Direct Tax Basket 2014-TIOL-2366-HC-MUM-IT + Story CIT Vs Shyam R Pawar Income tax - Section 68. Keywords - accomodation of cash - bogus & sham transaction - capital gain - contract notes - DMAT account - sale of share capital & unaccounted income. Whether discrepancy pointed out by a Stock Exchange regarding client Code in a share transaction, is sufficient to prove such transaction as a sham - NO: HC Whether payment on sale of shares can be treated as mere accommodation of cash, in case of availability of DMAT account showing credit of share transactions and contract notes from the brokers - NO: HC - Revenues appeal dismissed : BOMBAY HIGH COURT 2014-TIOL-2365-HC-AHM-IT CIT Vs City Gold Entertainment Pvt Ltd Income Tax - Sections 194C, 201(1) & 201(A). Keywords: any work - advertisement - supply of labour - TDS - theatre - films. Whether the intendment for professional services or service simplicitor which do not involve contract for carrying out any work itself or a contract for a labour for carrying out such services, are to be covered within the purview of section 194C - Whether the activity of exhibition of film by assessee in its theatre, supplied by the distributor, could fall within the category of work within the ambit of section 194C, in case the distributor gets his share as he has acquired rights of the distribution of the films in the particular area and no work is carried out by the distributor for which the payment is made. - Revenues appeal dismissed : GUJARAT HIGH COURT 2014-TIOL-2364-HC-DEL-IT CIT Vs Amar Nath Virender Kumar Income Tax - Sections 69A & 132. Keywords: Addition of income - Black money - Cash loan transactions - Search and seizure operations. Whether the action of AO making addition is justified on the ground that during search and seizure operations u/s 132 of some person involved in money lending business of black money, the documents collected, without a strong ground to believe, appearntly suggest the name of the assessee as one of the party involved in such transactions. - Revenues appeal dismissed : DELHI HIGH COURT 2014-TIOL-2363-HC-MUM-IT Virtuous Finance Ltd Vs DCIT Income Tax - Sections 80M, 115O, 143(3), 147, 148. Keywords: dividend received - deduction u/s 80M - reassessment of income. Whether when all conditions necessary for claiming deduction on the dividend received under Section 80M including the monetary cap of being less than the dividend distributed were satisfied, the AO can deny such benefit to the assessee, even if it is known that the deduction being claimed by the assessee u/s 80 M is not on the amounts which have been distributed as dividend by the Petitioner to its share holders and on which the tax is paid under Section 115O. - Assessees appeal allowed : BOMBAY HIGH COURT 2014-TIOL-2362-HC-P&H-IT CIT Vs Smt Kailash Grover Income Tax - Sections 142(1), 143(1), 143(2) & 154. Keywords: job work - fabrication charges - rectification - painting and flex related expenses Whether an assessee earning income from the activity of displaying of hoardings and wall painting is entitled to the deduction on account of hoarding, flex structure and paint as a necessary part of business being direct expenses - Whether the AO can reject such a claim of the assessee even when the books of accounts of assessee has been accepted by the Revenue. - Revenues appeal dismissed : PUNJAB AND HARYANA HIGH COURT 2014-TIOL-2361-HC-P&H-IT CIT Vs Harbhajan Singh And Co Income Tax - Section 44AD. Keywords - depriciation - gross receipts - net profit rate. Whether assessee is entitled to depreciation benefit if the gross receipts surpass Rs 40 lakhs - Whether reduction of net profit rate from 10% to 6% will give rise to substantial question of law when 6% is the past net profit rate, applied to the assessee and that there is no perceptible change, in the assessment year under consideration. - Revenues appeal dismissed : PUNJAB AND HARYANA HIGH COURT 2014-TIOL-1015-ITAT-CHD BBF Industries Ltd Vs JCIT Income Tax - Sections 80IB, 147 & 148 - Reopening of assessment, reassessment, change of opinion, subsidies - Whether mere change of opinion does not confer jurisdiction on the ITO to initiate proceeding for reassessment u/s 147 merely by resorting to explanation 1 to section 147 - Whether when any particular issue has been considered by the ITO and CIT(A) and when there is no failure to disclose the facts, the reassessment proceedings on similar issues are not valid - Whether the revenue subsidies received by the assessee would not be eligible for deduction u/s 80IB of the Act. - Assessee’s appeal partly allowed & Revenue’s appeal dismissed : CHANDIGARH ITAT Indirect Tax Basket SERVICE TAX SECTION 2014-TIOL-2615-CESTAT-MUM Forbes Marshall Pvt Ltd Vs CCE ST - Payment of Tax under reverse charge mechanism - Appellant failed to pay required tax for the months of March 2008 and March 2009, and the same was paid only on 1 st October 2009 - Simply because a situation leads to revenue neutrality does not imply that tax need not be paid on time - The time to be considered for interest purposes is the time between due date and payment day - It cannot be said that Government has not lost interest between two dates, notwithstanding the fact that Credit could have been availed on the same date if duty had been paid on time - Interest is payable under Section 75 of FA, 1994: CESTAT [Para 6, 8] ST - Penalty - appellants paying ST regularly, two transactions were missed due to oversight and tax could not be paid - Intention to evade payment of duty is not established when clearly appellants are eligible for taking CENVAT Credit as soon as duty is paid by them - penalties set aside - appeal disposed of: CESTAT [Para 7, 8] - Appeal disposed of : MUMBAI CESTAT 2014-TIOL-2614-CESTAT-MUM Millenium Beer Inds Ltd Vs CCE ST - Appellant entered into an amalgamation agreement with United Breweries Ltd on 01.04.2010 and proceedings completed on 30.11.2011 - As per Clause 2 of the scheme, amalgamation shall be effective from appointed date i.e it shall be effective on 01.04.2010 - Prima facie Bench is convinced with argument that appellant is manufacturing goods for themselves, therefore, they cannot provide service to themselves - ST demand not sustainable under category of BAS - definition of Section 2(f) is squarely applicable to the facts of this case, therefore, the appellants activity does not fall under category of BAS prior to 01.04.2010 also - Appellant has made out a case for complete waiver of pre-deposit - stay granted: CESTAT [Para 2, 6] - Stay granted : MUMBAI CESTAT 2014-TIOL-2613-CESTAT-MAD Malabar Hotels Pvt Ltd Vs CCE & ST Service Tax - Stay / dispensation of pre deposit - import of services - applicant is operating a hotel in the name of Asiana Hotels; entered into agreements with overseas providers to advice, assist, manage and operate the Hotel, distribution, reservation etc., and paid consideration in foreign exchange - Revenue viewed the same taxable under categories “Management or Business Consultancy Service and “Business Auxiliary Service under reverse charge and confirmed demands, agitated herein. Held: the preamble of the agreement indicates that the other company took fees to assist, manage and operate the hotel - consideration has been received as Management Fees - Prima facie, appears that the other company rendered the service as Management Consultant - applicant failed to make out a strong prima facie case for waiver of pre-deposit of the entire amount of dues, and is directed to make a pre-deposit of Rs.12,00,000/- (Rupees Twelve Lakhs only) within a period of eight weeks. [Para 4, 5] - Pre deposit ordered : CHENNAI CESTAT CENTRAL EXCISE SECTION 2014-TIOL-2369-HC-AHM-CX Krishna Screen Art Vs CCE CE - Clandestine manufacture and clearance without payment of duty - Tribunal has given its conclusion on the factual finding based on evidence on record - Such findings cannot be stated to be perverse - When the Tribunal is final fact finding authority, any interference in the factual conclusion of the Tribunal would be permissible only if it is demonstrated that such findings are perverse in the sense that the same are not based on evidence on record or that irrelevant evidence is taken into account - it would be incorrect to suggest that the conclusions of the Tribunal were based on a single factor namely un-retracted statement of the proprietor - placing reliance on a statement that was not retracted is not impermissible - no substantial questions of law arise - appeals dismissed: High Court [ para 6, 10, 11] - Appeals dismissed : GUJARAT HIGH COURT 2014-TIOL-2612-CESTAT-DEL Bright Shaft Industries Vs CCE CE - Appellant producing bright bars by conversion of rods and rounds - by treating the same as manufacture, appellant discharging CE duty by availing CENVAT credit of the duty paid on the inputs rods and rounds - department alleging that the conversion does not amount to manufacture and hence the appellant should not have paid the duty on the final product and should not have availed the credit on the inputs. Held - Matter is no longer res integra - once the appellants have discharged duty liability on their final product after availing CENVAT credit there is no justification to deny credit - duty paid has to be treated as reversal of credit - Appeal allowed: CESTAT [ para 2, 3] - Appeal allowed : DELHI CESTAT 2014-TIOL-2611-CESTAT-AHM STI Indusries Vs CCE CE - Notification No. 23/2003-CE dated 31.3.2003 - Appellant, a 100% EOU, clearing the goods in DTA to its own unit under stock transfer during the period Sept. 2009 to May 2011 and without paying any sales tax or special additional duty - Audit party took an objection to non-payment of SAD on the ground that clearance made to their sister concern would fall under the category of exempted from payment of sales tax hence they are liable to pay SAD. Held: Issue of demand of SAD on the goods cleared by 100% EOU to their own DTA Unit is decided in favour of the assessee in the case of M/s MICRO INKS Vs. CCE, DAMAN 2014-TIOL-258-CESTAT-AHM wherein the demands were set aside - No requirement to pay SAD though no sales tax is paid - Revenue appeal dismissed : CESTAT [ para 10] CE - Demand of CVD - No allegations for demand have been stated either in the show cause notice nor there are any reasoning in the impugned orders for confirmation of such demand - such demand cannot be confirmed as it is not in accordance with law - there is also strong force in the contention of the counsel as regard plea of revenue neutrality raised - there is no dispute that clearances were made by appellant to their own DTA Unit and the credit of SAD and CVD was available to the DTA Unit, hence the entire issue is revenue neutral - it cannot be said that there has been intentional evasion of payment of duty by the appellant-assessee - demands of CVD raised by invoking extended period of limitation are not sustainable and only the demand of CVD under normal period would survive: CESTAT [ para 11] CE - Limitation - goods were cleared on invoices indicating all the particulars and, therefore, there is no deliberate act on the part of the assessee to evade payment of duty - demands raised by invoking extended period of limitation on this count are not invokable - Since most of the demand is set aside, having held that there was no intention to evade duty, penalties imposed are unwarranted and they are set aside: CESTAT [ para 11] - Revenue appeal dismissed/Assessee Appeal disposed of : AHMEDABAD CESTAT 2014-TIOL-2610-CESTAT-DEL CCE Vs Q H Talbros Ltd CENVAT - Rule 2(l) of CCR - Whether Outdoor catering service for providing the canteen facility for the workers are Input services - as per the provisions of s. 46 of the Factory Act, 1948, every factory having 250 workers or more, is required to provide canteen facility to the workers - In view of this, providing of canteen facility to the workers has to be treated as an activity in or in relation to the manufacture of final products as without compliance with the provisions of Factories Act, an assessee would not be allowed to conduct the manufacturing activities - Credit admissible: CESTAT [ para 8, 8.1] CENVAT - Rule 2(l) of CCR - Banking and financial services, whether are Input services - issue stands decided in favour of the respondent by the judgement of the Tribunal in the cases of JSW Steel Ltd. ( 2008-TIOL-2351-CESTAT-MAD ) and MPI Machines Ltd . 2013-TIOL-1186-CESTAT-DEL - Credit admissible: CESTAT [ para 7] - Revenue appeal dismissed : DELHI CESTAT CUSTOMS SECTION 2014-TIOL-2370-HC-DEL-NDPS + Story Nnadi K Iheanyi Vs Narcotics Control Bureau NDPS Act, 1985 - Failure to examine the panch witness - in a case where the NCB specifically names a public witness as being associated in the arrest and seizure, its failure to produce such person for cross-examination must be specifically explained by it - In the present case the failure to produce the public witness was attributable to a false address given for the witness. This raises serious doubts as to whether such a witness existed at all. It will amount to falsification of the trial Court record if the thumb impression on the arrest and seizure memo is attributed to a witness who is not able to be produced and it is shown that the address given for him, even in the first instance in the summons issued by NCB, was false. This casts serious doubts on the trustworthiness of the prosecution version and in that circumstance the benefit of doubt should certainly go to the accused Variation in test results of first and second set of samples - While the literature shows that even in the same set of samples from the same source, there is possibility of differences in percentages on account of hydrolysis of DAM into MAM, they do not explain the possibility of total absence of constituents in the second set of samples. In the instant case, this raises a doubt to whether both the set of samples were from the same source. The Court, on a careful perusal of the evidence of the expert evidence in the present case is not satisfied that the prosecution has been able to explain the considerable variation in the purity percentages of DAM in the two samples sent for testing. Even on this score, the Court is inclined to grant benefit of doubt to the Appellant. Trial Court order convicting the appellant is set aside - ordered his release if not wanted in some other case. - Appeal allowed : DELHI HIGH COURT 2014-TIOL-2609-CESTAT-MUM + Story Santosh M Jain Data International Vs CC Cus - S.129E of Customs Act, 1962 - A one line sentence that the case involves a pre-meditated modus operandi and is a prima facie case in favour of revenue cannot constitute an order of pre-deposit - since no sufficient reasons given, matter remanded to Commr(A) for disposal of appeal on merits: CESTAT [para 5.1, 5.2, 5.3] - Matter remanded : MUMBAI CESTAT
Posted on: Fri, 26 Dec 2014 10:28:12 +0000
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