Annexure XIV Continued… - Edelweiss

Section 73A of the Finance Act along with interest and is a part of our Company’s total tax liability of ` 177
million in respect of business auxiliary service and ` 8.5 million for cargo handling service under Section 73 of
the Finance Act. Our Company, in its reply dated November 13, 2007 had refuted the allegations in the
aforesaid show cause notice and further claimed that the show cause notice was barred by limitation and that
the beneficiation of coal is an activity in relation to mining of minerals and is taxable with effect from June 1,
2007 and not covered under the two alleged heads. However, the Commissioner of Service Tax, by way of an
order dated April 30, 2008 bearing no. 44/VKG/2008 and issued subsequently on May 2, 2008 held that
beneficiation of coal was taxable under the category of business auxiliary service and that our Company was
providing cargo handling services in respect of loading, unloading and transportation charges collected from
its clients. Our Company has filed this appeal before the Customs, Excise and Service Tax Appellate Tribunal,
New Delhi in 2008 praying inter-alia that the aforesaid order dated April 30, 2008 be set aside; that the
demand of service tax amounting to approximately ` 16.5 million in the category of business auxiliary service
and ` 8.59 million in the category of cargo handling service be dropped with consequential relief that the
amount of ` 11.77 million should be held as a part of ` 9.07 million already deposited with the department and
that the penalties imposed be quashed. The Customs, Excise and Service Tax Appellate Tribunal
(“CESTAT”), New Delhi vide its order dated August 19, 2008 has admitted the appeal and waived the
requirement of pre-deposit of the remaining amount of service tax and penalties. The total amount involved in
the appeal aggregates approximately to ` 186 million and the appeal is currently pending.
4. Our Company v. Additional Commissioner of Income Tax Range 2, New Delhi -Appeal No. 73/09-10
before the Commissioner of Income Tax (Appeals)-V, New Delhi for the A.Y. 2007-08
Our Company on December 18, 2009 has filed an appeal under section 246A of the I.T. Act before the
Commissioner of Income Tax (Appeals)-V (“CIT Appeals”), New Delhi against the assessment order for the
A.Y. 2007-08 dated November 25, 2009 passed by the Additional Commissioner of Income Tax, Range-II,
New Delhi. The Additional Commissioner of Income Tax vide its aforesaid order has disallowed amounts of `
1.94 million and ` 0.36 million under section 14A of the I.T. Act and ` 0.36 million under section 40A(2)(b)
of the I.T. Act, and on account of interest paid to a related party. The total amount involved in the appeal is `
0.79 million and the appeal is currently pending.
5. Our Company v. Deputy Commissioner of Income Tax, Circle 2(1), New Delhi -Appeal No.265963
dated April 26, 2010 before the CIT Appeal-V, New Delhi for the A.Y. 2008-09
Our Company on April 26, 2010 has filed an appeal under section 246(A) of the I.T. Act before the CIT
Appeals-V, New Delhi against the assessment order dated March 31, 2010 for the A.Y. 2008-09 passed by
Deputy Commissioner of Income Tax, Circle 2(1), New Delhi. The Deputy Commissioner of Income Tax has
disallowed an amount of ` 1.20 million under section 14A of the I.T. Act, and ` 0.01 million on account of
addition under section 40A(2)(b) of the I. T. Act, 1961; ` 0.3 million being village welfare expenses treated as
charity and donation expenses and ` 4.70 million being late deposit of employees share of provident fund. The
total amount involved in the appeal is ` 4.15 million and the appeal is currently pending.
6. Our Company v Deputy Commissioner of Income Tax, Circle 2(1), New Delhi-Appeal No. 266138 dated
April 11, 2011 before the CIT Appeals -V, New Delhi for the A.Y. 2009-10
Our Company has filed an appeal before CIT Appeals on April 11, 2011 against the assessment order dated
March 11, 2011 passed by the Deputy Commissioner of Income Tax, Circle 2(1), New Delhi for the A.Y.
2009-10 wherein the assessing officer has disallowed ` 8.13 million on account of section 14 A of the I.T. Act;
` 0.47 million on account of charity and donation; ` 6.74 million on account of capital work in progress
written off and ` 0.17 million being difference between annual information reporting and disclosure by
Company. The total amount involved in the appeal is ` 5.27 million and the appeal is currently pending.
Compounding application dated May 24, 2011 filed with the RBI on May 25, 2011
Our Company by way of an application dated January 3, 2011, sought the approval of the FIPB for the
subscription to 298,705 Equity Shares upon the conversion of 298,705 warrants by Pineridge. These warrants
were issued by our Company to Pineridge, by way of a preferential allotment under the foreign direct
investment route. On May 9, 2011, FIPB granted its ex-post facto approval for the issuance of 298,705
warrants and their subsequent conversion into Equity Shares on March 14, 2008. The FIPB approval is subject
to compounding by the RBI. Accordingly, on May 24, 2011, our Company filed a compounding application
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