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2022 (7) TMI 1109
Revision u/s 263 - Addition u/s 40A (3) and additional depreciation claimed by the assessee which was not verified accordingly excess depreciation was required to be disallowed - HELD THAT:- The assessment proceeding is continued by verification of expenses as required by the ld AO. The ‘a’ provided details during proceeding. Only in point of additional depreciation the issue is covered during filing of return with financial statement & ld AO had taken care during computation to total income. Where specific issue related to assessee-company's claim of higher rate of depreciation was raised by AO in scrutiny assessment and assessment order was passed after detailed submissions made by assessee were duly accepted. Mere non-mentioning of specific reasons for accepting explanation of assessee by AO in assessment order could not be reason to invoke revisionary powers under section263.
PCIT had invoked the section 263 which is beyond the jurisdiction. Appeal of the assessee is allowed.
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2022 (7) TMI 1108
Appealable orders before Commissioner (Appeals) u/s 246A - Levy of late Fee u/s 234E - intimation under section 200A - HELD THAT:- In this case the Appellant assessee had filed an appeal before the CIT(A) against the Intimation u/s 200A of the Act. The said fact is clearly mentioned in the Form-35, Column Number 2a. Therefore, as per section 246A of the Act, the assessee has a right to file an appeal before the ld.CIT(A) against the intimation u/s 200A of the Act. Therefore, we are of the opinion that the CIT(A) has erred in holding that the appeal is not maintainable. Hence, the issue is set aside to the file of the CIT(A) to be decided a fresh after giving opportunity to the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purpose.
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2022 (7) TMI 1107
Search and seizure - Gold Flake Super Star cigarettes - illicit trade/supply - jurisdiction of CGST Delhi North Commissionerate - reasonsto believe - HELD THAT:- Issue notice, returnable in two weeks.
There will be a stay of the impugned judgment till the next date of hearing.
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2022 (7) TMI 1106
Grant of Bail - requirement to make various deposits - HELD THAT:- The appellant, on instructions states that after the initial deposit of Rs. 60 crores, Rs. 40 more crores have been deposited totaling to Rs.100 crore - the appellant will make arrangements to ensure that Rs. 50 more crores is deposited in 12 weeks and another Rs. 50 more crores within 12 weeks thereafter, totaling to Rs. 200 crores.
The appellant is granted bail on terms and conditions to the satisfaction of the trial Court apart from have been already stipulated - appeal disposed off.
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2022 (7) TMI 1105
Seeking release of seized goods - Expiry of validity of E-way bill - requirement to deposit of 25% of the disputed demand of penalty - HELD THAT:- Any amount that may have already been deposited by the petitioner shall be adjusted towards the amount required to be deposited under this order - The GSTN authority is required to consider the feasibility of providing an additional field in the online form to be filled by dealers/transporters to obtain E-way bill, such that an additional field may be provided to feed the vehicle type i.e. normal or ODC etc., as may allow for the validity of the E-way bill to be issued with appropriate validity printed on that form issued to the concerned.
The above exercise if done may also allow for accurate tracking of vehicles and fewer disputes between the revenue authorities and the transporters with respect to validity period of E-way bills. Here, it may be noted, under Rule 138 of the UPGST Rules, the period of validity of an E-way bill has been provided on the basis of 100 Km of distance covered per day by an ordinary vehicle.
Application disposed off.
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2022 (7) TMI 1104
Refund of unutilized input tax credit - rejection of petitioner’s appeal on the ground that, it did not reflect zero rated turnover in the returns - suppression of sales turnover or not - period April, 2018 to March, 2019 - section 16(3) of Integrated Goods and Services Tax Act, 2017 (IGST Act) read with section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act), Maharashtra Goods and Services Tax Act, 2017 (MGST Act) and rules framed therein - HELD THAT:- Since the annual returns have been filed and it is not clear whether respondent No.4 got an opportunity to consider the annual returns, the matter has to be remanded to respondent No.4 for de novo consideration. The statement of Mr.Paranjape that copy of the annual returns will be supplied to respondent No.4 within two weeks from today is accepted.
The matter is remanded for de novo consideration. Respondent No.4 shall dispose the appeal within four weeks of receiving copy of the annual returns filed - Petition disposed off.
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2022 (7) TMI 1103
Valuation of taxable supply - inclusion of cost of Diesel - providing service of transportation of goods by road using trucks - contractual scope of the customer - Whether the value of Diesel as filled in the vehicle by applicant, is not required to be included in the value of freight charged by Applicant for the said transportation? - HELD THAT:- The Applicant is about to enter into contract/ Agreement with service recipient for providing GTA services. As per the terms of the draft agreement, the Applicant is required to transport the goods belonging to the service recipient by deploying trucks/ trailers. The scope of service of the Applicant is to provide the truck/ trailer along with the driver and report at the unit of the service recipient Apart from above, the term of agreement provides that the fuel required for carrying out the transport of goods is in the scope of the service recipient and not in the scope of work of the Applicant. That fuel will be in the scope of the service recipient and the Applicant is not concerned, in any manner, with reference to the free of cost fuel.
The jurisdictional officer in his report has given the views that GST is not leviable on Free of Cost (FOC) material provided by service recipient to applicant when such goods are in the scope of service recipient as per contractual terms.
Transportation Activities - HELD THAT:- GTC has capacity of arranging trucks/trailers listed in Annexure-1 hereto. GTC will undertake transportation activities for ABC and the required trucks/trailers along with the driver and assistant will report at the day/time and place directed by ABC. The trucks/trailers so placed by GTC along with driver and assistance will be required to undertake transportation of the goods in accordance with the instructions of ABC - The activity of safe transportation is critical, and it is incumbent on GTC to ensure that goods are safely transported from point of origin to point of destination. For this, GTC ensures that it has experienced drivers and assistants who have the capacity to undertake transportation of industrial goods on trucks/trailers listed in Annexure-1 and understand load bearing capacity of the given trucks/trailers, maintenance of speed limit on full load, adequate safeguard measures on bad roads and all other measures warranted for safe transportation of goods.
GTC is strictly instructed that under no circumstances would any quantity of goods carried in the truck/trailer be disposed of, other than by way of delivery of the goods to the destination against receipt. For any reason, if the consignment is not accepted at the destination point, GTC will take necessary directions from ABC on the next steps. Under no circumstance, the consignment it to be brought back without prior written approval of ABC - Responsibility for any deviation and consequent losses during transportation vests solely on GTC.
Consideration - HELD THAT:- The value of fuel, which is in the scope of ABC, shall neither be adjusted with nor by any means affect the payment to be made by ABC against the bills issued by GTC - All payment will be subject to deduction of income tax (TDS/TCS), wherever applicable any other taxes/levies which may be levied by Government from time to time.
Responsibilities of GTC - HELD THAT:- GTC would arrange to get all the trucks/trailers weighed first and then place the trucks/ trailers for loading. Before loading the material, dispatch instruction should be handed over along with tare weight slip, thereafter only, truck will be loaded. After loading the truck, the truck should be again weighed, and net weight of the material would be arrived at for preparation of Tax Invoice - GTC will ensure to obtain acknowledgement at the point of destination. At the destination place, goods carrying truck/trailer will be gross weighted and after unloading goods truck/trailer will be tare weighted. Net Quantity would be receipted by ABC. the said results obtained at the destination would be final and no dispute in respect thereof would be entertained by ABC.
Responsibilities of ABC - HELD THAT:- It is seen that as per the proposed agreement/contract, the fuel (diesel) is not in the scope of service of the Applicant. The proposed agreement/contract also provides that fuel (diesel) shall not be adjusted with nor affect the payment to be made by the service recipient against the bills issued by the applicant. Given this, as per the proposed contractual terms, the scope of service of the Applicant does not include the fuel (diesel) which is sought to be tilled by the service recipient on free of cost (FOC) basis for the given transportation.
As per section 7 CGST Act, all forms of supply of services are considered as “supply”. It is also seen that Schedule I CGST Act which provides the levying GST on supplies made without consideration. In any case, it stood submitted by the Applicant that the proposed transaction is not being planned with related parties and therefore also Schedule I CGST Act is not applicable.
It is seen that section 15 (2)(b) only includes the amount that the supplier is liable to pay in relation to such supply, but which has been incurred by the recipient and not included in the price actually paid or payable. Hence, trigger of section 15 (2)(b) CGST Act can be said to apply when the contractual liability is that of the supplier, but the same stands paid by the recipient. In the issue at hand, it is seen that the contractual liability of FOC diesel is not that of the Applicant. Therefore, FOC diesel cannot be included in the scope of supply proposed to be made by the Applicant. There is no economic gain made by the Applicant and no consideration received in reference to FOC diesel. Since contractual liability of FOC diesel is not proposed to be vested on the Applicant, the present proposed transaction cannot fall under section 15(2)(b) CGST Act. FOC diesel is a condition of the contract and not a consideration of the contract.
It is also seen that the Draft GST law proposed to include the following in section 15 (2) CGST Act “the value, appropriated as appropriate, of such goods and/or services as a supplied directly and directly by the recipient of the supply free of charge or at reduced cost for use in connection with the supply of goods and/or services being valued” - the intent of the legislation is required to be seen. Therefore, the present section 15(2)(b) CGST Act cannot be used to include the given transaction since contractual liability on FOC diesel is not being vested on the Applicant.
Revenue Neutrality - HELD THAT:- The issue is also revenue neutral inasmuch as even if the value of the free of cost diesel was required to be included in the value of GTA service then also the service recipient of the Applicant would be in a position to take input tax credit of the GST charged on such an invoice raised by the Applicant.
The Hon’ble Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] has held that where the service provider receives free of cost goods/material from the service recipient, no amount is charged for such goods/material and, therefore, the value of such goods/ materials cannot be included in the gross amount charged by the service provider for the service provided by him.
The value of diesel filled free of cost (FOC) by the service recipient is not includable in the value of the GTA service proposed to be provided by the Applicant in the facts and circumstances of the present application subject to conditions as mentioned in draft Transport Service Agreement/ contract incorporated in the body of this decision/ruling.
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2022 (7) TMI 1102
Classification of services - Restaurant Service or Outdoor Catering Service - providing services relating to supply of food to the employees of NTPC Anta at the premises rented from them - rate of tax applicable, for providing such services, on consideration received from NTPC - rate of tax applicable, for providing such services, on consideration received in the form of sale of food items to the employees/workers/others - HELD THAT:- A fixed amount is paid by the NTPC for running and maintenance of canteen. Balance is recovered from those procuring food from the canteen.
On the behalf of M/s Indian Coffee “Workers’ Cooperative Society Limited, Mumbai, Shri K. B. Sanjayan, Manager, M/s Indian Coffee House, NTPC, Anta, Rajasthan has acknowledged the aforesaid Service Purchase Order by making signature as Authorised Signatory over it in token of acceptance of the same. Further, on perusal of ‘Bill of Quantity’ and S. No. 16, 21 & 24 of the Service Purchase Order dated 28.09.2021, it is find that applicant has provided manpower i.e. Manager, clerk, cook, cleaner, helper etc. for running & maintenance of the canteen at NTPC, Anta for a consideration amounting to Rs. 68,45,452/- for a period of 10 months. The activity undertaken by the applicant is covered under ‘Supply’ as defined under Section 7 (1) of the GST Act, 2017 - the activity of supply of manpower service for running & maintenance of the canteen for consideration in the course of business is covered under ‘supply’ as per section 7 of the CGST Act, 2017 and liable to tax as per section 9 of the CGST Act, 2017.
The service provided by the applicant is neither classifiable as Restaurant Service nor Outdoor Catering Service, rather it is classifiable as Temporary staffing services under heading No. 998514 and attracts GST @ 18% as per S. No. 23 (iii) of the Notification No. 11/2017-CT (Rate) dated 28.06.2017 (as amended).
Applicable tax rate on the supply made by the applicant - HELD THAT:- In the instant case supply made by the applicant is classifiable under Chapter, Section or Heading 998514 under SI. No 23(iii) of Notification No. 11/2017-CT (Rate) dated 2S.06.2017 as amended time to time and is taxable at the rate of @ 18%.
Rate of tax applicable, for providing services, on consideration received in the form of sale of food items to the employees workers others - HELD THAT:- In the present case the canteen is not located in any premises having ‘hotel accommodation’ services. Rather is it situated at premises of NTPC on a contractual agreement on rent. Hence the case of the applicant is not covered in exclusion in respect of item (ii) of serial number 7 of the table of the said notification No. 11/2017-CT(R) dated 28.06.2017. As far as relevancy of “Outdoor catering” in respect of applicant’s services is concerned, it crystal clear that the supply being undertaken by the applicant is not event based or occasional in nature which is evident from the agreement which provides for the operation of the agreement for a period of 10 months.
Thus, the activities of selling articles for human consumption at pre-decided rates to the employees of the recipient at canteen of NTPC, Anta by the applicant would be fall under the ‘restaurant service’ and are classifiable under HSN 9963 under SI. No. 7(ii) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended time to time and attract 5% GST provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
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2022 (7) TMI 1101
Classification of goods - Anna Malai Mithai - the mithai is containing the ingredients Sugar, Vegetable Fat, Skimmed Milk Powder, Whey Powder, Emulsifier and other permitted Flavor’s, which is identical to the commonly known Indian sweet “Rabdi” - to be classified under the Tariff Heading 2106 as Sweet Meats or under Tariff Heading 0404 as other dairy product consisting of natural milk constituents?
HELD THAT:- Chapter 04 essentially covers dairy products and as per Chapter Note 4 of Chapter 04, the heading 0404 applies interalia to products consisting of natural milk constituents whether or not containing added sugar or other sweetening matter or flavoured or containing added fruit or cocoa. Now while chapter head 0401 to 0406 are meant for natural dairy products viz. Milk, Cheese, Butter Milk, Butter, Whey etc. and other products made out of such items, the product in question i.e. Anna Malai Mithai contains Skimmed Milk Powder, Whey Powder, Sugar, Emulsifiers etc. as predominant ingredients, which would not make it appropriate to be classified as a product of natural milk constituents as has been pleaded by the Applicant. By no stretch of imagination, the product in question can be brought under the ambit of Chapter 04 of the HSN. Thus, we definitively rule out the classification of the impugned product under Chapter 04 of the HSN.
Classification of the product under Chapter 1704 - HELD THAT:- The Chapter 17 of the HSN is for ‘Sugar & Sugar Confectionery’. While 1701 to 1703 headings relate to Sugars in different forms, the Heading 1704 mentions Sugar Confectionery. Sugar Confectionery has nowhere been specifically defined under the GST law or under HSN - the product ‘Anna Malai Mithai’ cannot be terms as ‘Chewing Gum’ (1704 10 00) or Jelly Confectionery (1704 90 10) or Boiled Sweet (1704 90 20) or Toffee, caramel etc (1704 90 30). Clearly the product is neither a gum nor boiled sweet nor toffee or caramel. That leaves residual entry ‘Others’ (1704 90 90) if at all the impugned product is to be brought under the purview of Chapter 17.
There is no specific entry under Chapter 17 which would encompass the impugned product even by a remote chance. Moreover, the residual entry i.e., ‘Others’ (1704 90 90) is to take care of other similar products of the same family viz. Sugar Confectionery which do not find specific mention against rest of the subheadings. The impugned product i.e., ‘Anna Malai Mithai’ is made of Skimmed Milk Powder, Sugar, Whey Powder, Emulsifiers & flavours etc. mixed together in a semi-liquid form and packed in elongated pouches/sachets and ready for consumption. The ingredients, process and final shape of the impugned product takes itself out of family of Sugar Confectionery.
Impugned product vis-a-vis heading 2106 - HELD THAT:- Chapter 21 essentially covers ‘Miscellaneous Edible Products’. Obviously, the term ‘Miscellaneous’ indicates that this particular chapter would contain all such edible products which are not specifically covered elsewhere under the Tariff. The Chapter Headings further describes various edible preparations such as extracts of Coffee, tea, Yeast, Soups, broths, Sauces etc under Heading 2101 to 2105. Further as is the convention, heading 2106 has been given to include all those items which are not elsewhere specified. Furthermore, 2106 further sub-divides various edible items like Protein Concentrates, Pan Masala, Sharbats, Supari, Custard Powder etc. under Sub-headings 21061000 to 21069080 and to conclude there is a residual entry as ‘Others’ under 2106 90 99.
The product in question i.e., ‘Anna Malai Mithai’ is a product made out of Skimmed Milk Powder, Sugar & Whey Powder as main ingredients with Emulsifiers etc. put up in small sachet/pouch in semi-liquid (paste) consistency, ready for consumption. The product cannot be termed as Dairy Product or Sugar Confectionery - the impugned product viz. ‘Anna Malai Mithai’ would merit classification as Miscellaneous Edible Product under Chapter Heading 2106 90 99, as ‘Sweetmeat’ and chargeable to GST as applicable.
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2022 (7) TMI 1100
Levy of GST - providing buses on hire (service) - supply of services to BCLL, AICTSL, JCTSL (State Government Co.) - Rate of tax - Admissibility of Input tax credit - HELD THAT:- The supply relates to transportation of passengers on behalf of the client, where the buses are operated and maintained by the applicant and management of the route, slops and collection of fee is done by the client. Therefore, the service of transportation of passengers is being provide by the client. The supply being made by the applicant is that of mode of transportation and therefore, in the nature of renting / hiring of the mode of transport.
While the Uttarakhand High Court in COMMISSIONER, CUSTOMS & CENTRAL EXCISE VERSUS SACHIN MALHOTRA, RAJ KUMAR TANEJA, M/S. SHIVA TRAVELS [2014 (10) TMI 816 - UTTARAKHAND HIGH COURT] had held that Renting and Hiring are different activities and are to be treated differently for taxation under the Finance Act. 1994. the Allahabad High Court in ANIL KUMAR AGNIHOTRI VERSUS COMMISSIONER, CENTAL EXCISE KANPUR [2018 (1) TMI 171 - ALLAHABAD HIGH COURT] has departed with the Uttarakhand High Court's. Also, the Honorable Gujarat High Court in the matter of Vijay Travels has held that renting and hiring are not different so far as tax treatment for service lax is concerned. The matter is currently before the Honorable Supreme Court.
The different tax liability cannot be fastened on identical service by terming them as "rent" and "hire". Further, it may be noted that under the consideration under the agreement in the form of "hire".
On a joint reading of the terms of the agreement, high court rulings. Entry No. 10 of Notification No. 11/2017 - Central Tax (Rate) and Entry No. 22 of Notification No. 12/2017 - Central Tax (Rale) it appears that supply covered under the agreement entered into by the applicant with AICTSL is covered under Entry No. 22 of Notification No. 12/2017 - Central lax (Rate) and is an exempt services - also para 8 of Board Circular No. 164/20/2021 GST dated 06.10.2021, perused, wherein it has been clarified on the recommendation of the GST Council that "giving on hire" in Entry No. 22 of Notification No. 12/2017 - Central Tax (Rate) includes renting of vehicles.
Once the supply is exempt, the question relating to rate of tax and admissibility of input Tax credit is redundant.
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2022 (7) TMI 1099
Classification of supply - composite supply or not - administering of COVID-19 vaccination by hospitals - administering of COVID-19 Vaccine by clinical establishments (Hospitals) - supply of goods or supply of services - Health care services as per Notification No. 12/2017 Central Tax Rate dated 28.06.2017 or not - administering of COVID-19 vaccination by clinical establishment - exemption from GST or not?
Whether administering of Covid -19 vaccine by hospitals is 'supply of goods or services or both goods and services'? - HELD THAT:- Basically, two activities are involved in this transaction, 'sale of vaccine' under 'supply of goods' and 'administering of vaccine' under 'supply of service'. When it comes to administering of the vaccine by hospitals, it involves a combination of two supplies, which are naturally bundled, i.e, 'supply of vaccine' and the 'service component' followed by way of administering the same.
In the present case, both the supplies are intrinsically connected with each other, and it is viewed as a single package by the recipient, where he purchases the vaccine and gets it administered subsequently. In order to determine, which of the above two, is the principal supply, it would rather depend upon the normal or frequent practices followed in the area of business or the perception of the consumer / recipient as well. Generally, the primary requirement of the recipient would be the receipt of the vaccine, basing on his choice i.e., Covishield or Covaxin. Thus, the supply of goods constitutes the major supply. The proper administration of the vaccine by the technically qualified personnel as prescribed by the guidelines of the government becomes the ancillary supply, which involves 'service charge'. Hence the taxability of the total transaction in the instant case is based on the tax rate of the principal supply i.e., sale of vaccine @ 5 %.
Whether the administration of Covid-19 vaccine by clinical establishments (hospitals) would qualify as "Health Care Services" as per Notification No.12/2017 Central Tax (Rate) dt. 28.06.2017 or not? - HELD THAT:- In this regard the dominant intention of the recipient is the receipt of the vaccine followed by its administration. In the instant case, there is no doubt that the applicant qualifies to be a clinical establishment but, the supply transaction is predominantly of sale of goods and not the service component of healthcare - It has been settled by various Advance Ruling Authorities that inpatient services are covered under the healthcare services extended by the clinical establishments, which are exempt under GST. By no stretch of imagination, the receipt of vaccine can be considered as inpatient services rendered by the hospitals in this regard.
Thus, it is concluded that the exemption is not allowed in the instant case as claimed by the applicant under 'health care services' provided by the 'clinical establishment'. The taxability of the supply is under 'composite supply', wherein the principal supply is the 'sale of vaccine' and the auxiliary supply is the service of 'administering the vaccine' and the total transaction is taxable at the rate of principal supply i.e, 5%. The service charge of administering the vaccine as prescribed by the Central Government from time to time is applicable and inclusive of the total value of the composite supply.
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2022 (7) TMI 1098
Classification of goods - product marketed under brand name “Ber Berry”, manufactured and supplied by the applicant, containing the ingredients jujube fruit, sugar, salt, permitted preservative (E-211] and mixed spices - to be classified under the Tariff Heading 0810 as Jujube fruit (Ber/Bore) or under Tariff Heading 0811 as fruits cooked by steaming or under the Tariff Heading 2008 as fruits, otherwise prepared or preserved containing added sugar?
HELD THAT:- The chapter 8 is covered either fresh fruit or fruit cooked by steaming/boiling in water only whereas the process of the applicant is more than the process covered under chapter 0811. In the applicants case, after the product soaked in hot water, transferred to steamed jacketed tank where it is cooked with steam and at this stage other ingredients i..e. sugar salt, preservative and some spices are added. The process of manufacture of product of the Applicant is not simple to cover in the chapter 0811. The process of the applicant is preparation of fruit which contained preservative and other ingredients i.e. sugar, salt and some spices also - It is found that as per the ingredients and process for manufacture of product in question given by the Applicant, the said product is not covered under the chapter 0811 and rightly classified/covered under the chapter heading number 2008 of the tariff.
The case of Harith Budhraja (M/s Bharat Agro) [2018 (9) TMI 1864 - APPELLATE AUTHORITY FOR ADVANCE RULING UTTAR PRADESH] is not applicable as in the instant case, the process of manufacture and ingredient of product i.e. “Bery Berry” is entirely different.
Thus, the product “Ber Berry”, is rightly classifiable under the chapter heading 2008.
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2022 (7) TMI 1097
Classification of goods - Roof Mounted AC package Unit - to be classified under chapter 86079910 or not? - HELD THAT:- Ongoing through the exclusion clause of the Chapter 86 of the GST Tariff, it is found that the product “Roof mounted AC package unit” is not covers in the exclusion clause of Chapter 86 and parts of Railway and tramway is covers under chapter 86.
In the case of COMMISSIONER OF C. EX., BANGALORE VERSUS SRI RAM METAL WORKS [1997 (11) TMI 265 - CEGAT, MADRAS] the Hon'ble Tribunal has observed that In the case of railways, it goes without saying that the provision of water in the coach is a necessity and the coach can be taken to be complete with the fitment of the water tank. More so, when the water tank becomes ports of the coach itself Tariff Heading 8607 for assessment of the water tank - By applying the same analogy in the instant case also, we observe that the Roof Mounted AC Package Unit”, specially meant for the Railways, as per the design and layout provided by them, are integral part of the coach and rightly classifiable under chapter 86.07.
Further, applying the same analogy, in the case of COMMISSIONER OF C. EX., BANGALORE VERSUS RAMSONS UDYOG (P) LTD. [1999 (9) TMI 284 - CEGAT, NEW DELHI] the Hon'ble has observed that the Sanitaryware are also design for fitment into the Coach they would be classifiable under Heading 86.07”.
Thus, the Roof Mounted AC package Unit would be manufactured by the applicant, strictly as per the specification and design provided by the Indian Railways (RDSO) and specially meant to be solely used in Railway coaches and nowhere else - further, it is observed that as per Section Notes and Chapter Notes, parts suitable for use solely or Principally with the articles of those chapters are covered under chapter 86 to 88.
Thus, the classification of the Roof mounted AC package Unit manufactured as per the specific design and layout provided by the railways (RDSO) and supplied to the Indian Railways only and no where else, falls under chapter 86.07 of the GST Tariff.
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2022 (7) TMI 1096
Revision u/s 263 - Period of limitation - Reopening of assessment u/s 147 - HELD THAT:- As in response to show cause notice inter alia took a stand that the revisional power could not be exercised in view of the Bar of limitation as contained in Section 263(2) which provides that no Order could be revised after the expiry of two years from the end of the financial year, in which the Order sought to be revised was passed.
CIT, however, did not accept the stand of the assessee and set aside the Order passed under Section 143(3) dated 14 December 2007 read with Order dated 16 November 2009 under Section 147 holding the same to be erroneous and prejudicial to the interest of revenue.
This Order came to be challenged before ITAT, who vide its Order dated 16 January 2017 allowed the Appeal of the assessee on the ground that Order passed by CIT was passed on 31 March 2011 under Section 263(1) and was, therefore, barred by limitation, as such an Order could be passed only upto 31 March 2010, considering the fact that the Order that was sought to be revived by CIT was passed by AO on 14 December 2007.
Not only this, the ITAT held on a question of fact that no notice in terms of Section 263(1) was served on the assessee in respect of the Order passed u/s 143(3) read with Section 147 dated 16 November 2009 and the show cause notice dated 18 March 2011 was only in respect of Order of assessment under Section 143(3) of the Act.
We are of the view that the view expressed by ITAT does not warrant any interference and it was rightly held that the Order impugned passed by CIT was barred by limitation in terms of Section 263(2).
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2022 (7) TMI 1095
Assessment u/s 153A - unexplained investment - ITAT confirming the order passed by CIT(A) deleting the additions - Whether ITAT has erred in holding that balance/trial sheet found during search being a public document is not an incriminating material? - HELD THAT:- As in the present case, the Assessing Officer in the satisfaction note has recorded that the documents found during the search pertained to assessee and therefore it is a fit case for initiation of proceedings under Section 153C of the Act. However, the Assessing Officer failed to record as to how the documents found during search reflected any undisclosed income of the assessee. Assessing Officer, without even demonstrating/or drawing any nexus of the seized documents with the undisclosed income of the assessee, merely on the ground that the seized documents belong to the assessee initiated proceedings under Section 153C of the Act, which is against the settled position of law in several decisions of this Court.
In the present case, both the CIT (A) as well as ITAT have given concurrent findings of fact that no incriminating materials had been seized during search. Consequently, the contention of learned counsel for the Appellant that incriminating documents or materials had been found and seized at the time of search is contrary to fact.
CIT(A) had directed that the transactions need to be scrutinised in the case of the seller of the shares, namely, Triveni Infrastructure Development Company Co. Limited (TIDCO). Also, the same shares had been sold by assessee in the subsequent Assessment Year 2011-2012 at a lesser price as against the addition made by the Assessing Officer which is accepted by the Assessing Officer.
Thus no incriminating documents or materials had been found and seized at the time of search. - No substantial question of law.
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2022 (7) TMI 1094
Application u/s 197 - Certificate for deduction at lower rate - seeking a withholding certificate at a lower tax rate of 1.74% - HELD THAT:- This Court finds that the Petitioner’s application seeking withholding certificate at a low tax rate has been rejected by Respondent No.1 on the ground that there exists huge outstanding demand on their internal portal. However, in the very first paragraph of the impugned order, the Officer takes note of the observation of the PAN Assessing Officer that a number of rectification applications of the assessee are pending and once they are decided, the demand against the assessee is likely to be reduced to NIL. Consequently, this Court finds that the very foundation for rejection of the application filed by the Petitioner under Section 197 is self-contradictory.
Accordingly, this Court set asides the impugned order dated 16th May, 2022 and directs the Respondent No.2 to decide the rectification applications filed by the Petitioner, in accordance with law within six weeks. Needless to state that if any refund is due and payable to the Petitioner, the same shall be refunded not later than eight weeks from today, in accordance with law. This Court clarifies that it has not expressed any opinion on the merit of rectification application.
Further, the Respondent No.1 is directed to once again decide the Petitioner’s application u/s 197 of the Act qua Sections 194A and 194J of the Act, within two weeks of disposal of the rectification applications.
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2022 (7) TMI 1093
Disallowance u/s 14A r.w.r. 8D - ITAT deleted the addition - scope of amendment made by the Finance Act, 2022 to Section 14A - Amendment is retrospective or prospective in nature - Whether ITAT erred in relying on the decision of this Court in PCIT vs. IL & FS Energy Development Company Ltd., [2017 (8) TMI 732 - DELHI HIGH COURT] wherein it has been held that no disallowance under Section 14A of the Act can be made if the assessee had not earned any exempt income? - HELD THAT:- A perusal of the Memorandum of the Finance Bill, 2022 reveals that it explicitly stipulates that the amendment made to Section 14A will take effect from 1st April, 2022 and will apply in relation to the assessment year 2022-23 and subsequent assessment years.
The Supreme Court in Sedco Forex International Drill. Inc. v. CIT, (2005 (11) TMI 25 - SUPREME COURT] has held that a retrospective provision in a tax act which is “for the removal of doubts” cannot be presumed to be retrospective, even where such language is used, if it alters or changes the law as it earlier stood.
Consequently, this Court is of the view that the amendment of Section 14A, which is “for removal of doubts” cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood.
Though the judgment of this Court has been challenged and is pending adjudication before the Supreme Court, yet there is no stay of the said judgment till date. Consequently, in view of the judgments passed by the Supreme Court in Kunhayammed and Others vs. State of Kerala and Another, [2000 (7) TMI 67 - SUPREME COURT] and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras (1992 (4) TMI 183 - SUPREME COURT] the present appeal is dismissed being covered by the judgment passed by the learned predecessor Division Bench in PCIT vs. IL & FS Energy Development Company Ltd (2017 (8) TMI 732 - DELHI HIGH COURT] and Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT].
As clarified that the order passed in the present appeal shall abide by the final decision of the Supreme Court in the SLP filed in the case of PCIT vs. IL & FS Energy Development Company Ltd .
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2022 (7) TMI 1092
Validity of order as exercise of power u/s 281 - Certain transfers to be void - validity of purchase of property being land and farm house - Certain transfers to be void - validity of purchase of property being land and farm house - t the order impugned in declaring th - pendency of the assessment proceedings against the assessee - assessee had created a charge on the said property and parted with the possession by way of sale deed in favour of the Petitioner during the pendency of the assessment proceedings against the assessee and was, therefore, void in terms of Section 281(1) of the Income Tax Act - HELD THAT:- Incidentally, a Division Bench of this Court in the case of Ms. Ruchi Mehta V/s Union of India [2007 (8) TMI 270 - BOMBAY HIGH COURT] which is also impugned in the present petition, followed the ratio of the judgment in Gangadhar’s case and declared the order passed by the TRO in terms of Section 281 of the Act, 1961 as void and without jurisdiction. The order was also held to be bad on the ground that no opportunity was at all given to the Petitioner in the said case before exercising jurisdiction under Section 281, which was thus held to be in violation of principles of the natural justice.
Be that as it may, following the ratio of the Supreme Court judgment in the case of Tax Recovery Officer V/s. Gangadhar Vishwanath Ranade [1998 (9) TMI 1 - SUPREME COURT] as also the view already expressed by the co-ordinate bench in the case of Ms. Ruchi Mehta V/s Union of India, we hold that the order impugned in declaring the transfer of the property in favour of the Petitioner as void in terms of Section 281 of the Act, 1961, is without jurisdiction and is, accordingly, set aside. Respondents would be entitled to proceed in the matter by following the due procedure.
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2022 (7) TMI 1091
Estimation of income - Bogus purchases - ITAT upheld the addition estimated based upon estimated profit at the rate of 12.5% on the total purchases in question - HELD THAT:- We are of the opinion that the view expressed by the Tribunal in upholding the order passed by the learned CIT(A), cannot be said to be in any manner perverse or legally untenable, inasmuch as, if the entire amount were to be held as non-genuine purchases, then it would not be possible to justify as to how the works allotted to the assessee for execution by the semi Government Agencies could be completed. Therefore the argument that the entire amount ought to have been added to the income of the assessee is untenable, especially when the learned CIT(A) in its order as upheld by the Tribunal in the order impugned held that the purchases per se were not in dispute but the parties from whom the purchases are shown to have been made are disputed.
The order passed by the Tribunal is legally valid warranting no interference.
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2022 (7) TMI 1090
Assessment u/s 153A - Addition u/s 68 - HELD THAT:- Since no incriminating documents or materials had been found and seized at the time of search as relying on KABUL CHAWLA [2015 (9) TMI 80 - DELHI HIGH COURT] when no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C - Decided in favour of assessee.
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