2014-TIOL-1510-HC-DEL-IT + Story CIT Vs Gulab Sundri Bapna Income tax - Sections 45(5), 48(2), 54, 54F & 55(2) - Land Acquisition Act - Sections 4, 6 & 18 Keywords - cost of acquisition - capital gains - ownership - occupation over property - lease - sub-lease - tenancy rights - quantum of compensation Whether no capital gains tax is to be levied if no value is attributed to the tenancy rights - Whether, for the purpose of taxation, cost of acquisition of tenancy right is to be taken as NIL in case of enhanced compensation - Whether enhanced compensation can be taxed only when the original compensation was taxed. - Revenues appeal allowed : DELHI HIGH COURT Also see analysis of the Order 2014-TIOL-1509-HC-DEL-IT CIT Vs T G Buildwell Pvt Ltd Income Tax - Section 260A Keywords - AS 2 - AS 7 - capitalized - pre-operative expenditure Whether expenditure incurred on a project can be capitalized, although it has already commenced and is in its initial stage - Whether the AO was correct in not applying AS-9, although the assessee is engaged in a construction contract business - Whether the AO should have given reasons for non applicability of AS-2, when the same was considered by the assessee for computing its income. - Revenues appeal dismissed : DELHI HIGH COURT 2014-TIOL-1508-HC-DEL-IT CIT Vs Star Finvest Pvt Ltd Income Tax - Sections 14A, 143(3), 147 & 148, Rule 8D Keywords - disclosed particulars- reassessment - retrospective Whether the AO can initiate reassessment proceedings even when the assessee has made complete disclosure in its return - Whether section 147 can be invoked when the AO had all the information required and the issue could have been examined and considered in the first/original assessment order itself. - Revenues appeal dismissed : DELHI HIGH COURT 2014-TIOL-1507-HC-AP-IT CIT Vs Y Ramachandra Reddy Income Tax - Sections 32, 36(1)(iii) & 144 Whether depreciation and interest, which are otherwise deductible in the ordinary course of assessment, remain the same legal character, even where the profit of assessee is determined on percentage basis. - Revenue’s appeal dismissed : ANDHRA PRADESH HIGH COURT 2014-TIOL-613-ITAT-MUM ACIT Vs Iqbal M Chagala Income Tax - Section 14A, Rule 8D. Whether when the assessee has not claimed any expenditure relating to its investments in the P & L account, the onus is on the AO to prove that out of the expenditure incurred under various heads were related to earning of exempt income - Whether the AO can merely presume that the assessee must have incurred some expenditure under the heads salary, telephone and other administrative charges for earning the exempt income - Whether the AO can adopt the formula of estimating expenditure on the basis of a certain percentage of assessees investments, although the justification for calculating such disallowance u/s 14A is missing. - Revenue’s appeal dismissed : MUMBAI ITAT 2014-TIOL-612-ITAT-DEL Hindustan Fibres Ltd Vs DCIT Income Tax - Sections 28(iv) & 4. Whether waiver of loan by financial institution is to be treated as income at the hands of the assessee - Whether waiver or writing off loans on working capital which was received for carrying out day to day operations of the assessee, can be treated as income in the hands of the assessee. - Assessee’s appeal allowed : DELHI ITAT 2014-TIOL-611-ITAT-DEL ACIT Vs Diamond Hut India (P) Ltd Income tax - Sections 69, 131, 145. Keywords - cash credit limit , estimate basis, stock statement, unexplained investment Whether additions to the assessees income could be made on the ground of differences in the value of stock as per stock statement submitted by the assessee to the bank against the value of stock statement furnished during the assessment proceedings - Whether provisions of section 145 would be applicable in a case where addition to income of assessee was made on account of unexplained investment u/s 69 - Whether stock statement for gold and diamond items furnished by the assessee on estimate basis could be inferred as such that the assessee had not disclosed the excess stock to banks - Whether an assessee could declare higher quantity of closing stock for the purpose of obtaining higher cash credit limit from the bank. - Revenue’s appeal dismissed : DELHI ITAT 2014-TIOL-610-ITAT-AHM Chartered Motors Pvt Ltd Vs ACIT Income tax - Sections 68 & 131. Keyword - creditworthiness - genuine transaction, - investment - undisclosed income- share application. Whether when the assessee has discharged its onus to prove genuineness of a transaction in relation to any investment u/s 68, the burden can be said to have shifted to the Revenue to prove ingenuity of such transactions - YES: ITAT - Assessees appeal allowed : AHMEDABAD ITAT Indirect Tax Basket SERVICE TAX SECTION 2014-TIOL-1680-CESTAT-MUM + Story Westin Hospitality Services Pvt Ltd Vs CST ST - Outdoor Catering Service - Appellant supplying ready-to-serve food to Khanna Hotels Pvt. Ltd. - whether the food prepared is served by employees of KHPL or by the appellant himself requires verification - Matter remanded: CESTAT [para 6, 7] - Matter remanded : MUMBAI CESTAT 2014-TIOL-1679-CESTAT-MUM Triveni Coal Transport Pvt Ltd Vs CCE ST - Cargo handling service - appellant receiving work order from M/s. Western Coalfields Ltd. for transportation of coal from Saoner Group of Mines to B.G. Railway Siding and for hiring pay loaders for wagon loading at the Saoner B.G. Siding - Orissa High Court in the case of Coal Carriers vs. CCE &ST, Bhubaneswar has held that the activity such as hiring of pay loader for mechanical transfer within the mining area, which is similar to the activity undertaken by the appellant, comes under the service of taxable service of Cargo handling service – no merit in appeal so dismissed: CESTAT [Para 7, 8] - Appeal dismissed : MUMBAI CESTAT 2014-TIOL-1678-CESTAT-MAD M/s Vodafone Cellular Ltd Vs CCE, C & ST Service Tax - Stay / dispensation of pre deposit - Sponsorship Service under Section 65 (105) (zzzn) of Finance Act, 1994 – applicant, a provider of Cellular Mobile Telephone Service to their subscriber in Tamilnadu Circle – Tax Demand adjudicated on the amount paid towards sponsorship to Cricket Tournament, namely, ICC World Cup and IPL, agitated herein. Held: Sponsorship of sports events excluded from definition prior to 01.07.2010; Tribunal consistently viewed demand prima facie unsustainable in similar cases; hence prima facie strong case for waiver on this issue – applicant made a provisional arrangement for sponsorship in the books of accounts for every year, which was reversed in the subsequent financial year - strong prima facie case for waiver of pre-deposit of entire amount of tax along with interest and penalty till disposal of the appeal. - Stay granted : CHENNAI CESTAT CENTRAL EXCISE SECTION 2014-TIOL-1677-CESTAT-MUM + Story Jindal Stainless Steelway Ltd Vs CCE CX - Apart from undertaking the activity of cutting and slitting of coils appellants are doing the activity of putting of layer of plastic for improving drawability of material, and applying inter-leaving paper for protection of the material so as to be fit for end use application - such activity is ancillary to completion of the manufactured product and, therefore, amounts to manufacture in terms of section 2(f)(i) of CEA, 1944 read with Board letter 4/3/2006-CX.I dated 19.06.2006 - no cause for reversal of CENVAT credit taken on capital goods, inputs and input services - extended period of limitation is also not invokable - paying of duty on activity undertaken amounts to reversal of credit taken - orders set aside and appeals allowed: CESTAT - Appeals allowed : MUMBAI CESTAT 2014-TIOL-1676-CESTAT-MUM Conros Steels Pvt Ltd Vs CCE CX - Default - Rule 8(3A) of CER, 2002 - Prohibition under Rule 8 (3A) for utilizing CENVAT Credit account is not with reference to the arrears but to the entire credit lying in the account and, therefore, the assesse has to pay excise duty through account current for each consignment at the time of removal - Since CENVAT Credit was unavailable, utilizing the same for payment of duty was an exercise in nullity and could not be recognized as payment towards duty - s.11A/11AB of CEA, 1944 correctly invoked: CESTAT Background: CE - Rule 8(3A) of CER, 2002 - default in payment - Appellant defaulted in payment of duty amounting to Rs. 4,18,97,700/- for the month of September 2008 and had paid the same with interest of Rs.1,28,23,375/- vide challan in April 2011 - SCN issued to the appellant proposing to demand excise duty of Rs.13,43,70,490/- and which has been confirmed along with interest, penalty and appropriation of the amount deposited - Appeal before CESTAT. Held : Out of the amount of Rs.13,43,70,490/-, assessee discharged duty liability to the extent of Rs.2,38,10,995/- through PLA and Rs.11,05,59,585/- through CENVAT account - discharge of duty liability through CENVAT account during the period of default is clearly prohibited under rule 8(3A) - this amount should have been paid in cash along with interest and, thereafter, the assessee should have been allowed to take re-credit in CENVAT account - prohibition under Rule 8 (3A) for utilizing CENVAT Credit account is not with reference to the arrears but to the entire credit lying in the account and, therefore, the assesse has to pay excise duty through account current for each consignment at the time of removal - Since CENVAT Credit was unavailable, utilizing the same for payment of duty was an exercise in nullity and could not be recognized as payment towards duty and, therefore, there is a short payment of duty which is recoverable invoking s.11A of the CEA, 1944 - consequently, liability to pay interest u/s 11AB also arises - however, the adjudicating authority has committed an error by holding that the payment made through CENVAT Credit account during the default period is sufficient which is not what the law mandates - matter remanded for quantifying the duty demand liable to be paid in cash and also the interest liability: CESTAT [Para 3, 4.4] - Matter remanded : MUMBAI CESTAT 2014-TIOL-1675-CESTAT-MUM M/s Parle Products Pvt Ltd Vs CCE CX - Classification - “Cheeselings” manufactured by the appellant - for previous period Tribunal has observed that whether product would be called Namkeen or not is debatable and after taking notice that the appellant would be entitled to CENVAT credit ordered pre-deposit - on similar lines, appellant is ordered to make a pre-deposit of Rs. 24 lakhs and report compliance: CESTAT [Para 4] - Pre deposit ordered : MUMBAI CESTAT 2014-TIOL-1674-CESTAT-MAD M/s Sanmar Foundries Ltd Vs CCE & ST Central Excise - Stay / dispensation of pre deposit – CENVAT credit - Appellant, manufacturer of Steel Castings, availed input services credit on ‘MRS of helicopter; ‘Rent-a-cab, ‘contract bus services; and Management Consultancy service – Revenue viewed credit inadmissible, adjudged recovery, agitated herein. Held: Applicant contended in the reply to show cause notice that they have paid service tax whenever the helicopter was used by the Group Company and they were raising invoice on the group company - Prima facie, force in this submission. Regarding the denial of credit on Management Consultancy Service, the applicant availed the impugned credit based on the fact that Shri Sankar, Group Chairman of the Company was providing Management Consultancy Services to the applicant and raised invoices for the services rendered and service tax was paid on those services by the applicant unit and service was rendered to other units also - Hence on this issue, the applicant failed to make out a prima facie case for waiver of entire amount of tax. Regarding the denial of credit on Rent a cab and contract bus services, the applicant is not seriously contesting this issue considering the earlier stay order. Applicant directed to make pre-deposit of an amount of Rs. 12,00,000/- (Rupees Twelve lakhs only) within a period of eight weeks. - Pre deposit ordered : CHENNAI CESTAT 2014-TIOL-1673-CESTAT-KOL M/s Thakur Prasad Sao And Sons Pvt Ltd Vs CCE, C & ST Central Excise - CENVAT credit - Appellant availed credit on items like M.S.Angles, Channels, Beams, Plates, flats, G.C./G.P. Sheets etc., used in the manufacture of capital goods under Rules 2(a) and 2(k) of the Cenvat Credit Rules 2004 - Revenue viewed that the credit was inadmissible inasmuch as the impugned items were used in fabrication of structurals not related to capital goods as defined as Rule 2 (a) - credit denied, demand for recovery of credit with interest and penalty adjudged and agitated herein. Held: Periodical show cause notices alleging wrong availment of cenvat credit on various items, namely, M.S.Angles, Channels, Beams, Plates, flats, G.C./G.P. Sheets etc., claimed to have been used in the fabrication of capital goods, have been adjudicated - Rebutting the allegation of the Department on the use of the said items in structurals of the plants and machinery, the Appellant had furnished Chartered Engineers Certificate claiming that these items were used in the fabrication of various machineries, which are nothing but Capital Goods as defined under Rule 2 (a) of Cenvat Credit Rules, 2004 - Adjudicating Authority initiated factual verification of the Appellants claim; jurisdictional ROs verification report explaining the use of disputed items was not supplied to appellant, resulted in violation of principle of natural justice - appropriate case for remand for deciding the issue afresh after taking into consideration the submission, if any, that would be filed by the Appellant on the said Report - Commissioner directed to complete the process of adjudication within a period of four months from the date of communication of this order. - Matter remanded : KOLKATA CESTAT
Posted on: Fri, 05 Sep 2014 09:42:57 +0000
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