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TIOL COMMENTARY C&F Agent – Clearing Agent – Commission Agent – Confusion Agent? Back to Square One with Karnataka High Court's latest judgement; CBDT game for 20-20 but needs to sweat a lot! MIXED BUZZ TRAI, Japanese body MIC join hands for promotion of telecom; SPMCIL to print tickets for ASI monuments; Addl Judges appointed for AP, HP and Patna High Courts; |
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CBDT new Member Prakash Chandra gets IT charge; NOTIFICATION TDS - CBDT notifies Rural Electrification Corp u/s 194A; CASE LAWS CIT, Bangalore Vs M/s Sunrise Sales Corpn (Dated: November 24, 2009) Income tax - Sec 132 - block assessment - Revenue alleges Tribunal reversed AO's order without considering the evidence culled during the search and seizure operations and application of mind - held, from Tribunal's order it appears that it has not applied its mind and looked into evidence furnished - issue remanded:KARNATAKA HIGH COURT; CIT, Coimbatore Vs M/s Annamalai Finance Ltd (Dated: November 2, 2009) Income tax - Sec 145 - Assessee is in lease and finance business - it follows mercantile system of accounting but complies with cash system so far as collection of overdue financial charges on hire purchase and lease transactions go - Revenue for tax on accrual basis - Assessee pleads for cash system - CIT(A) and Tribunal support the plea of the assessee - held, as long as a change in method of accounting does not lead to tax evasion, the Revenue cannot have any grievance - deletions made by the Tribunal upheld - Revenue's appeal dismissed:MADRAS HIGH COURT; Bimal Chimanlal Shah Vs DCIT (Dated: September 4, 2009) Income Tax - Sec 148 - The case of the petitioner selected for scrutiny and assessment framed u/s 143 (3) - Sec 148 notice for re-assessment after 4 years - Assessee submits that from the reasons supplied, it appears that the surrender value of the tenancy rights which has been received by the petitioner and allowed as exempted from the levy of income tax in the original assessment order is sought to be treated as taxable income and, therefore, the impugned notice came to be issued and hence, it is nothing but change of opinion on the part of the Revenue without there being any new information or material coming to his knowledge – Held, when the action itself is without jurisdiction, the ratio of the Apex Court in the case of Calcutta Discount Company Limited is squarely applicable - decision of the Apex Court in GKN Driveshafts (India) Limited does not lay down that when such an objection is in relation to the absence of jurisdiction and the same is revealed ex-facie or apparent on the face of a notice or reasons in support thereof, the assessee has compulsorily to invite an order from the AO in relation to the absence of jurisdiction. The present case also proceeds, more or less, on the same footing of the Bombay High decision in Caprihans India Limited, and this Court arrives at the same conclusion. Assessee's petition allowed.:GUJARAT HIGH COURT; CIT, Ludhiana Vs M/s Pearl Woolen Mills (Dated: November 12, 2009) Income tax - Sec 254(2) - Assessee is a manufacturer of woolen yarn - AO makes addition for unaccounted stock pledged with the bank and not accounted for in the books - CIT(A) partly upholds the addition - Tribunal retores the addition made by the AO - Assessee files ROM application u/s 254(2) - Tribunal dismisses it - after nine months a fresh ROM application is filed - Tribunal opts to readjudicate the case - held, Tribunal cannot readjudicate the matter under Section 254 (2). It is well settled that a statutory authority cannot exercise power of review unless such power is expressly conferred. There is no express power of review conferred on the Tribunal. Even otherwise, scope of review does not extend to rehearing of a case on merits - Revenue's appeal allowed:PUNJAB AND HARYANA HIGH COURT; 2010-TIOL-14-ITAT-MUM.pdf + huf story.pdf K K Goel (HUF) Vs ACIT, Mumbai (Dated: December 8, 2009) Income tax - Sec 269SS, 69B, 271D and 2(22)(e) - Assessee is an HUF - it earns income from house property and other sources - Search u/s 132 conducted - AO notices the assessee has purchased a flat and received huge cash payment from a company - Assessee pleads that the cash payment was towards purchase of 40% share in the flat and the sum was given for interior decoration work - Revenue treats the same as unexplained cash u/s 69B and makes additions and imposes penalty u/s 271D - AO further treats the same in the assessment order as loan from the company till the time the share is transferred to the company - CIT(A) deletes the addition - held, ++ There is a contradiction in the assessment order in the sense that the cash payment cannot be a loan as well as the assessee's income at the same time. This contradiction invalidates the satisfaction or belief of the Assessing Officer that the assessee committed a violation of section 269SS. The very initiation of penalty proceedings on such contradictory findings is invalid. ++ it is not possible to treat the cash payment by the company for purchase of the property as a loan made to the assessee in cash even by implication. Generally, a loan or deposit of money would carry interest but in the present case there is no such finding. One of the essential characteristics of a loan is absent. ++ Even assuming that the company made the cash payment to enable the assessee to acquire the flat in its own name, still it cannot be said to be a loan since it was never intended to be repaid. An essential feature of a loan is that there is an agreement to repay the same. Thus, there is no justification for holding the same to be a loan given by the company to the assessee in contravention of section 269SS. ++ It would appear that the CIT(A) had not only deleted the addition made under section 69B, but had also held that the addition cannot be made even under section 2(22)(e) of the Act as deemed dividend. The Tribunal affirmed the finding of the CIT(A) to the effect that, since the assessee HUF was not a shareholder in the company . The Tribunal had also affirmed the decision of the CIT(A) to delete the addition made under section 69B. ++ Penalty imposed u/s 271D is not sustainable.: MUMBAI ITAT; |
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SEZ - INSTRUCTION Implementation of the provisions of the SEZ Act and SEZ Rules, 2006;
SERVICE TAX SECTION 2010-TIOL-20-HC-KAR-ST.pdf + st story.pdf CCE, Bangalore Vs M/s Mahaveer Generics (Dated: November 24, 2009) Service tax – C&F Agent – Commission agent also acting as a consignment is covered within the definition of C&F Agent: the assessee having given the authority and power to appoint dealers, stockists and distributors it is clear that it is not a mere case of commission agent but, on the other hand, it is the responsibility fixed on the assessee to carry out the activity of getting the goods stored by clearing it and then forwarding it to the stockists and dealers if any appointed by the assessee itself or as directed by the Principal. If there was mere procurement of purchase orders for the principal on commission basis by the assessee, it would have definitely fallen under the category of commission agent and would have stood outside the activity of the clearing and forwarding agent. But, it is not so in the instant case as seen from the Clauses mentioned in the Agreement.:KARNATAKA HIGH COURT; 2010-TIOL-41-CESTAT-MUM.pdf + rubicon story.pdf M/s Rubicon Formulations Pvt Ltd Vs CCE, Aurangabad (Dated : Novermber 23, 2009) Production of goods containing alcohol and discharging State Excise duty – CESTAT while granting Stay ordering for pre-deposit – later, in another case of same appellant setting aside order of lower authority by holding activity not liable to Service Tax under head BAS – Appellant files Modification applications – CESTAT dismisses the same as infructuous and also sets aside demand.:MUMBAI CESTAT; Sempertrans Nirlon Pvt Ltd Vs CCE, Raigad (Dated : July 24, 2009) Sale of final product on door delivery basis and prices inclusive of freight and insurance borne by assessee - Cenvat credit in respect of outward goods transport services claimed on basis of Larger Bench decision in ABB Ltd Vs CCE, Banglore, [ 2009-TIOL-830-CESTAT-BANG-LB ] and Ambuja Cement Ltd. Vs UOI [ 2009-TIOL-110-HC-P&H-ST ] - High Court in Ambuja Cement Ltd. upheld Board's circular dt. 23.8.2007 for fulfillment of conditions laid down therein before allowing credit – Case remanded to original authority for fresh decision.:MUMBAI CESTAT; M/s Thakur Tours & Travels Vs CCE, Noida (Dated : October 26, 2009) Revenue suo motu revised adjudication order and imposed penalty under sections 76 and 78 of Finance Act, 1994 - Appellant is entitled to fair opportunity of hearing and the adjudicating authority is required to pass a reasoned and speaking order taking into consideration the allegation in the SCN which was foundation for the original proceeding proposing consequence of penalty and the averments of the appellant as well as the law of the land – Matter remanded.:DELHI CESTAT; V N S S Textiles Vs CCE, Madurai (Dated : October 5, 2009) Service Tax – Clearing and forwarding Agent Service – the goods are already cleared by the principal and the same are received by appellant who stores the same and dispatches to the clients – the activity is not covered under Clearing and Forwarding Service as held by the High Court of Punjab and Haryana in case of M/s Kulcip Medicines.: CHENNAI CESTAT;
CENTRAL EXCISE SECTION NOTIFICATION Central Excise - review cases: Valsad substituted by Vapi; CASE LAWS 2010-TIOL-37-CESTAT-MUM.pdf + rdc story.pdf RDC Concrete (I) Ltd Vs CCE, Mumbai (Dated : Novermber 23, 2009) Asstt. Director (Cost) is an employee of the department and is not a Cost Accountant entitled to carry on the profession in terms of Sec.2(1)(b) read with Sec.2(2) of the Cost and Works Accountants Act, 1959 read with Explanation 1 to Sec.14A of the Central Excise Act - He should not have been appointed under Sec. 14A of the Act to estimate the cost of production, let alone the assessable value of the goods - CESTAT sets aside 90 lakhs demand and equivalent penalty on ROM application.:MUMBAI CESTAT; M/s Sivakasi Electro Chemicals Ltd Vs CCE, Madurai (Dated : September 30, 2009) Central Excise – Small Scale exemption – Potassium Chlorate specified in the small scale exemption Notification No 1/93 CE with effect from 23.07.2006 – the duty paid at full rate from 23.7.2006 till the date of availing the benefit of exemption has to be adjusted against the liability of the appellants in view of the Larger Bench decision in case of M/s Marutham Textiles Pvt Ltd.: CHENNAI CESTAT; CCE, Guntur Vs M/s The Andhra Sugars Ltd A P (Dated : September 10, 2009) Central Excise - Fabrication of tankers of S. Steel & M. Steel and mounted/fitted on chassis of motor vehicles used for transportation of chemicals - Exemption under Notification 6/2002-CE not deniable :BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION Customs - review cases: Valsad substituted by Vapi; CASE LAWS 2010-TIOL-15-HC-P&H-CUS.pdf + cus hc story.pdf M/s Manoj Kumar Sanjay KumarVs CC And Another (Dated: October 9, 2009) Customs – Fraudulent Import – misdeclaration - petitioner cannot be allowed to take advantage of the wrong committed by it by filing writ in the High Court – “a show cause notice has been served upon the petitioner firm. The firm has got ample opportunity to prove its innocence before the concerned authorities. There is inbuilt mechanism under the Act for redressal of the grievance of the petitioner firm. In case petitioner fails to convince the concerned authorities, it has legal remedy to prove its point. There is no bar to the petitioner to urge before the authorities that the firm has suffered losses by paying demurrage and detention charges and it should be compensated. However, in case it is held that the conduct of the petitioner firm is visited by fraud and forgery, by mis -declaration of the goods, in the bills of entry and in the guise of goods declared, it has indulged in importing banned substance, petitioner firm will not be entitled to take advantage of the wrong committed by it. Exercise of power of seizure of any goods in the absence of a quick decision, without any responsibility is prima facie not permissible - Directions to Customs in 2006 to take steps for quick clearance of goods – Court satisfied with Report from Customs. … It remains undisputed that in the present case the samples taken on 31.10.2006 have still not been tested, though a period of about 7 weeks has gone by and it is expected to take two weeks further time. Once there is jurisdiction to seize goods on any suspicion, there is a corresponding obligation to take quick decision. Exercise of power of seizure of any goods in the absence of a quick decision, without any responsibility is prima facie not permissible in view of Articles 14 and 19 of the Constitution of India. Ms.Mahajan submitted that there being only two Laboratories available for conducting the tests, the delay is inevitable. She assured the Court that decision to streamline the working on this aspect will be quickly taken within a week and reported to this Court on the next date of hearing … … …” On 21st December, 2006, the Court was assured that in pursuance of the observations made by this Court, a circular dated 20th December, 2006 was issued by the Ministry of Finance, Department of Revenue (Central Board of Excise and Customs) for expeditious clearance of imported cargo, where testing of sample is necessary before clearance. :PUNJAB AND HARYANA HIGH COURT; |
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