We find that as per the appellant, major amount of demand working out to Rs.12.07 crores pertains to capital goods credit utilised. We note that the Commissioner wrongly found that the restriction contained in Rule 6(3) of CCR as regards the use of cenvat credit above 20% of the tax paid applied to credit of capital goods also. In the circumstances, we set aside the impugned order and remand the entire case to the Commissioner for a fresh decision on all issues after hearing the assessee. The appeal is allowed by way of remand. Stay petition is also disposed of.
The chemicals namely ZYGLO-ZP-4B and 9C RED concentrate were received in bulk packing of 205 litre of drums and those were repacked into small packs of 1 kg. and cleared as ‘trading goods’ without payment of duty. the Deputy Commissioner had made an order on 03-02-1998 in respect of one of the items covered thereunder and held that there was no suppression of facts as the respondent firm has already brought the matter to the notice of the Jurisdictional Assistant Collector. The show cause notice dated 29.3.2000 was time barred and it was rightly set-aside by the Tribunal.
CIT Vs Sanjay Chhabra ( Chandigarh High Court)- The sole point for consideration in this appeal is that once the Revenue had come to the conclusion that the assessee had made sales of apples amounting to Rs. 5,75,654/- to one Jagdish Chawla, whether it was the entire amount, or the 5% profit thereof, being commission on such sale, that was to be added to the income of the assessee.
Singareni Collieries Company Ltd Vs ACIT (ITAT Hyderabad) – Whether book profits is to be computed with reference to each assessment year – Whether profits earned during the period of sickness and available for setting off under normal provisions of Income Tax are to be excluded from the ambit of book profit of non-sick years. – Assessee’s appeal dismissed.
DIT v Sahu Jain Trust – Exemption under s 11 — A charitable trust, if acquires tenancy right in respect of some immovable property owned by a different person, and thereafter sublets the said tenancy right and in the process earns some income, such income should not be treated to be an income from business as to attract the provisions contained in s 11(4A) — as held by KolHC in DIT v Sahu Jain Trust; ITA No. 38 of 2001, 13 April 2011
“Whether in the facts and circumstances of the case where the delay in the disposal of the relevant appeals is not attributable to the assessee, the Tribunal can extend the stay already granted beyond the period of 365 days even after 01.1 0.2008 or it has no power to grant/extend such stay as a result of amendment made by the Finance Act 2008 by substituting third proviso to Section 254(2A) w.e.f. 01.10.2008?”
Recently, the Mumbai bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of ITO v. Galaxy Saws P. Ltd. (ITA No.3747/M/2010) (Judgement Date: 11 March 2011, Assessment Year: 2005-06) held that revaluation reserve not routed through Profit & Loss Account but directly transferred to balance sheet could not be added to net profit while computing the book profit for the purpose of Minimum Alternate Tax (MAT). Further, the Tribunal reiterated that principle that once the accounts have been prepared as per the provisions Schedule VI of the Companies Act and adopted at the Annual General Meeting (AGM) of the company, the net profit disclosed in such accounts cannot be tinkered with by the Assessing Officer (AO) while computing the book profit.
The Delhi bench of the Income-tax Appellate Tribunal [“The Tribunal”] recently pronounced its ruling in the case of Clear Plus India Private Limited v. DCIT [ITA NO. 3944/DEL/2010], wherein it upheld the transfer pricing methodology adopted by the taxpayer to benchmark its export sale by the application of internal comparable uncontrolled price [“CUP”] method, adopting its associated enterprise [“AE”] as the tested party. The revenue’s contention to use Transactional Net Margin Method [“TNMM”] was rejected as in view of the Tribunal minor aberrations in the application of CUP method do not warrant its abandonment.
Income Tax Appellate Tribunal (“The Tribunal”), Delhi Bench recently pronounced its ruling in the case of ACIT v. M/s NIT Limited (Appeal no. -2011-TII-1 6-I TA T-DEL-TP or ITA No.1844 & 1871/Del./2009) on various transfer pricing issues. The most important issue dealt by the Tribunal was in respect of details submitted before the Tribunal that were not available in the public domain at the time of assessment and first appellate proceedings. The Tribunal held that since these documents were essential for determining arm’s length price of the relevant international transactions, the same need to be admitted for consideration.
K.K. Velusamy Vs. N. Palanisamy (Supreme Court) – A compact disc containing recording of telephone conversation could be valid evidence according to Section 3 of the Evidence Act and Section 2(t) of the Information Technology Act, the Supreme Court has stated in the case, K K Velusamy vs N Palanisamy. One of the parties in a suit over sale of property produced a CD in the court as evidence. The opposite party objected to its validity as evidence, arguing that the recordings were created with the help of mimicry specialists. In this context, the Supreme Court stated that electronically recorded conversation is admissible in evidence, if the conversation is relevant to the matter in issue and the voice is identified and the accuracy of the recorded conversation is proved by eliminating the possibility of erasure, addition or manipulation. A CD recording of a relevant conversation is comparable to a photograph of a relevant incident.
