Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 15, 2019
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Addition u/s 41(1)(a) - cessation of trading liability - the method of accounting, cash or mercantile, adopted by the assessee is also irrelevant as far as section 41(1) is concerned, so that as soon as the assessee is found to have benefited from the remission or cessation of a trading liability, allowed in an earlier year, the provision would get attracted.
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Liability to collect TCS - activities of collecting toll fees as entrusted by the assessee was not a contract within the meaning of section 206C and will not attract provisions of section 206C(1C) of the Act, rather it was in the nature of outsourcing of job for collection of user fees
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Capital gain - on entering into a JDA, there is a ‘transfer’ as per the provisions of section 2(47) of the Act and consequently capital gains is attracted.
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Disallowance as bonus to director shareholders of the assessee company u/s. 36(1)(iii) - whether it is a dividend payment in disguise - Held No - it should be allowed as a deduction while computing the income of the assessee.
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Exemption u/s 11 - transaction of purchases of land as voluntary contribution in the form of donation - it is in effect the donation of the plot by the alleged seller to the assessee trust. - Benefit of exemption allowed.
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Income from purchase and sale of shares - majority of the profits earned are through buying and selling of shares which taken place within a period of 10 days and 100% share transactions were completed within one month - Since the assessee has treated the securities as investment, the revenue is not permitted to take a contrary view.
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Addition u/s. 68 - unexplained cash credit - since no books of account are maintained in the ordinary course of business of the assessee, no such addition u/s 68 of the Act is tenable.
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Penalty u/s 271(1)(c) - Failure to furnish returns, comply with notices, concealment of income - the assessee had shown that they had acted bonafidely. Thus, the assessee should not have been burdened with penalty for concealment of income u/s 271(1)(c)
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Penalty u/s 271C - assessment u/s 153C - When there was no addition to the declared income in any of the years, penalty was correctly deleted by the Tribunal. Explanation 5A below Section 271 would apply only in case of searched person, it cannot be extended to the person other than the searched person
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Levy of penalty u/s 271(1)(c) - assessment u/s 153A - notwithstanding that the income declared in the return filed for a period under consideration is accepted, the assessee would still be liable to penalty under Section 271(1)(c) of the Act.
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TDS u/s 194C - Requirement of deducting tax at source itself did not arise since the Assessee had simply hired the trucks for specific transportation work for jobs assigned to him and there was no contract of agency or middle man. Thus, there was no contract or sub-contract between the payer or payee.
Customs
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Duty Drawback - overvaluation of export goods - there is overwhelming evidence produced by the appellant in support of the fact that the value declared in the shipping documents by them is correct and/or plausible - demand set aside.
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Validity of Show Cause Notice (SCN) - the provisions provide for deemed conclusion of the proceedings against the assesses if the payment as regard the duty, interest and 15% penalty thereof stands made by the assesse within a period of 30 days of the receipt of Show Cause Notice.
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Service of order - Once the matter came to the knowledge of petitioner efforts were made to obtain certified copy of the order which clearly indicate the fact that the order-in-original was not received by him - matter restored before the appellate authority.
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Detention of goods - demurrage/detention charges - This is an unfortunate case where the respondents/Customs authorities intentionally appeared to have omitted issuing the detention certificate - if any liability accrues, that shall be on account of the customs authorities in the circumstances of the case.
PMLA
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Prevention of Money-laundering (Restoration of Confiscated Property) Amendment Rules, 2019
Central Excise
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Transfer of accumulated CENVAT credit - shifting of the company - Rule 10 - Only the intimation is required and it is upto the satisfaction of the Asstt./Dy. Commissioner. There is no mention of getting the permission of transfer from the previous location to the new location.
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CENVAT Credit - capital goods - Since denaturing process takes place, while Extra Natural Alcohol were stored in the storage tank, it cannot be concluded that those storage tanks were used exclusively for manufacture of the exempted/non-excisable goods.
VAT
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Input Tax Credit - assessee received incentives from its manufacturer - The credit note having not been issued in the prescribed form, there is no question of an input tax credit being granted with respect to the incentive - credit not allowed.
Case Laws:
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Income Tax
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2019 (1) TMI 659
Reopening of assessment - Reasons to believe - CIT(A) found that the disclosure was a full and true disclosure by the assessee and quashed the reassessment order - ITAT confirmed the order of CIT(A) - Held that:- It is now well settled that the reasons which are recorded by the A.O. for reopening the assessment are the only reasons which can be considered. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. This being the position in law, and admittedly there being no allegation in the reasons that there was any failure on the part of the assessee to disclose fully and truly any material fact, we find that the Tribunal was not incorrect in upholding the order of the CIT(A) and dismissing the appeal filed by the revenue. We find that the CIT(A) as well as ITAT have examined the factual aspects of the matter and thereafter come to the conclusion that in fact there has been no failure on the part of the assessee to disclose fully and truly all material facts as contemplated under the first proviso to Section 147. These findings, being purely factual in nature, and nothing being brought to our notice that these findings are in any way perverse, we do not think that the questions of law as proposed by Mr. Suresh Kumar give rise to any substantial question of law requiring our consideration in an appeal under Section 260A.
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2019 (1) TMI 658
TDS u/s 194C - Assessee had made payments for transportation of the goods in excess of ₹ 50,000/- without deducting tax at source - addition u/s 40(a)(ia)- proof of contract or sub-contract between the payer or payee - Held that:- Tribunal reiterated relying on judgment in case of Merilyn Shipping and Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM), is clearly an error. The Supreme Court in the case of Palam Gas Service v/s Commissioner of Income Tax [2017 (5) TMI 242 - SUPREME COURT] has reversed the view of the Merilyn Shipping and Transports (supra) holding that the disallowance would also cover the payments which are also made as long as of-course the breach of the requirements of deduction of tax at source is found. Requirement of deducting tax at source itself did not arise since the Assessee had simply hired the trucks for specific transportation work for jobs assigned to him and there was no contract of agency or middle man. Thus, there was no contract or sub-contract between the payer or payee. In this respect, we are in agreement with the view of the authorities below. No questions of law arises. - Decided against revenue
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2019 (1) TMI 657
Levy of penalty u/s 271(1)(c) - assessment u/s 153A - poof of incriminating material found in search - Held that:- Where any income based on any entry in books of account or other documents or transactions is found and the assessee claimed that such entry in the books of account or transactions represents his income from any previous year, then notwithstanding that the income declared in the return filed for a period under consideration is accepted, the assessee would still be liable to penalty under Section 271(1)(c) of the Act. In the present case going by the order of the Tribunal, this is precisely what has happened. By virtue of this explanation, therefore, penalty could be levied and the fact that in the assessment order, no additional income is assessed in assessment in response to the notice under Section 153A of the Act, would be of no consequence. The contention that there was no incriminating material found during such search which related to the income so declared, cannot be accepted in view of the clear findings of facts from the Tribunal - decided against assessee.
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2019 (1) TMI 656
Penalty u/s 271(1)(c) - assessment under Section 153C - proof of addition to the declared income - Held that:- Assessee had filed returns of income for three assessment years even before the notice under Section 153C of the Act was issued. For remaining two years the Assessee contended that no such return was required to be filed since his income did not exceed the taxable limit. This later assertion of the Assessee also was found to be true and correct since the Assessing Officer accepted the Assessee’s declaration of meager income of ₹ 18,957/- and ₹ 43,857/- respectively for the said two assessment years 2005-06 and 2006-07. We find no error in the Tribunal holding that the penalty could not have been imposed. There was no question of the Assessee not declaring the income of the particulars of the income so as to invite penalty under Section 271C. The three returns had been filed even before issuance of notice under Section 153C of the Act and in other two cases as accepted by the AO the Assessee had no taxable income. When there was no addition to the declared income in any of the years, penalty was correctly deleted by the Tribunal. Explanation 5A below Section 271 of the Act would apply only in case of searched person. This Section is confined to searched person and cannot be extended to the person other than the searched person. - decided against revenue.
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2019 (1) TMI 655
Penalty u/s 271(1)(c) - Failure to furnish returns, comply with notices, concealment of income - disallowance of expenses - Held that:- On the question of full and true disclosure, we would like to refer the accounts of the appellant-assessee that were audited. The audit report placed on record had stated that the appellant-assessee had recognized revenue from the projects based on PoC Method in relation to sold areas on the basis of percentage of actual construction and other related costs incurred thereon excluding land cost as against the total estimated cost of the project under execution subject to such actual cost being 30% or more of the total estimated cost. Similarly, there were disclosures under the heading 'inventory and cost of construction/development' to the effect that 'work in progress' was valued at lower of the cost than net realizable value, cost of pricing of land including development rights, material services and other overheads. Costs of construction/development incurred would be discharged to the profit and loss accounts proportionate to the project area sold, in cases where threshold of 30% had been exceeded. Full details with regard to the expenses claimed under selling, administrative and another expenses had been disclosed. As noticed above, the figures given in columns and heads have not been disturbed by the Assessing Officer and no addition has been made by doubting and disturbing the figures and amounts mentioned. The Tribunal has also not stated that full and complete disclosure of material facts was not made by the appellant-assessee. Given the aforesaid facts, i.e. the relevant clauses of AS-7, applicable Guidance Notes, the fact that the accounts were duly audited and the disclosures made in the audit notes, the loss income as declared, small taxable income as assessed even after the additions were made and that the expenses as claimed were otherwise eligible and allowed in the next assessment year, we would accept that the appellant-assessee had shown that they had acted bonafidely. Thus, the appellant-assessee should not have been burdened with penalty for concealment of income under Section 271(1)(c) of the Act. - decided in favour of assessee.
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2019 (1) TMI 654
Benefit of exemption u/s 54B denied - Held that:- There were conspicuous gaps and loopholes in the case set-up by the appellant-assessee, which has been disbelieved by the Tribunal after in depth appraisal of conspectus of facts and material. Inspector s report had not only reflected on the land in 2011, but on the spot inquiries to ascertain whether the land was being used for agricultural purposes prior to sale of land in December, 2008. Pertinently, the assessee had purchased the said land on 11th November, 2006 for a substantial amount of ₹ 58.90 lakhs. The land is located in Ghaziabad district, which is approximate and adjoins Delhi and falls within the National Capital Territory of Delhi. It was sold after 3 years in December, 2008 to a builder and real-estate developer for ₹ 6.51 crores. Relevant evidence and material have been considered, evaluated and appreciated by the Tribunal, which has given reasonable and cogent reasons for the findings on facts. This is not the case where the Tribunal s order is perverse in the sense that no reasonable person would, in the relevant field, have not have arrived at the final finding and conclusion as drawn and under challenge. The test and parameter whether an order or judgment is perverse are rather strict. Even if we were to form a different opinion on evidence, we would not categorize the impugned order as a perverse order. The appeal has no merit and is accordingly dismissed.
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2019 (1) TMI 653
TPA - direction given by the Tribunal to exclude M/s Aptico Ltd., Cameo Crop Ltd., Global Procurement Consultants, Killik Agencies Marketing Ltd. and TSR Darashaw Ltd. from the list of comparables - Held that:- Reasoning given by the Tribunal discloses the functional and other reasons to elucidate, dissimilarities between the five entities and the assessee. Keeping in view the aforesaid factual background, which is not doubted and debated nor challenged on the ground of perversity, we do not find any substantial question of law for consideration in this appeal.
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2019 (1) TMI 652
Unaccounted income from undisclosed source - Held that:- From perusal of the findings of Ld.CIT(A) as well as copies of bank statements and fixed deposit receipts paced before us as well as in the given facts and circumstances of the case there remains no doubt that the alleged amount is duly accounted for in the regular books of accounts of the assessee and it comprises of three fixed deposit receipt and accrued interest and therefore this amount cannot be treated as unaccounted income from undisclosed source. No interference is therefore called for in the finding of Ld.CIT(A) deleting the impugned addition - decided against revenue.
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2019 (1) TMI 651
Addition u/s. 68 - unexplained cash credit - during the course of assessment proceedings, when the assessee was asked about purchase and sale of shares, the assessee filed a revised computation of income declared longer capital gain amounting, which was claimed as exempt u/s 10(38) - AO concluded that the transactions were sham and aimed only to bring unaccounted money in the semblance of exempted long term capital gains - Held that:- in this case AO has invoked the Section 68 of the Act on cash deposits found in the bank accounts. It is correct that since no books of account are maintained in the ordinary course of business of the assessee, no such addition u/s 68 of the Act is tenable. Therefore, in my considered opinion the ground in dispute is squarely covered by the decision of the ITAT [2019 (1) TMI 264 - ITAT DELHI] - Decided in favour of assessee.
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2019 (1) TMI 650
Benefit of deduction u/s 80P - assessee contended that the income earned by it was primarily from other co-operative societies and co-operative banks only which is claimed as deduction u/s 80P(2)(d) of the Act and that it is not a bank as concluded by the AO - Held that:- The issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. (2010 (2) TMI 3 - SUPREME COURT) and case of Tumukur Merchants Souharda Co-operative Ltd. (2015 (2) TMI 995 - KARNATAKA HIGH COURT). We also make it clear that the examination of claim for deduction in respect of interest income of ₹ 2,14,13,128/- received on deposits from other Co-operative Societies and with Co-operative banks will be made only u/s.80P(2)(a)(i) and in so far as deduction u/s.80P(2)(d) of the Act is concerned, the same becomes not allowable in view of the decision of Karnataka High Court in the case of PCIT Vs. Totgars Cooperative Sale Society Ltd. (2017 (7) TMI 1049 - KARNATAKA HIGH COURT). - Appeal by the Revenue treated as allowed for statistical purposes.
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2019 (1) TMI 649
Income from purchase and sale of shares - income from business against OR short term capital gain - Held that:- We notice that assessee has declared income from salaries, business and short term capital gains (STCG). The majority of the income is derived from STCG. A.O. treated the STCG as business income with the observation that the assessee has dealt in the share market regularly and the volume of transaction denotes that the assessee is in the business of share trading. Further, he observed that majority of the profits earned are through buying and selling of shares which taken place within a period of 10 days and 100% share transactions were completed within one month. In our considered view, the intention to hold the investment for long period or transfer within that period to earn additional profit is depending upon the action of the assessee but cannot be demonstrated. This is the one issue always lead to litigation. For this purpose and to reduce the litigation, the CBDT has issued a circular No. 06/2016. - Decided in favour of assessee.
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2019 (1) TMI 648
Penalty u/s 271(1)(c) - assessment u/s 153A - Held that:- It is pertinent to observe that the well settled proposition of law in such a situation would be that courts used to decide a dispute between the parties, because it involves decisions on facts. It can also involve decision on point of law. Both may have bearing on the ultimate result of decision. When a court interprets a provision, it decides as to what is the meaning of provision and effect of the words used by the legislature. It is a declaration regarding the statute. Judgment declares as to what is the legislative intent at the time of proclamation of law. The declaration is …. “This was the law, this is the law and this is how provision shall construe.” Scope of section 153A has been explained in these four decisions therefore, it is incumbent upon us to take cognizance all these decisions and take note of additional legal point raised in appeal. If facts are being examined, then it would reveal that had the assessee challenged quantum addition, then that addition could have been deleted. But since the assessee has not challenged that does not mean that the AO has got jurisdiction to visit the assessee with penalty also. Once no incriminating material was found and time limit to issue notice u/s 143(2) had already expired, no action could have been taken against the assessee even in quantum. If no action could have been taken in the quantum proceedings, then how penalty which is to be computed on the basis of quantum addition could be levied upon the assessee ? Considering the above facts and circumstances, and in the light of the above four decisions, we are of the view that penalty is not sustainable in the case of the assessee. It is deleted. - Decided in favour of assessee.
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2019 (1) TMI 647
Exemption u/s 11 - Treating of the transaction of purchases of land as voluntary contribution in the form of donation - Held that:- It is undisputed that the seller initially wanted to gift the said plot of land to the assessee trust. Since permission of gift was not received from the concerned government authorities, the sale deed was executed. The sale consideration is purportedly paid by post-dated cheques which were never presented for encashment. Thereafter, the seller did not claim the outstanding amount of sale consideration. In the balance sheet of the assessee in the relevant year, the amount is not shown as payable to the seller of the land. These facts clearly establish that the transaction of transfer of plot of land is in substance the gift which has been given the form of sale. We uphold the finding of learned CIT(A) that it is in effect the donation of the plot by the alleged seller to the assessee trust. Accordingly, ground No.1 of the assessee’s appeal is rejected. Adoption of the value as per circle rate at ₹ 1,11,12,000/- - Held that:- It is an admitted position that the assessee society is registered trust under Section 12AA of the Income Tax Act, 1961. By adopting the circle rate of property, the Assessing Officer applied Section 56 of the Income Tax Act, 1961 to the assessee trust which is not at all applicable to the trust in the particular scenario when the section 56 (2)(vii) is applicable to individuals and HUF only. Besides section 56 (2)(x) will also be not applicable as the same is w.e.f. 01.04.2017 and the Assessment year before us is A.Y. 2015-16. In fact, Section 56(2)(x) of the Act is not applicable to the educational institutions. Therefore, the Assessing Officer wrongly invoked Section 56 of the Act and wrongly adopted circle rate of property in the present case. Thus, Ground No. 2 of the appeal is allowed. Donation as received in kind i.e. in property - income u/s 2(24)(iia) for the purpose of Section 11 - Held that:- AO has applied the circle rate to the land which is also not as per law and we have allowed Ground No. 2 of the assessee’s appeal. In fact, the revenue’s case was that the assessee received land without any consideration which amounts to donation/gift. AR relied upon the decision of Shri Sachyaya Mataji Trust Osian, Jodhpur [2014 (5) TMI 1178 - ITAT JODHPUR] which is an apt decision in present assessee society’s case. In the present case also, it is an admitted fact that the assessee received the donation in kind i.e. land and the same could not be applied, accumulated or invested, therefore it cannot be treated as income. The donation received in kind did not come under the definition of income u/s 2(24) of the Act, therefore, it could not be the income of the trust u/s 12(1) of the Act and the acceptance of donation in kind does not come under the purview of income u/s 2(24)(iia) for the purpose of Section 11 of the Act
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2019 (1) TMI 646
Levy of penalty u/s 271(1)(b) - failure to comply 142(1) notice - Held that:- A.O. is correct in holding that the penalty u/s. 271(l)(b) may be attracted for each of such failure to comply 142(1) notice The assessee failed to give any plausible explanation for his failure to comply with the notice issued by the AO. Hence, penalty of ₹ 10,000/- has rightly been imposed and has rightly been confirmed by the ld.CIT(A) in both the years. - Decided against assessee
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2019 (1) TMI 645
Disallowance as bonus to director shareholders of the assessee company u/s. 36(1)(iii) - whether it is a dividend payment in disguise - Held that:- The partners are duly qualified and they have participated in the day to day affairs of the assessee company and payment of bonus is duly authorized by the Board Resolution. Taking all these facts into consideration, the bonus was paid in addition to salary as a reward for services rendered by the two directors to the assessee company and it was in no way related to their share holdings in the assessee company. Further, it also cannot be considered as a dividend payment in disguise. Having regard to their qualification & experience and participation in the management of the assessee company, the payment of bonus has been made as part of salary in terms of Board Resolution which was linked to the services rendered by them. Accordingly, it should be allowed as a deduction while computing the income of the assessee. This issue was considered by the judgments cited supra as per which, when bonus has been paid to the directors for the services rendered and as part of a payment of employment which is to be allowed u/s. 36(1)(ii) - Direct the AO to allow the claim of assessee for payment of bonus as deduction while computing the income of assessee. - Decided in favour of assessee.
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2019 (1) TMI 644
Charging of interest u/s 234A and 234B - Held that:- The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT]. Thus uphold the action of the AO in charging the assessee the aforesaid interest u/s 234A and 234B - Decided against the assessee Capital gain computation - assessee along with his mother and siblings entered into a JDA - Transfer as per section 2(47)(v) - Held that:- As per the details that emanate from the record, the assessee along with his mother and siblings entered into a JDA on 03.12.2007 with M/s. Sai Deep Estates, which, find, is a registered document. in the case of Dr. T. K. Dayalu ( [2012 (6) TMI 405 - KARNATAKA HIGH COURT]) has held that on entering into a JDA, there is a ‘transfer’ as per the provisions of section 2(47) of the Act and consequently capital gains is attracted. In that view of the matter, this issue is covered in favour of the Revenue and against the assessee. Claim of Exemption u/s 54/54F - multiple units/ flats i.e., the 2 flats in the same apartment building received by him in lieu of entering into the JDA dated 03.12.2007 with M/s. Sai Deep Estates - Held that:- There was a structure/building on the said property before the JDA was entered into on 03.12.2007, it is of the considered opinion that the issue for consideration in this ground i.e., the assessee’s claim for exemption u/s 54/54F of the Act in respect of 2 flats in the same residential building complex; is squarely covered in favour of the assessee by the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Smt. K. G. Rukminiamma [2010 (8) TMI 482 - KARNATAKA HIGH COURT]. As decided in COMMISSIONER OF INCOME TAX VERSUS SMT. VR. KARPAGAM [2014 (8) TMI 899 - MADRAS HIGH COURT] Amendment to section 54F of the Act being para materia to section 54 of the Act with regard to substitution of “a” residential unit by Finance (No.2) Act, 2014 was operative only w.e.f. 01.04.2015, whereby exemption for more than one unit/flat (residential house) is to be withdrawn. However, prior to the aforesaid Amendment (supra), a residential house would include multiple flats/residential units in the same apartment building. - Decided in favour of assessee.
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2019 (1) TMI 643
Levy of penalty u/s 271(1)(c) - expenditure incurred on scientific research - Held that:- If the claim besides being incorrect in law is mala fide, Explanation 1 to Section 271(1)(c) would come into play. Therefore, the precise question before us is to give a finding whether the claim of the assessee is bonafide or not. As we have already mentioned that in this case, the claim of the assessee that it incurred expenditure on scientific research has already been accepted by the learned CIT(A), so there is no question of claim being malafide. The position remains after the order of the CIT(A) is that the assessee’s claim that it incurred expenditure on scientific research stood accepted but the deduction is allowed at the rate of 100% instead of 150% as claimed by the assessee. In our opinion, merely because the rate of deduction is reduced by the CIT(A), it cannot be said that the claim of the assessee is malafide or incorrect. That Hon'ble Jurisdictional High Court in a recent decision in the case of Samtel India Ltd. [2018 (7) TMI 660 - DELHI HIGH COURT] has reexamined the decision of Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] and held that unless the details supplied in the return of income are not accurate, not exact or correct, not according to truth or erroneous, it cannot be said to be inaccurate particulars. In the case under appeal before us, admittedly, the particulars of expenditure incurred by the assessee have been accepted to be true and accurate by the Assessing Officer himself because he has not doubted the genuineness of the expenditure incurred. He only disputed whether the expenditure was incurred for normal business of manufacturing or for research work. This claim is also accepted by the learned CIT(A) that the expenditure was incurred for research purposes. The disallowance was made only because the deduction was allowed at a lesser rate than what was claimed by the assessee no inaccurate particulars deemed to be given - Decided in favour of assessee.
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2019 (1) TMI 642
Liability to collect TCS - Demand raised u/s 206C(6A)/206C(7) - treating the assessee as “assessee-in-default” for not collecting TCS from the collecting party - case of the assessee is that, the collecting entity is doing job of toll collection from different plazas on behalf of the assessee and the collection amount daily deposited in the designated bank of the assessee-company - Held that:- CIT(A) has gone through all the relevant material and analysed the issue in details including the agreement entered into by the assessee-company and the collecting entity, and came to a conclusion that the said collecting entity’s role was restricted to collecting the toll amount and deposit the same on daily basis in bank account of the company and it has no right on any part of the toll collection. The ld.AO has construed the collection of toll with right of toll collection being transferred to the entity, which is not correct in the present case. Considering the scope and nature of the work carried out by the collecting entity, it clearly shows that activities of collecting toll fees as entrusted by the assessee was not a contract within the meaning of section 206C and will not attract provisions of section 206C(1C) of the Act, rather it was in the nature of outsourcing of job for collection of user fees. See ACIT, BHUBANESWAR VERSUS PROJECT DIRECTOR, NATIONAL HIGHWAY AUTHORITY OF INDIA, PROJECT DIRECTOR, PARADIP PORT ROAD CO. LTD., BHUBANESWAR [2013 (1) TMI 975 - ITAT CUTTACK] - Decided in favour of assessee.
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2019 (1) TMI 641
Penalty u/s 271(1)(c) - disclosure of unaccounted receipts for accounting year in addition to its regular income - Held that:- Evidence is an information only, which does not carry evidentiary value, hence, on the basis of this statement, it cannot be concluded that the assessee has furnished inaccurate particulars of income. Apart from above, the assessee has completely disclosed the details along with copies of accounts. It has made a noting in the return of income showing as to how ₹ 3.00 lakh is not to be included in its income. Such addition has been made, which might have not been changed, but for the purpose of penalty, the stand taken by the assessee deserves to be looked into and deserves to be decided afresh. CIT(A) has confirmed penalty for deemed concealment, whereas, this was not used by the AO as reason for visiting the assessee with penalty. We extracted a part of the penalty order as well as finding of the CIT(A). If both the orders of the Revenue authorities are being examined in the light of the discussion made by the Tribunal in the case Shri Kantibhai Naranbhai Prajpati [2018 (2) TMI 1823 - ITAT AHMEDABAD] then penalty is not sustainable. - Decided in favour of assessee.
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2019 (1) TMI 640
Addition u/s 40(a)(ia) on account of interest paid to Tata Capital Ltd. - TDS liabilities - scope of amendment to section 40(a)(ia) - Held that:- DR relied on Thomas George Muthoot Vs. CIT [2015 (7) TMI 810 - KERALA HIGH COURT] in which, decided that amendment to section 40(a)(ia) is prospective in nature, while, the assessee has relied on the decision in the case of CIT Vs. Ansal Land Mark Township (P) Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] in which, the Hon’ble Court adjudicated that the amendment is a curative in nature and it has effect of retrospective. By relying on the judgment in the case of CIT Vs. M/s Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME COURT] in which adjudicated that the amendment is a curative in nature and it has effect of retrospective. We hold that where two views are possible on an issue, the view, which is favourable to the assessee has to be preferred. We direct the AO to delete the addition made u/s 40(a)(ia) on account of interest paid to Tata Capital Ltd. - Decided in favour of assessee.
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2019 (1) TMI 639
Reopening of assessee - Held that:- Assessee has received ₹ 4,60,01,150/- as per MOU dated 1.12.2007 from NRI Ashok Sarin to start business. MOU dated 1.12.2007 has not been filed before the AO for verification and was only filed before the CIT(A). After perusing the finding of the CIT(A), CIT(A) has quashed the assessment and reduced the demand to NIL by passing a non-speaking order without verifying the assessment records. We are also of the view that this MOU dated 1.12.2007 which was filed before the Ld. CIT(A) has not been confronted to the AO for verification. As per the assessment record, assessee has also not appeared before the AO. We are of the view that impugned order is not sustainable in the eyes of law and the issue involved in the present appeal requires re-adjudication at the level of the AO for verification of the MOU dated 1.12.2007. Hence, we are directing the AO to verify the same and decide the issue in dispute afresh, under the law, after giving adequate opportunity of being heard to the assessee for substantiating the issue before the AO. - Appeal filed by the Revenue stands allowed for statistical purposes.
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2019 (1) TMI 638
Assessment u/s 153C - Held that:- CIT (A) has decided the appeals in favour of the assessee/s by holding that since there was no incriminating material found during the course of search and seizure which could be said to be belonging to the assessee/s, there cannot be any additions in the hands of the assessee/s. On the other hand, he has confirmed the additions on merits. This is contrary to the settled legal position that if the appeals are allowed on the legal ground, then additions on merits cannot be sustained. CIT (A) has, thus, given contradictory findings in the same appellate order. Further, it is also settled law that an order giving effect to the appellate order is also appealable u/s 246A of the Act. Respectfully placing reliance on the judgment of Caltex Oil Refining (India) Ltd. vs. CIT (1992 (12) TMI 23 - BOMBAY HIGH COURT), we hold that the Ld. CIT (A) was legally incorrect in holding that the appeal effect order is not appealable and, therefore, his action of dismissing the assessee’s appeals in limine cannot be upheld. Accordingly, we restore all the four appeals to the file of the Ld. CIT (A) to reconsider the assessee’s appeals which have been filed against the order of the AO giving effect to the order of the Ld. CIT (A). - Appeals of the assessee allowed for statistical purposes.
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2019 (1) TMI 637
TDS u/s 192 - Short deduction of tax U/s 201 and interest u/s 201(1A) - reimbursement made to Officers for foreign travel leg of LTC claim - assessee bank default for short-deduction of TDS on LFC/LTC claim relating to foreign leg of the travel of its employees - eligibility for exemption u/s 10(5) r/w Rule 2B - Held that:- As decided in SBI vs. ACIT(TDS) [2019 (1) TMI 145 - ITAT JAIPUR] the order of the ld CIT(A) is hereby affirmed where he has held the assessee bank to be assessee in default for short-deduction of TDS on LFC/LTC claim relating to foreign leg of the travel of its employees being not eligible for exemption under section 10(5) r/w Rule 2B. The grounds of appeal taken by the assessee are accordingly dismissed.
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2019 (1) TMI 636
TPA - comparable selection - functinal similarity - Held that:- Assessee was engaged in the business of distribution of subscription rights of satellite channels of Cartoon Network, WB, CNN, POGO and HBO. The assessee was also engaged in the business of imports, promotion marketing, distribution and provision of sub-distribution rights to cable and broadcast entities, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Direct the AO to allow the benefit of the working capital adjustment to the assessee while working out the arm s length price.
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2019 (1) TMI 635
Late filing fees u/s 234E while processing the TDS return (26Q) u/s 200A - scope of amendment to section 200A - Held that:-In the present case, the assessee filed its TDS returns (Form 24Q & Form 26Q) for the third quarter of financial year 2014-15 which was processed and intimation under section 200A was issued vide respective intimations issued under section 200A dated 11.05.2015 much prior to the amendment to section 200A of the Act w.e.f. 01.6.2015 empowering the Assessing officer levying the fees under section 234E of the Act. We hereby direct the demand raised by way of charging the fees under section 234E of the Act in both the cases to be deleted. - Decided in favour of assessee.
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2019 (1) TMI 634
Estimation of sale - method of accounting - Held that:- The assessee’s accounting for the current year is on the same basis as for the preceding year; rather, continues to be the same from year to year. No difference has in any case been pointed out to us, with in fact the assessing authority relying on his findings for AY 2013-14. There is, as such, no reason why our findings for that year should not hold good for the current year as well. We, accordingly, following the tribunal’s order for AY 2013-14, delete the impugned addition, of course, subject to the same observations as obtaining for that year. We decide accordingly. Disallowance of prior period expenses - claim in respect of commission expenditure (on sales) - Held that:- The assessee’s explanation of the commission arising to the payee/s only on the realization of the sale proceeds, so that the impugned expenditure in fact accrued during the current year, was found incorrect on facts. No improvement in its’ case stands made before us. The assessee has at no stage substantiated its’ case of it accounting and, accordingly, claiming the commission expense on the realization of the corresponding sale. The dates of the realization of the corresponding sale/s, which therefore assumes relevance in this regard, are conspicuous by their absence. Why, we observe no rebuttal to the findings, issued on the examination of the relevant record, by the ld. CIT(A) – who has been reasonable in allowing part relief, and the assesseee’s case completely fails on facts. The impugned disallowance is accordingly confirmed. - Decided against assessee.
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2019 (1) TMI 633
Addition u/s 41(1)(a) - cessation of trading liability - relevancy of accounting entry - Held that:- Whether a trading liability, which the impugned amount/s represents, could be added u/s. 41(1)(a), subject of course to the conditions in its respect being satisfied, where the purchase (of goods), to which the said liability/s relates, is not doubted for its genuineness or its genuineness otherwise not in dispute. There is nothing in the clear mandate of the provision to so suggest, as sought to be canvassed by Sh. Sarna with reference to the decision in Jain Exports Pvt. Ltd. [2013 (5) TMI 690 - DELHI HIGH COURT]. Why, the very fact that the liability under reference stands allowed as a deduction, a condition precedent for the applicability of section 41(1), in an earlier year, itself implies that the genuineness of the transaction/s of purchase, giving rise to the liability, is not under question. Rather, where so, the same would disqualify the relevant amount/s for being allowed as a deduction for the year in which it arose, i.e., under the relevant provision, as under section 37(1) qua a purchase transaction, even as explained in Jain Exports (P.)Ltd. (supra). As such, nothing turns on the assertion that the relevant purchase/s stands not doubted by the Revenue; the very basis of sec. 41(1)(a) being the allowance of deduction qua the liability under reference earlier. As explained in Motilal Ambaidas v. CIT [1976 (2) TMI 17 - GUJARAT HIGH COURT] in the context of a sec. 41(1) addition, wherein no entries in respect of sale-tax collected (from customers) and paid to the Government were made by the assessee in his books of account, contending that therefore no deduction qua sales-tax paid had been claimed by him for section 41(1) to apply on the refund of the sales-tax from the Government. The contention was not accepted by the Hon’ble Court, further explaining that the provision is a machinery provision. In fact, as explained in CIT v. Balabux Birla & Co. [1985 (5) TMI 39 - PUNJAB AND HARYANA HIGH COURT] the method of accounting, cash or mercantile, adopted by the assessee is also irrelevant as far as section 41(1) is concerned, so that as soon as the assessee is found to have benefited from the remission or cessation of a trading liability, allowed in an earlier year, the provision would get attracted in the facts and circumstances of the case. The said condition, in view of the foregoing, stands satisfied, so that in my view section 41(1)(a) stands rightly invoked by the Revenue in the instant case qua the impugned liabilities. No case for telescoping, also considered, also obtains. Assessee’s appeal dismissed.
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2019 (1) TMI 632
Bogus purchases - estimation of income - Held that:- The profit element embedded in the impugned purchases are required to be assessed in the hands of the assessee, as the assessee has failed to furnish the stock register and also evidence for receipt and consumption of materials. Since the assessee has exported materials, the receipt of materials cannot be doubted. The possibility is that the assessee might have purchased materials from one party and obtained bills from another party. Accordingly the profit element embedded in the purchase may be added inthe hands of the assessee. CIT(A) has estimated the profit element at 30% which, in our view, is on the higher side. The learned A.R.submitted that the VAT rate applicable to the impugned purchases is 12.5%. Accordingly, by following the ratio rendered in the case of Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) we modify the order passed by the learned CIT(A) and direct the AO to sustain the addition to the extent of 15% of the value of alleged bogus purchases. Appeal filed by the assessee is partly allowed.
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Customs
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2019 (1) TMI 627
Concessional rate of duty - import of BMW CARS IN CKD - Held that:- Issue notice in the appeal as well as in the stay application, returnable in four weeks.
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2019 (1) TMI 626
Detention of goods - imports consignment imported through Bills of Entry dated 11-10-2017 - Section 108 of the Customs Act, 1962 - Held that:- This Court is of the opinion that since the goods have been in detention for more than a year and no irregularity of any kind whatsoever has been indicated by the DRI and furthermore, that the DRI has also expressed no objection for the release of the goods upon payment of the differential duty, if any, the imported goods should be released to the present petitioners who are undoubtedly the actual beneficiaries of the import. This is an unfortunate case where the respondents/Customs authorities intentionally appeared to have omitted issuing the detention certificate - After considering the application for waiver of the demurrage/detention charges, if any liability accrues, that shall be on account of the customs authorities in the circumstances of the case. Petition allowed.
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2019 (1) TMI 625
Penalty u/s 112(a) of the Customs Act - case of appellant is that there was fraud by CHA, the appellant/facilitator cannot be held responsible - Held that:- The record discloses that the appellant admitted that he did not even examine the basic record such as the existence or otherwise of authorization letter. He concededly helped the clearance of identical consignments in the past of the same party. Given these conspectuses of circumstance, the submissions made on his behalf that he was merely a facilitator and working outside the margin of law as it was, cannot be accepted - appeal dismissed.
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2019 (1) TMI 624
Cancellation of bail - smuggling of red sanders - bailable offence - Held that:- Considering the facts and circumstances of the case and since the fact remains that the Learned Magistrate under the impression that the respondent committed the offence, which is bailable one and accordingly, granted bail to him, without ordering notice to the prosecution, however, the Learned Magistrate has not perused the remand report and the remand report reveals that the respondent/accused was booked under Section 135(1)(C) of the Customs Act, which is non-bailable one, therefore, issuing notice to the petitioner is mandatory - petition allowed.
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2019 (1) TMI 623
Service of order - presumption of service of order as the order-in-original was sent to the petitioner through the registered post at the recorded address on 31-8-2016 and since undelivered cover was not received back - Held that:- It is no doubt correct that there is a presumption of service upon the petitioner but the same is rebuttable. In case the petitioner had received the order-in-original, we see no reason for the petitioner to have not taken any steps. Once the matter came to the knowledge of petitioner efforts were made to obtain certified copy of the order which clearly indicate the fact that the order-in-original was not received by him - Interest of justice also demands that an opportunity should be provided to the petitioner to contest the matter on merits in appeal - petition disposed off.
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2019 (1) TMI 622
Validity of Show Cause Notice (SCN) - Misdeclaration of imported goods - refrigerant - it was alleged that appellant mis-declared the refrigerant as R-32 which actually is R-22 and also mis-declared about weight, size and price - whether when the appellant has paid the entire duty amount alongwith the interest and the penalties, the proceedings would have been concluded? - Held that:- The bare perusal of sub-section 5 and sub-section 6 of Section 28 of the Customs Act makes it clear that the same is a beneficial piece of legislation with an intention to reduce the litigation proceedings where the assesse satisfies the condition of the said Section. The language makes it clear that the provisions provide for deemed conclusion of the proceedings against the assesses if the payment as regard the duty, interest and 15% penalty thereof stands made by the assesse within a period of 30 days of the receipt of Show Cause Notice. The appellant herein has made the payment against the impugned bill of entry dated 29.09.2015 even prior the issuance of Show Cause Notice dated 30.01.2016 alongwith the payment towards the penalty interest on 01.12.2015, 07.01.2016 and 18.02.2016 respectively. The requisite TR-6/GAR-7 Challans are attached with the Appeal papers. As per the above provision, the appellant had the time to make the deposit till 01.03.2016 but the payment stands made by 18.02.2016. It is also apparent from the Show Cause Notice that the said payment of the differential duty and that of the penalty was brought to the notice of the Department vide letter dated 08.01.2016. The said acknowledgment is very much recorded in the Show Cause Notice itself - In the given circumstances, it can be concluded that the Department has committed an error even while issuing the Show Cause Notice. No doubt Sections 28(5) and 28(6) are applicable without prejudice to the provisions of Sections 135, 135A and 140 of the Customs Act but perusal of Show Cause Notice makes it clear that none of these provisions have been invoked at the time of issuing Show Cause Notice - It is well settled law that the legislative intent, extending certain beneficial provision to the assessee, should not be made frivolous by interpreting the provision in a particular manner other than the one which reflects upon such intent. The present is opined to be a clear case of presumed and assumed interpretation of Section 28(5) and 28(6) by the Adjudicating Authorities below. The Commissioner(Appeals) is held to have committed an error while giving more emphasis to a clarificatory Circular than to the settled provision of the statute - appeal allowed.
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2019 (1) TMI 621
Fraudulent availment of Duty Drawback - overvaluation of export goods - demand based on photocopy of the Bill of Entry/invoice in the importing country - Held that:- There is no dispute that the appellant has received payment in freely convertible foreign currency against all six shipments. This fact has been recorded in the show cause notice and also in the impugned order. It is also seen that there is no confessional statements or corroborative evidence to establish the allegation of overvaluation. There is no dispute over the fact that the goods were cleared by the Indian Customs after the proper examination of the goods, as per the prescribed norms. The only document on which the Revenue has placed reliance is the photocopy of the invoice presented by one of the overseas buyer M/s Saeed Al Mutorshi Ltd., wherein the value of the imported goods has been declared extremely low i.e. about ₹ 10/- per readymade garment - It is settled legal position that mere photocopy of the invoice received from overseas buyer/ importer is not sufficient to uphold that there is mis-declaration in value by the Indian seller/ Indian exporter - In the present case, there is no corroborative evidence to suggest the overvaluation of the export goods. There is no corroborative evidence to establish the allegation of overvaluation, whereas there is overwhelming evidence produced by the appellant in support of the fact that the value declared in the shipping documents by them is correct and/or plausible - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2019 (1) TMI 628
Appointment of provisional liquidator - Appellant inter-alia denies the issuance of the communication dated 4th March, 2013 and argues that the Company Petition is not maintainable on the ground that the amount alleged to be due from the Appellant is barred by limitation - Held that:- We have already dismissed the Company Appeal No. 30/2018 in the case of ICRI Research Pvt. Ltd. Versus Bon Lon Securities Ltd. [2019 (1) TMI 520 - DELHI HIGH COURT] recording our reasons for rejecting the arguments and contentions raised by the Appellant. The said reasons need not be reiterated in the present petition and it would suffice by observing that the reasons in the said appeal are also applicable to the present appeal - appeal dismissed.
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Insolvency & Bankruptcy
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2019 (1) TMI 631
Initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor - default in making repayment of loan - admission of application under Insolvency and Bankruptcy Code, 2016 - Held that:- In this case the existence of debt and default is reasonably evidenced in the documents supporting the petition as well as from the statement of the ld. Counsel for the Corporate Debtor of not having any objection if the petition is admitted. Further the Petition under section 7 is complete. The Petitioner having named the Interim Resolution Professional with his consent, and there being no disciplinary proceedings against the same. We are of the view that the present case is fit for admission under the Insolvency and Bankruptcy Code, 2016. This petition filed under Section 7 of IBC, 2016, against the corporate debtor for initiating corporate insolvency resolution process against the corporate debtor is admitted and the moratorium with consequential directions declared.
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2019 (1) TMI 630
Initiation of Corporate Insolvency Resolution Process - Corporate Debtor committed default along with pending TDS - Section 7 of Insolvency and Bankruptcy Code, 2016 - Held that:- This Adjudicating Authority, on perusal of the documents filed by the Creditor, is of the view that the Corporate Debtor defaulted in repaying the loan availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of Section 7 is taken as complete - this Bench hereby admits this Petition - petition admitted.
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2019 (1) TMI 629
Initiation of Corporate Insolvency Resolution Process - Section 10 of Insolvency & Bankruptcy Code, 2016 - scope of the term ‘Corporate Debtor’ - Held that:- Under Clause (b) of Section 10(3) the corporate applicant is bound to propose the name of Registered Resolution Professional to be appointed as Interim Resolution Professional. We have perused the written communication in Form No.2 Annexure-A8 (page Nos.63 to 67) furnished by Mr. Arun Chadha a registered Insolvency Professional with IBBI. This Form contains all the particulars provided in the Form. He has furnished his written consent and stated that presently he is serving as Interim Resolution Professional/Resolution Professional/Liquidator in two proceedings under the Code so far. The figures extracted indicate complete loss of net worth of the corporate applicant. It is clear from the above that the corporate applicant has failed to pay its debt and has thus committed default. In fact the financial creditor despite service has chosen not to appear or file reply or contest the admission of the petition. It clearly seems that the corporate applicant has fallen into debt trap and thus competent to set in motion the insolvency resolution process under the Code to ensure maximum value of assets which is in the interest of all the stakeholders. The petition is admitted.
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Service Tax
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2019 (1) TMI 620
Condonation of delay in filing appeal - date of receipt of the letter from the Superintendent is dated 6.12.2016 the appeal was filed on 23.2.2017 - Time Limitation - Held that:- The impugned order dismissing the appeal on time bar is not sustainable in law because the appeal was filed within 76 days from the date of receipt of the letter dated 6.12.2016, which is within condonable period of 30 days and therefore, I condone the delay in filing the appeal before the Commissioner (A). Further, the letter dated 6.12.2016 demanding interest for the delayed payment of service tax to the tune of ₹ 37,76,801/- is without any proper quantification given in the said letter - case remanded back to the original authority to quantify the interest payable and communicate to the appellant for compliance - appeal disposed off.
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Central Excise
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2019 (1) TMI 619
Principles of natural justice - though the respondents issued notice for personal hearing, the first respondent has not given an opportunity of personal hearing to the petitioners and without their consent passed impugned order - Held that:- When the personal hearing could not be held due to administrative reasons, the first respondent ought to have passed the impugned order, after providing such opportunity to the petitioners. But, in violation of the principle of natural justice, the first respondent has passed the impugned order. As there is a clear violation of the principles of natural justice, this Court is inclined to set aside the impugned order. The matter is remanded back to the file of the first respondent to proceed from the stage of personal hearing - petition allowed by way of remand.
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2019 (1) TMI 618
CENVAT Credit - capital goods and inputs were exclusively used in the manufacture of exempted grain base ENA/rectified spirit as also dutiable goods - Rule 6 of the Cenvat Credit Rules - Held that:- The rectified spirit so manufactured, are captively used by the appellant for manufacture of dutiable product i.e. denatured spirit. The storage tanks installed in the factory to store Extra Natural Alcohol were used for denaturing process, as per the market requirement. Since denaturing process takes place, while Extra Natural Alcohol were stored in the storage tank, it cannot be concluded that those storage tanks were used exclusively for manufacture of the exempted/non-excisable goods. Further, Extra Natural Alcohol is an intermediate product, which is used for manufacture of the denatured alcohol - denial of Cenvat benefit of central excise duty paid on capital goods is not proper and justified. Further, DDHS and Barli are not the final product manufactured by the appellant. Since, those products emerged during the course of manufacture of alcohol i.e. both dutiable as well as exempted, it will not be appropriate to deny the benefit of Cenvat Credit availed of capital goods used in the manufacture of such waste product. CENVAT credit - input services - construction service - Held that:- The Learned Commissioner (Appeals) vide paragraph 7 in the impugned order has held that the appellant had not extended any argument regarding availment of such credit. Also, from the appeal records that the appellant has not made any specific grounds in support of its claim that it is entitle for the benefit of input service credit used in the construction activities. Therefore, in absence of proper substantiation of the issue, the impugned order denying the Cenvat benefit on input service amounting to ₹ 7,51,900/- cannot be interfered with at this juncture - the appellant is liable to pay/reverse Cenvat Credit on the input services used for the construction services and original order confirming the adjudged demand on such count is sustainable. Appeal allowed in part.
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2019 (1) TMI 617
CENVAT Credit - inputs/capital goods - MS plates, HR sheets, angles, channels, beams, joists and MS flats falling under Chapter 72 were used as inputs for fabrication of bunkers - Held that:- This issue has been settled in favour of the appellant by various decisions wherein it has been held that the availment of credit on various items of iron and steel which are used in fabrication of storage tanks/bunkers are held to be inputs and the assessee is entitled to CENVAT credit of the same - reliance placed in the case of Suguna Metals Pvt. Ltd. vs. CCE, Hyderabad-I [2016 (1) TMI 1167 - CESTAT HYDERABAD] - credit allowed - appeal allowed - decided in favor of appellant.
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2019 (1) TMI 616
Transfer of accumulated CENVAT credit - shifting of the company - Rule 10 of the Cenvat Credit Rules, 2004 - requirement of intimation for credit transfer - Held that:- Only the intimation is required and it is upto the satisfaction of the Asstt./Dy. Commissioner. There is no mention of getting the permission of transfer from the previous location to the new location by the concerned Central Excise Authorities, which has been made a ground for confirming the penalty against the appellant. It is on record that the intimation has been filed to both the new and old jurisdiction by the appellant - Hence, the procedural requirement under Credit Rule is duly complied with. The various credits undertaken by the appellant have been shown under ER-I Returns and the same amount has been taken as credit at the new location, which has been shown in return of the previous location - transfer of credit allowed - appeal allowed - decided in favor of appellant.
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2019 (1) TMI 615
Penalty under erstwhile Section 11AC(1)(b) of the Act - penalty of 50% of the demand confirmed - valuation - change of opinion - suppression o facts or not - Held that:- The appellant have valued their goods as per their understanding, under Rule 8 which, is applicable in the case of related party or interconnected undertakings. Further, the demand of differential duty by the Revenue is by way of change of opinion that instead of Rule 8 Rule 4 is applicable, of the Valuation Rules. Thus, there is no suppression of facts and mis-conduct on the part of the appellant - penalty set aside - appeal allowed - decided in favor of appellant.
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2019 (1) TMI 614
SSI Exemption - use of brand name - basis of allegation of the department is that since, the brand name ‘Shree Aditya’ was registered in the name of the director, hence, SSI exemption to the appellant company was not available during the impugned period - Held that:- Hon’ble Division Bench’s decision in case of Anil Pumps (P) Ltd. Vs CCE [2004 (12) TMI 134 - CESTAT, NEW DELHI)] wherein the identical issue has been decided in favour of the assessee and it was held that by using these brand names in the appellants company wherein he is Director, he cannot be said to had used brand name of another person. This decision was upheld by the Apex Court [2010 (4) TMI 1171 - SUPREME COURT] - the appellants are held entitled to SSI exemption - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (1) TMI 613
Principles of natural justice - grievance of the petitioner before this Court is that the Assessing Officer has not considered the second reply filed by the petitioner dated 30.08.2017 before passing the impugned order - Form-C also not considered - Held that:- It is seen that the Assessing Officer has taken into consideration all the C-Forms filed for the value of ₹ 5,13,45,835/- and passed the assessment order. As it is stated that the petitioner has subsequently filed another set of C-Forms on 20.10.2017, this Court is of the view that all these contentions can be raised by the petitioner before the Assessing Officer, by properly filing an application under Section 84 of the Tamil Nadu Value Added Tax Act, 2006, so that, he will be in a position to consider the grievance of the petitioner and pass appropriate orders - petition allowed by way of remand.
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2019 (1) TMI 612
Principles of natural justice - petitioner is not a registered dealer - opportunity of personal hearing not provided - Held that:- Considering the fact that the assessment order was passed based on the reason that the petitioner did not file any reply and further considering the fact that the Assessing Officer imposed penalty, without affording an opportunity of personal hearing, this Court is of the view that interest of both parties will be protected, if the following order is passed in this writ petition by putting the petitioner on some terms - matter is emitted back to the Assessing Officer to redo the assessment - petition allowed by way of remand.
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2019 (1) TMI 611
Input Tax Credit - assessee received incentives from its manufacturer - disallowance of the discount despite filing of credit notes and declaration as per Circular No. 41/2007 - applicability of instructions contained in Circular 41/2007 to dealers like the petitioner - failure to account the turnover - Held that:- Having gone through Form No. 9, we are of the opinion that it is not confined to a mere transaction of return of goods. Rule 59 and section 41 read together would only indicate that if a credit note is issued on return of goods, then it should be in Form No. 9. This is not to say that the form prescribed for credit note under the Act is exclusively for the purpose of return of goods. A reading of the form and the various details enumerated therein would also indicate that, the form would take in all instances where a credit note is issued, based on which a claim is raised by an assessee. The credit note having not been issued in the prescribed form, there is no question of an input tax credit being granted with respect to the incentive, as has been held by the AO. We are of the opinion that the Tribunal has rightly confirmed the order of the AO. The question of law with respect to Circular No. 41/2007 would not arise since the assessee had not made a claim with the prescribed form. Though the amounts were disclosed in the books of account, discrepancy was noticed in the audit statement and the petitioner did not attempt a revised return under section 42 of the Act - the questions of law raised are to be answered against the assessee and in favor of the Revenue.
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