Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 17, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
Income Tax
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U/s 92C(2) of IT Act 1961- Computation of arm's length price - price variance upto 1% in case of wholesale trade and 3% in all other cases will be allowed.
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Correct head of income - Income from capital gains or business income - the business activity of the assessee is trading in shares, there can be a presumption that the amount claimed was derived through trade; in such case, the assessee has to establish that the impugned amount was indeed invested and the proceeds of sales were of a capital asset. - AT
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Disallowance of deduction u/s 80IB - net profit on the trading goods - AO is correct in his decision not allowing deduction u/s 80IB on such sale made by the assessee (appellant) out of purchased Deshee Ghee and Skimmed Milk. - AT
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Additions towards cash seized at airport - Tax should be charged in the relevant assessment year in which it has been received or deemed to be received/accrues or arises or is deemed to accrue or arise/accrues or arises to the assessee at the rate in force in that assessment year. - AT
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CBDT authorises that the Assistant Commissioner of Income-tax (e-Verification), having headquarter at Delhi, to act as prescribed Income-tax Authority for the purpose of section 143(2) and 142(1)
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Allowance of wage expenses - Unsigned vouchers - most of the payments are in cash - Though 100% disallowance by AO was not justified but in the given facts and circumstances of the case, disallowance of 20% of the total impugned wages will meet the end to justice for both the parties. - AT
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Penalty levied u/s. 271(1)(c) - Income disclosed by the assessee in the Return of Income which is not part of Regular Accounts - CIT(A) directed the AO that levy penalty u/s. 271AAA cannot sustained - Hence the action of the Assessing Officer to sustain the penalty u/s 271(1)(c) levied in the revision order is upheld. - AT
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Penalty u/s 271C - bonafide belief - Governmental authority itself has demanded not to deduct TDS. In case even if tax was required to be deducted on such payment but not deducted under a bonafide belief then no penalty shall be leviable u/s 271C - AT
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Levy of penalty u/s 271(1)(c) - Scrutiny under CASS - the assessee failed to prove the creditworthiness of the cash deposits (Capital) in the partnership firm and therefore was no illegality in the orders - Levy of penalty confirmed - AT
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Claim of weighted deduction @ 200% made us/ 35(2AB) - need for production of Form NO.3CL - The year under consideration being AY 2014-15, the same would fall prior to 1/4/2016 and hence the tax authorities are not justified for insisting on production of Form NO.3CL for allowing deduction u/s 35(2AB) - AT
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Condonation of delay - delay is of 20 years - Here, the applicant wants to condemn the advocate behind his back. In my view, it is impermissible and unacceptable. Further, no steps are also being taken by the applicant against any advocate under the provision of the Advocates Act - Application for condonation of delay dismissed with cost - HC
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Claim for registration u/s 12AA - Bye-laws of the Trust is not having any provision in relation to disbursement of balance funds in the eventuality of the dissolution of Trust - the situation contemplated by the CIT(E), has now taken care of in any way u/s 115(TD)(c) - registration cannot be denied merely on the basis of future event which is uncertain - HC
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Warrant of Authorization u/s 132A(1) - the satisfaction has been recorded based on cogent materials on record - The submission that there is no clarity in the Warrant of Authorization issued under section 132A whether the case is one in which the income could be said to be not disclosed or would not have been disclosed, is not acceptable - HC
Customs
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Valuation of imported goods - if the value has been changed by the respondents themselves, there would be no cause for an appeal which would have been against their own assessment as the self-assessment regime is under place - Commissioner (Appeals) wrongly directed the revenue to conduct audit - AT
DGFT
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Annexure I to Appendix 2A revised - laying down the procedure for import of various items under Tariff Rate Quota under different Trade Agreement.
SEBI
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Schemes of Arrangement by Listed Entities and (ii) Relaxation under Sub-rule (7) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957
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Additional commodities as Eligible Liquid Assets for Commodity Derivatives Segment
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Renewal of recognition for "Metropolitan Stock Exchange of India Limited" one year
Service Tax
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Re-opening of assessment made under VCES - merely classifying the services under a different head does not tantamount to mis-declaration and therefore it is not open for the department to reopen the assessment in case of VCES unless there is a substantial mis-declaration otherwise. - AT
Central Excise
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Rejection of refund claim - unjust enrichment - on realizing the mistake of excess payment of duty, they have issued credit notes to the customers so as to adjust the excess payment made by them. This adjustment is rebutted in the balance sheet in the form of receivables - Refund allowed. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (9) TMI 665
Maintainability of appeal - service of order - appeal has been dismissed on the ground that certified copy of order in original has not been appended, whereas factually original order had been appended - Haryana GST Act - HELD THAT:- The learned State counsel on instructions from Shri Vijay Kumar Singh, Addl. Excise and Taxation Commissioner, Panchkula submits that Revisional Authority exercising the powers under Section 108 of Haryana Goods and Services Tax Act, 2017 has annulled impugned order while remanding back to Appellate Authority for adjudication of appeal on merits. Appeal disposed off.
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2019 (9) TMI 664
Permission for withdrawal of petition - Levy of service tax - payment of element of service tax on the rented property for commercial purposes - GST Act - HELD THAT:- Having failed to convince this Court to invoke writ jurisdiction, learned counsel for petitioners prays for permission to withdraw writ petition so as to enable his clients to avail proper remedy. Petition dismissed as withdrawn.
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Income Tax
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2019 (9) TMI 663
Penalty u/s 271(1)(c) - defective notice - Disallowance on account of claiming excessive bad debts written off - whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings? - HELD THAT:- Hon ble High Court of Karnataka in case of CIT vs. Manjunatha Cotton and Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] while deciding the identical issue held that when the AO has failed to issue a specific show-cause notice to the assessee as required u/s 274 read with section 271(l)(c), penalty levied is not sustainable. When the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. See M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] Even the AO has failed to apply his mind at the time of recording satisfaction at the time of framing assessment to initiate the penalty proceedings u/s 271(1)(c) of the Act as to under which limb of section 271(1)(c) i.e. for concealing particulars of income or furnishing inaccurate particulars of such income, penalty proceedings have been initiated rather written vague and ambiguous satisfaction recorded that, penalty proceedings u/s 271(1)(c) are initiated - Decided in favour of assessee.
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2019 (9) TMI 662
Nomination fee - allowable business expenditure - Appointment of assessee as sole hanger supplier by its non-resident client - As a consideration, the assessee has to pay a nomination fees as a percentage on the sale value of hangers to ASDA, C A, Old Navy Arcadia for this referral/accredition as a preferred vendor . - HELD THAT:- In the case of the assessee, all the entities are aliens to each other but for their business connections. Further it is not for the Ld.Revenue Authorities to decide as to what expenditure is to be incurred by the assessee and what not. Following the decision in the own case of assessee [ 2018 (5) TMI 1743 - ITAT CHENNAI] appeal of the revenue dismissed.
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2019 (9) TMI 661
Exemption u/s 11 - charitable activity u/s 2(15) - assessee is an organisation incorporated under section 25 of the Companies Act, 1956 as not-for-profit organisation, registered under section 12A - grant of approval to the petitioner under Section 10(23C)(iv) - HELD THAT:- As decided in own case [ 2015 (1) TMI 928 - DELHI HIGH COURT] where an institution is not driven primarily by a desire or motive to earn profits, but to do charity through the advancement of an object of general public utility, it cannot but be regarded as an institution established for charitable purposes. Thus, while we uphold the Constitutional validity of the proviso to Section 2(15) of the said Act, it has to be read down in the manner indicated by us. As a consequence, the impugned order dated 23.01.2013 is set aside and a mandamus is issued to the respondent to grant approval to the petitioner under Section 10(23C)(iv) of the said Act within six weeks from the date of this judgment. The writ petition stands allowed as above. Depreciation to assessee trust - HELD THAT:- As decided in own case [ 2015 (8) TMI 89 - DELHI HIGH COURT] The equally plausible and consistent interpretation of clause (a) of Section 11(1) of the Act is that income derived from property must be calculated as per the principles of the Act. The said clause is not a computation provision and does not disturb the income earned or available but postulates that the income as computed in accordance with the provisions of the Act to the extent of 86% must be applied. Application of income may include purchase of a capital asset. The said purchase is valid and taken into consideration for the purpose of ensuring compliance, i.e., application of money or funds and is not a factor which determines and decides the quantum of income derived from property held under trust. Addition on a/c of space rent income on the basis of disclosure in Notes to Accounts of the assessee - HELD THAT:- We are of the considered view that when income on account of space rent has not been accrued, as in the instant case due to dispute, there cannot be any rent even though entry in the books of account have been made on account of notional income. So, when the income would be received its taxability can be examined by the Revenue. Ld. DR for the Revenue has not brought on record any document if the dispute between the parties qua the space rent has been resolved. So, in these circumstances, we are of the considered view that there is no illegality or perversity in the findings returned by the ld. CIT (A) - Decided against revenue
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2019 (9) TMI 660
Correct head of income - Income from capital gains u/s. 111A or business income - assessee has admitted income from sale on shares (INTRADAY) under the head business and income from profit on sale of shares under the head capital gains also - considering the frequency of buying and selling and the period of holding of shares, the AO held that the nature of the activity is that of trading in shares and not an investment in shares, therefore he held that the income arising from sale of shares, claimed by the assessee under the head capital gains, is assessable as business income and assessed accordingly - HELD THAT:- As relying on OM PRAKASH ARORA [ 2014 (4) TMI 972 - DELHI HIGH COURT] the reasoning given by the lower authorities to assess the income under the head business is, in our view, very well justified. Further, since in this case, the business activity of the assessee is trading in shares, there can be a presumption that the amount claimed was derived through trade; in such case, the assessee has to establish that the impugned amount was indeed invested and the proceeds of sales were of a capital asset. However, the assessee has not laid any such material either before the lower authorities or before us. Therefore, no merit in the submissions of the assessee and hence dismiss the appeals. - Decided in favour of revenue.
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2019 (9) TMI 659
Benefit u/s. 54F denied - investment in purchase of a new residential house - only objection of the department that the execution of sale deed and possession by the assessee is much beyond the stipulated period - HELD THAT:- Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as required under the law, that would not disentitle the assessee from the said benefit. In the present case, this is not in dispute that the assessee has made investment of ₹ 1 Crore for purchase of residential house and only the registered deed was executed after more than 4 years and the possession was also taken after more than 4 years but as per the judgment of H SAMBANDAM UDAYKUMAR [ 2012 (3) TMI 80 - KARNATAKA HIGH COURT] the assessee will not disentitled from claiming deduction u/s. 54F of the IT Act. Respectfully following this judgment of Hon'ble Karnataka High Court, we hold that assessee should be allowed deduction u/s. 54F as claimed by the assessee because investment in purchase of a new residential house made by the assessee is of ₹ 1 Crore and it was made by the assessee on 30.06.2012 whereas the transfer of the original asset took placed on 19.09.2011. There is no dispute on these factual aspects because the same are noted by the AO and there is no observation of the AO that these facts are not correct. - Decided in favour of assessee.
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2019 (9) TMI 658
TP Adjustment - assessee used TNMM as most appropriate method and OP/OC as PLI and determined margin to be 15% for software and hardware development service segment - HELD THAT:- Assessee provides software and hardware development services to NI U.S., operating as an independent contractor. The foreign AE compensates assessee on cost plus markup basis for services rendered in accordance with agreement entered into between assessee and NI US, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2019 (9) TMI 657
Disallowance of deduction u/s 80IB - net profit on the trading goods of Dholpur Unit - whether repacking of trading goods after a cleaning process can be called as manufacturing? - HELD THAT:- The word manufacture has been defined u/s 2(29BA) in the present appeal in case of trading goods, the purchased material is Deshee Ghee and Skimmed Milk and the material sold is also Deshee Ghee and Skimmed Milk. The only difference is that before selling, guthaie from Deshee Ghee and moisture from Skimmed Milk has been removed and they are packed in pouches and tins having brand name of company. No other processing done on trading goods before theirs sale has been explained. Therefore, purchased goods as well sold goods remained to be Deshee Ghee and Skimmed Milk in respect of trading goods and no new product has come into existence with a different chemical composition or having different name, character and use Therefore, the Deshea Ghea and Skimmed Milk sold after purchasing from the market and repacking them after removing guthale from Deshee Ghee and moisture from Skimmed milk would not amount to manufacture, if the above definition of manufacture is applied. In the present case also, for the Deshee Ghee and Skimmed Milk sold out of Desnee Ghee and Skimmed Milk purchased from the market, what was Deshee Ghee and Skimmed Milk continued to be Deshee Ghee and Skimmed Milk but with lesser quantity of guthale in Deshee Ghee and lesser quantity of moisture in Skimmed Milk and no new product has emerged from the process employed by the assessee. Since the output product is not different than the input product and the purpose for which input product can be used, arc only the purpose for which the output product can be used, the Deshee Ghee and Skimmed Milk purchased from the marked cannot be said to be sold out of manufactured Dashee Ghee and Skimmed Milk. Therefore, such sales have been shown by the assessee (appellant) to the Trade Tax Department as trading sale and hence, for such sale, the assessee (appellant) would not be entitled for deduction u/s 80IB as held by the AO in the assessment order and accordingly, the CIT(A) was justified in confirming the addition in articulative manner. Heating of the scrap bitumen in order to obtain solid bitumen, by causing moisture and oil in the scrap bitumen to evaporate or separated, cannot amount to a process of manufacturing. Similarly removing of guthale from Deshee Ghee and moisture from Skimmed Milk cannot amount to a process of manufacturing. Therefore, we appreciate the finding of the CIT(A) in holding hold that the AO is correct in his decision not allowing deduction u/s 80IB on such sale made by the assessee (appellant) out of purchased Deshee Ghee and Skimmed Milk. Since there is no dispute in respect of calculation of trading and manufacturing goods, we confirm the decision of the CIT(A)in upholding AO s disallowing net profit on trading goods of Dholpur unit while calculating deduction u/s 80IB and hence deduction u/s 80IB computed by the AO is confirmed and accordingly - Decided against assessee.
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2019 (9) TMI 656
Block assessment proceeding u/s 158BC(c) - Disallowance u/s 40A(3) - HELD THAT:- Answer to the question whether any disallowance can be made u/s 40A(3) while passing the block assessment order ? is no. The addition which needs to be made u/s 158BC (c) of the Act is the addition on the basis of the documents found during the course of search. Where this was the position as far as Section 158BC(c) assessment was considered and the provisions of Section 40A(3) of the Act are outside the ambit of block assessment, which is the proposition laid down by Pune Bench of the Tribunal in the case of ACIT Vs. Rushiraj Builders [ 2012 (2) TMI 686 - ITAT PUNE] . Applying the said proposition to the facts of the case, we hold that there is no merit in making the aforesaid disallowance u/s 40A(3) - decided in favour of assessee Unexplained investment during block period - as per assessee once the addition has been made in one of the hands, then there is no question of making same addition in the hands of the partnership firm - HELD THAT:- In facts and circumstances, when both the partners of the partnership firm were of 20 years of age and were still studying, then and also where the investment has been admitted to have been made by Shri Subash G. Pingale, there is no question of rejecting the plea of the assessee in this regard. Accordingly, we reverse the orders of the authorities below and hold that once the addition has been made in the hands of Shri Subash G. Pingale, may be, the block assessment was not upheld on technical grounds, but where the partners were minors and were studying and had no source of income, then no addition is warranted in the hands of the partnership firm. Charge of interest u/s 158 BFA(1) - whether the said interest levied for filing the return late for the block period is to be upheld or not ? - HELD THAT:- As plea of the assessee before us is that the delay was on the ground that Assessing Officer had not provided the photo copies of the documents. The learned Authorised Representative has pointed out that the issue stands covered by the order of the Pune Bench of the Tribunal in the case of ACIT Vs. Mr. Amod Subhash Pingale [ 2016 (7) TMI 1542 - ITAT PUNE] . The said paras are being referred to but are not being reproduced for the sake of brevity. In its order the Tribunal has already decided the said issue and remitted the matter back to the file of AO. In view of the same and following the same parity of reasoning, we direct the AO to follow our directions in this regard and re-compute the interest, if any, leviable. Charging of surcharge - HELD THAT:- Search was for the period prior to 01.06.2002 and no surcharge is to be levied in such cases. Such is the proposition laid down by Tribunal in the case of Mr. Amod Subhash Pingale [ 2016 (7) TMI 1542 - ITAT PUNE] and following the same, we hold that no surcharge is leviable.
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2019 (9) TMI 655
Accrual of income - year of assessment - cash seized at airport - HELD THAT:- Findings noted by the ld. CIT(A) that the disputed amount has been earned during the assessment year 2013-2014, therefore, it would be taxed in the assessment year 2013-2014. Accordingly, we do not find any substance in the submissions of assessee that this amount is included in ₹ 20 lakhs. The amount has been earned by the assessee during the impugned assessment year, therefore, taxability on the same amount cannot be carried forwarded in the subsequent year. The income has been defined as per Section 2(24) of the Act. Tax should be charged in the relevant assessment year in which it has been received or deemed to be received/accrues or arises or is deemed to accrue or arise/accrues or arises to the assessee at the rate in force in that assessment year. Ld. AR of the assessee has also not disputed that this income has been earned during the impugned assessment year, therefore, in view of the above, ld. CIT(A) has rightly decided the issue. - Decided against assessee
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2019 (9) TMI 654
Levy of penalty u/s 271(1 )(c) - validity of notice issued for initiation of penalty - debatable issue - security deposit forfeited represented capital loss and hence, not allowable as deduction - HELD THAT:- The issue involved is only of the interpretation of the transaction of loss of security. According to the assessee, it was in the nature of revenue expenditure whereas according to the Assessing Officer, it is capital loss, not allowable against the business profit. There is no doubt that there were two opinions, whether the advances written off could be considered as revenue expenditure or capital expenditure. See MYSORE SUGAR COMPANY LIMITED [ 1962 (5) TMI 3 - SUPREME COURT] Hon ble High Court of Punjab and Haryana in the case of Commissioner of Income Tax versus Amtek Auto Limited [ 2013 (6) TMI 133 - PUNJAB AND HARYANA HIGH COURT] has held that merely because assessee claimed expenditure as revenue, which was held as capital by the Assessing Officer, penalty for concealment could not be imposed where assessee discloses nature of transaction . In the case of Commissioner of Income Tax Vs. Electrolux Kelvantro Ltd. [ 2013 (9) TMI 970 - DELHI HIGH COURT] held that where the issue involved is debatable and not free from doubt, no penalty can be levied. - Decided in favour of assessee.
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2019 (9) TMI 653
Re-opening of assessment u/s 147 - disallowance of claim u/s. 36(1)(viia) - HELD THAT:- There is no violation on the part of the assessee to fully disclose material facts, are of the substantive opinion that the re-assessment u/s 147 is bad in law as the assessee bank has substantiated with evidence and judicial decisions on full and fair disclosure of material. Assessee-bank has discharged its duty by disclosing all material facts fully and truly and if the information submitted is untrue or on account of omission or failure to discharge fully and truly, the provisions of section 147(a) shall not apply. We also support our view and rely on the decision of the Hon ble Karnataka High Court in the case of Infosys Ltd. (Formerly known as Infosys Technologies Ltd.) vs. Deputy Commissioner of Income-tax [ 2019 (6) TMI 1261 - KARNATAKA HIGH COURT] Accordingly, we set aside the order of CIT(A) and quash the re-assessment proceedings - Decided in favour of assessee.
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2019 (9) TMI 639
Claim of depreciation on hotel building - additions u/s 41(1) - additions u/s 68 - unexplained share capital - HELD THAT:- SLP dismissed on the ground of low tax effect.
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2019 (9) TMI 638
Reopening of assessment u/s 147 - invalid notice - contention of assessee is that the notice was not issued with the prior sanction of the Joint Commissioner, but sanction was accorded by the Additional Commissioner therefore, notice u/s 148 issued by the A.O. was without jurisdiction - Section 2 of the Act is Definitions Section. Clause (28C) of Section 2 of the Act defines the word Joint Commissioner and explains it means a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income Tax under sub-section (1) of Section 117 - HELD THAT:- SLP dismissed.
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2019 (9) TMI 637
Review petition - unexplained cash - disclosure about the source of the cash seized by the police - Warrant of Authorization under Sub-section (1) of Section 132A - HELD THAT:- None of grounds raised for the purpose of review are tenable in law. For the purpose of review, the error should be palpable or to put in other words, it should be apparent on the face of the record. Mr. Shah, the learned senior counsel has virtually argued the whole matter. The same is not permissible in law. It is not in dispute that cash worth ₹ 2,45,00,000/- came to be seized from the two employees of the courier company and it is also not in dispute that the cash belongs to the writ applicant. In the course of the hearing of the writ application, it has been admitted that although it was asserted before the authority that the cash was withdrawn from the Bank Account of the wife of the writ applicant, but later, the writ applicant clarified that no cash was withdrawn from the Bank Account of his wife. The matter is still at the stage of investigation by the respondent authority. The picture is quite hazy. The procedure under section 132B of the Act will make the picture clear. We are not convinced with the submission of Mr. Shah, that there is no clarity in the Warrant of Authorization issued under section 132A whether the case is one in which the income could be said to be not disclosed or would not have been disclosed. We had also called for the original file and after perusing the same, we were convinced that the satisfaction has been recorded based on cogent materials on record. No case is made out for review of the judgement
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2019 (9) TMI 636
Claim for registration u/s 12AA - division of the property - whether Constitution/ Bye-laws of the Trust is not having any provision in relation to disbursement of balance funds in the eventuality of the dissolution of Trust ? - HELD THAT:- This Court is of the opinion that the absence of dissolution clause or condition as rightly contended by the assessee, is an uncertain future event. Further-more, given that the property is vested in a public charitable trust, it is always open to the concerned party including the Revenue, to approach the Civil Court for a remedy under Section 91-92 of the Code of Civil Procedure. Court noticed the situation contemplated by the Commissioner of Income Tax (Exemption), has now taken care of in any way under Section 115(TD)(c) brought into force w.e.f. 1st June, 2016. Decided in favour of assessee and against the revenue.
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2019 (9) TMI 635
Deduction u/s 80P(4) - assessee-society is registered under the provisions of the TNCS Act - whether activity of the appellant is that of finance business and cannot be termed as cooperative society? - definition of the word 'members' - HELD THAT:- The substantial question of law framed for consideration was considered by a Division Bench of this Court in the case of The Principal Commissioner of Income Tax, Salem vs. M/s.S-1308 Ammapet Primary Agricultural Cooperative Bank Ltd. [ 2019 (1) TMI 116 - MADRAS HIGH COURT] where held Definitions of the expressions 'members' and 'associate member' under the TNCS Act held that an 'associate member' is also a 'member' in terms of Section 2(16) of the TNCS Act. Furthermore, the Assessing Officer himself found that the associate members are also admitted as members of the society. AO fell into an error in not granting any relief to the assessee society, which was rightly granted by the CIT (A) as confirmed by the Tribunal AO has not pointed out that loans have been disbursed to all and sundry in terms of the provisions of the TNCS Act and in terms of Clause (b) to Sub-Section (4) of Section 80P the society has an area of operation, operates within the taluk and will provide long term credit for agricultural and rural development activities as well. CIT (A) rightly granted the relief to the assessee as confirmed by the Tribunal. - Decided against the Revenue.
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2019 (9) TMI 634
Condonation of delay - delay is of 20 years - as per applicant she entrusted her brief to her advocate and her advocate did not take any steps to pursue the matter - HELD THAT:- Mr. Motwani, learned counsel for the applicant could not point out before this Court that at any point of time from 18.10.1997, when the decree, which is sought to be challenged before this Court, was passed, the applicant even remotely tried to contact her advocate to know the fate of litigation. In the application, it is stated that she entrusted her matter to Mr. Vilas Mate, of Tumsar. She never met with Mr. Bhole, Advocate. According to the learned counsel for the applicant, Mr. Bhole might, on instructions from Mr.Vilas Mate, have appeared before the Court below. It is very easy for a litigant to make allegations against an advocate behind his back. If the applicant wishes to make allegations against the advocate, the applicant should have a courage to join the advocate as a party and in his presence should make allegation against him. Here, the applicant wants to condemn the advocate behind his back. In my view, it is impermissible and unacceptable. Further, no steps are also being taken by the applicant against any advocate under the provision of the Advocates Act. Thus, the reason as supplemented in the application is nothing but a attempt for claiming discretionary relief of condonation of delay from the Court. The applicant has not explained the delay, rather has not given plausible explanation for delay. Application dismissed with costs of ₹ 1,000/-
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2019 (9) TMI 633
Claim of weighted deduction @ 200% made us/ 35(2AB) - need for production of Form NO.3CL for allowing deduction u/s 35(2AB) - scope of amendment - HELD THAT:- Whether furnishing of Form No.3CL is mandatory for allowing deduction u/s 35(2AB) of the Act came to be considered by the coordinate bench in the case of M/s Mahindra Electric Mobility Ltd., Vs. ACIT [ 2019 (1) TMI 20 - ITAT BANGALORE] held that prior to 1/7/2016, Form No.3CL had no legal sanctity. It was further held that, only w.e.f 1/7/2016, in view of the amendment made to Rule 6(7A((b) of the Income-tax Act Rules, the quantification of weighted deduction allowable u/s 35(2AB) of the Act has to be based on From No.3CL and hence the said form has obtained significance. The year under consideration being asst. year 2014-15, the same would fall prior to 1/4/2016 and hence the tax authorities are not justified for insisting on production of Form NO.3CL for allowing deduction u/s 35(2AB) of the Act. Accordingly, we set aside the order passed by the ld CIT(A) and direct the AO to allow the deduction @ 200% of the expenditure incurred by the assessee, after examining the claim from the books of accounts - Decided in favour of assessee
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2019 (9) TMI 632
Levy of penalty u/s 271(1)(c) - Scrutiny under CASS - addition of unexplained capital of the partner of the firm u/s 68 - AO also disallowed interest - second round of assessment,the assessee again could not explain the source of capital introduction - HELD THAT:- From the information received by the Directorate of Income-tax (Investigation), it was found that the assessee had received the bogus gift of certain amount which, in fact, was the income of the assessee introduced in her funds in the shape of the gifts. As the assessee was not able to produce said persons for confirmation of gift and the creditworthiness of the donors could not be proved by the assessee, the Assessing Officer made addition under section 68 which was confirmed in appeal. Held that since the assessee failed to prove the creditworthiness of the donors there was no illegality in the orders of the authorities below. The same proposition of law is applicable to the facts of the present case as the assessee failed to prove the creditworthiness of the cash deposits (Capital)in the partnership firm and therefore was no illegality in the orders of the authorities below as well in the present case. No illegality in the orders of the authorities below as well as in the impugned order of the Tribunal and since the assessee/ appellant has failed to prove the creditworthiness of the partners as well as failed to place any evidence in support of its contention in respect of the issues which are raised before the Tribunal, therefore, we find no error in the order of the ld. CIT(A). The order of the ld. CIT(A)is confirmed and the appeal filed by the appellant is dismissed as the ld. CIT(A) has recorded a categorical finding of facts. Following the case of Jagmohan Ram Chandra Vs. CIT [ 2004 (8) TMI 46 - ALLAHABAD HIGH COURT] and Smt. Sheela Ahuja [ 2017 (11) TMI 686 - ALLAHABAD HIGH COURT] we hereby upheld the order the ld. CIT(A) and confirmed the levy of penalty u/s 271(1)(c) - Decided against assessee.
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2019 (9) TMI 631
Penalty u/s 271C - bonafide belief - TDS liability on payment paid for external development charges (EDC) to Govt. by issuing payment in the name of Haryana Urban Development Authority (HUDA) for and on behalf of and on instructions of Govt. - bonafide belief - HELD THAT:- As decided in RPS INFRASTRUCTURE LTD. VERSUS ACIT, RANGE-78, NEW DELHI. [ 2019 (9) TMI 39 - ITAT DELHI] assessee was under a bonafide belief that no tax is required to be deducted at source on such payments, firstly, for the reason that agreement was between DTCP, who is Governmental authority and licence was granted by the Government and EDC charges was directed to be paid to HUDA, therefore, this could led to reasonable cause that TDS was not required to be deducted; Secondly, DTCP had issued a clarification dated 29.06.2018 to the effect that no TDS was/is required to be deducted in respect of payments of EDC and this clarification issued by DTCP, covers both past and future as the words used are was/is. This shows that Governmental authority itself has demanded not to deduct TDS. In case even if tax was required to be deducted on such payment but not deducted under a bonafide belief then no penalty shall be leviable under section 271 C of the Act as there was no contumacious conduct by the assessee. - Decided in favour of assessee.
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2019 (9) TMI 630
Addition on account of cash gift - sufficient evidence or material on record to prove creditworthiness of the donor and genuineness of the gift in the matter - HELD THAT:- D.R. rightly objected to the admission of the same at this stage. Exclude the confirmation-cum-Gift Deed from consideration of the issue. It, therefore, stand proved on record that assessee has failed to explain the nature and purpose of the gift. No confirmation and Gift Deed was filed from the donor. In the absence of any evidence or material on record, the A.O. has correctly treated the Gift to be non-genuine. The assessee failed to prove the creditworthiness of the donor and genuineness of the transaction in the matter. No reasons or occasion of Gift have been filed on record. Gifts have been made on seven different dates in cash, for which, no explanation have been given, despite donor was maintaining her Bank A/c. Since no sufficient evidence have been filed before the authorities below to prove genuineness of the gift in the matter, therefore, it is clear that gifts are not genuine gifts and are arranged affairs of the assessee. Assessee failed to prove ingredients of genuine gift in the matter. As rely upon case of CIT vs. Anil Kumar [ 2007 (3) TMI 223 - DELHI HIGH COURT] , CIT vs. P. Mohankala [ 2007 (5) TMI 192 - SUPREME COURT] and in the case of Yashpal Goyal vs. CIT [ 2009 (1) TMI 58 - PUNJAB AND HARYANA HIGH COURT] . Assessee failed to produce sufficient evidence or material on record to prove creditworthiness of the donor and genuineness of the gift in the matter. Durga Prasad More [ 1971 (8) TMI 17 - SUPREME COURT] and Smt. Sumati Dayal [ 1995 (3) TMI 3 - SUPREME COURT] have held that the Courts and Tribunals have to Judge the evidence before them by applying the test of human probabilities . If the said test is applied in the matter, it is clearly established that assessee has failed to prove the genuineness of the gift in the matter. - Decided against assessee.
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2019 (9) TMI 629
Penalty levied u/s. 271(1)(c) - levy penalty u/s. 271AAA - assessee not admitted any undisclosed income u/s. 132(4) - HELD THAT:- Income disclosed by the assessee in the Return of Income which is not part of Regular Accounts is liable for levy of penalty u/s.271(1)(c) and (ii) the order of the CIT(A) directing the AO to levy penalty u/s. 271AAA of the Income Tax Act on the undisclosed income cannot be sustained. Hence the action of the Assessing Officer to sustain the penalty u/s 271(1)(c) levied vide order dt 27/6/2011 in the revision order dt 13/1/2017 is upheld. is justified and hence, we do not find any merit in the assessee s appeal. - Decided against assessee
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2019 (9) TMI 628
Unexplained cash credit u/s 68 - share capital of the company which was treated as unexplained investments - HELD THAT:- Section 68 allows the assessing officer to make the addition of unexplained cash credit. As per section 68, the sum should be credited in the books of accounts of the assessee and the source of which remained unexplained. In the instant case, land and building was constructed by the co-owners and the same was transferred - no credit for which the source was remained unexplained. Since the assessee has furnished all the details of the co-owners with confirmation letters, income tax assessment particulars and produced all the directors except 4 mentioned in the assessment order, the burden of the assessee got discharged and shifted to the AO. AO has not conducted the enquiries, did not give any finding that the company infused cash credits in the books and made the investments from unexplained sources. In the instant case, since all the promoter directors / co-owners are assessed to tax, explained the sources for investment in land and building in their hands, there is no case for making addition u/s 68 of the Act in the hands of the company and if at all any unexplained investment remained, the same required to be examined in the hands of individual share holders / co-owners in the respective assessment years of investment. - Decided against revenue. Capital gain computation - validity of valuation report and the assessment made by the AO on the basis of the report of Departmental Valuation Officer (DVO) - CIT(A) held that the report submitted by the DVO is non-est in law and has no value in the eyes of the law. Accordingly deleted the addition made by the AO - HELD THAT:- Though the assessee raised objection before the AO, the AO ignored the objection raised by the assessee and discussed the issue of time limit available for completion of assessment and justified the assessment without considering the actual objection raised by the assessee. Since there is no extension of time for submission of report is allowed under the Act and no concession was made available to the DVO for non cooperation of the assessee, the report submitted by the DVO beyond the time limit is invalid and is to be treated as non-est. The Ld.CIT(A) rightly held that the report of the DVO cannot be relied upon or considered by the AO to frame the assessment u/s 143(3). In the grounds of appeal, though the department contended that AO has not fully relied upon the DVO's Valuation report and taken as a guidance, it is found from the order of the AO that the assessment was framed on the basis of the DVO s report. From plain reading of the assessment order it evidenced that the AO has made the addition purely relying on the DVO s report. Since the report of the DVO is non-est the assessment made on the basis of invalid report is unsustainable. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. Allowance granted CIT(A) on account of self-supervision and the rate difference - objection of the department is that the CIT(A) has taken inconsistent stand with regard to validity of the report and the concessions granted to the assessee on the same report relating to rate difference and self supervision - HELD THAT:- CIT(A) rightly adjudicated the grounds raised by the assessee both on validity of assessment made on invalid valuation report and also on rebates requested by the assessee. Thus we do not find any error in the order of the Ld.CIT(A) in adjudicating the alternate grounds. In this regard, we confine ourselves in holding that the Ld.CIT(A) is right in adjudicating the alternate grounds, but we are not going into merits of the order of the Ld.CIT(A) with regard to allowances granted by the Ld.CIT(A) in respect of rebate for rate differences, savings for self supervision etc. and the said issues are kept open. Since we have held that the additions made on the basis of invalid report are unsustainable, we uphold the order of the Ld.CIT(A) and dismiss the appeals of the revenue. Therefore, we consider it is not necessary to adjudicate the grounds raised by the revenue with regard to allowances granted by the Ld.CIT(A) in respect of rate differences and self supervision.
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2019 (9) TMI 627
Rectification u/s 154 - deduction u/s 80HHC on sale proceeds of DEPB license in favour of the assessee - HELD THAT:- There is no dispute with respect to the fact that the subsequent decision of the Hon'ble Supreme Court in the case of Topman Exports [ 2012 (2) TMI 100 - SUPREME COURT] has decided the issue of deduction u/s 80HHC on sale proceeds of DEPB license in favour of the assessee. Once that is so, it can be safely inferred that the legal position on the issue of deduction under Section 80HHC of the Act on sale proceeds of DEPB license has been clarified by the Hon'ble Supreme Court and which decision has a retrospective effect. As such, the legal position clarified by the Hon'ble Supreme Court was existing at the time of passing of the order by the AO and the CIT(A). Order passed by the AO was in contravention of the legal position subsequently clarified by the Hon'ble Supreme Court. Thus, it can be said that the mistake was a patent mistake, and which was apparent from the record. Accordingly, it can be termed as a mistake apparent from record and was very much rectifiable under Section 154 of the Act. We find that the issue of deduction under Section 80HHC of the Act on sale proceeds of DEPB license has been decided by the Hon'ble Supreme Court in the case of Topman Exports (supra). We accordingly direct the Assessing Officer to re-compute the deduction under Section 80HHC of the Act on sale proceeds of DEPB license in light of decision of Hon'ble Supreme Court in the case of Topman Exports (supra). Accordingly, the Ground raised by the assessee in appeal is allowed.
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2019 (9) TMI 626
Allowance of wage expenses - CIT(A) allowing 90% of wages expenses claimed by the assessee related to two projects - Case was selected for scrutiny assessment as per CASS, followed by serving of notices u/s 143(2) 142(1) - HELD THAT:- There is no representation from the side of the assessee to bring on the facts and relevant financial statement on record - necessary details have been examined including the muster roll. CIT(A) seems to be satisfied with the details mentioned therein and also referred to minor discrepancy in the records. Mainly various vouchers of labour payments are unsigned. It is also noteworthy that the assessee being a building construction project has declared huge loss. No details have been filed for the tax deducted at source if any on the labour contract charges. Site wise details were also not available on record. Allegedly, most of the payments have been made in cash. Submissions given by the assessee before the CIT(A) is general in nature. Labour licence stood expired on 31.03.2013. Though 100% disallowance by AO was not justified but in the given facts and circumstances of the case, disallowance of 20% of the total impugned wages will meet the end to justice for both the parties. Appeal of the Assessee is partly allowed.
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2019 (9) TMI 625
Addition u/s 68 - bogus LTCG - assessee did not produce the share applicants before the AO establishes that the share applicants did not exist at all and so the claim of assessee is bogus - onus of identity, creditworthiness and genuineness of the transaction - HELD THAT:- Assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee cannot be brushed aside by the AO to draw adverse view cannot be countenanced. In the absence of any investigation, much less gathering of evidence by the AO, we hold that an addition cannot be sustained merely based on inferences drawn by circumstance. Applying the propositions laid down in these case laws to the facts of this case, we are inclined to uphold the order of CIT (Appeals) Section 68 provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. - Decided in favour of assessee.
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2019 (9) TMI 624
Exemption u/s.11(1)(d) - Revenue contended that, CIT(A) deleted the additions on Infrastructure subsidy received from BCCI denying exemption u/s.11(1)(d) of the Income Tax Act, 1961 on corpus donation without any 'specific direction' for the purpose - whether CIT(A) has erred in deleting the disallowance of 'Bogus Donation' claimed on account of expenses relating to Tournament Trophy and Ranji Trophy without considering that the expenses could not be substantiated during the assessment proceedings . - HELD THAT:- These issues are covered in favour of the assessee by the decision of the Ranchi Bench of the Tribunal in the case of M/s. Jharkhand State Cricket Association vs. DCIT(E), Ranchi [ 2019 (3) TMI 1585 - ITAT RANCHI] as held that receipts from BCCI cannot be considered as income received from activities in the nature of trade, commerce or business. The pith and substance of the argument of the ld. D/R is that the nature of receipt in the hands of BCCI is business or commercial receipts on account of IPL Subvention, T.V. Rights etc. and where these receipts are shared with the state association on an 30:70 ratio basis, the nature of receipt does not change and it would be business receipts in the hands of the State Associations also. The allegation of revenue is that these receipts are couched in the form of subsidies. Disallowance u/ 69C - HELD THAT:- Addition cannot be sustained as the amounts in question were recorded in the books of accounts and are part of the income and expenditure account and the source of the expenditure has been disclosed in the books of account. Assessing Officer made quantum disallowance exceeding more than what was debited to the income and expenditure account. AO has mixed up the disallowance due to non deduction of TDS. When application of income is considered u/s 11 of the Act, disallowance u/s 40(a)(ia) of the Act, cannot be made for the impugned Assessment Year. no infirmity in this order of the ld. CIT(A) as explanation (iii) to Section 11(1) of the Act, was introduced by the Finance Act, 2018 only w.e.f. 01/04/2019. Thus, we uphold the order of the ld. CIT(A) as stated above - Decided against revenue D elay in filing Form No. 10 for setting apart funds u/s 11(2) - HELD THAT:- We find that this is not a case were a fresh claim has been made by the assessee. This is a case where there is a delay in filing intimation in Form No. 10, for the purpose of accumulation of funds. The Hon ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association [ 2000 (12) TMI 99 - SUPREME COURT] had held that Form No. 10 can be filed by the AO before the completion of assessment. - Decided against revenue
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2019 (9) TMI 623
Adjustment u/s 145A - assessee company has claimed deduction on account of adjustment made to the value of the closing stock in the earlier years and has been allowed as deduction - HELD THAT:- Assessee is following the method of accounting consistently and even in AY 2007-08 and 2008-09 assessing officer accept the contentions of the assessee and no adjustment was made u/s 145 A while assessing the income under section 143(3) of the Act. Similarly, in AY 2009-10, the AO do not accept the contention of the assessee and adjustment was made u/s 144 while assessing the income under section 143(3) of the Act. Based on the working of assessment years 2007-09 and 2008-09, the income was reduced by a sum of ₹ 1,32,86,625/-. Adjustment carried out u/s 145A of the Act in assessing the income for AY 2009-10 is in according with the consistency followed by income tax department and not by the assessee. Hence, we are of the view that the direction of revision by CIT is without any basis on merits. The assessee has full proof case. On this issue, we allow the claim of the assessee. Allowability of capital expenditure - assets acquired but not put to use during the year ended 31.03.2009 claimed under section 35(1)(vi) read with section 35(2) - HELD THAT:- For the purpose of availing deduction of capital expenditure u/s. 35(1)(iv) of the Act, an assessee has to incur expenditure of capital in nature on scientific research relating to its business. The language employed in Section 35 of the Act, nowhere provides for the purpose of allowability of capital expenditure u/s. 35(1)(iv) of the Act that the assessee has to use the asset for research and development purposes during the relevant previous year in which such expenditure is incurred. The assessee becomes entitled to deduction even if the asset in question is not actually used, provided it has incurred capital expenditure during the previous year on scientific research. For the purpose of claiming deduction of capital expenditure u/s. 35(1)(iv) read with Section 35(2) of the Act, what is necessary is incurrence of expenditure, which the assessee company has incurred and not the user of the asset during the previous year in which such expenditure is incurred. Further, the eligible year of claiming deduction is the year of incurrence of such expenditure. It will be observed that as per Section 35(I)(iv) read with Section 35(2) of the Act, deduction for capital expenditure incurred is allowable. Central Board of Direct Taxes vide their Circular No. 5-P (LXXVI63) of 1967 also endorses the above proposition Even, the circular issued by the Central Board of Direct Taxes are legally binding on the Revenue authorities as held by the Hon. Supreme Court in the case of UCO Bank Vs. CIT [ 1999 (5) TMI 3 - SUPREME COURT] . Hence, we are of the view that this issue is allowable on merits and we accordingly, reverse the revision order of CIT on this issue. We reverse the revision order passed by CIT under section 263 of the Act but sustain the order on the issue of MAT Credit.
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2019 (9) TMI 622
Scrutiny under CASS - addition of unexplained capital of the partner of the firm u/s 68 - AO also disallowed interest - second round of assessment,the assessee again could not explain the source of capital introduction - HELD THAT:- AO was correct in holding these credits as unexplained in the hands of the assessee and the CIT(A)was justified in confirming the addition as unexplained capital of the assessee firm u/s 68 of the Act. Facts of case on hand demonstrate unexplained cash deposit in the books of account of M/s Verma Service Station P. Ltd. for which neither the assessee firm nor the partners could give any evidence or satisfactory explanation regarding identity and source of such deposits and therefore, disbelieving the contrary explanation offered by the appellant assessee in the two round of proceedings before the Tribunal and the Authorities below without substantiating with corroborative documentary evidences, the addition is confirmed as unexplained capital u/s 68 of the Act in the hands of the firm. Following the jurisdictional Hon ble Allahabad High Court in the case of Jagmohan Ram Chandra Vs. CIT [ 2004 (8) TMI 46 - ALLAHABAD HIGH COURT] we hereby upheld the order the ld. CIT(A) and confirmed the addition - Decided against assessee.
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Customs
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2019 (9) TMI 652
Refund of provisional assessed duty deposited under protest - period of limitation - condonation of delay - HELD THAT:- Delay caused in filing the court fee as well as delay in filing affidavit of valuation is condoned - application disposed off.
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2019 (9) TMI 651
Valuation of imported goods - import of HSS Drills - rejection of declared value - enhancement of value - re-assessment done without following the procedure - Commissioner (Appeals) directed the revenue to conduct audit - Section 17(6) of the Customs Act, 1962 - HELD THAT:- On going through the records of the case, it is seen that the value of the goods imported vide Bill of Entry No. 5500405 dated 19/12/2011 has been increased and the Respondents have cleared the goods by paying duty of ₹ 8,59,459. However, it is not clear as to whether the Respondent have contested the loading of the value or whether duty has been paid under protest. Further, it is not coming forth by records whether the provisions of Section 17(5) of the Customs Act, 1962 have been complied with or otherwise. From a plain reading of the provisions of Section 17(6) give an understanding that the same would be necessitated when reassessment has not been done or when a speaking order has not been passed on reassessment - There is certainly a change in the value initially declared and the value on which duty was paid and goods were given out of charge. However, it appears that as the respondent is not satisfied with the value adopted, they filed an appeal. Understandably, if the value has been changed by the respondents themselves, there would be no cause for an appeal which would have been against their own assessment as the self-assessment regime is under place - Therefore, it can be deemed that there was a reassessment, understandably, without following the procedure. Under the circumstances, conducting audit would not serve any purpose and would result in absurd situation as contended by Revenue. The situation envisaged under Section 17(6) is not applicable to such circumstances. The appeal filed by the department is allowed by way of remand to the Commissioner Appeals with a direction to decide the issue on merits - Appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2019 (9) TMI 650
Voluntary winding up - default in repayment of due installments - Section 10 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The learned counsel for petitioner-Company has tendered a crossed cheque, payable in the name of Liquidator for a sum of ₹ 11, 41, 223/- to learned counsel for respondent No. 2, which has been accepted towards arrears of rent - It is agreed between the parties that after adjusting the amount of refundable security and amount tendered today in Court, nothing remains outstanding against petitioner-Company towards any claim for the period premises having remained in its occupation, except a sum of ₹ 1, 48, 525/- towards arrears of Electricity Charges for the period prior to 1.7.2019 as per electricity bill dated 9.8.2019. The learned counsel for petitioner-Company states that since details of Electricity charges for period till 30.6.2019 have been disclosed now, his client shall tender said amount by way of crossed cheque to the Liquidator within two weeks from today - Petitioner-Company shall be bound by its statement towards payment of outstanding electricity charges for the aforesaid period. Petition disposed of as infructuous.
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Service Tax
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2019 (9) TMI 649
Permission for withdrawal of appeal - Liability of sub-contractor to pay service tax - HELD THAT:- The appeal is dismissed as withdrawn.
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2019 (9) TMI 648
Re-opening of assessment made under VCES - wrong declaration of service under the scheme - Department was of the view that services are to be classified under Works Contract Service and not Construction of Residential Complex Service - HELD THAT:- The facts of the case reveal that there is no dispute as to the value of services declared by the respondents. The allegation of mis-declaration is only with respect to classification of the services. The respondent classified the services as Construction of Residential Complex Services whereas department classifies it as Works Contract Service. This is only an issue of interpretation. Construction of residential complex services provides a more specific classification than works contract service and accordingly will prevail over the other classification. Also, the issue covered by the decision in the case of FRONTLINE BUILDERS AND DEVELOPERS VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, CALICUT [ 2017 (12) TMI 1440 - CESTAT BANGALORE] where it was held that merely classifying the services under a different head does not tantamount to mis-declaration and therefore it is not open for the department to reopen the assessment in case of VCES unless there is a substantial mis-declaration otherwise. Appeal dismissed - decided against Revenue.
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2019 (9) TMI 647
Classification of Services - Business Auxiliary Service or not - contribution made by members which are sugar Mills - demand of service tax alongwith penalty - HELD THAT:- The issue stands covered by the decision in the case of M/S UP CO OPERATIVE SUGAR FACTORIES FEDERATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE S.T., LUCKNOW [ 2017 (8) TMI 1004 - CESTAT ALLAHABAD] where it was held that no service tax would be chargeable on the amount being received by the appellant from its Member Sugar Mills - demand set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (9) TMI 646
Permission for withdrawal of appeal - Monetary amount involved in the appeal - refund claim - HELD THAT:- The appellant admits that in view of instructions dated 22. 8. 2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal would not be maintainable before this Court, as claimed refund i. e. ₹ 23, 76, 046/- is below the monetary limit of ₹ 1 Crore. Appeal dismissed as withdrawn.
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2019 (9) TMI 645
Permission for withdrawal of appeal - Monetary amount involved in the appeal - clandestine removal - HELD THAT:- The appellant admits that in view of instructions dated 22.8.2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal would not be maintainable before this Court, as demand amount i.e. ₹ 50, 53, 000/- approximately is to be recovered, which is below the monetary limit of ₹ 1 Crore. Appeal dismissed as withdrawn.
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2019 (9) TMI 644
Clandestine removal - finished goods cleared without recording such clearance in their Daily Stock Register - demand based on allegation of shortage of goods - principles of natural justice - HELD THAT:- The reasons assigned for proposing the duty demand were the shortage of goods found during physical verification on 10.01.2011 and that the details of such goods were not reflected in the ER-1 returns filed during the impugned period from 28.02.2010 to 10.01.2011. It is found that the said physical verification was carried out as per the request of the Appellant to verify the destroyed goods and grant permission to restart production. In the Adjudication order, no finding has been given by the Asstt. Commissioner about the various correspondences exchanged between the Appellant and the Department though the table containing sequence of events were duly submitted by the Appellant in the SCN reply dated 28.07.2016 which is on record. None of the correspondences reflects that the Department had any suspicion regarding the destruction of goods in the fire incident. The only finding given by the Asstt. Commissioner in the Adjudication order is that the Appellant could not furnish the remission certificate to claim waiver from payment of duty - In any case, mere fact of non-submission of remission certificate is not sufficient to draw an adverse inference to level the allegation of clandestine removal. The Appellant could not be made to suffer for the inaction on the part of the Departmental authorities. Since there is no evidence on record to show that the prayer for remission was rejected, the only conclusion that can be drawn is that the instant demand is wholly pre-mature which cannot survive in the eyes of the law - Further, the findings of Asstt. Commissioner and the Ld. Commissioner (Appeals) are contradictory. Lastly, it is now well accepted that the charge of clandestine clearance is a serious charge for which the department has to show positive evidences against the assessee corroborating various factors like unaccounted procurement of raw material and labour, sale of finished goods in cash, etc. - In the instant proceedings, there is no evidence regarding recording of statements of buyer or transporter, recovery of cash towards sale proceeds of goods clandestinely cleared, interception of vehicles carrying the alleged goods by the department. In absence of the aforementioned evidence, the allegation of clandestine removal levelled against the Appellant cannot sustain. Appeal allowed - decided in favor of appellant.
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2019 (9) TMI 643
100% EOU - Clandestine removal - diversion of goods to DTA instead of EOU - penalty u/r 25 of Central Excise Rules, 2002 - HELD THAT:- As per facts of the case, it is not case of clandestine removal as the appellant have cleared goods initially which was meant for another EOU and clearances was made ARE-3 against CT-3 certificate. It is only due to the cancellation of the order, the appellant was compelled to divert the goods to DTA for which necessary permission was obtained from the Deputy Commissioner, therefore, there is no malafide intention on the part of the appellant. Penalty cannot be upheld - appeal dismissed - decided against Revenue.
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2019 (9) TMI 642
Rejection of refund claim - unjust enrichment - duty discharged @ 16% instead of 9.6% due to oversight for the period from July 2002 to December 2002 - N/N. 9/2002-CE dated 1.3.2002 - rebuttal of presumption - section 12B of CEA - HELD THAT:- Undisputedly, the appellant had shown the duty amount in the invoice issued to the customers. Thereafter, on realizing the mistake of excess payment of duty, they have issued credit notes to the customers so as to adjust the excess payment made by them. This adjustment is rebutted in the balance sheet in the form of receivables. Thus, it is very much clear from the accounts as well as the documents that the appellant has rebutted the presumption envisaged under section 12B of Central Excise Act. The rejection of the refund claim on the ground that it is hit by unjust enrichment therefore cannot sustain - Refund allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (9) TMI 641
Notification G.O.Ms.No.604, Revenue (CT.IV) Department, dated 22.04.2008 - Exemption from entertainment tax - exemption to feature films/low budget films produced in the then State of Andhra Pradesh - HELD THAT:- As per this G.O., the theatre proprietor not only had to intimate to the concerned Entertainment Tax Officer, in advance and in writing, the particulars of the feature film/low budget film produced in Andhra Pradesh which was being screened but also furnish a certified copy of the certificate of the Film Development Corporation. Logically, the Film Development Corporation would not be in a position to issue such a certificate without knowing the number of prints of the movie that had been released. As noted, a low budget feature film was one where the number of prints was less than 35. This fact could only be ascertained after release of the movie and not prior thereto. In effect, the condition was practically impossible to perform. Significantly, the petitioner company asserted that it was alone being singled out for this discriminatory treatment and other similarly situated theatres were allowed to furnish the certificates from the Film Development Corporation later and not in advance. This assertion by the petitioner company was not rebutted by the third respondent in her counter-affidavit. No explanation is forthcoming even now as to why the petitioner company alone is being picked upon for violation of the condition of furnishing the certificates in advance. The third respondent also does not dispute that the certificates were produced by the petitioner company after release of the movies and there is no shortcoming or lacuna in this regard - The assessment orders, which proceeded only on the premise that such benefit could not be extended to the petitioner company owing to belated production of the certificates, therefore cannot be countenanced. Impugned Order set aside - petition allowed.
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2019 (9) TMI 640
Validity of assessment order - Section 25 of the Kerala VAT Act - assessment completed without issuance of SCN - Principles of Natural Justice - HELD THAT:- This Court is of the view that the assessment order dated 25.09.2018 is violative of principles of natural justice and contrary to Section 25 of the Kerala Value Added Tax Act. This Court is also satisfied with the explanation given by the petitioner that the petitioner is not served with the original copy of order of assessment dated 25.09.2018. This Court is not examining the merits or otherwise of the assessment order dated 25.09.2018. The assessment order is set aside and the matter restored to file.
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