TaxTMI Updates e-Newsletter
Apr 27,2013

Unexplained credit under section 68 - onus to prove identity, creditworthiness and genuineness of creditors - confirmation letters and corroborative evidence for loans/gifts - gifts from relatives-proof of source and specific withdrawals - loose/slip documents as 'dumb documents' and need for corroboration under section 69C - section 2(22)(e) - requisites and cumulative conditions for deeming receipt as dividend

Unexplained credit under section 68 - onus to prove identity, creditworthiness and genuineness of creditors - Additions treated as unexplained credits in A.Ys. 2003-04 and 2004-05 were sustainable where assessee failed to prove identity, capacity of creditors and genuineness of transactions - HELD THAT: - For A.Y. 2003-04 and A.Y. 2004-05 the Tribunal considered the materials placed before AO and CIT(A), the confirmation letters produced and remand reports. The assessee could not satisfactorily explain the nature of earlier advances, furnish bank/PAN or credible corroborative evidence, or show source of funds of the creditors. The Tribunal held that where amounts stand credited, the assessee bears the onus to establish identity, capacity and genuineness; mere assertions or belated confirmations without corroboration were inadequate. In these factual circumstances the additions under section 68 were upheld. [Paras 4, 5, 6, 9, 10]

Additions under section 68 for A.Ys. 2003-04 and 2004-05 confirmed; assessee's appeals dismissed.

Unexplained credit under section 68 - onus to prove identity, creditworthiness and genuineness of creditors - Addition under section 68 in A.Y. 2005-06 (advance from T. Sreenivasulu) was sustainable as assessee failed to prove creditor's capacity and genuineness - HELD THAT: - The assessee produced confirmation and household account but failed to provide bank particulars, details of nature of transaction or corroborative evidence. The Assessing Officer's remand report found the documents self-serving and inadequate. Applying the same standard of proof under section 68, the Tribunal found no breach of natural justice and affirmed the CIT(A)'s confirmation of the addition. [Paras 11, 12, 13]

Addition of Rs. 19.65 lakhs in A.Y. 2005-06 confirmed; assessee's appeal dismissed.

Gifts from relatives-proof of source and specific withdrawals - unexplained credit under section 68 - Gifts received in A.Ys. 2006-07 (and related years) from close relatives were not proved; additions under section 68 sustained - HELD THAT: - The assessee claimed gifts from family members but changed particulars at different stages and failed to show specific withdrawals or sources from donors' accounts to justify the gifts. The Tribunal applied precedent (including the Supreme Court's position in P. Mohanakala) and held that absence of basic details and inability to demonstrate donors' means justified treating the receipts as unexplained credits. [Paras 14, 15, 16]

Additions in A.Y. 2006-07 in respect of claimed gifts confirmed; assessee's appeal dismissed.

Unexplained credit under section 68 - section 2(22)(e) - requisites and cumulative conditions for deeming receipt as dividend - confirmation letters and corroborative evidence for loans/gifts - For A.Y. 2007-08 (i) amount from P. Muddukrishna Reddy deleted where creditor's confirmations, books and subsequent assessments supported genuineness; (ii) invocation of section 2(22)(e) not justified absent proof of flow of funds and accumulated profits; (iii) amount from M/s MVS Developers remitted for ledger verification; (iv) additions in respect of M/s NR Constructions and Sri Surendra Babu sustained where no adequate corroboration of capacity/genuineness - HELD THAT: - The Tribunal examined each creditor separately. In respect of P. Muddukrishna Reddy the creditor appeared, confirmed advances and produced income-tax particulars; the Tribunal followed earlier Tribunal/High Court reasoning that where ostensible creditor is assessed and confirms the transaction the assessee's primary onus is discharged, and the AO must probe the creditor if required. The AO's attempt to invoke section 2(22)(e) rested on presumption without proving bogus subcontracts or flow of funds; requirements of s.2(22)(e) were cumulative and not satisfied. For M/s MVS Developers the Tribunal found the Balance Sheet showed aggregate loans/advances and remitted the matter to AO to verify ledger bifurcation. For M/s NR Constructions and Sri Surendra Babu no confirmation/creditworthiness records were produced so additions under s.68 were sustained. [Paras 30, 31, 33, 34, 35]

Addition from P. Muddukrishna Reddy deleted; section 2(22)(e) not attracted; issue as to M/s MVS Developers remanded to AO for ledger verification; additions in respect of M/s NR Constructions and Sri Surendra Babu sustained (ITA No. 1240 partly allowed).

Unexplained credit under section 68 - unexplained expenditure and section 69C - loose/slip documents as 'dumb documents' and need for corroboration under section 69C - For A.Y. 2008-09 (i) unexplained credit of large advance from M. Jayaram Reddy deleted where source-advance by his son and reflected in son's books-was proved; (ii) additions in respect of certain small creditors (Surendra Babu, Smt. Saroja) confirmed where identity/creditworthiness not established; (iii) addition by AO under section 69C based solely on seized loose sheets was reversed because loose sheets are 'dumb documents' requiring corroboration; CIT(A)'s partial confirmation reduced by Tribunal - HELD THAT: - The Tribunal accepted documentary evidence (banking route, statement under s.131, Profit & Loss and Balance Sheet of M/s HR Constructions) showing that funds credited to M. Jayaram Reddy originated from his son who had means; accordingly the addition treating the credited amount as unexplained under s.68 was deleted and Department should question the true creditor if required. For other small creditors, mere belated confirmations without corroborative proofs were insufficient and additions sustained. On the s.69C issue the AO's addition was founded on typewritten, undated loose slips seized in search; Tribunal held such 'dumb documents' without corroboration do not constitute reliable evidence of actual unaccounted expenditure and reversed the CIT(A)'s sustainment of the full addition (ITA No. 1241 partly allowed). [Paras 45, 46, 47, 74, 75]

In A.Y. 2008-09 deletion of addition relating to M. Jayaram Reddy; certain other creditor-additions sustained; addition under section 69C based solely on loose seized papers reversed and CIT(A)'s order altered (appeal partly allowed).

Unexplained credit under section 68 - For A.Y. 2009-10 the Tribunal followed its earlier reasoning: deletion of addition in respect of A. Jayaram Reddy and upholding of addition in respect of cash advance from N. Vijay Kumar where no sale documentation or land particulars were produced - HELD THAT: - The Tribunal applied its finding in A.Y. 2008-09 to delete the addition relating to A. Jayaram Reddy for the subsequent year. In respect of the Rs. 3,00,000 received in cash as advance for sale of land from N. Vijay Kumar, absence of agreement, location details or corroborative evidence justified treating the receipt as unexplained credit under section 68; the CIT(A)'s confirmation was upheld. [Paras 85, 86, 87]

A.Y. 2009-10: deletion in part (Jayaram Reddy); addition of Rs.3,00,000 in respect of N. Vijay Kumar sustained (ITA No. 1242 partly allowed).

Confirmation letters and corroborative evidence for loans/gifts - remand for ledger verification - Remand for re-verification ordered in respect of alleged advance from M/s MVS Developers (A.Y. 2007-08) to verify ledger bifurcation underlying schedule of loans and advances - HELD THAT: - The Tribunal observed that Schedule III in M/s MVS Developers' Balance Sheet aggregated loans/advances and did not specifically identify the alleged Rs.20 lakhs. The lower authorities should have called for ledger account details to verify ledger bifurcation; accordingly the Tribunal remitted the issue to the Assessing Officer for re-verification and decision in accordance with law. [Paras 31, 32, 33]

Issue remitted to Assessing Officer for re-verification of ledger details concerning M/s MVS Developers; further adjudication to follow on factual verification.

Final Conclusion: The Tribunal applied established principles under section 68 that the assessee must prove identity, creditworthiness and genuineness of credited amounts; where that onus was not discharged additions were confirmed (multiple assessment years). Where ostensible creditors produced corroborative evidence (confirmation, tax filings, bank records) the Tribunal deleted additions and rejected invocation of section 2(22)(e) absent cumulative facts. Additions founded solely on undated/typewritten loose seized papers were not sustained without independent corroboration and were reversed; one factual matter (ledger bifurcation of M/s MVS Developers) was remanded to the AO for verification.

Treatment of unreconciled inter-branch accounts as income - applicability of Reserve Bank of India directions to the tax character of amounts - revisionary jurisdiction under section 263 of the Income-tax Act - invocation of revisionary powers where an issue is debatable - set off of brought forward losses

Treatment of unreconciled inter-branch accounts as income - applicability of Reserve Bank of India directions to the tax character of amounts - revisionary jurisdiction under section 263 of the Income-tax Act - invocation of revisionary powers where an issue is debatable - Income represented by unreconciled inter-branch account balances is not assessable as the bank's income and the Commissioner was not justified in invoking revisionary jurisdiction under section 263 in respect of that matter. - HELD THAT: - The Tribunal followed consistent earlier decisions of other benches which held that inter-branch imbalances are accounting discrepancies expected to be reconciled and do not, by themselves, constitute income. The Reserve Bank of India had directed reconciliation and permitted transfer to reserves with a specific rider that such amounts cannot be used for dividend distribution and that the bank remains obliged to meet claims; those directions indicate the amounts lack the character of the bank's income. The Supreme Court decisions relied upon by the Revenue (notably in T.V. Sundaram Iyengar) concern unclaimed trade deposits which, by lapse of limitation and appropriation, became trade surplus-facts distinguishable from inter-branch accounting imbalances. Given the regulatory context and the debatable nature of the question, the Commissioner could not validly invoke section 263 to revise the assessment on this point. [Paras 11]

The assessment is not erroneous or prejudicial to the interests of Revenue on the issue of inter-branch balances; the CIT's revision under section 263 is quashed in respect of that issue.

Set off of brought forward losses - revisionary jurisdiction under section 263 of the Income-tax Act - The Assessing Officer was correct in allowing set off of the brought forward loss relating to assessment year 2005-06 and the Commissioner was not justified in treating that loss as non-existent under section 263. - HELD THAT: - The Commissioner concluded the brought forward loss was non-existent by relying on subsequent proceedings in the earlier year. The Tribunal, on review of the record, held that losses brought forward as per the assessee's books must be allowed to be set off against the income of the year under appeal unless the Revenue establishes they were non-existent; the Commissioner did not establish that justification. Accordingly, the revisionary direction to disallow the set off was held to be not sustainable. [Paras 13]

The CIT's direction to disallow the set off of brought forward losses is cancelled and the Assessing Officer's acceptance of the set off is upheld.

Final Conclusion: The appeal is allowed: the order under section 263 is quashed insofar as it sought to tax unreconciled inter-branch balances and insofar as it sought to disallow the set off of brought forward losses; the Assessing Officer's treatment on both issues is upheld.

Allocation of overhead expenses - deduction under section 80-IA - ad hoc disallowance - remand for fresh allocation and verification - opportunity of being heard

Allocation of overhead expenses - deduction under section 80-IA - ad hoc disallowance - opportunity of being heard - Remittance to the Assessing Officer for fresh allocation of overhead expenses between the eligible power generation unit and the non eligible cement manufacturing unit and direction to afford reasonable opportunity of hearing. - HELD THAT: - The Assessing Officer made a round sum adhoc disallowance by allocating an additional sum to the power generation unit without examining or pinpointing the basis on which the assessee's head wise allocation was improper. The assessee had consistently followed an allocation method accepted by the department in earlier years and furnished the audit report as required under section 80 IA. Where the AO has reservations about the correctness of an allocation, he must examine the parameters and specifically identify items or heads that are incorrectly allocated rather than impose an unexplained estimate. In view of these considerations and the absence of specific findings justifying the adhoc reduction, the Tribunal remitted the matter to the Assessing Officer to re allocate the overheads between eligible and non eligible units, clearly pinpointing the expenditure to be allocated and after giving the assessee a reasonable opportunity to be heard. [Paras 7, 8]

Matter remitted to the Assessing Officer for fresh, specific allocation of overheads between 80 IA and non 80 IA units after affording the assessee reasonable opportunity of hearing; appeal allowed for statistical purposes.

Final Conclusion: The appeal is allowed for statistical purposes and the issue of allocation of overhead expenses between the power generation (80 IA) unit and the non eligible cement unit is remitted to the Assessing Officer for fresh, specific allocation and for affording the assessee a reasonable opportunity of being heard.

Accrual of income on transfer of property/possession - taxation of the person entitled to receive income - transfer of underlying asset versus transfer of right to income - application of the ratio in Ch. Atchaiah - unexplained credits and onus of proof under section 68 - necessity of proof of source for introducers of capital

Accrual of income on transfer of property/possession - taxation of the person entitled to receive income - application of the ratio in Ch. Atchaiah - transfer of underlying asset versus transfer of right to income - Whether rental income from 1.4.2000 to March 2001 was rightly assessed in the hands of the assessee despite sale agreements dated 1.4.2000 - HELD THAT: - The Tribunal, after recording the CIT(A)'s findings, held that mere execution of an agreement with an earlier written date did not effectuate transfer of ownership or possession from 1.4.2000. The Assessing Officer's factual finding that consideration was paid only in January/March 2001 and that possession was not handed over was accepted. Clause 22 of the agreement and other contractual terms (requirement of IT clearances, obligations on purchaser to maintain property) indicated the transfer was not intended to vest rights in the buyer from 1.4.2000. Applying the principle in Ch. Atchaiah that taxing a wrong person does not preclude taxation of the right person, the Tribunal upheld that income accruing from April 2000 to March 2001 remained assessable to the assessee and was rightly included in its return and assessed accordingly. The Tribunal therefore dismissed the ground seeking exclusion of that rental income from the assessee's income for A.Y.2001-02. [Paras 12]

Ground rejected; rental income for April 2000-March 2001 rightly assessed in the hands of the assessee.

Unexplained credits and onus of proof under section 68 - necessity of proof of source for introducers of capital - Whether additions made under section 68 by treating partner credits as unexplained were justified - HELD THAT: - The Tribunal noted that amounts were credited to partners' accounts and the Assessing Officer examined the partners' claims. For partners who were assessed persons, the AO found that introductions were not reflected in their returns; for one partner (Smt. Ratan Bai Kothari) the claimed introduction of funds lacked reasonable proof of source. The CIT(A) affirmed the AO's conclusion and the Tribunal found no additional material to overturn that finding. In these circumstances the Tribunal sustained the addition under the provision dealing with unexplained credits, as the assessees failed to satisfactorily establish the source of the amounts introduced. [Paras 13]

Appeal dismissed; addition under section 68 confirmed as justified.

Final Conclusion: The Tribunal allowed the miscellaneous application, inserted clarificatory paragraphs into its earlier order, and upheld the CIT(A)'s decisions: rental income for April 2000-March 2001 was properly assessable to the assessee, and the additions under section 68 were sustained.

Profit from the operation of aircraft in international traffic - participation in a pool, a joint business or an international operating agency - meaning of 'operation of aircraft' for treaty protection under Article 8 - taxability under Article 7 as attributable to a permanent establishment - binding precedent of coordinate Benches

Profit from the operation of aircraft in international traffic - participation in a pool, a joint business or an international operating agency - meaning of 'operation of aircraft' for treaty protection under Article 8 - taxability under Article 7 as attributable to a permanent establishment - Whether receipts from ground handling and technical handling services rendered to other airlines are covered by Article 8 of the Indo Netherlands DTAA (and thus not taxable in India) or are taxable under Article 7. - HELD THAT: - The Tribunal examined the comparative text of Article 8 across relevant DTAAs and followed its earlier determination that ground handling and technical handling receipts, on the facts of the assessee's case, fall within the scope of profits from the operation of aircraft in international traffic or arise from participation in pools/joint business as contemplated by Article 8. The Bench noted that three coordinate Benches had considered identical facts for earlier years and had reached a consistent conclusion that such receipts are not chargeable to tax in India. The Revenue did not place on record persuasive material or strong circumstances to depart from those earlier decisions; accordingly the Tribunal applied the binding precedent of the coordinate Benches and held these receipts are not taxable in India under Article 8, rather than being taxable under Article 7 by reason of a PE. [Paras 6, 9]

Income from ground handling and technical handling services is not taxable in India as it is covered by Article 8 of the Indo Netherlands DTAA; the assessee's appeal is allowed on this ground.

Binding precedent of coordinate Benches - reference to Larger Bench - Whether the matter required referral to a Larger Bench or reconsideration of prior Tribunal decisions. - HELD THAT: - The Tribunal acknowledged the Revenue's contention that earlier orders should be reconsidered or referred. Having found that three separate coordinate Benches had adjudicated identical facts and reached the same conclusion for earlier assessment years, and in the absence of any new material or strong circumstances warranting departure, the Tribunal declined to refer the matter to a Larger Bench. The Tribunal also observed that the Revenue's dissatisfaction with prior orders is not by itself a sufficient ground for such a reference and noted that the Revenue's remedies in respect of earlier years lie before the High Court. [Paras 9]

No reference to a Larger Bench; the Tribunal will follow the binding precedent of the coordinate Benches until modified by a higher authority.

Final Conclusion: Following earlier coordinate Bench decisions on identical facts, the Tribunal holds that the assessee's receipts from ground handling and technical handling services for AY 2008 09 are covered by Article 8 of the Indo Netherlands DTAA and are not taxable in India; the appeal is allowed and no reference to a Larger Bench is warranted.

Deduction under section 80P(2)(a)(vi) - collective disposal of labour - Proviso to section 80P(2) restricting voting rights in bye laws - Disallowance under section 40(a)(ia) for failure to deduct tax at source - Remand for fresh consideration and verification of bye laws and income sources - Condonation of delay in filing appeal/cross objection

Deduction under section 80P(2)(a)(vi) - collective disposal of labour - Proviso to section 80P(2) restricting voting rights in bye laws - Remand for fresh consideration and verification of bye laws and income sources - Entitlement to deduction under section 80P(2)(a)(vi) was not finally adjudicated and is remanded to the assessing officer for fresh consideration. - HELD THAT: - The Tribunal held that two cumulative conditions must be examined before allowing deduction under section 80P(2)(a)(vi): (i) whether the society is engaged in the collective disposal of the labour of its members, and (ii) whether the rules and bye laws restrict voting rights to the classes specified in the proviso to section 80P(2). The assessment order is silent on the claim and the Assessing Officer did not examine these questions; the Commissioner (Appeals) accepted the exemption without examining the bye laws and various other income heads. The bye laws as produced are silent or ambiguous about voting rights (clause 58 referring generically to 'Act and Rules' and clauses 5, 9, 14 raising questions about membership), and the Profit & Loss account shows receipts (sales, commission on lottery, dividend, interest, rent) that were not addressed by the Commissioner (Appeals). In view of these lacunae, the Tribunal set aside the appellate finding and directed that the Assessing Officer make a detailed verification of the bye laws and other relevant materials and decide both eligibility as a labour disposal society and compliance with the proviso to section 80P(2). [Paras 9, 10, 11, 12, 14]

Order of the Commissioner (Appeals) on entitlement under section 80P(2)(a)(vi) is set aside and the issue is restored to the file of the Assessing Officer for fresh consideration.

Disallowance under section 40(a)(ia) for failure to deduct tax at source - Remand for fresh consideration and verification of payments - The correctness of the disallowance under section 40(a)(ia) requires fresh examination and is remanded to the Assessing Officer. - HELD THAT: - The Assessing Officer disallowed rent payments for failure to deduct tax at source and also made an addition of interest income not offered. The Commissioner (Appeals) granted partial relief by applying the Supreme Court decision in Hindustan Coca Cola Beverage P. Ltd. The Tribunal observed that, since the main issue under section 80P(2)(a)(vi) is being restored for fresh consideration, the question of disallowance under section 40(a)(ia) should also be re examined afresh by the Assessing Officer. The Revenue contested the Commissioner (Appeals) reliance on Hindustan Coca Cola; the Tribunal set aside the appellate conclusion on this issue and directed fresh adjudication. [Paras 3, 4, 15]

Order of the Commissioner (Appeals) insofar as it deals with section 40(a)(ia) is set aside and the matter is remitted to the Assessing Officer for fresh examination.

Condonation of delay in filing appeal/cross objection - Delay in filing the revenue appeal and the assessee's cross objection was condoned and both matters were admitted for hearing. - HELD THAT: - Both appeals were originally time barred (revenue by 60 days; assessee by 10 days). Each party filed a petition for condonation and, having considered the submissions in those petitions, the Tribunal exercised its discretion to condone the delay in both cases and admitted the appeals for hearing. [Paras 1]

Delay in filing both the appeal and the cross objection is condoned and the matters are admitted for hearing.

Final Conclusion: The Tribunal set aside the Commissioner (Appeals) order on the issues of entitlement to deduction under section 80P(2)(a)(vi) and the disallowance under section 40(a)(ia), remitting both issues to the Assessing Officer for fresh consideration and verification; delay in filing the appeal and cross objection was condoned and the matters were admitted for hearing. The appeal and cross objection are treated as allowed for statistical purposes.

Reassessment under notice issued u/s. 148 - reopening of assessment for the benefit of the Revenue - assessment of undisclosed income as income from other sources - shortage of stock treated as sales outside the books - fresh claim in reassessment inadmissible without revised return - deduction under Explanation (baa) to sec. 80HHC requires net inclusion of receipts - 90% exclusion under Explanation (baa) applies to the quantum included in business profits - deduction under sec. 80IB requires positive profit from manufacturing activity

Assessment of undisclosed income as income from other sources - reassessment under notice issued u/s. 148 - Credit in capital account of Rs.14,96,230/- was assessable as income from other sources and deduction under sec. 80HHC was not allowable on the basis pleaded. - HELD THAT: - The assessee failed to substantiate with contemporaneous material that the cash credit represented export business profits of earlier years. The assessee also did not demonstrate compliance with conditions necessary for claiming the deduction under sec. 80HHC. The Tribunal therefore found no infirmity in the assessing officer's treatment of the cash credit as income from other sources and in rejecting the 80HHC claim in respect of that amount. [Paras 5, 6]

Addition of Rs.14,96,230/- upheld as income from other sources; claim of deduction under sec. 80HHC rejected.

Shortage of stock treated as sales outside the books - fresh claim in reassessment inadmissible without revised return - Addition for shortage of stock (deficit of 6141 bags) was sustained and valued by the appellate authority; the assessee's alternate explanation of high-seas sales was rejected. - HELD THAT: - The assessee had accepted omission to account for the sale of the specified bags, but sought to substitute valuation by relying on 'high seas sales' to a sister concern. The Tribunal agreed with the CIT(A)'s rejection of the high-seas sales theory on the facts: the transactions involved a related party, were not recorded in either party's books, and the invoices/agreements were self-generated and unsupported by external evidence. The Tribunal also agreed that offering the income in a later return filed in response to a subsequent reopening could not be used to advantage the assessee where the matter was already under challenge, and therefore upheld the valuation and addition determined by the CIT(A). [Paras 7, 11, 12, 13, 31]

Addition for shortage of stock sustained as determined by the CIT(A); high-seas sales explanation and later-offered income dismissed.

Fresh claim in reassessment inadmissible without revised return - reopening of assessment for the benefit of the Revenue - Claim for payment to group gratuity scheme made for the first time in reassessment proceedings was disallowed. - HELD THAT: - The payment to group gratuity scheme was not claimed in the original assessment and was raised as a fresh claim during reassessment. Applying the settled proposition that reopening under sec. 148 is for the benefit of the Revenue and that fresh claims ought to be made by filing a revised return under the statute, the Tribunal upheld the view of the authorities that such a claim could not be admitted in reassessment proceedings. [Paras 14, 15]

Payment to group gratuity scheme disallowed in the reassessment proceedings.

Deduction under sec. 80IB requires positive profit from manufacturing activity - fresh claim in reassessment inadmissible without revised return - Deduction claimed under sec. 80IB was denied as there was no positive profit from manufacturing activity after exclusion of incidental incomes. - HELD THAT: - The assessing officer excluded incidental incomes (such as sale of import licences) from manufacturing profits and found no positive profit from manufacturing activity; the assessee did not substantiate entitlement to the deduction after such exclusions. The CIT(A) confirmed this view and the Tribunal found no infirmity in rejecting the 80IB claim on the basis that eligibility requires positive manufacturing profit. [Paras 17, 18, 30]

Claim for deduction under sec. 80IB denied.

Deduction under Explanation (baa) to sec. 80HHC requires net inclusion of receipts - 90% exclusion under Explanation (baa) applies to the quantum included in business profits - Computation of deduction under sec. 80HHC was set aside and remanded to the assessing officer for fresh examination in light of subsequent Supreme Court and High Court decisions. - HELD THAT: - Later judicial pronouncements clarified that the 90% exclusion under Explanation (baa) to sec. 80HHC applies to the quantum of receipts that has been included in the profits of the business (i.e., net receipts as included in profits), and that various categories (processing charges, DEPB benefits, etc.) and the manner of netting expenses must be examined in the light of those decisions. Given these developments, the Tribunal concluded that the computation of 80HHC deduction required fresh consideration by the assessing officer, taking into account the principles laid down by the Supreme Court and relevant High Court authority and any explanations or information the assessee may supply. [Paras 21, 22, 23, 24, 25]

Orders on computation of deduction under sec. 80HHC set aside and remanded to the assessing officer for fresh determination in accordance with law.

Reopening of assessment when earlier reopened assessment pending in appeal - Ground challenging validity of reopening while earlier reopened assessment was pending in appeal was dismissed for want of argument. - HELD THAT: - No argument was advanced before the Tribunal on this ground; accordingly the Tribunal dismissed the ground without further consideration. [Paras 26, 27]

Ground relating to validity of reopening while an earlier reopen was pending in appeal dismissed.

Final Conclusion: Both appeals by the assessee were partly allowed for statistical purposes: additions and disallowances in respect of the capital account credit, shortage of stock, group gratuity payment and denial of sec. 80IB relief were upheld, the challenge to the procedural reopening was dismissed, and the matter concerning computation of deduction under sec. 80HHC was set aside and remitted to the assessing officer for fresh adjudication in accordance with the subsequent judicial decisions and the law.

Perversity of appellate order - assessment record and verification - burden of inquiry by Assessing Officer - sham or accommodation entries - substantial question of law

Perversity of appellate order - assessment record and verification - burden of inquiry by Assessing Officer - sham or accommodation entries - Validity of the Tribunal's order upholding the assessment in respect of share money received and whether the Tribunal's decision was perverse. - HELD THAT: - The Court examined whether the Tribunal's order could be characterised as perverse given a statement allegedly admitting accommodation entries. The assessee had furnished confirmation letters from the companies, PAN details, bank statements, affidavits and balance sheet during assessment proceedings. The Assessing Officer thereafter asked the assessee to produce the directors/parties but the assessee said it could not do so; the Assessing Officer did not undertake further inquiries or verification. In these circumstances the Court found that the Assessing Officer's factual findings were incomplete and sparse because necessary enquiries and investigation were not conducted despite material having been placed on record. Given that the Assessing Officer failed to verify the evidence before concluding, the Tribunal's order could not be treated as perverse merely on the basis of the extraneous statement relied upon by Revenue. Consequently the appeal did not raise any substantial question of law.

Appeal dismissed; Tribunal's order not perverse and no substantial question of law arises.

Final Conclusion: The Revenue's appeal under Section 260A challenging the Tribunal's order for AY 2006-07 is dismissed because the assessing proceedings were not adequately verified and the Tribunal's conclusion cannot be treated as perverse; no substantial question of law is made out.

Revenue expenditure - business nexus of expenditure - recurring foreign registration fees as revenue expenditure - expenditure on sales promotion/market access

Revenue expenditure - business nexus of expenditure - Garden expenses debited by the assessee are allowable as revenue expenditure. - HELD THAT: - The Tribunal and this Court held that the garden expenditure was incurred for maintaining the garden inside the factory premises to control pollution arising from the effluent treatment plant. The expenditure had a direct nexus with the assessee's business activity and was incurred for business purposes, thereby qualifying as revenue expenditure rather than a capital outlay. The Court found the Tribunal's conclusion on nexus and business purpose to be justified and non-perverse. [Paras 5]

The disallowance of the garden expenses was appropriately deleted and the amount is to be treated as revenue expenditure.

Recurring foreign registration fees as revenue expenditure - expenditure on sales promotion/market access - Foreign registration fees paid for product registrations in overseas markets are allowable as revenue expenditure. - HELD THAT: - The Tribunal found, and the Court upheld, that the fees were paid to foreign drug regulatory authorities to obtain and renew product registrations necessary to market the assessee's products abroad. These payments were recurring in nature, made on expiry of registrations, and were integrally connected to enabling exports and promoting sales in foreign markets. The Court accepted the Tribunal's reasoning, including its factual finding of substantial growth in exports, and concluded that such expenditure was for business purposes and properly treated as revenue expenditure. [Paras 4, 5]

The direction to treat the foreign registration fees as revenue expenses was confirmed and the disallowance was set aside.

Final Conclusion: The Tribunal's findings that the garden expenses and foreign registration fees are revenue expenditures with requisite business nexus are upheld; no substantial question of law arises and the Revenue's appeal is dismissed.

Mis-declaration to evade customs duty - classification of imported goods - self-elevating platform versus barge - benefit of doubt in classification and declaration disputes - classification as floating or submersible drilling or production platforms

Mis-declaration to evade customs duty - self-elevating platform versus barge - benefit of doubt in classification and declaration disputes - Whether the importer mis-declared the goods as a 'barge' to evade payment of customs duty - HELD THAT: - Revenue relied on documents recovered in search showing the description 'self-elevating platform' whereas documents filed with the Bill of Entry described the goods as a 'jack-up barge'. The importer produced technical literature and registration evidence showing that the commercial parlance for such units includes the term 'jack-up barge' and that 'barge' is used for modular self-elevating platforms. Having regard to trade practice and the contemporaneous documentary record, the Tribunal found that the use of the term 'barge' in the import documentation could not be taken as deliberate mis-declaration for the purpose of evading duty and, accordingly, gave the importer the benefit of doubt. [Paras 7, 9, 10, 15]

No mis-declaration; benefit of doubt given to the importer

Classification of imported goods - classification as floating or submersible drilling or production platforms - self-elevating platform versus barge - Whether the imported goods are classifiable under CTI 8905 20 00 (floating or submersible drilling or production platforms) or under CTI 8905 90 90 (other) - HELD THAT: - The HSN notes for Heading 8905 include 'self-elevating platforms' within the category of floating or submersible drilling or production platforms where such platforms are designed for discovery or exploitation of offshore deposits and are fitted with drilling or production equipment. The Tribunal examined the imported unit's constituents and accepted the respondents' uncontested position that the item lacked drilling or production capability (no machinery for seabed drilling or exploitation). Since the imported goods do not possess the functional characteristics of platforms designed for drilling or production from the seabed, they cannot be classed under CTI 8905 20 00. In that factual and legal landscape, the Tribunal held that classification under CTI 8905 90 90 ('other') was appropriate. [Paras 12, 13, 14, 15]

Goods not classifiable under CTI 8905 20 00; classification under CTI 8905 90 90 upheld

Final Conclusion: The Revenue's appeal is rejected: there was no deliberate mis-declaration by the importer and the Tribunal upholds classification of the imported unit under CTI 8905 90 90 rather than CTI 8905 20 00.

Extension of warehousing period - power of Commissioner and Chief Commissioner to extend warehousing period under Section 61 - private bonded warehouse licence renewal - re-export of warehoused goods - rule of audi alteram partem / opportunity of hearing

Rule of audi alteram partem / opportunity of hearing - civil consequences of an administrative communication - Whether the communication dated 20 June 2011 rejecting the petitioner's request for extension of the warehousing period was vitiated for want of hearing - HELD THAT: - The Court found that the decision communicated on 20 June 2011 imposed civil consequences by calling upon the petitioner to pay duty, interest and penalty. That decision was taken and communicated without furnishing the petitioner an opportunity of being heard. As the absence of an opportunity to be heard affected the validity of the decision, the Court set aside the order communicated on 20 June 2011 on the ground of breach of the rule of audi alteram partem. The Court expressly refrained from expressing any view on the merits of the petitioner's entitlement to extension or re-export, limiting its order to the procedural infirmity identified. [Paras 7]

The communication dated 20 June 2011 is set aside for failure to afford the petitioner an opportunity of being heard.

Extension of warehousing period - power of Commissioner and Chief Commissioner to extend warehousing period under Section 61 - re-export of warehoused goods - private bonded warehouse licence renewal - Whether the competent authority should reconsider requests relating to transfer/re-export of goods covered by the surviving bonds and pass fresh orders - HELD THAT: - The Court directed that, because the earlier order has been set aside for procedural defect, the Chief Commissioner (as the competent authority) must pass a fresh order in accordance with law after affording the petitioner an opportunity of being heard. The Court noted that the petitioner's licence to operate the private bonded warehouse had expired on 5 June 2011 and that some factual/legal questions (including whether extension or transfer may be permitted) involve merits which the Court did not decide. Consequently, the matter in respect of the eight surviving bonds is to be considered afresh by the competent authority with hearing of the petitioner, and appropriate orders shall be passed in respect thereof. [Paras 7, 8]

Matter remitted to the Chief Commissioner to decide afresh in accordance with law after giving the petitioner an opportunity of being heard in respect of the eight surviving bonds.

Final Conclusion: The order communicated on 20 June 2011 and the consequential order of 23 January 2012 are set aside for want of hearing; the Chief Commissioner is directed to decide afresh, after granting the petitioner an opportunity of hearing, on the requests relating to transfer/re-export of goods covered by the eight surviving bonds; petition disposed of with no order as to costs.

Oppression and mismanagement under Section 397/398 - just and equitable ground for winding up - power to order purchase of shares and reduction of capital under Section 402 - preferential share allotment and voting rights - piercing or lifting the corporate veil in family/company disputes - continuing acts constituting oppression

Oppression and mismanagement under Section 397/398 - just and equitable ground for winding up - Validity of Company Law Board's order under Section 397(2) directing buy out/parting of ways by reference to valuation and packages - HELD THAT: - The Court held that before exercising powers under Section 397(2) the Tribunal must be satisfied that the facts would justify a winding up on just and equitable grounds and that the company's affairs are being conducted oppressively. Applying settled authorities, the Court found that the material produced did not establish continuous, burdensome, harsh and wrongful conduct by the majority that would justify winding up or substitute relief under Section 397(2). The Company Law Board failed to appreciate that many contested acts were isolated, historical or not shown to involve lack of probity, and that the petitioners had received dividends and benefits proportionate to their shareholding. Accordingly the Company Law Board's direction for valuation and buy out was unsustainable and was set aside. [Paras 20, 55, 56, 57, 58]

Company Law Board's order directing parting of ways/buy out under Section 397(2) set aside; appeals allowed.

Preferential share allotment and voting rights - oppression and mismanagement under Section 397/398 - Whether allotment of 2,000 8% cumulative redeemable preference shares to trusts amounted to oppression and warranted being struck down - HELD THAT: - The Court examined the statutory backdrop (amendment requiring minimum paid up capital) and the nature of preference capital (limited to preferential dividend and capital repayment, generally not carrying voting rights). It found the allotment was effected to raise paid up capital to comply with the law and did not alter voting rights or, in substance, the petitioners' proprietary position. Although the Company Law Board regarded the allotment as prejudicial, the High Court concluded the allotment did not constitute a just and equitable ground for winding up nor an act of oppression; the company is willing to offer equivalent preferential shares to the petitioners, and the Court directed that equal preferential shares be allotted to petitioners on written application. [Paras 31, 33, 34, 36, 38]

Allotment held not oppressive; direction issued that company shall allot equivalent preferential shares to petitioners on application.

Exclusion from management - piercing or lifting the corporate veil in family/company disputes - Whether non reappointment/defeat of petitioners' candidates and absence of Board seats amount to oppression or just and equitable grounds for winding up - HELD THAT: - The Court applied authorities distinguishing corporate rights from directorial grievances: inability to secure election as director in a corporate democracy is not, by itself, oppression under Section 397. On examining family history and shareholding patterns, and after 'piercing the veil', the Court found this was not a case of one family faction excluding another abusively; election results and Board composition reflect voting rights exercised by the majority. The Company Law Board erred in treating proportional board representation as a legal entitlement and its finding of oppression on this ground was set aside. [Paras 26, 39, 41, 47, 48]

Exclusion from management does not constitute oppression or just and equitable grounds for winding up; Company Law Board's finding set aside.

Execution of long lease deeds - continuing acts constituting oppression - Whether historical long term leases of company property at nominal rents constituted oppressive mismanagement warranting relief - HELD THAT: - The Court reviewed the lease deeds and contemporaneous minutes and found the leases were executed when relationships were cordial and with disclosure (the petitioner's non participation in votes where he had interest was recorded). Many leases pre dated the dispute and the petitioners had acquiesced for decades; absence of provisions for periodic rent enhancement was a shared omission. There was no cogent evidence of mala fide conduct or diversion of funds by the majority at the time of the transactions. Accordingly the Company Law Board's adverse finding on leases was contrary to record and was set aside. [Paras 49, 51, 52]

Findings that leases constituted oppression/mismanagement set aside.

Service of notices and communications - oppression and mismanagement under Section 397/398 - Whether alleged non sending of notices and balance sheets amounted to continuing oppression - HELD THAT: - The Court accepted the respondents' explanation that, by long practice in a small town and because parties lived locally, notices and documents were hand delivered without insistence on acknowledgements; dividends were received and encashed by the petitioners. The plea of non service was treated as an afterthought. Nevertheless, to avoid recurrence the Court directed that all future notices and communications be sent to the petitioners by registered post acknowledgement due at the company's cost. [Paras 53, 54]

Non service plea rejected as basis for oppression; direction given for future service of notices by registered post Acknowledgement Due at company cost.

Final Conclusion: Both appeals allowed. The High Court set aside the Company Law Board's order directing parting of ways/buy out under Section 397(2). The impugned findings that preferential allotment, exclusion from management and the leases constituted oppression or just and equitable grounds for winding up were reversed. The company is directed to allot equal preferential shares to the petitioners on written application and to send all future notices/communications to the petitioners by registered post acknowledgement due at the company's cost; parties to bear their own costs.

Mortgagee for value - recorded mortgagee as separate juristic entity - security trustee - enforcement of mortgage - jurisdiction of Company Court to adjudicate rights of third-party mortgagees before winding up - notice to Special Officer - leave of Company Judge for taking legal steps to enforce security

Mortgagee for value - recorded mortgagee as separate juristic entity - security trustee - Whether the appellant established prima facie that it was the mortgagee entitled to attack the observations and directions in the impugned company court order. - HELD THAT: - On the supplementary affidavit and documents filed on leave, the appellant did not demonstrate that it was the recorded mortgagee of the two immovable properties; the indentures annexed show that M/s. 3i Infotech Trusteeship Services Limited is the recorded mortgagee, purportedly acting as a security trustee. The Court treated the recorded mortgagee as a separate juristic entity and held that, on a prima facie reading, it could not be concluded that the appellant derived title or was the mortgagee entitled to challenge the impugned observations; accordingly the appellant was not shown to be the aggrieved mortgagee for the purposes of deleting those parts of the company court order.

Appellant has not prima facie established that it is the mortgagee; the recorded mortgagee appears to be a separate juristic entity and may be the proper aggrieved party.

Enforcement of mortgage - jurisdiction of Company Court to adjudicate rights of third-party mortgagees before winding up - notice to Special Officer - leave of Company Judge for taking legal steps to enforce security - Whether the observations and direction in the impugned order touching the enforceability of the alleged mortgages should be expunged, and what procedural course should govern any attempt to enforce those mortgages. - HELD THAT: - The Court declined to delete the relevant observations and directions from the impugned order because the recorded mortgagee had not approached the Court and the appellant had not made out its title; however, the Court clarified that the Trial Judge lacked jurisdiction at that stage to make binding determinations affecting persons not heard. Consequently the impugned observations and directions are not to be treated as binding on any person. If any person seeks to enforce the alleged mortgages, prior notice must be given to the Special Officer appointed by this Court; the Special Officer, on receiving such notice, is entitled to approach the learned Company Judge to seek leave to take appropriate legal measures. The appellant (or any other interested person) remains free to take steps in accordance with law, subject to giving notice to the Special Officer and obtaining such leave or directions as may be appropriate.

Observations/directions in the impugned order are not binding; enforcement of the alleged mortgages requires prior notice to the Special Officer and, where appropriate, leave from the Company Judge before legal steps are taken.

Final Conclusion: The appeal is dismissed; the Court finds on prima facie material that the appellant is not shown to be the recorded mortgagee, declines to expunge the company court's observations and directions but clarifies they are not binding, and directs that any attempt to enforce the alleged mortgages must be preceded by notice to the Special Officer who may seek leave from the Company Judge.

Bona fide dispute - contingent debt - company winding-up under Section 433(e) of the Companies Act, 1956 - interpretation of commercial contract / Share Transfer and Subscription Agreement - company court's jurisdiction in admitting winding-up petitions

Bona fide dispute - contingent debt - interpretation of commercial contract / Share Transfer and Subscription Agreement - company court's jurisdiction in admitting winding-up petitions - Whether the claimed sum under Clause III(A)(ii) of the STASA constituted an admitted debt enforceable in winding-up proceedings or was a contingent claim bona fide disputed by the respondent, rendering the winding-up petition untenable. - HELD THAT: - The contested clause withheld a sum to be released only to the promoters to the extent of the tax shield availed by setting off accumulated losses against future profits, and therefore payments were conditional on future profits and verification by auditors. A plain reading permits two reasonable interpretations: that a presently payable liability exists or that payment arises only upon occurrence of contingencies (future profits/utilisation of losses). Determination of whether the contingencies have occurred and quantum payable requires detailed factual inquiry, interpretation of contract terms and examination of evidence, matters beyond the scope of a company court in summary winding-up proceedings. Applying the principle that a company petition cannot be maintained in respect of contingent debt unless the contingency has happened, and having found that the respondent has consistently and in good faith disputed the claim on substantial grounds, the Court concluded that the debt was bona fide disputed and not an admitted liability. Consequently the petitioners failed to establish an admitted debt or neglect to pay such debt, and the winding-up petition could not be entertained. [Paras 10, 11, 12, 13, 14]

The claim is a contingent liability bona fide disputed on substantial grounds; the company petition for winding up is not maintainable and is dismissed.

Final Conclusion: The petition for winding up under Section 433(e) of the Companies Act, 1956 is dismissed as the claimed sum is a contingent, bona fide disputed claim requiring detailed adjudication and is not an admitted debt.

Classification of activity as rent-a-cab service - waiver of pre-deposit under Section 35F of the Central Excise Act - stay of recovery - remand for disposal of appeals on merits without insistence on pre-deposit

Classification of activity as rent-a-cab service - The appellants' provision of buses to APSRTC under route agreements does not, prima facie, constitute rent-a-cab service. - HELD THAT: - The Tribunal found a prima facie case for the appellants based on facts that the bus owners made their buses available to the Andhra Pradesh State Road Transport Corporation (APSRTC) under agreements whereby APSRTC would operate the buses on predetermined routes using stage carriage permits, fix time schedules and pay hire charges per km while the owners provided drivers. Relying on a prior stay order of this Bench (Stay Order Nos.1361-1384/2012 dated 09/08/2012) in a batch of similar appeals, the Tribunal held that on these and allied facts the activity could not be classified as rent-a-cab service and therefore the demands framed on that basis were prima facie unsustainable. [Paras 3]

Prima facie finding in favour of the appellants that the activity is not rent-a-cab service.

Waiver of pre-deposit under Section 35F of the Central Excise Act - stay of recovery - remand for disposal of appeals on merits without insistence on pre-deposit - The Commissioner (Appeals) erred in dismissing appeals for non-compliance with pre-deposit without examining merits; appeals remanded with direction to decide on merits without insisting on pre-deposit and stay of recovery granted. - HELD THAT: - The Tribunal noted that the Commissioner (Appeals) rejected the appeals solely for non-compliance with pre-deposit requirements under Section 35F without considering merits. Given the prima facie view that the demands did not constitute rent-a-cab service (as per the reasoning reproduced from the earlier Stay Order), the Tribunal directed that pre-deposit be dispensed with and that the Commissioner (Appeals) should dispose of the appellants' appeals on merits. The Tribunal remanded the matters with a request that parties be afforded reasonable opportunity of hearing and that speaking orders be passed. The stay applications were also disposed of accordingly. [Paras 2, 3, 4, 5]

Impugned orders set aside; appeals remanded to Commissioner (Appeals) to be decided on merits without insisting on pre-deposit and with stay of recovery in the interim.

Final Conclusion: Impugned orders of the Commissioner (Appeals) rejecting appeals for non-deposit are set aside; on a prima facie view that the bus-owners' arrangements with APSRTC do not constitute rent-a-cab service, pre-deposit is dispensed with and the appeals are remanded for adjudication on merits with opportunity of hearing and speaking orders; stay applications disposed of.

Penalty under Section 78 of the Finance Act, 1994 - 25% option/benefit on penalty under Section 78 - penalty under Section 76 of the Finance Act, 1994 - penalty under Section 77 of the Finance Act, 1994 - mutual exclusivity of Sections 76 and 78

Penalty under Section 78 of the Finance Act, 1994 - 25% option/benefit on penalty under Section 78 - Whether further recovery under Section 78 is permissible when 25% of the penalty under Section 78 has already been paid and the lower authorities did not offer the statutory option to pay 25% within 30 days. - HELD THAT: - The Tribunal noted that the adjudicating authority imposed a lower quantum under Section 78 while the Commissioner enhanced the penalty but did not extend the statutory option to the appellant to pay 25% of the penalty within 30 days to avail the reduced payment facility. Relying on the principle that the option must be given before enforcing a higher penalty, and observing that the appellant has already paid 25% of the penalty under Section 78, the Tribunal held that no further penalty under Section 78 is recoverable. The Tribunal therefore accepted that the 25% payment already made is appropriate in the circumstances and that the authorities should have offered the option as required by law. [Paras 4]

No further penalty under Section 78 is recoverable where 25% of the penalty under Section 78 has already been paid and the statutory option to pay 25% within 30 days was not afforded by the lower authorities.

Penalty under Section 77 of the Finance Act, 1994 - Whether penalty under Section 77 is imposable for non-compliance with prescribed procedures under the Service Tax law. - HELD THAT: - The Tribunal observed that Section 77 penalises failure to comply with procedural requirements under the Service Tax law. On facts, the Commissioner imposed a penalty under Section 77 for such non-compliance. The Tribunal found no error in imposing the penalty and upheld the imposition as justified by failure to follow the prescribed procedural requirements. [Paras 5]

Penalty under Section 77 was properly imposed and is sustained.

Penalty under Section 76 of the Finance Act, 1994 - mutual exclusivity of Sections 76 and 78 - Whether penalty under Section 76 is imposable once penalty under Section 78 has been imposed (and 25% of Section 78 penalty paid). - HELD THAT: - The Tribunal considered and reproduced the reasoning in Motor World which explains that Sections 76 and 78 operate in mutually exclusive fields and, following the clarificatory proviso introduced by subsequent amendment, if penalty is payable under Section 78 the provisions of Section 76 do not apply. The Tribunal held that this clarificatory position applies retrospectively and therefore penalty under Section 76 cannot be imposed where penalty under Section 78 has already been imposed and the 25% payment under Section 78 stands. [Paras 5, 6]

Penalty under Section 76 is not imposable once penalty under Section 78 has been imposed and 25% of that penalty has been paid.

Final Conclusion: The appeal is partially allowed: further recovery under Section 78 is barred as 25% of the Section 78 penalty has been paid and the statutory option was not afforded; the penalty under Section 77 is upheld; penalty under Section 76 is not imposable once Section 78 penalty has been imposed and the 25% payment accepted.

Simultaneous imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994 - Amendment of Section 78 of the Finance Act, 1994 held to be clarificatory - Imposability of penalty under Section 76 where penalty under Section 78 has been imposed

Simultaneous imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994 - Amendment of Section 78 of the Finance Act, 1994 held to be clarificatory - Whether penalty under Section 76 of the Finance Act, 1994 can be imposed where penalty under Section 78 has been imposed, in light of the amendment to Section 78. - HELD THAT: - The Tribunal upheld the Commissioner (Appeals) finding that once penalty under Section 78 is imposed, penalty under Section 76 cannot simultaneously be levied. The Bench relied on its earlier decision in Jivant Enterprise and the decision of the Hon'ble Karnataka High Court in Motor World, which held that the amendment of Section 78 was clarificatory and that simultaneous imposition of penalties under Sections 76 and 78 is not permissible even for periods prior to 10/05/2008. In the present case the show-cause notice was issued on 10/08/2009, i.e., after the amendment of Section 78 on 10/05/2008, and the Commissioner (Appeals) had examined the intention of the amendment in paragraph 6.1 of his order. Having applied the stated precedents and the clarificatory character of the amendment, the Tribunal found no merit in the department's appeal.

The Commissioner (Appeals) order setting aside imposition of penalty under Section 76 (in view of penalty under Section 78) is upheld and the department's appeal is rejected.

Final Conclusion: The appeal is dismissed; the Commissioner (Appeals) order setting aside penalty under Section 76 because penalty under Section 78 was imposed is affirmed in view of the clarificatory nature of the amendment to Section 78 and applicable precedents.

CENVAT Credit - Input services - Renting of immovable property service - Use of inputs for providing output service - Eligibility of credit - Service Tax liability

CENVAT Credit - Input services - Renting of immovable property service - Use of inputs for providing output service - Whether the appellant is eligible to avail CENVAT Credit of Service Tax paid on various input services for providing renting of immovable property service - HELD THAT: - The appellant, an Agriculture Products Market Committee that hires out godowns, incurred expenditures on services such as advertising, management consultancy and related input services to attract and carry on the business of renting godowns. The Tribunal found that those input services were used in relation to the appellant's business activity of renting immovable property and therefore fall within the concept of input services whose credit is available when such inputs are used for providing an output service. Reliance on the Tribunal's decision in Navaratna S.G. Highway Prop. Pvt. Ltd. and the High Court of Mumbai's decision in Coca Cola India Pvt. Ltd. supports the proposition that where the services availed are intrinsically connected with and necessary for the provision of the output service, CENVAT credit cannot be denied. Applying that principle to the facts, the denial of credit was unsustainable and the consequential penalty question did not survive.

The impugned order denying CENVAT Credit on the cited input services is set aside and the appeals are allowed.

Final Conclusion: Appeals allowed; order denying CENVAT Credit of Service Tax on the input services set aside and credit permitted as these services were used for providing the renting of immovable property service.

CENVAT credit of inputs and input services for renting of immovable property - commercial/industrial construction service and works contract service as input services - disallowance of CENVAT credit under Rule 14 read with Section 73(2) - unconditional waiver of pre-deposit and interim stay of recovery - prima facie reliance on precedents for availment of credit

CENVAT credit of inputs and input services for renting of immovable property - commercial/industrial construction service and works contract service as input services - disallowance of CENVAT credit under Rule 14 read with Section 73(2) - unconditional waiver of pre-deposit and interim stay of recovery - prima facie reliance on precedents for availment of credit - Grant of unconditional waiver of pre-deposit and stay of recovery on the ground that the appellant made out a strong prima facie case that CENVAT credit of inputs and input services used in construction of the mall could be availed and utilized for payment of service tax on renting of immovable property. - HELD THAT: - The Tribunal considered the show cause notice and adjudication disallowing CENVAT credit availed by the appellant for services used in construction of the mall and the consequential demand, interest and penalties. Noting that the question of whether excise duty on inputs and service tax on input services used in construction of immovable property can be taken as credit for payment of service tax on renting of such property had been decided in favour of the assessees by the Andhra Pradesh High Court and by the Ahmedabad Bench of the Tribunal, the Bench found that the appellant had made out a strong prima facie case. In view of these precedents and the appellant's case on merits, the Tribunal exercised its appellate jurisdiction to grant an unconditional waiver of the pre-deposit and to stay recovery of the dues during the pendency of the appeals. The order is interlocutory and rests on the existence of a prima facie case supported by earlier decisions rather than a final adjudication on merits in these appeals.

Unconditional waiver of pre-deposit granted and recovery stayed during pendency of appeals.

Final Conclusion: The Tribunal granted an unconditional waiver of the pre-deposit and stayed recovery, holding that the appellant had established a strong prima facie case-relying on earlier decisions-that CENVAT credit of inputs and input services used in construction of the mall could be availed and utilized for service tax on renting of immovable property; the order is interlocutory and does not decide the merits of the dispute.

CENVAT credit on input services - packing material as intermediate product - liability under Notification No.67/95-CE dated 16/03/1995 - prima facie case - waiver and stay of demand

Packing material as intermediate product - liability under Notification No.67/95-CE dated 16/03/1995 - CENVAT credit on input services - prima facie case - waiver and stay of demand - Whether duty could be demanded on corrugated boxes used as packing material for biscuits and whether the denial of CENVAT credit on input services should be stayed - HELD THAT: - The Tribunal noted that the assessee manufactured and cleared biscuits which were exempt during the period in question, and that the impugned demand related to corrugated boxes used as packing material. The Department treated the packing material as an "intermediate" and sought duty in terms of Notification No.67/95-CE dated 16/03/1995 because the final product was exempt. The Tribunal found a prima facie case for the appellant: the assessee did not take CENVAT credit on Kraft paper (an input) and stated it was not manufacturing corrugated boxes; moreover, the lower authorities had not disclosed convincing grounds to construe the packing materials as intermediates in the manufacture of biscuits. In view of these factors and the relatively small amounts involved, the Tribunal exercised its discretion to grant waiver and stay of the adjudged dues, including the denial of CENVAT credit on input services.

Waiver and stay of the adjudged demands, including the denial of CENVAT credit on input services, granted on the basis of a prima facie case.

Final Conclusion: The Tribunal granted stay and waiver of the adjudged duties and stayed the denial of CENVAT credit on input services, finding a prima facie case that the corrugated boxes were not shown to be intermediates in the manufacture of exempt biscuits for the period 03/05/2007 to 30/06/2008.

Pre-deposit for grant of stay - burden of proof on assessee for CENVAT credit - prima facie satisfaction based on statements of CHAs, transporters and employees - fraudulent claim of input credit by use of false/forged transport documents - conditional waiver of balance dues upon compliance with deposit - stay of recovery subject to compliance - right to cross-examination and principles of natural justice

Burden of proof on assessee for CENVAT credit - prima facie satisfaction based on statements of CHAs, transporters and employees - fraudulent claim of input credit by use of false/forged transport documents - Whether there is prima facie evidence to uphold the conclusion that CENVAT credit was irregularly taken as goods were not received by the factory and that certain persons were involved in preparation of false documents. - HELD THAT: - The Tribunal accepted the departmental evidence that CHAs, transporters and certain employees gave statements indicating that goods imported at Mumbai and Nhava Sheva were diverted to Tughlakabad and did not reach the Hyderabad factory, and that transport documents contained vehicle numbers not allotted or belonging to two wheelers. The assessee bears the burden to prove receipt and utilization of inputs for claiming CENVAT credit; the cumulative evidence and acknowledgements recorded by the department furnished a prima facie basis to conclude that credit was taken without receipt of goods. The Tribunal also found prima facie involvement of named individuals in preparation of false documents to enable such credit, and regarded the appellants' explanations and vague evidence of return of goods to Hyderabad as insufficient to rebut the departmental case. [Paras 3, 5, 6]

Prima facie findings that CENVAT credit was irregularly taken and that certain persons were involved in preparing false documents are upheld.

Pre-deposit for grant of stay - conditional waiver of balance dues upon compliance with deposit - stay of recovery subject to compliance - right to cross-examination and principles of natural justice - Terms on which stay of recovery and waiver of balance of dues would be granted in the pending appeals. - HELD THAT: - Having recorded the prima facie findings against the appellants, the Tribunal disposed of the stay applications by prescribing specified pre-deposits for each appellant (including specified sums for M/s Cubex Tubings Ltd. and the individual respondents) to be made within a fixed time frame; subject to such deposits, the balance of dues under the impugned orders would be waived and recovery stayed until disposal of the appeals. The Tribunal fixed the compliance timeline and directed reporting of deposits; it also warned that failure to comply would result in dismissal of the appeal of the defaulting appellant without further notice. Although the appellants contended denial of cross-examination to some witnesses, the Tribunal proceeded on the basis of the material on record and the prima facie conclusions already noted, without granting broader relief on that ground. [Paras 4, 6, 7, 8]

Stay granted subject to specified pre-deposits and compliance within the stipulated period; balance of dues waived on such compliance and recovery stayed until disposal of appeals; non-compliance to invite dismissal of the appeal.

Final Conclusion: On the basis of prima facie findings that CENVAT credit was irregularly availed and that false transport documents were used, conditional stays were granted subject to specified pre-deposits by the appellant assessee and the individuals; compliance within the prescribed time would result in waiver of the balance and stay of recovery pending disposal of the appeals, while failure to comply would lead to dismissal of the appeal without further notice.

Interpretation of exemption under Notification No. 5/98-C.E. - availment of Cenvat/Modvat credit and its effect on exemption - limitation and extended period of limitation - re-quantification of duty after allowing Modvat benefit - penalty for non-declaration of Modvat/Modvat credit

Interpretation of exemption under Notification No. 5/98-C.E. - availment of Cenvat/Modvat credit and its effect on exemption - Whether Tipwood Pallets cleared from a unit in the factory could legitimately claim exemption under Notification No. 5/98-C.E. when another unit in the same factory availed Modvat/Cenvat credit - HELD THAT: - The Tribunal examined the factual matrix of two registered units operating within the same factory premises, one unit availing Modvat credit and discharging duty while the other claimed exemption on Tipwood Pallets under Notification No. 5/98-C.E. It found that on merits the assessee had no case to claim the exemption where Modvat credit had been availed in relation to products manufactured in the same premises. The bench applied the ratio of the Tribunal's earlier decisions, including reliance on M/s. N.M. Nagpal Pvt. Ltd. and this Bench's decision in M/s. Poonam Plastic Industries, which sustained the demand but provided for re-quantification after allowing Modvat benefit and set aside penalty in appropriate facts. The Court therefore held that the exemption could not be sustained on merits in the factual posture where Modvat credit had been availed. [Paras 6]

On merits the exemption claim under Notification No. 5/98-C.E. is unsustainable where Modvat/Cenvat credit was availed by another unit in the same factory.

Limitation and extended period of limitation - penalty for non-declaration of Modvat/Modvat credit - re-quantification of duty after allowing Modvat benefit - Whether the Department could invoke the extended period of limitation for demand of duty for the period in question despite having knowledge of the assessee's declarations under Notification No. 5/98 and related 173B declarations - HELD THAT: - The Tribunal recorded that the assessee had filed declarations (including 173B) claiming benefit under Notification No. 5/98 and disclosing non-availment of Modvat credit in respect of the declared unit, and that the Department was aware of these facts. The first appellate authority had found that there was no suppression or mala fides and therefore the extended limitation period was not invocable. The Tribunal found these limitation findings uncontroverted on the record and held that the extended period could not be lawfully invoked where the Department had knowledge of the declarations, rendering the show cause notice time-barred. Although the Tribunal observed against the assessee on merits, it upheld the impugned order because of the limitation bar. [Paras 7, 8, 9]

The extended period of limitation could not be invoked; the demand was time-barred and the impugned order is upheld on the ground of limitation.

Final Conclusion: The Tribunal held that while the exemption claim under Notification No. 5/98-C.E. was not maintainable on merits where Modvat/Cenvat credit had been availed by another unit in the same factory, the demand was barred by limitation because the Department was aware of the assessee's declarations; accordingly the impugned order is upheld and the Revenue's appeal is rejected.

Clubbing of clearances - Mutuality of interest - Financial flow-back - Benefit of Notification No.175/86-CE and Notification No.1/93-CE - Subsidiary-holding company relationship - Interpretation of SSI exemption notifications

Clubbing of clearances - Mutuality of interest - Financial flow-back - Benefit of Notification No.175/86-CE and Notification No.1/93-CE - Whether clearances of the holding company and its wholly owned subsidiary could be clubbed for denying SSI exemption under Notification No.175/86-CE and Notification No.1/93-CE in absence of proof of mutuality of interest or financial flow-back. - HELD THAT: - The Tribunal examined the scope of Notifications No.175/86 and No.1/93 and the authorities relied upon. It noted that, unlike the earlier Notification No.85/85, the later notifications do not contain an express provision treating clearances made 'on behalf of' a manufacturer as automatically includible. Following the reasoning in Catalco Chemicals (P) Ltd., and decisions distinguishing the ratio of Gammon Far Chems Ltd. applicable to Notification No.85/85, the Tribunal held that mere subsidiary status or provision of share capital by the holding company does not, by itself, justify clubbing. Clubbing is permissible only if the department establishes mutuality of interest or flow-back of funds between the companies. As the show cause notice in the present case alleged only shareholding and contained no allegation or evidence of financial flow-back or intermingling of finances, the adjudicating authority's finding of clubbing was unsupported. Respectfully applying the Gujarat High Court's reasoning, the Tribunal set aside the adjudication to the extent it denied the benefit of the notifications on the ground of subsidiary relationship alone. [Paras 6, 7, 11]

Clubbing of clearances was not justified on the sole basis of shareholding; in absence of any allegation or proof of mutuality of interest or financial flow-back, the claim to exemption under Notification No.175/86-CE and Notification No.1/93-CE must be allowed.

Final Conclusion: The adjudication denying SSI exemption by clubbing clearances of the holding company and its wholly owned subsidiary was set aside because the Revenue failed to establish mutuality of interest or flow-back of funds; the appeals are allowed and the Revenue's cross objections are disposed of accordingly.

Eligibility for input service credit - restriction on distribution of input tax credit between units - binding effect of co ordinate bench precedents

Eligibility for input service credit - restriction on distribution of input tax credit between units - binding effect of co ordinate bench precedents - Denial of credit of service tax paid on input services and the permissibility of restricting distribution of such credit between units of the same manufacturer/service provider. - HELD THAT: - The Tribunal examined earlier Division Bench orders in the appellant's own case which held that the only restrictions on distribution of service tax credit are that (i) the credit should not exceed the service tax paid and (ii) the credit should not relate to services used for exempted goods or services; there is no rule authorising a restriction limiting distribution on the basis that services were used in respect of a different unit. The Bench further relied on the principle articulated by the High Court of Bombay in Mercedes Benz India Pvt. Ltd. that a co ordinate bench should ordinarily follow the decision of another co ordinate bench on identical questions of law and, if inclined to differ, should refer the matter to a larger Bench rather than overrule it. In view of these precedents and the identical factual and legal matrix to earlier decided periods, the Tribunal followed the Division Bench precedent in the appellant's own case and set aside the impugned orders denying credit, notwithstanding the Revenue's reliance on contrary decisions; the Tribunal considered it unnecessary to re adjudicate the detailed contentions urged by the Revenue in face of the binding co ordinate bench precedent and the High Court's admonition regarding judicial propriety. [Paras 5]

Impugned orders denying input service tax credit are set aside and the appeals are allowed, following the Tribunal's earlier decision and the High Court of Bombay's ruling on following co ordinate bench precedents.

Final Conclusion: Appeals allowed; impugned orders denying input service tax credit set aside, the Tribunal following its earlier decision in the appellant's own case and the High Court of Bombay's guidance on adherence to co ordinate bench precedent.

Interest on differential duty - imposition of penalty for short-payment of duty - voluntary payment before detection - short-payment of duty - CAS-4 standard - waiver of penalty in cases of unintentional short payment

Interest on differential duty - CAS-4 standard - Whether interest is payable on differential duty which was paid after clearance by issue of supplementary invoices but before the show-cause notice, where valuation for the relevant years was subsequently computed as per CAS-4 standard. - HELD THAT: - The Tribunal applied the principle laid down by the Hon'ble Supreme Court in Commissioner of Central Excise, Pune v. SKF India Ltd. The appellants initially computed value on the basis of prior year's costing and, after applying the CAS-4 standard for the relevant years, paid the differential duty by issuing supplementary invoices before the issuance of show-cause notices but after departmental detection. In these circumstances the Tribunal confirmed that interest on the differential duty is exigible in accordance with the authoritative decision in SKF India Ltd., and therefore interest as levied requires confirmation. [Paras 2, 3]

Interest on the differential duty was confirmed in light of the SKF India Ltd. decision.

Imposition of penalty for short-payment of duty - waiver of penalty in cases of unintentional short payment - voluntary payment before detection - short-payment of duty - Whether penalty should be imposed for the short-payment of duty and, if so, the quantum of penalty. - HELD THAT: - The Tribunal distinguished the present cases from those where the Supreme Court had waived penalty on the basis that short-payments were entirely unintended and without deceit. Here the appellants were aware of the need to apply CAS-4 costing for the relevant years but did not voluntarily pay the differential amounts until after departmental detection. On that basis the Tribunal held that imposition of some penalty was justified. Applying that reasoning, the Tribunal declined to reduce the penalty in one appeal and reduced the penalty in the other appeal in the interests of justice. [Paras 3, 4]

Penalty upheld in one appeal; in the other appeal the penalty was reduced.

Final Conclusion: Both appeals were dismissed; interest on the differential duty was confirmed, a penalty was sustained in one appeal, and the penalty in the other appeal was reduced as indicated by the Tribunal.

Reassessment under Section 21 of the U.P. Trade Tax Act, 1948 - escaped assessment - works contract versus sale of goods - taxability under Section 3-F of the U.P. Trade Tax Act, 1948 - change of opinion of assessing officer not a bar to reassessment - retrospective operation of judicial interpretation

Reassessment under Section 21 of the U.P. Trade Tax Act, 1948 - change of opinion of assessing officer not a bar to reassessment - escaped assessment - Validity of reassessment proceedings initiated under Section 21 where the assessee contends full disclosure was made, the assessing officer had earlier treated the transaction as works contract and an appeal was pending. - HELD THAT: - The Court held that reassessment under Section 21 is permissible where there is reason to believe that turnover has escaped assessment. The assessment order had excluded the price of generator sets from turnover although those amounts ought to have been included under Section 3-F(1)(b); this omission established escaped assessment. Reliance on a change of opinion by the assessing officer does not by itself preclude reassessment: Section 21 empowers reassessment notwithstanding change of opinion, as supported by the Division Bench decision in General D Confiteria India Ltd. The pending appeal against the assessment order does not prevent the Assessing Authority from issuing a notice under Section 21 and proceeding with reassessment where escaped turnover is believed to exist. [Paras 9, 10, 15]

Reassessment notice issued under Section 21 was lawful because the court found that turnover had escaped assessment and a change of opinion did not bar reassessment; the writ petition challenging the reassessment was dismissed.

Works contract versus sale of goods - taxability under Section 3-F of the U.P. Trade Tax Act, 1948 - retrospective operation of judicial interpretation - Whether the price of generator sets supplied and installed by the petitioner constituted part of taxable turnover (sale of goods) under Section 3-F despite the contract being treated as a works contract in the original assessment. - HELD THAT: - The Court analysed statutory definitions of 'sale', 'goods', 'works contract' and the charging provisions, concluding that transfer of property in goods involved in execution of a works contract falls within taxable turnover under Section 3-F(1)(b). The assessment order had deducted the price of generator sets, but material on record (purchase price and commissioning expenses) showed the supply component was dominant, indicating the price should have been included. The Court noted relevant Supreme Court precedents (including Hindustan Shipyard Ltd. and Kone Elevator) and observed that judicial interpretation of the law operates retrospectively; hence the Assessing Authority was entitled to form a belief of escaped assessment and proceed to reassess the omitted sale component. [Paras 9, 13, 14]

The price of the generator sets was correctly regarded as escaping assessment and liable to be included in turnover under Section 3-F; reassessment on that basis was justified.

Final Conclusion: Both writ petitions were dismissed: the High Court found that the price of the generator sets had escaped assessment and that reassessment under Section 21 was permissible notwithstanding earlier treatment as a works contract and a pending appeal; accordingly the reassessment proceedings challenged by the petitioner were held to be lawful.

Detention under Section 47(2) of the KVAT Act - Requirement of documentary proof accompanying inter state consignment - Prima facie validity of detention - Release of detained goods pending adjudication on furnishing of bond

Detention under Section 47(2) of the KVAT Act - Requirement of documentary proof accompanying inter state consignment - Prima facie validity of detention - Detention of the consignment under Ext.P3 was not prima facie irregular. - HELD THAT: - The court examined whether the detention was irregular in view of the petitioner's contention that the consignee had placed a purchase order and that ownership/declaration certificates (Exts.P4 and P5) showed tax was paid and the goods were for the consignee's use. It was found that Exts.P4 and P5 did not accompany the consignment at the time of transit. In the absence of the requisite documentary proof accompanying the inter state consignment, the authorities' action in detaining the goods under the impugned notice cannot be regarded as prima facially irregular.

Detention under Ext.P3 sustained as prima facie valid because ownership/declaration certificates did not accompany the consignment.

Release of detained goods pending adjudication on furnishing of bond - Whether the detained consignment should remain under detention pending adjudication or be released on conditions. - HELD THAT: - While upholding the prima facie validity of the detention, the court concluded that the goods need not remain detained during the pendency of adjudication. Balancing the prima facie justification for detention against the consequences of continued custody, the court directed conditional release pending completion of the adjudicatory process. The condition imposed was furnishing a bond for the amount demanded; no sureties were required.

Consignment to be released to the petitioner pending adjudication upon furnishing a bond for the amount demanded, without sureties.

Adjudication to be completed by assessing authority - Adjudication consequent to the detention notice must be completed by the authority. - HELD THAT: - The court directed that the adjudication in pursuance of the detention notice (Ext.P3) shall be completed by the concerned authority. The direction leaves the substantive determination of liability and any final consequences to the adjudicatory process, indicating that the court's order only governs interim custody of the goods and procedural completion of the assessment/adjudication.

Adjudication pursuant to Ext.P3 to be completed by the authority; interim release ordered subject to the bond condition.

Final Conclusion: Petition disposed: detention under Ext.P3 held prima facially valid as ownership/declaration documents did not accompany the consignment; however, pending completion of adjudication the consignment shall be released to the registered dealer on furnishing a bond for the amount demanded without sureties, and the adjudication directed to be completed.

Reassessment versus revision - revisionary jurisdiction - limitation period for revision under section 20(3) of the GST Act

Reassessment versus revision - revisionary jurisdiction - Respondent's exercise of power constituted a reassessment of the Deputy Commissioner's order dated March 15, 2003 and not a revision of the Additional Commissioner's order dated February 28, 2007. - HELD THAT: - The Court found that although the respondent styled the proceedings as a revision of the Additional Commissioner's order, he in substance reopened and re-decided the correctness of the Deputy Commissioner's assessment for 2000-01 by conducting fresh enquiries in 2007-08 and 2008-09, issuing fresh notices (including the November 11, 2009 notice seeking production of agents' accounts, sale bills and assessment orders) and treating defects in the F forms as a basis to disallow exemption. Those acts amounted to reassessment of the original Deputy Commissioner order rather than revising the Additional Commissioner's decision. The impugned order (paras 20-23) demonstrates that the respondent proceeded to reassess the assessment for the year 2000-01, an exercise for which no provision was shown to exist permitting such reassessment by the Commissioner in the circumstances pleaded. [Paras 20, 21, 22, 23]

The respondent, in effect performing reassessment of the Deputy Commissioner's order instead of revising the Additional Commissioner's order, acted beyond his revisional remit and such exercise was impermissible.

Limitation period for revision under section 20(3) of the GST Act - The proposal for revision dated May 11, 2009 and the consequential order dated July 13, 2010 are barred by the four year limitation under section 20(3) of the GST Act in relation to the assessment dated March 15, 2003. - HELD THAT: - Section 20(3) permits revision of an assessment only within a period not exceeding four years from the date on which the assessment order was served. The Deputy Commissioner's assessment order was served on March 15, 2003, whereas the respondent's show-cause proposing revision was issued on May 11, 2009-well beyond the four year period. The Court followed prior authorities holding that revisional jurisdiction cannot be invoked after the prescribed period where the revisional exercise in substance seeks to reopen the original assessment (illustratively noted: Hyderabad Insulated Wires and the Supreme Court's decision in Alagendran Finance Ltd.), and concluded that the respondent's action was time barred.

The initiation of the revision and the resultant order are barred by limitation under section 20(3) and therefore without jurisdiction.

Final Conclusion: The Special Appeal is allowed: the impugned show cause and revision order are without jurisdiction and barred by limitation; the respondent's order dated July 13, 2010 is quashed.

Availability of alternative remedy by way of appeal - exhaustion of statutory remedies before invoking writ jurisdiction - mere mis reference to statutory provision not vitiating order if source of power exists - jurisdictional challenge based on wrong section reference

Availability of alternative remedy by way of appeal - exhaustion of statutory remedies before invoking writ jurisdiction - Maintainability of the writ petition in view of an alternative statutory remedy of appeal - HELD THAT: - The Court accepted the respondents' preliminary objection that the petitioners have an alternative remedy by way of appeal under the Wealth Tax Act and therefore should be relegated to that remedy. Reliance was placed on United Bank of India where the principle that tax litigants must ordinarily exhaust statutory remedies before approaching the High Court under Article 226 was reiterated (para-43 referred to in the judgment). The petitioners' contention that jurisdictional defect entitled them to bypass the statutory remedy was considered but rejected as not establishing prejudice. Applying the principle of exhaustion of remedies, the Court declined to entertain the writ petition.

Writ petition dismissed on the ground of availability of alternative remedy by way of appeal.

Mere mis reference to statutory provision not vitiating order if source of power exists - jurisdictional challenge based on wrong section reference - Whether the impugned assessment orders are void or without jurisdiction because they mentioned section 16(3) instead of section 16(5) - HELD THAT: - The Court examined the assessment orders and noted the wrong reference to section 16(3) (with overwriting on the figure '3') but found no prejudice caused to the petitioners. It observed the well settled principle that where the source of power for an order can be traced, a mere incorrect citation of the statutory provision does not invalidate the order. Consequently, the contention that the orders were without jurisdiction merely because of the wrong section being mentioned was rejected as technical rather than substantive.

The challenge that the orders are illegal or null and void for naming the wrong section is rejected; no jurisdictional invalidity found from the mis reference.

Final Conclusion: The High Court dismissed the writ petition of the assessees for Assessment Year 2010-2011 on the ground that an adequate alternative remedy by way of appeal is available; the Court also held that the mere mis mention of a provision (section 16(3) instead of section 16(5)) does not render the assessment orders void where the source of power is discernible.