Direct Tax Basket DIT, SYSTEMS NOTIFICATION Notification for Extension of date for receipt of ITR-Vs in CPC, Bengaluru, for the cases of AY 2012-13 and 2013-14 received/e-filed in FY 2012-13- Reg. OFFICE MEMORANDUM Highlights of the Video Conference held on 20.03.2014-reg CASE LAWS 2014-TIOL-27-SC-IT + Story Union of India Vs M/s Tata Chemicals Ltd Income Tax - Section 143, 115WE, 115WJ, 156, 195(2), 199, 214, 240, 243, 244A(1)(b), 273A, Circular Nos 549 of 1989, 769 & 790 of 2000 - interest on refund - Direct Tax Laws (Amendment) Act, 1987 - reimbursement of expenses - service charges - golden rule of interpretation - substantive right to interest - “other proceedings under the Act” - Whether the statutory obligation to refund carries with it the right to interest also - Whether when the assessee deposits tax as per an order passed u/s 195(2), the Revenue is under obligation to pay interest on refund processed as per the appellate order - Whether interest obligation arises for the Revenue in every case where excess tax paid has been retained by the State for its own enjoyment. - Revenues appeal dismissed : SUPREME COURT OF INDIA 2014-TIOL-344-HC-ALL-IT CIT Vs G M (Telecom), BSNL Penalty - There can be no dispute about the fundamental principle of law that ignorance of law is no excuse - Section 273B of the Act, however, stipulates that notwithstanding anything contained in Section 271C , no penalty shall be imposed on a person or assessee for any failure to deduct tax at source, if it is proved that there was a reasonable cause for such failure - CIT(A) has exercised his discretion particularly having regard to the fact that at the relevant time, there was a decision in Idea Cellular Ltd. and in view whereof the assessee was under a bona fide belief that tax was not liable to be deducted on commission/trade discount - this view which has been sustained by Tribunal is legal and proper - Revenue appeal does not give rise to any substantial question of law, hence dismissed: ITAT [ para 5, 6] - Appeal dismissed : ALLAHABAD HIGH COURT 2014-TIOL-343-HC-DEL-IT Anand Kumar Vs CIT Income Tax - Sections 56, 80HHC, 143(3), 260A - Fixed Deposit Receipts - Whether interest income earned on Fixed Deposit can be considered as business income - Whether deduction u/s 80HHC in respect of interest earned on Fixed Deposit receipts is allowable on net basis. - Assessees appeal dismissed : DELHI HIGH COURT 2014-TIOL-342-HC-DEL-IT M/s Dewan Chand Ram Chandra Industries Pvt Ltd Vs UoI Income Tax - Section 10(15)(iv)(c) - mining - research - foreign currency loan - Whether extracting mineral oil is covered within the meaning of mining activities - Whether an industrial undertaking having oil fields and excavating or winning oil from oil fields, would be considered as engaged in mining activities - Whether while dealing with a provision/clause capable of two constructions, it might not be easy to make a choice particularly, when both constructions would lead to some anomaly - Whether the term engage means a single transaction or it involves continuity of action. - Assessees writ allowed : DELHI HIGH COURT 2014-TIOL-341-HC-MUM-IT DIT Vs Jamshetji Tata Trust Income Tax - Sections 10, 11, 12 - Whether the denial of benefit u/s 11 would deprive the assessee of Sec 10 benefits also. - Case remanded : BOMBAY HIGH COURT 2014-TIOL-340-HC-MUM-IT M/s Procon Financial And Investment Pvt Ltd Vs CIT Income Tax - Writ Petition - Sections 143(3), 147, 148 - Whether the jurisdictional requirement for issuing a notice u/s 148 beyond the period of 4 years is satisfied when there is no averment also in the reasons for reopening the assessment that there has been any failure on the part of the petitioner to truly and fully disclose all material facts necessary for assessment. - Assessee’s Writ Petition allowed : BOMBAY HIGH COURT 2014-TIOL-339-HC-AHM-IT CIT Vs Hiraben Govindbhai Patel Income Tax – Stamp Valuation authority – purchase consideration – capital gains - Whether the sales consideration recorded as per the sles deed made by the assessee has priority over the value as determined by the stamp valuation authority – Whether in case no specific evidence is referred to by the Assessing Officer about the allegation that assessee has been paid any amount in excess of the price as disclosed in the documents, any addition in the sales consideration can be made. - Revenue’s appeal dismissed : GUJARAT HIGH COURT 2014-TIOL-150-ITAT-MUM + Story Sudhir Menon HUF Vs ACIT Income Tax - Sections 2(22)(a), 2(24)(xv), 2(45), 4, 10, 12AA, 14, 25, 45, 49, 49(4), 52, 52(1), 52(2), 55, 55(2)(aa), 56(2)(v), 56(2)(vii), 56(2)(vii)(c), 68, 69/69A/69B/69C, 81, 110, 122, 143(3) - extinguishment of rights - transfer - bonus shares - right shares - Whether the provisions of section 56(2)(vii) apply to all capital assets, including bonus and rights shares offered on proportionate basis even if the offer price is less than the fair market value - Whether in case the value of the property in the additional shares is derived from that of the existing shareholding, it can be presumed that additional property have been received by the shareholder - Whether in case there is no disproportionate allotment, shares are allotted pro-rata to the shareholders, based on their existing holdings, there is any scope for any property being received by them on the said allotment of shares - Whether in case the value of additional shares is derived from that of the existing shares, the decline in the value thereof can be excluded from valuation - Whether purchase or transfer implies existence of a property, while the shares, where out of un-appropriated capital, come into existence only on their allotment - Whether the consequences can alter the meaning of a statutory provision, even where such meaning is plain and unambiguous. - Assessees appeal partly allowed : MUMBAI ITAT Indirect Tax Basket SERVICE TAX SECTION 2014-TIOL-433-CESTAT-MUM + Story M/s Graphite India Ltd Vs CCE ST - Commercial or Industrial Construction Services - Lowering, laying, jointing and testing GRP pipes for Gujarat Industrial Development Corporation is taxable service as GIDC is a corporation primarily undertaking development of infrastructure for industries - Appeal dismissed: CESTAT Limitation - In none of the Returns filed, they have indicated that they are rendering the services to GIDC or the amount of consideration received for such services - demand not time-barred. Penalty - appellant had not shown any reasonable cause for failure to discharge of Service Tax liability inasmuch as they were well aware of the provisions of law as they were discharging the Service tax liability in respect of the very same activity undertaken for other entities - waiver not available u/s 80 of FA, 1994. - Appeal dismissed : MUMBAI CESTAT 2014-TIOL-432-CESTAT-MAD The Kalpakkam Industrial Co-Operative Service Society Ltd Vs CCE Service Tax - Stay / dispensation of pre deposit - Classification of service - applicant is a co-operative society registered under the Societies Act and administered by Special Officer of Govt. of Tamil Nadu, claiming to have merely supplied manpower during material period - Revenue viewed that the service actually rendered to Madras Atomic Power Station for maintenance works in Reactor Building Group in Civil Service and others was classifiable under “Management, Maintenance & Repair service - tax demands confirmed with interest and penalty in adjudication; Commissioner(Appeals) rejected their appeal for non compliance of stay order; and agitated herein. Held: Work Order No. NPCIL/MAPS/KINCOSS/2007-2008 dt. 2.8.2007 reveals that the works are in relation to maintenance work - prima facie applicant failed to make out a case for waiver of predeposit of entire amount of tax along with interest and penalty - considering the financial hardship of the co-operative society, applicant to deposit a sum of Rs.10,00,000/-. - Pre deposit ordered : CHENNAI CESTAT CENTRAL EXCISE SECTION NON-TARIFF NOTIFICATIONS exnt14_16 Specifying nature of restrictions and procedure for issue of orders by Chief Commissioner - notification issued under rule 12CCC of CER, 2002/12AAA of CCR, 2004 exnt14_15 Rule 12AAA of CCR, 2004 substituted - Misuse of CENVAT - Power to impose restrictions in certain types of case - now, Chief Commissioner to pass orders - pending proposals to be governed under substituted rule exnt14_14 Rule 12CCC of CER, 2002 substituted - Evasion of duty - default in duty payment - Power to impose restrictions in certain types of cases - now, Chief Commissioner to pass orders - pending proposals to be governed under substituted rule. exnt14_13 Notification 6/2012-CX(NT) authorizing Member (CX) to withdraw f acilities and impose restrictions on delinquent assessees rescinded CASE LAWS 2014-TIOL-431-CESTAT-MUM + Story Ajinkya Enterprises Vs CCE CE - A miscellaneous application is not a substitute for an appeal as provided for in the law - Application dismissed: CESTAT by Majority - Application dismissed : MUMBAI CESTAT 2014-TIOL-430-CESTAT-DEL M/s Bellsonica Auto Component India Pvt Ltd Vs CCE Central Excise – Cenvat credit – appellant, manufacturer of sheet metal components for automobiles, availed credit of the service tax paid by the service providers on the rent for the land and on the charges for erection, installation, and commissioning service under Rule 2(l) of the Cenvat Credit Rules 2004, denied in adjudication confirming demand for recovery of credit with interest and penalty; agitated herein. Held: During material period, definition of input service is very vide and would cover all the services relating not only to erection, installation, commissioning of the plant and machinery, but also the services used in relation to construction of the office premises within the factory – impugned services to be treated as an input services used in or in relation to manufacture of final product (auto components) and would be eligible for credit - rental of immovable property has also been used in or in relation to manufacture of final product as it is on the land rented by the appellant that the factory for manufacture of auto components has been set up, having clear nexus with the manufacture of final product and has to be treated used in or in relation to, whether directly or indirectly in the manufacture of final product and would be covered by the definition of input service – findings in impugned order totally wrong; unsustainable and set aside. - Appeal allowed : DELHI CESTAT 2014-TIOL-429-CESTAT-MUM M/s Sanjivani Paranteral Ltd Vs CCE CENVAT - When the input credit was taken by the appellant, the final product was dutiable and which became exempted later-on, therefore, the appellant is not required to reverse the credit - sub-rule (3) inserted in rule 11 of the CCR, 2004 by notification 10/2007-CE(NT) dated 01/03/2007 is not applicable retrospectively - issue no longer res integra - appeal allowed with consequential relief: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT 2014-TIOL-428-CESTAT-MAD Unimech Industries Pvt Ltd Vs CCE Central Excise - Stay / dispensation of pre deposit - Cenvat credit - removal of capital goods as such to other unit - demand for reversal of credit under Rule 3(5) of the Cenvat Credit Rules 2004 under dispute herein. Held: Most of the capital goods were used approximately within a span of 3 to 6 months, hence prima facie the decisions relied upon by the appellant inapplicable, stand distinguished on facts and law - applicant to make a pre-deposit of Rs.3,00,000/- (Rupees Three lakhs only) within 6 weeks; and upon compliance, pre-deposit of balance duty along with interest and penalty would be waived and its recovery stayed during pendency of the appeal. - Pre deposit ordered : CHENNAI CESTAT 2014-TIOL-423-CESTAT-DEL + Story M/s Essar Packaging Pvt Ltd Vs CCE & ST Central Excise – Stay/Dispensation of pre-deposit – Printing of laminated / unlaminated poly films – Whether amounts to manufacture – Per Member (J) - whether the process of printing as well as on lamination of printed poly film amounts to manufacture or not has to be considered in the light of different judgements on the issue. Prima facie it is to be viewed that even if the printing amounts to manufacture, the final product which emerges would be printing under Printing Industries Act, thus classifiable under Chapter 49 which attract nil rate of duty. Taking into consideration that a part of the demand would be within the limitation period and considering that the appellant has already deposited an amount of Rs.40 lakhs , the offer to further deposit of amount of Rs.20 lakhs as fair offer. Contra Per Member (T) - Appellants contention that the lamination does not amount of manufacture by relying upon the decision of the Supreme Court in the case of (2004-TIOL-77-SC-CX) is not relevant to the facts of case - It has been held in that case that laminating/metalizing duty paid film does not amount of manufacture as the film remains a film and no new and distinct product comes into existence. As per facts of the present case, a new and distinct commodity comes into existence which is printed and laminated plastic film. Therefore, the piecemeal plea of the party that lamination does not amount to manufacture as final product is printed material exempt under chapter 49 is not at all sustainable in the facts and circumstances of the present case - It is clear that balance of convenience is in the favour of revenue - Interest of justice shall be met if appellant are directed to make pre-deposit of Rs. 1.00 (one crore ) as a condition for hearing the appeal in addition to Rs. 40 lakh already deposited during investigation. - Referred to Third Member : DELHI CESTAT (BEING SENT AGAIN WITH CORRECTIONS) CUSTOMS SECTION NON-TARIFF NOTIFICATION cnt14_024 CBEC notifies new Customs Exchange rates effective from March 21, 2014 CASE LAW 2014-TIOL-427-CESTAT-MUM Sanjay Vasantlal Shah Vs CCE Cus - duty free imported capital goods clandestinely removed in violation of the conditions - as the appellant has not appeared before the Tribunal for final hearing in spite of service of notice, stay granted earlier from recovery of penalty is vacated and Revenue is free to recover the adjudged dues: CESTAT [para 1] - Stay vacated : MUMBAI CESTAT
Posted on: Fri, 21 Mar 2014 13:39:26 +0000
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