Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 21, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Securities / SEBI
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Release of provisionally attached property and bank accounts - the order of provisional attachment as well as the order of prohibition are not sustainable on two counts, i.e. (i) the order has been passed by the Assistant Commissioner, and (ii) the order has been passed without any credible materials, available for the purpose of passing such order of provisional attachment.
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CENVAT credit - capital goods - Vehicle used for Demonstration purpose - As per Section 18(6) of the CGST Act, when there is a supply of capital goods on which ITC has been taken, as in the subject case then the applicant shall pay an amount equal to the ITC taken on the said Demo Vehicles reduced by such percentage points as may be prescribed or the tax on the transaction value of such Demo Vehicles, whichever is higher.
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Benefit of concessional rate of tax / GST - The benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs., in this scheme which is covered in the category of affordable housing.
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Release of detained conveyance along with the goods - The respondents are directed to release the vehicle aforesaid alongwith the goods, upon the petitioner furnishing a bank guarantee for the penalty amount - petitioner directed to provide requisite proof in the form of monthly returns to establish that the tax on the goods in question, being transported, stands paid
Income Tax
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Reopening of assessment u/s 147 - Bogus accommodation entries - The allegation of attributing illegal conspiracy/activities etc. is hurled without any basis and therefore, on merits as well as on the legal issue the assessee succeeds - assessee succeeds in respect of the legal issues - reassessment order quashed
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Revision u/s 263 - Bogus purchases - it is not understood what more can be achieved by setting aside the assessment order and restoring the issue to him for making a fresh assessment without any specific direction - exercise of power u/s 263 in the facts of the instant case is not valid.
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Capital gain computation - assignment of lease rights in the shop - As sec. 50C applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. As the assessee has transferred leasehold right for 99 years in the shop and not land itself, the provisions of sec. 50C of the Act cannot be invoked.
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Nature of income - rental income from letting out of some adjoining shops by the assessee company to one person - An independent let out of property could be possibly regarded as ‘business income’ only where some elements/characters of business is present. Dominant intention to let out property as ‘business activity’ is not shown to exist.
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Exemption u/s 11 - charitable activity u/s 2(15) - Once the cancellation of registration has been set aside and registration granted under section 12A of the Act has been restored by the Tribunal, learned Commissioner (Appeals)’s decision for disallowance of exemption under section 11 of the Act becomes redundant, hence, has to be set aside.
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Reopening of assessment u/s 147 - AO was not having even the material before him, at the time of initiation of proceedings, on the basis of which the Investigation Wing sent his report. AO assumed and worked only on the satisfaction of only Investigation Wing. - AO has not even specified as to what is the amount of alleged income escaping assessment - re-assessment order quashed
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Revision u/s 263 - allowing of interest on interest u/s 244A - there is no delay which could be said to be inordinate delay on the part of the revenue in granting refund. - Accordingly, the order passed by ld. PCIT fulfils the twin condition of section 263 of the Act.
Customs
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Refund of differential duty - Benefit of N/N. 69/2011-Cus - no refund can be claimed once assessment is finalised without challenging the assessment even if such assessment was done under self assessment procedure.
SEBI
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Segregation of the funds and securities of client - The submission that the money was withdrawn from one account and credited to another account was on the strength of the letter of authority from the respective client cannot be accepted so far as the present circular is concerned. In our view, the appellant had committed breach of the directions contained in the said circular.
Service Tax
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Exemption from job-work - intermediate process - services of cutting of fabric according to the pre-determined shapes, sizes, specifications as designed, on job work basis - As such, the principal manufacturer is required to pay the duty on their final product so as to make the intermediate job worker exempted from payment of service tax - Facts needs to be verified.
Central Excise
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CENVAT Credit - input services - House Keeping Service - C & F Services - Warehousing maintained at C & F Agent - all the services related to clearance of the goods up to the place of removal is eligible input service - credit allowed.
Case Laws:
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GST
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2020 (1) TMI 743
Release of provisionally attached property and bank accounts - Jurisdiction - search and seizure - validity of prohibition order - scope of the powers of the concerned Officer under subsection(2) of section 67 of the Act - whether the order of provisional attachment passed by the Assistant Commissioner in exercise of powers under Section 83 of the GGST Act, 2017, is sustainable in law? HELD THAT:- The issue is no longer res integra, in view of the decision of this Court in VALERIUS INDUSTRIES VERSUS UNION OF INDIA [ 2019 (9) TMI 618 - GUJARAT HIGH COURT] - A Co-ordinate Bench of this Court, to which one of us, Mr.J.B.Pardiwala, J., is a party had the occasion to consider two questions, (i) the power of Commissioner of State Tax to delegate his powers under Section 83 of the Act to the Assistant Commissioner, and (ii) assuming for the moment that it is permissible for the Commissioner to delegate his powers to the Assistant Commissioner, what is expected of the Assistant Commissioner while exercising his delegated powers under Section 83 of the Act, for the purpose of provisional attachment. The dictum of law, as laid in the decision of this Court in the case of Valerius Industries, can straight way be made applicable to the case on hand. In the case on hand, we looked into the order passed by the Assistant Commissioner of State Tax under Section 83 of the Act - in the case on hand, the order of provisional attachment as well as the order of prohibition are not sustainable on two counts, i.e. (i) the order has been passed by the Assistant Commissioner, and (ii) the order has been passed without any credible materials, available for the purpose of passing such order of provisional attachment. The order of provisional attachment passed by the Assistant Commissioner, so far as the immovable property is concerned is set aside - application allowed.
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2020 (1) TMI 741
CENVAT credit - capital goods - inward supply of Motor Vehicle which are used for Demonstration purpose in the course of business of supply of Motor Vehicle - whether the credit can be utilised for payment of output tax payable? HELD THAT:- As per Section 2(19) of the CGST Act, 2017, capital goods means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business - the Demo cars in the subject case fulfill the definition of capital goods, are received under a Tax Invoice and are used or intended to be used in the course or furtherance of business i.e. sale of motor vehicles - the applicant is eligible to avail ITC on capital goods. Whether Section 17 (5) of the said Act debars the applicant from taking credit? - applicant has submitted that every model of demo cars is used by them for demonstration only for a limited period i.e. every two years or 40,000 Kms whichever is earlier - HELD THAT:- Since the applicant will be making further supplies of the Demo vehicles, and there is no time limit prescribed in the GST Act for making such further supplies, we are of the opinion that they will be eligible to avail ITC in the subject case. Whether the ITC availed by them on capital goods can be utilized for payment of output tax payable under this Act? - HELD THAT:- The manner of utilization of ITC is provided as per provisions of Section 49 of the CGST Act. Section 18 of the CGST Act deals with availability of credit in special circumstances. As per Section 18(6) of the CGST Act, when there is a supply of capital goods on which ITC has been taken, as in the subject case then the applicant shall pay an amount equal to the ITC taken on the said Demo Vehicles reduced by such percentage points as may be prescribed or the tax on the transaction value of such Demo Vehicles, whichever is higher.
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2020 (1) TMI 740
Benefit of concessional rate of tax - dwelling units at Joyville, Virar - low cost houses - benefit of concessional rate would be available to common amenities such as club house, swimming pool and amenities of like nature - ongoing project - whether the construction services provided by the applicant under the subject qualifies for the reduced GST rate of 12% as provided in Sr. No. 3 - item (v) - sub item (da) of Notification No. 01/2018-CT (Rate) dated 25.01.2018? - HELD THAT:- The applicant s case is covered under the tax rate of 12% (8% GST after deducting value of land), under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended, since the project undertaken by applicant falls under the definition of Affordable Housing . The benefit of reduced rate would be available to applicant only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and only in respect of dwelling units having carpet area less than 60 sq. mtrs. Whether the benefit of concessional rate would be available to common amenities such as club house, swimming pool, etc., except corpus fund subscription and share application money, as mentioned in Annexure D of the agreement for sale? - HELD THAT:- Such services will qualify as composite supply of works contract service, where the principal supply would be, construction services. Accordingly, the rate applicable to the principal supply will also be applicable to common amenities. The word housing project cannot be confined only to dwelling units, it would also include within its fold, other common amenities, structures, etc. The jurisdictional office has also opined that Common amenities form part of the overall construction service and are always naturally bundled when offered to the customer. Therefore, such services will qualify as composite supply of works contract service wherein provision of construction services is the principal supply. Accordingly, the rate applicable to the principal supply will also be applicable to common amenities - the concessional rate of 12% will be charged on such amounts collected by the applicant from buyers of units with area less than 60 sq mtrs. and GST @ of 18% will be charged on such amounts collected by the applicant from buyers of units with area greater than 60 sq mtrs. Whether the project of the Applicant at Joyville, Virar qualifies as an ongoing project under Notification No. 3/2019-Central Tax (Rate) dated 29.03.2019 so as to be eligible for the concessional rate of benefit under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The project of the Applicant at Joyville, Virar qualifies as an ongoing project under Notification No. 3/2019-C.T. (Rate) dated 29.03.2019. Further, the jurisdictional officer has also agreed that subject project is an ongoing project as per said Notification No. 3/2019-Central Tax (Rate) dated 29.03.2019. What would be the rate of Goods and Services Tax on the units at Joyville, Virar which do not qualify the criteria of low cost houses ? - Whether 12% or 18% tax is to be levied on those units? - HELD THAT:- The applicant s case is covered under the concessional rate of 12% (8% GST after deducting value of land), under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended since the project undertaken by them fails under the definition of Affordable Housing - The benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs., in this scheme which is covered in the category of affordable housing. In case of other flats which have carpet area more than 60 sq.mtrs. applicant would be required to pay GST at normal applicable rate i.e. @18% GST.
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2020 (1) TMI 739
Release of detained conveyance along with the goods - submission of learned counsel for the petitioner is that the tax in respect of the goods carried in the aforesaid conveyance already stands paid by the respective suppliers and that the petitioner was only transporting the goods - HELD THAT:- The respondents are directed to release the vehicle aforesaid alongwith the goods, upon the petitioner furnishing a bank guarantee for the penalty amount under the CGST Act, DGST Act and Cess, totalling to ₹ 7,30,782/- - the petitioner shall also provide requisite proof in the form of monthly returns to establish that the tax on the goods in question, being transported, stands paid. List on 13.08.2020.
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2020 (1) TMI 738
Filing of TRAN-1 Form - transitional credit - transition to GST regime - Section 140 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Rule 117 of the SGST Rules prescribed a period of 90 days from the appointed day to file Form GST TRAN-1 mentioning the amount of transitional input tax credit claimed by the registered person. The Form GST TRAN-1 is to be filed electronically on the common portal within the time fixed in the Rule initially or extended by notifications. The claim of the petitioner is that initially, it tried to upload the details of the VAT credit in Form TRAN-1 on 27.12.2017 but the same could not be uploaded due to some technical errors. As the time fixed for filing the GST TRAN-1 electronically expired, the petitioner approached the authorities to submit the application manually but the authorities have not taken any action on the same. This Writ Petition is disposed of in terms thereof directing the respondents to either open the portal to enable the petitioner to again file the Form GST TRAN-1 electronically or in the alternative, accept the Form GST TRAN-1 presented manually, on or before 31.12.2019.
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Income Tax
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2020 (1) TMI 737
Entitlement to deduction u/s 80HHC (1A) - Reopening of assessment - Non compliance with the mandatory conditions - Assessee cannot claim benefit under the said provisions as Supporting Manufacturer, in the absence of relevant Certificate from the Export House, and the Report of the Chartered Accountant, as stipulated therein - Reopen on the basis of CIT(A) order in subsequent year - HELD THAT:- SLP dismissed.
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2020 (1) TMI 736
Rejection of books of account - AO adopted G.P. Rate @15% instead of 14.52% as disclosed - enhanced the addition by estimating the G.P. @23.01%, after considering the past history - exercise of the powers under Section 260-A of the Act, the findings of fact of the Tribunal cannot be disturbed - HELD THAT:- SLP dismissed.
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2020 (1) TMI 735
Assessment u/s 153A - validity of search conducted u/s 132 - search conducted in the premises in which the assessee may not be carrying on the business - HELD THAT:- SLP disposed of as withdrawn.
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2020 (1) TMI 734
Revision of other orders u/s 264 in favor of assessee - Seraulim property was not at all reflected in the returns for A.Y. 2012-13, 2013- 14, 2014-15 and 2015-16. - HELD THAT:- According to us, although, it is true that neither the books of account/ledgers nor the balance sheets were produced by the petitioners along with their applications under Section 264 of the I.T. Act or during the course of personal hearing thereon, the interests of justice would require that the petitioners are given an opportunity to produce this material before respondent no.1. The impugned order, makes reference to certain reasons or circumstances, which, may not be entirely relevant. In any case, the impact of such irrelevant circumstances on the ultimate decision is also not quite clear from perusal of the impugned order. The fact that for A.Y. 2015-16, the respondents themselves treated the Seraulim property as capital asset is really begging the point because it is the case of the petitioners that this was the error committed by them on account of which they filed their applications under Section 264 of the I.T. Act. The aforesaid means that the impugned order is based upon certain circumstances, which can be styled as irrelevant. The petitioners, though had not placed any contemporaneous material before respondent no.1 at the time of hearing of their applications under Section 264 of the I.T. Act, have, in the course of present hearing, placed some material. The effect of such material cannot be decided by this Court and it is only appropriate that the same is decided by the respondent no.1 afresh. The impugned order also does not reflect that the same was based on the alleged failure on the part of the petitioners to make any fair valuation of the Seraulim property at the stage of their alleged conversion into stock in trade. No doubt, all these matters might be relevant for determining whether this is a case where the petitioners had made a genuine error, as contended by them, or whether, this is a case where the petitioners, merely, by way of an afterthought, seek to invoke provisions of Section 264 of the I.T. Act and thereby avoid paying capital gains tax. Interest of justice would be met if the impugned order is set aside and the respondent no.1 is directed to once again consider the petitioners' applications under Section 264 of the I.T. Act and to dispose of the same on their own merits and in accordance with law.
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2020 (1) TMI 733
Reopening of assessment u/s 147 - reasons to believe - HELD THAT:- As perused the reasons in this case and the objections filed by the Petitioner giving explanation and creditworthiness of the Petitioner. The order passed by the Respondent No.1 Assessing Officer disposing of the objections, do not show application of mind qua the objections raised by the Petitioner. Firstly there is a reference to fact that there was no scrutiny assessment, then the objection of the Petitioner on law regarding jurisdiction is commented on then it is stated that earlier no documents could be examined because it is the case of intimation u/s 143(1) AO reproduced the paragraphs regarding what is meant by reasons to believe and passed the order. In view of the fact that there is absolutely no application of mind whatsoever while disposing of the objections to the factual errors and factual aspects pointed out by the Petitioner, we find that arguable case is made out. - The earlier ad-interim order to continue
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2020 (1) TMI 732
Deduction u/s 80HHC - excluding from the total business income the labour charges and Labour Commission for the purpose of calculating deductions - Retrospective operation of the 1991 amendment to Section 80HHC - HELD THAT:- In view of this dicta of the Supreme Court in the case of P.R. Prabhakar [2006 (7) TMI 121 - SUPREME COURT ] and K.K. Doshi [2000 (8) TMI 74 - BOMBAY HIGH COURT] the foundation of the decision of the Tribunal does not survive and the question of law as framed will have to be answered against the Revenue.
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2020 (1) TMI 730
Reopening of assessment u/s 147 - notice issued beyond the period of four years - HELD THAT:- Clear finding of the Tribunal that there was no failure on the part of the Respondent Assessee to disclose fully and truly all material facts and that nothing contrary is demonstrated as to why this finding is incorrect, the questions of law proposed do not give rise to any substantial question of law.
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2020 (1) TMI 729
Settlement Commission - rectification of mistake - adjust the seized amount towards tax and interest payable by the applicant for the block period and remaining amount towards the tax/interest payable for the assessment year 1999-2000 - contention of the petitioners that if the amounts were adjusted then and there as per the directions of the 1st respondent Settlement Commission and reported to the 1st Respondent Settlement Commission, the interest in Annexures would not have been payable by the petitioners - HELD THAT:- Since the 1st respondent Settlement Commission is seized of the applications for rectification of mistake that the writ petitions were premature. These applications should be decided by the 1st respondent Settlement Commission. 2nd and 3rd respondents are directed to take steps to liquidate the fixed deposits which were also seized and to appropriate amount towards the balance of admitted tax liability and interest of the petitioners and file a report before the 1st respondent Settlement Commission within a period of 4 weeks from the date of receipt of a copy of this Order. The 1st respondent Settlement Commission shall thereafter dispose the applications filed for rectification of mistake by the petitioners within a period of 6 months thereafter. Liberty is given to the petitioners and the respondents to make appropriate submissions before the 1st respondent Settlement Commission and in case there is any excess amounts after such adjustment, the same may be directed to be refunded to the petitioners. In case of any deficit, petitioners may be directed to pay the aforesaid amount together with interest in accordance with law.
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2020 (1) TMI 728
Reopening of assessment u/s 147 - reason to believe that the income of the assessee has escaped assessment - Bogus accommodation entries - HELD THAT:- The reason to believe does not spell out any connection of assessee s with M/s. Avenue Dealers and what wrongful conduct of assessee has been detected by the Investigation Wing or FMC is discerned from the reasons recorded. Moreover, note from the said reasons recorded by AO that no where it is stated as to how the assessee got profit which he has derived from the commodity trading with M/s. Avenue Dealers Pvt. Ltd. and what is the connection of assessee with its director Shri Devesh Upadhyay. Though it was stated that Shri Devesh Upadhyay s statement was recorded there is no whisper as to whether the assessee has been named by Shri Devesh Upadhyay to be a beneficiary. The reasons recorded has not provided the details of the transaction alleged to be bogus such as nature of the commodity, dates and about the contracts as well as the number of contractee the assessee have entered into for taking the alleged bogus entries. The details of the bank transactions also are found absent. The reasons recorded by the AO is totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken place. Requirement under the law has not been made in the reasons recorded in the instant case to reopen the assessment and, therefore, the reopening and consequent reassessment is not valid in the eyes of law and, therefore, all the consequent proceedings are null in the eyes of law. No adverse view could have been taken against the assessee. The allegation of attributing illegal conspiracy/activities etc. is hurled without any basis and therefore, on merits as well as on the legal issue the assessee succeeds and, therefore, since the assessee succeeds in respect of the legal issues itself, since the AO did not satisfy the condition precedent for assuming jurisdiction to reopen the assessment, the notice issued u/s. 148 itself is null in the eyes of law and, therefore, all the subsequent proceedings are null in the eyes of law and therefore, the reassessment order is quashed and resultantly all the three appeals of assessee are allowed.
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2020 (1) TMI 727
Revision u/s 263 - Bogus purchases - AO estimated the gross profit @ 7% of the alleged non genuine purchase - HELD THAT:- As during the assessment proceedings, the Assessing Officer has not only enquired into the alleged purchase transaction, but has applied his mind to the materials brought on record. In fact, the disputed purchase is the sole reason for which the assessment was re opened under section 147 of the Act. In view of the aforesaid factual position, the observations of learned PCIT that the Assessing Officer has not applied his mind or has not made enquiry which he should have made, in our view, is without any factual basis. More so, when the selling dealer has responded to notice issued under section 133(6) by the Assessing Officer and has confirmed the sales made to the assessee PCIT has not expressed any opinion as to whether the entire purchase should have been disallowed or only profit element has to be added. He has again left the issue open for the decision by the Assessing Officer while directing him to make afresh assessment. When the Assessing Officer has already passed the assessment order after making necessary enquiry and applying his mind to the materials brought on record, it is not understood what more can be achieved by setting aside the assessment order and restoring the issue to him for making a fresh assessment without any specific direction. In the aforesaid facts and circumstances, we hold that exercise of power under section 263 of the Act in the facts of the instant case is not valid. Accordingly, we quash the order passed under section 263 of the Act and restore the assessment order. Assesee's Grounds are allowed.
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2020 (1) TMI 726
Capital gain computation - full value of consideration upon the assignment of lease rights in the shop - consideration received for the transfer of leasehold rights in the shop can attract Section 50C for computation of the capital gains as done by the AO and confirmed by the ld. CIT(A) - HELD THAT:- Section 50C is a deeming fiction for substituting, adopting the valuation of land or building or both by the Stamp Valuation Authority as full value of consideration is applicable only in respect of land or building or both . If the capital asset under transfer cannot be described as 'land or building or both', then Section 50C cannot be attracted. From the facts of this case narrated above, it is seen that the assessee was allotted lease right in the unit for a period of 99 years, which right was further assigned to Shri Surya Prakash Lal in the year in question. Since in this case neither 'land or building or both' has been transferred Section 50C of the Act cannot be attracted. The distinction between a capital asset being 'land or building or both' and any 'right in land or building or both' is well recognized under the Act itself. Attention was drawn to Section 54D of the Act, which deals with certain cases in which capital gain on compulsory acquisition of land and building is charged. It is palpable from Section 54D of the Act that 'land or building' is distinct from 'any right in land or building'. Attention was drawn to the Wealth Tax Act, 1957 also. Section 5(1) of the Wealth Tax Act at the material time provided for exemption in respect of certain assets. Clause (xxxii) of Section 5(1) of the Wealth Tax Act provided that the value, as determined in the prescribed manner, of the interest of the assessee in the assets (not being any land or building or any rights in land or building or any asset referred to in any other clauses of this sub-section) forming part of an industrial undertaking shall be exempt from tax. Thus it is noted that Parliament was aware of the distinction and has used differently between 'land or building' on one hand and 'or any rights in land or building' on the other. Here it is apt to apply the legal maxim Expressio Unius Est Exclusio Alterius meaning Express mention of one implies the exclusion of another. We are dealing with special provision for full value of consideration in certain cases u/s.50C of the Act, which is a deeming provision, the fiction created in this section cannot be extended to any asset other than those specifically provided therein. As sec. 50C applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. As the assessee has transferred leasehold right for 99 years in the shop and not land itself, the provisions of sec. 50C of the Act cannot be invoked. Therefore, hold that the full value of consideration in the instant case be taken as ₹ 1,25,92,000/-. To sum up, the full value of consideration upon the assignment of lease rights in the shop on 08.04.2015 shall be taken at ₹ 1,25,92,000/- and the capital gain/loss shall be accordingly re-computed as per law by the AO. Therefore the impugned order of Ld CIT(A) is set aside and the AO is directed to re-compute the capital gains/loss as discussed. - Appeal of the assessee is allowed.
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2020 (1) TMI 725
Assessment u/s 153C - assessee argued that assessment as barred by limitation - HELD THAT:- The impounded documents have been received by A.O. on 29.01.2014 when satisfaction under section 153C have been recorded. The First Proviso to Section 153C of the I.T. Act provides that six assessment years in which assessment or re-assessments could be made under section 153C of the I.T. Act would also have to be considered with reference to the date of handing over of the assets or documents to the A.O. of the assessee. Therefore, the six assessment years under section 153C of the I.T. Act in the case of assessee would be A.Ys. 2008- 2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. Further, the A.O. has not issued any notice under section 153C of the I.T. Act, therefore, the issue is covered by the above decision in favour of the assessee. The A.O. in the satisfaction note initiated the proceedings under section 153C only for A.Ys. 2006-2007 to 2011-2012 instead of A.Ys. 2008-2009 to 2013-2014. In view of the above, we are of the view that assessment order is illegal and bad in law and cannot be sustained in Law. - Decided in favour of assessee
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2020 (1) TMI 724
Revision u/s 263 - lack of inquiry into certain vital aspects concerning eligibility of deduction claimed u/s 54B - deduction claimed u/s 54B has not been properly examined by the AO and the deduction claimed u/s 54B has been allowed without meeting the pre-requisites of Section 54B and the amount of capital gains claimed as exemption u/s 54B has not been kept deposited in specified capital gains accounts scheme and the AO has also failed to make any proper inquiry in this regard - HELD THAT:- First part deals with exemption of capital gains from transfer of land (original asset) used for agricultural purpose in the two years immediately preceding the date on which the transfer took place. The second part deals with the manner of utilization of gains arising from transfer of such land used for agricultural purposes. Pr.CIT has impugned the eligibility of deduction u/s 54B. It is an admitted fact that on the date of transfer of land (which is broadly the legislative expression used in Section 54B of the Act), the land in question was neither agricultural land nor was used for agricultural purposes. The land has been admittedly declared as fallow land on which no agricultural produce is plausible. Thus, as per the certificate of Talati as produced by the assessee himself, the viability of carrying out agricultural activity was quite dismal. We also find that the assessee has not declared any worthwhile agricultural income in the earlier years from such a large track of land (9286 sq.mtr.). Some expenses voucher produced for expenditure incurred on Tractor does not inspire any confidence. Such material was not produced before the lower authorities as well. The assessee has failed to adduce any satisfactory evidence that the land was subjected to any systematic agricultural operation in last two years immediately preceding the date of transfer as required in law indeed. The reply of the assessee and evidence relied thereupon appears to be cosmetic. AO has failed to make any inquiry on this vital aspect while admitting the claim of the assessee and allowed the claim summarily. Pr.CIT in our view correctly appreciated the facts and applied the law in perspective to draw an adverse conclusion on eligibility of deduction. We see no error in the conclusion drawn by the Pr.CIT to hold that the claim u/s 54B has been allowed without fulfillment of prescribed conditions. We thus decline to interfere with the revisional order of the Pr.CIT on this score. Notwithstanding that claim of deduction u/s 54B is found to be in contravention with law and therefore the second aspect of the assessee need not to be gone into, we would however deal with the second aspect of controversy as well, for the sake of completeness. The assessee claims to have transfer an amount of ₹ 30,45,500/- from capital gains saving scheme to capital gain deposit scheme on same stipulations and claims to have not diverted the money for the purposes other than specified under s.54B(2) of the Act. However, it is the admitted position that no evidence in this regard was filed before the AO to substantiate the assertions being made. The AO has accepted the claim without looking into this aspect which has direct bearing on maintainability of deduction. The Pr.CIT, in the circumstances, has rightly remitted the issue back to the file of the AO for requisite verification action of Pr.CIT has shunned prejudice to Revenue without any perceptible prejudice to assessee. - Decided against assessee. Disallowance towards brokerage in the second round of proceedings - HELD THAT:- AO in second round of proceedings pursuant to Section 263 of the Act has, however, also disallowed brokerage of ₹ 3,12,500/- which is not seen to be emanating from the direction given by the Pr.CIT u/s 263. In the second round of proceedings, the AO was governed by the revisional order of the Pr.CIT and in view of the specific directions given therein, the AO could not expand the scope of inquiry while passing the order under s.143(3) r.w.s. 263. Therefore, the AO was in error in making disallowance towards brokerage in the second round of proceedings. AO has clearly travelled beyond the scope of inquiry under s. 263 of the Act guided to him by the Pr.CIT. The action of the CIT(A) confirming the addition is therefore set aside and the AO is directed to delete the disallowance of brokerage - Decided in favour of assessee.
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2020 (1) TMI 723
Assessment u/s 153A - assessment passed either under s.143(1) or under s.143(3) and not pending at the time of search in the absence of any incriminating material unearthed as a result of search or not ? - HELD THAT:- In the absence of any connection with the incriminating material unearthed in search proceedings of the assessee, additions/disallowances/realignment of income already declared in the regular course in respect of concluded statements i.e. AYs. 2010-11 2011-12 in the instant appeals, are not permissible in law. In the present appeals, the AO has merely attempted to realign the taxability of income from one head to another i.e. from business income to income from house property. Apparently, the AO has merely sought to revisit the chargeability of income already declared prior to search without any discovery of incriminating material while making assessment post search under s.143(3) r.w.s. 153A of the Act. This course adopted by the AO does not resonate with the judicial interpretations available in this regard. Hence, the action of the AO for realignment of income for AYs. 2010-11 2011-12 is bad in law and cannot be countenanced The Revenue is thus ousted from making such adjustments under s.153A of the Act in respect of concluded assessments. - Decided in favour of assessee. Nature of income - rental income from letting out of some adjoining shops by the assessee company to one person - chargeable to tax u/s 22 under the head income from house property or business income chargeable u/s 28 - HELD THAT:- The assessee in the instant case has merely let out three adjacent and adjoining shops to a cooperative bank and derived a pre-determined rental income therefrom in a passive manner without anything more. The lease agreement entered into with bank has not been placed on record despite specific query in this regard. In the instant case, the assessee himself has declared the rental income to be merely on other income source. As a corollary, the rental income was not regarded as part of the trading operations of the assessee. Thus, merely because one of the main object of the assessee is to let out property and derive rent thereon by itself cannot be viewed as a sole criteria for treatment of income derived under the head business income . The attendant circumstances and express statutory scheme of Act cannot be ignored while evaluating the nature of income. Significantly, a perusal of the Memorandum of Association placed on record shows that one of the clauses of the memorandum under category, other objects of the assessee is to let out immovable properties. We have also perused the main object for which the assessee company has been incorporated. A close reading of the main object shows that the company was incorporated to essentially carry on business as developers of land, building, immovable properties etc. by constructing and maintaining such buildings/shops etc. The leasing of shops and other property constructed in the course of such business as developer could however be also leased out as main object. It has not been shown that a single plunge to let out adjoining shops/galas to the bank resulted in the course of carrying on business as developer etc. An independent let out of property thus could be possibly regarded as business income only where some elements/characters of business is present. Dominant intention to let out property as business activity is also not shown to exist. - Decided against assessee.
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2020 (1) TMI 722
TP Adjustment - ALP of royalty paid to the Associated Enterprises (AE) - HELD THAT:- Identical dispute relating to the determination of arm s length price of royalty paid to the AE arose in assessment year 2010 11 and the Transfer Pricing Officer, on more or less on similar reasoning, has determined the arm s length price of royalty paid to the AE at nil. When the dispute ultimately came up for consideration before the Tribunal in the order referred to above, the Co ordinate Bench restored the issue back to the Assessing Officer/Transfer Pricing Officer - Thus we restore the issue back to the file of the Assessing Officer / Transfer Pricing Officer for fresh adjudication keeping in view the directions of the Tribunal as reproduced above Addition made of Sales Tax refund received under the incentive scheme - HELD THAT:- Various documentary evidences which are part of record before us were either not available before the Departmental Authorities or even if available, were not considered by them. Since, learned DRP has made a categorical observation that various evidences were not furnished by the assessee to support its claim, we are of the view that the entire issue relating to assessee s claim of Sales Tax refund / subsidy being a capital receipt requires fresh consideration in the light of various documentary evidences, including, the MoU between the Government of Maharashtra and M M. Further, the assessee is also required to meet the allegation of learned DRP that various documentary evidences were not furnished to support its claim. The assessee is also required to properly explain the impact of the observations made in Annexure C to the eligibility certificate regarding eligibility of the assessee for payment of IPS. Since, all these aspects have not been considered properly for whatever may be the reason, we are inclined to restore this issue to the file of the Assessing Officer for de novo adjudication after providing reasonable opportunity of being heard to the assessee. The assessee is at liberty to furnish further evidences, if required, to prove its claim. The Assessing Officer must consider not only the evidences filed but also the submissions made by the assessee while deciding the issue. Grounds are allowed for statistical purposes.
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2020 (1) TMI 721
Enhancement of annual letting value (ALV) of the house property - assessee is a co owner of a residential flat, a part of which is given out on rent - HELD THAT:- In assessee's case it is a residential house and a part of which is rented out. On a perusal of the material on record, we find that neither the AO nor Commissioner (Appeals) has made any enquiry with the Municipal Authorities or any other Government agencies to find out the market rent of assessee's property. Without making any such enquiry, the valuation of Municipal Authorities furnished by the assessee could not have been rejected, that too, without considering assessee's claim that the comparable cases referred to by the Assessing Officer are not at all comparable since they are commercial properties. Determination of ALV @ ₹ 1,00,000, per month by learned Commissioner (Appeals) is without any basis and is on a pure estimation. Therefore, when the assessee had furnished a valuation from the Municipal Authorities determining the ALV at ₹ 79,380, the same could not have been rejected without valid and cogent reasoning. In view of the aforesaid, we are inclined to accept assessee's claim that ALV of the property has to be determined at ₹ 79,380, as per the valuation of Municipal Authorities and thereafter assessee's share shall be determined for addition under the head income from house property. Accordingly, we set aside the impugned order of the learned Commissioner (Appeals) and direct the AO to determine the income from house property keeping in view our observations herein above.
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2020 (1) TMI 720
Exemption u/s 11 - charitable activity u/s 2(15) - withdrawal/cancellation of registration granted under section 12A - assessee an Association of Persons (AOP), claims to be a Charitable Institution as it is engaged in the promotion of equestrian sports viz. providing instructional course, lecture and demonstration, training, schooling and care, maintenance of horses horsemanship and offered kind of equestrian sports and knowledge of horse and to give all facilities for practice thereof - CIT-A held that since assessee s registration granted under section 12A of the Act has been withdrawn, it will not be eligible to claim exemption under section 11 - HELD THAT:- Reasoning on the basis of which DIT (Exemp.) withdrew/cancelled assessee s registration under section 12A were adopted by the AO while rejecting assessee s claim of exemption u/s 11 in the impugned assessment year. However, the Tribunal while deciding the issue has categorically held that nothing has been brought on record to show or to prove that the activities carried out by the assessee are in violation of its objects. Be that as it may, as observed earlier, the only reasoning on the basis of which learned Commissioner (Appeals) has upheld the disallowance of assessee s claim of exemption under section 11 of the Act is due to withdrawal/cancellation of assessee s registration under section 12A of the Act. However, after restoration of the registration granted under section 12A of the Act by virtue of the order passed by the Tribunal, as referred to above, the reasoning of learned Commissioner (Appeals) in rejecting assessee s claim of exemption under section 11 of the Act cannot be upheld. It is relevant to observe, in case of another assessee, viz. Cotton Textile Promotion Council, learned Commissioner (Appeals) had upheld rejection of claim of exemption under section 11 of the Act on identical reasoning for the very same assessment year. However, while deciding the appeal of the assessee in [ 2015 (1) TMI 1437 - ITAT MUMBAI] the Tribunal having taken note of the fact that the registration granted under section 12A of the Act has been restored by the Tribunal, allowed assessee s claim of exemption under section 11 of the Act by setting aside the order of learned Commissioner (Appeals). Against the order of the Tribunal, though, the Revenue went in appeal before the Hon'ble Jurisdictional High Court in1767919, the Hon'ble Jurisdictional High Court upheld the decision of the Tribunal. Facts in the present case are identical as the only reasoning on the basis of which learned Commissioner (Appeals) has upheld the rejection of exemption under section 11 of the Act is due to cancellation of assessee s registration under section 12A of the Act. Once the cancellation of registration has been set aside and registration granted under section 12A of the Act has been restored by the Tribunal, learned Commissioner (Appeals) s decision for disallowance of exemption under section 11 of the Act becomes redundant, hence, has to be set aside. Accordingly, we set aside the impugned order of learned Commissioner (Appeals) and allow assessee s claim of exemption under section 11 Characterization of rental income - Income From House Property or Income From Business - HELD THAT:- Rental income has to be treated as income from house property as the assessee has rented out his premises without carrying on any business activity itself.
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2020 (1) TMI 719
Reopening of assessment u/s 147 - information received from investigation wing regarding alleged accommodation entries - Borrowed satisfaction - non independent application of mind by AO - HELD THAT:- It is a case where action has been taken mechanically on the basis of information received from investigation wing, and, not on an independent application of mind and therefore on this ground, the proceedings are without jurisdiction. It is apparent from the fact that according to the AO, Investigation Wing has informed that assessee company has received accommodation entry in the garb of share application money which is said to be as per inquiry made by the Directorate of Investigation (DI) on the persons said to be involved providing accommodation entries/ bogus share application. Based on inquiries made, DI is said to have provided details of persons who are beneficiaries of such accommodation entries and one such beneficiary is said to be the assessee. In this case notice u/s. 148 was issued merely on the basis of information from D.I. that the assessee has received accommodation entry of ₹ 38 laks. There is no mention of any application of mind or any independent inquiry or any link between any tangible material and formation of reasons to believe that income chargeable to tax has escaped assessment. AO was not having even the material before him, at the time of initiation of proceedings, on the basis of which the Investigation Wing sent his report. AO assumed and worked only on the satisfaction of only Investigation Wing. It is also noted that even the copies of statements recorded by the Investigation Wing in the case of Tarn Goyal on the basis of which impugned proceedings have been initiated were not available with the AO as admitted by the AO himself in his letter dated 10.12.2015 AO has not even specified as to what is the amount of alleged income escaping assessment, which shows that AO has merely recorded certain unsubstantiated allegations on the basis of some information received, which is against the principle laid down in the case of CIT vs SFIL Stock Broking Ltd [ 2010 (4) TMI 102 - DELHI HIGH COURT] wherein held that mere information received from DDIT(Inv) cannot constitute valid reasons for initiating reassessment proceedings in the absence of anything to show that A.O. had independently applied his mind to arrive at a belief that the income had escaped assessment. Thus, the AO has acted mechanically and without any independent application of mind. Proceedings initiated by invoking the provisions of section 147 by the AO and upheld by the Ld. CIT(A) are nonest in law and without jurisdiction, hence, the re-assessment is quashed - Decided in favour of assessee.
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2020 (1) TMI 718
Revision u/s 263 - allowing of interest on interest u/s 244A - whether the order giving effect dated 11.03.2013 passed by AO in grant of refund which included refund being interest on interest is erroneous and prejudicial to the interest of revenue - whether there is inordinate delay or in an ordinary manner while granting refund ? - HELD THAT:- From the dates and events which is summarised by Ld. PCIT at para 2.1 of his order we find that the Tribunal passed the order on 19-02-2010 and refund was granted on 29-03-2010. Further, the CIT (A) passed the order on 24.12.2012 and order giving effect was passed by AO on 11-03-2013 and accordingly, the refund order was issued. Thus, there is no delay which could be said to be inordinate delay on the part of the revenue in granting refund. We are of the view that the case law in Sandvik Asia Ltd [ 2006 (1) TMI 55 - SUPREME COURT] is not helpful to the assessee. As we have already held that there was no inordinate delay on the part of the revenue in issuing the refund order, in our view the order giving effect dated 11-03-2013 is not only erroneous but also prejudicial to the interest of revenue. Accordingly, the order passed by ld. PCIT fulfils the twin condition of section 263 of the Act. Therefore, we do not find any merit in the appeal filed by the assessee, which is hereby dismissed.
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Customs
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2020 (1) TMI 742
Exemption from Customs Duty on Copper Concentrate to the extent of duty on the value of Gold and Silver contained in such Copper Concentrate - Denial of the benefit of N/N. 24/2011-Cus dated 01.03.2011 - denial of benefit of notification on the ground that the Assay Certificate of the Mining Company submitted at the time of provisional assessment is not co-relatable with the import documents submitted by the appellant. HELD THAT:- The appellants have produced a provisional assay certificate from the mining Company at the time of import. They have finalized the price with the supplier who is not a mine - Tribunal in the appellants own case HINDALCO INDUSTRIES LTD., COMMISSIONER OF CUSTOMS-AHMEDABAD VERSUS COMMISSIONER OF CUSTOMS-AHMEDABAD, HINDALCO INDUSTRIES LTD. [ 2015 (3) TMI 948 - CESTAT AHMEDABAD] has held that For a feasible solution it will be appropriate to take the value content of gold silver, either in the provisional assay certificate or in the final assay certificate produced by the appellant, which ever is less, for allowing the benefit of Notification No. 24/2011-cus when final assay certificate is given by an agency other than the mining company. In view of the clear cut finding of tribunal approved by Hon ble Apex Court in COMMISSIONER VERSUS HINDALCO INDUSTRIES LTD. [ 2016 (3) TMI 1038 - SC ORDER] , it cannot be said that the Notification can be denied just because final assay certificate has not been produced from the Mining Company and a provisional assay certificate has been produced. It is seen that vide Order-In-Original disputes the provisional assay certificates itself on the ground that the said certificate does not contain the Customer no. and Sales Order No. The said issue has not been dealt with by the First Appellate Authority - the matter is remanded to First Appellate Authority to examine if the provisional assay certificate produced by the appellant relates to the disputed consignment. If it is found to be the same, then assessment may be done in terms of the Tribunal Order in the appellants case - appeal allowed by way of remand.
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2020 (1) TMI 717
Refund of differential duty - Benefit of N/N. 69/2011-Cus dated 29.07.2011 - rejection on the ground that the bill of entry has not been challenged - HELD THAT:- It is not in dispute that the appellant was eligible for the exemption notification but they have not claimed the same in the bill of entry and paid excess duty. Thereafter, they filed the refund claim without challenging the bills of entry under which the duty was paid. It has now been decided by the Larger bench of the Hon ble Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] that no refund can be claimed once assessment is finalised without challenging the assessment even if such assessment was done under self assessment procedure. Appeal dismissed - decided against appellant.
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Securities / SEBI
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2020 (1) TMI 716
Segregation of the funds and securities of client - Regulation Of Transactions Between Clients And Brokers - violation of SEBI circulars dated November 18, 1993 and August 27, 2003 - Penalty imposed - HELD THAT:- There is no violation of circular dated November 18, 1993. The circular itself, inter-alia, provides that withdrawal of money on client authority is permissible. In the present case, money was transferred from the client's accounts to his own account in the commodities market on client's letter of authority. This is against the guidelines provided in the circular dated November 18, 1993 itself, therefore, the order, to that extent is required to be set aside. Transactions allegedly carried out by the appellant contrary to the directions contained in SEBI circular No. MRD/SE/Cir-33/2003/27/08 of August 27, 2003 - The submission that the money was withdrawn from one account and credited to another account was on the strength of the letter of authority from the respective client cannot be accepted so far as the present circular is concerned. In our view, the appellant had committed breach of the directions contained in the said circular. Considering the fact that though none of the prescribed mode of cash transfer was adopted by the appellant as provided by the circular, nonetheless, there was no cash handling in any of the transactions. Considering all these facts on the record, in our view, a penalty of ₹ 5 lacs would be fair.
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2020 (1) TMI 708
Pledging of client securities by Karvy by allegedly misutilizing the power of attorney granted by the clients - account frozen explicitly by the WTM of SEBI - appeal filed by Karvy before this Tribunal seeking flexibility in using the power of attorney - maintainability of the appeal - HELD THAT:- Preliminary objection regarding maintainability of the appeal is not sustainable since the appellant is an affected party impacted by all the impugned communications/ orders together which the appeal is also challenging. It is a fact that the appellant as a bank has lent funds to Karvy under a permitted Loan against Shares arrangement and under the Depositories Act, rights and sanctity are provided to such pledged accounts. Therefore, the appellant is an affected party is clearly undisputed. It is also a fact that the appellant was not heard either by SEBI or by the Exchanges or Depositories before passing the impugned directions. Though, the account frozen explicitly by the WTM of SEBI by order dated November 22, 2019 is not the same account as that of the appellant implicitly the order has got extended to such accounts because of the sweeping nature of the WTM s directions to protect the interest of the investors. Hence the action by Respondent No. 3 NSDL is also a consequential one as clearly stated in their communication. Though appellant seeks to suggest a solution stating that some of the investors in fact owe dues to Karvy and hence securities to the extent of such dues rightly belonging to Karvy at least could be used by the appellant to invoke the pledge so that at least part of the funds would be available to the appellant. We are not in a position to ascertain the veracity of the information as provided by Karvy to the appellant. Therefore, we direct the appellant to file an appropriate representation before SEBI. If such an application is filed SEBI will hear the appellant and other relevant entities and pass appropriate directions within 15 days from the date of this order. In the interim status quo shall be maintained in respect of the securities in Account No. 19502787 named Karvy Stock Broking Limited- Client Account-NSE CM .
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Insolvency & Bankruptcy
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2020 (1) TMI 715
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of a sum - debt due and payable or not - HELD THAT:- There is nothing placed on record to show that the Corporate Debtor has supplied a separate set of goods in favour of another entity worth ₹ 13,89,752/- as per the directions of the Operational Creditor - it is not clear how the supply of goods by the Corporate Debtor to another completely different entity can result in the debt due to the Corporate Debtor being cleared, unless it is shown that there was an express instruction to this effect from the Operational Creditor itself. Since nothing is placed on record in spite of opportunity given to the Corporate Debtor, it is difficult to accept the version of the Corporate Debtor. The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable - Application admitted - moratorium declared.
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2020 (1) TMI 714
Maintainability of application - initiation of CIRP - operational debt - debt due and payable and has not yet been paid or not - existence of a dispute between the parties - pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute - HELD THAT:- This adjudicating authority is of the considered view that operational debt is due to the Applicant. That, service is complete and no dispute has been raised by the respondent. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default - That, the Application filed by the Applicant is complete in all respects. It is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - petition admitted - moratorium declared.
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Service Tax
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2020 (1) TMI 713
Exemption from job-work - intermediate process - services of cutting of fabric according to the pre-determined shapes, sizes, specifications as designed, on job work basis to one M/s Aero Club, who was engaged in the manufacture of readymade garments - Serial No.30 of N/N. 25/2015-S.T. dated 20 June, 2012 - HELD THAT:- There is no dispute about the legal position. If the goods are the one on which appropriate duty is payable by the principal manufacturer, exemption from service tax would be available to the job worker. Though the expression used in Serial No.30(c) of the Notification is Payable and not Paid but definition 2(b) clarifies that such payable would not include nil rate of duty or duty wholly exempted. As such, the principal manufacturer is required to pay the duty on their final product so as to make the intermediate job worker exempted from payment of service tax. Admittedly the said issue is a factual issue required to be verified by the Authorities. The appellant have placed a return on record for the month of February 2013 indicating such payment of duty by the principal manufacturer - In such a view, the Adjudicating Authority is required to verify the fact of payment of duty by the principal manufacturer for the period involved in the present appeal - matter remanded to the Original Adjudicating Authority for doing the needful. Application disposed off.
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Central Excise
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2020 (1) TMI 712
CENVAT Credit - input services - House Keeping Service - C F Services - Warehousing maintained at C F Agent - HELD THAT:- There is no dispute about the nature of service and use thereof. Housekeeping service was used in the appellant s factory and/or Head Office. The House keeping service is used to up keep the property of the manufacturer which is essential requirement for manufacturing unit under the Factories Act, therefore, the same is qualified as input service. C F Service - HELD THAT:- Since the same is related to the warehousing at C F Agent where the finished goods is stored before clearance thereof and in case of goods sold through C F the place of removal stand extended up to the premises of C F Agent - thus, all the services related to clearance of the goods up to the place of removal is eligible input service. The appellant are entitled for the Cenvat Credit in respect of House Keeping Service C F service - appeal allowed - decided in favor of appellant.
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2020 (1) TMI 711
CENVAT Credit - input services - credit on input Services in respect of Head Office and Corporate Office were allowed to the manufacturing unit by issuing ISD invoices - HELD THAT:- The issue is no longer res-Integra as in the appellant s own case in M/S UNIQUE PHARMACEUTICALS LABORATORIES VERSUS C.C.E. S.T., - VADODARA-II [ 2018 (12) TMI 726 - CESTAT AHMEDABAD] and M/S UNIQUE PHARMACEUTICAL LABORATORIES VERSUS C.C.E. S.T. VADODARA-II [ 2018 (12) TMI 1099 - CESTAT AHMEDABAD] . Cenvat Credit on input services distributed by the Head Office has been allowed. Credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (1) TMI 710
Principles of Natural Justice - cancellation of registration - Petitioner was purchasing natural gas by paying Central Sales Tax - SCN was issued to the Petitioner for cancellation of registration under the Central Sales Tax Act, 1956 - HELD THAT:- The authority cancelling the certificate has to be satisfied that cause exists for cancellation of registration and the cancellation is to be done after due notice to the dealer. Therefore, if the dealer submits explanation to the show cause notice, the authority, before proceeding to cancel the registration, will have to be satisfied that the explanation is not proper. This procedure envisages that reasons need to be given to cancel the registration. The registered dealer is entitled to know why his explanation was not found satisfactory. The SCN issued to the Petitioner on the basis that the Petitioner had not effected sale of any of the goods specified therein in the year 2016-17. Thus Section 7(4) was invoked against the Petitioner. However, the impugned order refers to Section 7(5) of the Act. Section 7(5) of the Act deals with the contingency where registered dealer himself seeks cancellation of the registration - Petitioner has not made such application. Thus the order is unreasoned and without application of mind. The contention of the Petitioner of breach of principles of natural justice will have to be accepted - Petition allowed - decided in favor of petitioner.
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2020 (1) TMI 709
Refund claim alongwith interest - Section 42 of the Delhi Value Added Tax Act - case of petitioner is that direction to be given to the respondent no.3/ Value Added Tax Officer to decide the claim and refund of the petitioner within the stipulated time in accordance with law - HELD THAT:- The respondent no.3/ Value Added Tax Officer , Ward 80, I.P. Estate, New Delhi are directed to decide the claim and refund of the petitioner in accordance with rules, regulations and Government policies applicable to the facts of the case and also keeping in mind principle of unjust enrichment - petition disposed off.
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Indian Laws
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2020 (1) TMI 731
Procedure for recovery of tax - contention urged by the petitioner is that as per the provisions contained in the Second Schedule to the Income Tax Act as made out in the procedure for recovery of tax, (the Rules applicable for recovery under the SARFAESI Act), the 1st respondent cannot conduct a resale without repaying the amount remitted by the petitioner etc - HELD THAT:- A mere glance of the provisions contained in Rule 58 of the Rules in terms of the Second Schedule to the Income Tax Act, which deals with the procedure for recovery of tax (which has been made available for recovery under SARFAESI Act) as well as Rule 9(5) of the Security Interest (Enforcement) Rules, 2002 framed under the enabling provisions contained in SARFAESI Act would clearly mandate that in default of payment by the purchaser within the period mentioned in the Rule, the deposit may, if the Tax Recovery Officer thinks fit, after defraying the expenses of the sale, be forfeited to the Government and the property shall be resold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold. Similar provisions are also made out in Rule 9(6) of the Security Interest (Enforcement)Rules, 2002. In the light of the above said provisions contained in the above said Rules, it is only to be held that the above said contentions of the petitioner that he is legally entitled to get refund of the deposit made by him etc., is absolutely bereft of any merit and lacks any substance. Accordingly, it is only to be held that the above said prayers made by the petitioner in the above said Writ Petition are not tenable or sustainable. In that view of the matter, it is ordered that the above said Writ Petition (Civil) will stand dismissed.
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