With regard to the amendment to section 2(14), which has been brought about by the Finance Act, 2007 w.e.f. 1.4.2008 and which alters the clause pertaining to ‘personal effects’ in the manner indicated below, we may say straightaway that the same would not apply as it has prospective operation with effect from 01.04.2008, whereas in the present case the assessment year is 2002-03.
Insofar as ground (a) raised by the Assessing Officer that loss on sale of investment of Rs. 6,15,66,000, is a capital loss and is not allowable as deduction, is untenable in law in view of the judgment of Hon’ble Supreme Court and High Court. The Bombay High Court in Bank of Baroda (supra), after following the judgment of Hon’ble Supreme Court in UCO Bank (supra), held that the depreciation in value of investments held by a Bank is allowable as deduction as business loss.
As per DRP Rules Rule, objections, if any may be filed in person or through his agent within the specified period in Form 35A. There is no prescription that the objection should be filed by assessee in person. An agent is permitted to file the objection, but in the case of company whether the agent should be a Managing Director/ Director, Chartered Accountant or any other person has not been prescribed under the Rules.
It has been a very common practice in the manufacturing industry to remove raw materials as such i.e. without using in manufacturing activity. One of the common reasons for as such removal is that such raw materials do not satisfy the quality which is required for manufacturing the finished goods. In such a case, the manufacturer returns such raw materials to the supplier & reverses equal amount of CENVAT credit if availed on such raw materials.
In the instant case, the contention of the A.R of the assessee is that the impugned order passed u/s 143(3) by the Assessing Officer is not an order which is passed in pursuance of the directions of the DRP. However, if the above contention of the assessee is taken as correct then it implies that the assessee is not entitled to file directly appeal before the Tribunal in pursuance to such an order of the Assessing Officer passed u/s 143(3) of the Act. We find that the DRP has categorically stated that it has no jurisdiction to pass any direction in pursuance to the belated objections filed by the assessee against the draft order of the Assessing Officer and in fact, the Panel gave no direction in respect of objections of the assessee.
In the instant case, the business should be construed set up as the assessee obtained necessary approvals, recruited requisite personal, procured requisite machinery etc. In fact, the assessee has successfully identified certain mineral rich blocks too. As analyzed by the jurisdictional High Court in the case of Western India Vegetable Products Ltd. (supra), the expression ‘setting up’ means ‘to place on foot’ or to establish or ‘to ready to commence’. Therefore, we find no difficulty in coming to the conclusion that the assessee’s business is set up in this year and in fact commenced too. Thus the expenditure incurred after the set up constitutes allowable expenditure.
We are of the considered opinion that in fact the issue sought to be raised by the appellant-Revenue is already answered by Hon’ble Supreme Court in the case of Samtel India Ltd. (supra) and, therefore, in this appeal no question of law arises including with respect to the other two issues. The objection of the Revenue that in this very proceeding refund could not have been ordered or the claim of the assessee became barred by time, we are of the considered opinion that when the order with respect to disallowance itself had not become the final, before that the claim of refund could not have been raised by the assessee.
CENVAT Credit cannot be denied merely on the ground that HO who raised invoice was not registered under central registration during material period It is to be held that final rejection of centralized registration vide letter dated 26-5-2006 cannot be held to be a justifiable reason for denial of the credit. Apart from the fact that during the said period, the application was pending in the office of Deputy Commissioner, without their being any decision taken by him on the same, 1 find that there is otherwise no dispute about the availability of the credit to the appellant. The substantial benefit, if otherwise available, cannot be denied on the technical and procedural grounds. As such, in the absence of any dispute that the appellant was otherwise entitled to the benefit of Cenvat credit of Service Tax paid on GTA services, so received by them, the denial of the same on the ground that the credit was availed on the basis of invoices raised by their head office is neither justifiable nor warranted.
It was submitted by the learned A.R. that the appellant company being a limited company is not covered by the term association and exemption available is only to the association. However, it was pointed out by the learned counsel that the appellant is registered under Section 25 of the Companies Act, 1956 which provides that the word “limited” can be dispensed with in respect of an association formed as a limited company for promoting commerce, art, science, religion, charity or any other object.
It is not in dispute that under the Companies Act, 1956, both straight line method and written down value method are recognised. Therefore, once the amount of depreciation actually debited to the profit and loss account is certified by the auditors, then, as per the decision of the apex court in the case of Apollo Tyres Ltd. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115-J.
