report furnished by CRCL, Revenue contended that the goods were of hazardous waste and attracted the provisions of Hazardous Waste Rules, 2008 - Department has merely proceeded against assessee for imposition of penalty on the ground that goods were clandestinely diverted by him to M/s. ESS ESS Traders, which were imported under cover of Bill of Entry - Since the Bill of Entry was filed by one M/s. Amar Chand & Sons and based on declaration furnished by him, Bill of Entry was assessed and Customs out of charge was given on 06.12.2012, it cannot be said that assessee had provided certain false or incorrect material in relation to such import - Further, Department was also in doubt as to the persons, who were actually filed the Bill of Entry for assessment purpose - Tribunal in case of assessee itself, in respect of the common investigation, has held that assessee cannot be made liable for imposition of penalty under Section 114 AA ibid - No merits found in impugned order, so far as it imposed penalty on assessee: CESTAT - Appeal allowed : DELHI CESTAT
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MISC CASE |
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TIOL PRIVATE LIMITED.
TIOL HOUSE, 490, Udyog Vihar, Phase - V,
Gurgaon, Haryana - 122001, INDIA
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Email: updates@tiol.in
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