S. 36(1)(v): Payment To LIC Towards Group Gratuity fund Allowable : SC

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 447 OF 2003

Commner. of Income Tax, Coimbatore

Versus

M/s Textool Co. Ltd.

 

True that a fiscal statute is to be construed strictly and nothing should be added or subtracted to the language employed in the Section, yet a strict construction of a provision does not rule out the application of the principles of reasonable construction to give effect to the purpose and intention of any particular provision of the Act. (See : Shri Sajjan Mills Ltd. vs. Commissioner of Income Tax, M.P. & Anr. (1985) 156 ITR 585). From a bare reading of Sectin 36(1) (v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. In the instant case, it is evident from the findings recorded by the Commissioner and affirmed by the Tribunal that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year.Thus, the conditions stipulated in Section 36(1) (v) of the Act were satisfied. Having regard to the facts found by the Commissioner and affirmed by the Tribunal, no fault can be found with the opinion expressed by the High court, warranting our interference.

S. 54 Exemption available on Acquisition of new flat in exchange of old flat

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IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH ‘F’, MUMBAI

BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER &

SHRI VIVEK VARMA, JUDICIAL MEMBER

I.T.A. NO. 7159/Mum/2010 Assessment Year: 2006-07

Smt. Veena Gope Shroff, Vs. The Income Tax Officer

Date of Pronouncement: 04-07-2012.

 

The dispute is regarding allowability of exemption under section 54 of the Act and computation of long term capital gain in respect of exchange of old flat with a new flat and cash compensation under development agreement with the builder. The revenue authorities have held that since assessee had neither purchased a new flat or constructed a new flat, the provisions of section 54 are not applicable. We, however, do not subscribe with the view taken by revenue authorities. The exemption under section 54 is allowable in case the assessee transfers a residential house and within a period of 1 year before or 2 years after the date of transfer, purchases a new residential house or constructs a new residential house within a period of 3 years from the date of transfer. In this case, the assessee had exchanged old flat with new flat to be constructed by the builder under development agreement which amounts to transfer under section 2(47) of the Act. Thus, the only other condition which is required to be satisfied is that assessee either purchases a new residential flat within the prescribed limit or constructs a new residential flat within a period of 3 years from the date of transfer. The acquisition of a new flat under a development agreement in exchange of the old flat amounts to construction of new flat. This view is supported by the decision of the Tribunal in the case of another co-owner in the case of 3. K. Madan (supra). Therefore, the provisions of section 54 are applicable and assessee is entitled to exemption if the new flat had been constructed within a period of 3 years from the date of transfer.

The AR has also argued that entire cash compensation received by the assessee amounting to Rs. 11,25,800/- cannot be taxed as capital gain as assessee had invested a sum of Rs. 8,00,000/- lacs in NABARD bonds under section 54EC. Since cash compensation was part of consideration for transfer of the old flat and the assessee had invested the money in NABARD bonds, the exemption under section 54EC will be available. As regards the completion of new flat within a period of 3 years, assessee has filed a copy of letter dated 30.05.2007 of the builder in which it has been mentioned that the builder had applied for occupation certificate and possession was to be given on 14.6.2007, which in fact was given the very next day, i.e. 15-06-2007. We, therefore, allow the claim of exemption under section 54, and set aside the order of CIT(A) and direct the AO to allow the claim of the assessee.

Every credit institution has to become a member of at least one Credit Information Company – RBI

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RBI/2013-14/157
RPCD.CO.RRB.BC.No.14/03.05.33/2013-14

July 23, 2013

The Chairman
All Regional Rural Banks (RRBs)
Dear Sir,

Credit Information Companies (Regulation) Act, 2005 – Compliance

Please refer to our circular RPCD.CO.RRB.No.32/03.05.33/2009-10 dated October 20, 2009 advising RRBs, that in terms of Section 15(1) of Credit Information Companies (Regulation) Act 2005, every credit institution has to become a member of at least one Credit Information Company within a period of three months from commencement of the Act or any extended time allowed by the Reserve Bank on application.

2. As RRBs are also credit institutions as defined in sub-section (f) of Section 2 of the Act, they would be required to take membership of at least one credit information company and provide credit data in the format as required by the Credit Information Company (CIC).

3. However, it has come to our notice that a large number of RRBs are not members of any Credit Information Company as required under the Act. Therefore immediate steps may be taken by RRBs to become members of at least any one CIC.

4. Please acknowledge receipt to our Regional Office concerned

Banks not to accept fresh/additional PDV / EMI Cheques if ECS Services are available

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The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks/Local Area Banks
Madam / Dear Sir

Migration of Post-dated cheques (PDC)/Equated Monthly Instalment (EMI) Cheques to Electronic Clearing Service (Debit)

We invite a reference to our circular DPSS.CO.CHD.No.1622/04.07.05/2012-13 dated March 18, 2013 wherein all lending banks have been advised not to accept any fresh Post Dated Cheques (PDC)/Equated Monthly Installment (EMI) cheques in locations where the facility of ECS/RECS (Debit) is available and convert existing cheques in such locations into ECS/RECS (Debit) by obtaining fresh mandates.

2. However, instances of banks obtaining fresh cheques (both CTS-2010 and non CTS-2010 standard) in locations where the facility of ECS/RECS is available have been brought to our notice, thus necessitating a reiteration of our earlier instructions in this regard.

3. Accordingly, banks are advised to adhere to the following instructions with immediate effect:

1. No fresh/additional Post Dated Cheques (PDC)/Equated Monthly Installment (EMI) cheques (either in old format or new CTS-2010 format) shall be accepted in locations where the facility of ECS/RECS (Debit) is available. The existing PDCs/EMI cheques in such locations may be converted into ECS/RECS (Debit) by obtaining fresh ECS (Debit) mandates.
2. As indicated in our circular DPSS.CO.PD.No.497/02.12.004/2011-12 dated September 21, 2011, Section 25 of the Payment and Settlement Systems Act, 2007 accords the same rights and remedies to the payee (beneficiary) against dishonor of electronic funds transfer instructions under insufficiency of funds as are available under Section 138 of the Negotiable Instruments Act, 1881. Considering the protection available, there is no need for banks to take additional cheques, if any, from customers in addition to ECS (Debit) mandates.
3. Cheques complying with CTS-2010 standard formats shall alone be obtained in locations, where the facility of ECS/RECS is not available.

4. The above instructions are issued under section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).

CENVAT credit can be utilized for payment of Service Tax under Reverse Charge

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CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,

SOUTH ZONAL BENCH, AT BANGALORE.

M/s GE India Industrial Pvt. Ltd.

Versus

The Commissioner of Service Tax, Bangalore

Appeal No: ST/2134 OF 2010, Date of Order: 23.01.2013,

 

Issue – Whether a person who is not a actual service provider, but discharges the service tax liability on the Taxable Services, under Section 68(2) of Finance Act, 1994, as a deemed service provider, is entitled to avail the CENVAT credit on inputs/input services/capital goods for payment of GTA service tax, even if he is not using such inputs/input services/capital goods for providing taxable services by virtue of deeming legal fiction?

Held – In view of paragraph 2.4.2 of CBEC’s Excise Manual of Supplementary Instructions, the Hon’ble High Court answered the above question in the affirmative in favour of the assessee. The decision was rendered on 06.5.2010, i.e. long after a similar question was referred by a regular Bench of this Tribunal to Larger Bench in the case of Panchmahal Steel Ltd. (supra). Obviously, the referring Bench did not have the advantage of considering the High Court’s decision. At the present stage, one has to follow the view taken by the Hon’ble High Court, in the absence of any binding judicial precedent to the contra. Accordingly, it is held that the appellant was, during the material period, entitled to take CENVAT credit on input services and utilise the same for payment of service tax on the GTA service. Consequently, the impugned demands are liable to be set aside. In the result, the impugned order is set aside and this appeal is allowed.

 

 

 

No waiver of arrears of penalties on individuals who are no more

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F.No.296/110/2012-CX-9

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, the 18th June, 2013

To
All Chief Commissioners
Sub: Review of Action Taken Report (ATR) on the Minutes of the Conference of Chief Commissioners and Directors General held on 28.08.2012 – waiver of arrears of penalties on individuals who are no more – reg.

Sir/Madam,

As you may be aware, during the Conference of Chief Commissioners and Directors General on 28th August, 2012, a point was raised that the arrears of penalties imposed on individuals, who are no more, may be waived off.

2. The issue has been examined and it is observed that there are contrary decisions in these judgements on the issue of recovery of amount of penalty, which has been imposed on an individual during his lifetime, from his legal heir against the personal properties left behind by the defaulters. The following judgements on this issue are relevant:

(i) Bhagwan Devi Banka and Others [1986(26)ELT 890(Pat)]

(ii) Tarak Nath Gayen and Others [1987(31) ELT 631(Calcutta)]

(iii) Omwati Vs UOI [2000(125)ELT 136(All.)]

(iv) Khadeeja Vs District Collector [2006(2)KLT 654]

3. It is observed that the hon’ble High Courts at Kerala and Patna have given judgements in favour of the department by ruling that the proceedings can be continued against the personal assets in the hands of the legal heirs. On the other hand, the hon’ble High Courts at Allahabad and Calcutta have ruled that the penalty imposed in such cases cannot be recovered from the legal representatives of the deceased. Therefore, the facts of the case in these judgments are not identical and the application of ratio of these judgments will depend on the facts on case to case basis.

4. Accordingly, it has been decided not to issue any instructions in this matter. The field formations may, therefore, take action to realise such arrears in accordance with the statutory provisions and legal pronouncements in this regard.

Pen drive is admissible evidence in Income Tax Proceedings

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Shri Chetan Gupta Vs. ACIT (ITAT Delhi) ,

ITA Nos. 1891, 1892 & 1893/Del/2012 ,

Date of pronouncement – 21.06.2013

 

Contention of the Assessee :- The alleged Pen drive is not an admissible evidence, therefore the recording of reasons and consequent 148 proceedings based on the reasons of such unreliable evidence are bad in law.
Held by ITAT
6.1. It is apparent that many of the transactions recorded in the alleged pen drive belong to various concerns and bank accounts of the assessee. Thus prima facie the pen drive and its contents have a relationship with the assessee, the burden to disprove the same is on him. Assessee has raised various objections about the intentions and irregularities committed by Punjab Police while carrying out the search and seizure of the alleged pen drive and taking out printouts as per the Cr. P.C., IPC , Indian evidence Act and Cyber Laws, which in our view have no effect on recordings of reasons for forming a belief about escapement.
6.2. Income Tax proceedings are non adversarial in nature and the entire exercise is directed to ensure a fair and proper assessment on the assessee. It is trite law that technical rules of Evidence Act and Cr. P. C. are not applicable to these proceedings. An evidence which indicates the income of the assessee is admissible in Income Tax proceedings. From the record it emerges that many of the entries mentioned in the pen drive belonged to various business concerns of the assessee in which he is associated in the capacities of director or partner. Similarly many entries pertained to his bank accounts and other persons. They are explained by the assessee though on prejudice basis, but the fact remains that the entries have correlation with assessees activities. In this view of the matter the contents of the pen drive become admissible evidence in Income Tax proceedings and form a basis for investigations and additions. Consequently we hold that pen drive and print outs thereof constitute admissible evidence in these proceedings. The reasons for reopening were recorded on the basis of these contents. In view of the fore goings the reasons recorded for escapement of income and the material available on record with AO have a live link with each other. Thus, we hold that the reasons for reopening the assessments were properly recorded by AO. This question is answered against the assessee.