State of Jharkhand & Ors. v. Tata Steel Ltd. & Ors.(SC)(12 Feb, 2016)

Held:The concept of exemption is distinct from the concept of deferment of tax. After the JVAT Act came into force, under the statutory provisions, there was no exemption and beneficiaries were entitled to convert to the scheme of deferment. The period remains intact, that is, 8 years. The repayment has to be done in equal six monthly instalments and that period is 5 years. The repayment commences after completion of eligibility period of deferment or the prescribed percentage limit of fixed capital investment, whichever is earlier. The prescribed authority can grant an eligibility certificate but he has to keep in view the terms and conditions stipulated in thus analysed, the irresistible conclusion is that the repayment schedule has to end on 31.08.2013 within a span of 5 years from the expiration of the eligibility period. It is argued on behalf of the assessee that it is not a case for levy of interest. Regard being had to the special features of the case and taking note of the fact that the assessee-1st respondent had already deposited the amount in pursuance of the order of Court and regard being had to the nature of litigation, court direct that the 1st respondent-assessee shall pay 12% interest per annum and the said amount shall be deposited with the competent authority of the revenue within three months. Appeal disposed of..

Judgements/Tribunals

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Ravikiran Ceramics Pvt Ltd Vs. Commissioner of Income Tax(HC-GUJ)(2 Feb, 2016)

Held:As is wellknown section 69C of the Act pertains to unexplained expenditure and provides that where in any financial year, an assessee has incurred any expenditure, and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any offered by him is not in the opinion of the Assessing Officer satisfactory, the amount covered by such expenditure or part thereof, would be deemed to be the income of the assessee for such financial year. He noted that the officers of the assessee company had also admitted the commission payment to said Shri Laljeebhai and Shri Siddiquibhai who were associated with M/s. Sudchemie India Pvt. Ltd. Who would provide job work to the assessee. In this background, the assessee owed a duty to explain the source of such expenditure. Court may recall the explanation of the assessee was that the bills and vouchers were inflated to generate income for payment of such commission. However, such explanation was not accepted by the Assessing Officer in the order of assessment making observationsEntire issue, as can be appreciated, is based on the assessment of evidence on record. When the Assessing Officer and the Commissioner concurrently found that there was unexplained expenditure and source of such income was not satisfactorily explained, section 69C of the Act would certainly be applicable. Petition partly allowed.

National Petroleum Construction Company Vs. Director Of Income Tax (International Taxation) (HC-Delhi)(29 Jan, 2016)

Held:DTAA between India and UAE - Article 5 of the DTAA provides for an inclusive definition of the term "Permanent Establishment" and specifically lists out places of business that fall within the meaning of that expression. Read in the context of the other provisions of Article 5, paragraph 2 clearly indicates that it has been used as an explanatory provision to specifically include the species of places of business that would constitute a PE of an enterprise. In this view, paragraph 1 and 2 of Article 5 of the Insofar as sub-paras (h) and (i) of paragraph 2 of Article 5 are concerned, the test of permanence as required under paragraph 1 of Article 5 is substituted by a specified minimum period of nine months. The Project Office was only used for the purposes of correspondence and as a communication channel; apart from that, the Project Office had no role to play in the execution of the activities under the Contracts and no other business of the Assessee was carried on through the Project Office. The activity of the Assessee's Project Office in Mumbai would clearly fall within the exclusionary clause of Article 5(3)(e) of the DTAA and, therefore, cannot be construed as the Assessee's PE in India. Appeals disposed of.