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TMI Tax Updates - e-Newsletter January 24, 2020 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Articles SUPPLY OF GOODS AND CONSUMABLES TOGETHER NOT A COMPOSITE SUPPLY News NITI Aayog Releases Its Vision for the National Data and Analytics Platform The Fifteenth Finance Commission meets representatives of RLBs of Goa The Fifteenth Finance Commission meets representatives of Urban Local Bodies of Goa THE CONSTITUTION (ONE HUNDRED AND FOURTH AMENDMENT) ACT, 2019 Notifications GST - States Order No. 10/2019-State Tax - dated 14-1-2020 - Goa SGST Goa Goods and Services Tax (Tenth Removal of Difficulties) Order, 2019. 38/1/2017-Fin(R&C)(125)/72 - dated 14-1-2020 - Goa SGST Goa Goods and Services Tax (Ninth Amendment) Rules, 2019 38/1/2017-Fin(R&C)(124) - dated 14-1-2020 - Goa SGST Amendment in Notification No. 38/1/2017-Fin(R&C)(43)/433, dated 31st January, 2018 02/2020 - FD 03 CSL 2020 (e) - dated 16-1-2020 - Karnataka SGST Amendment in Notification No. (02/2018) FD 47 CSL 2017, dated the 23rd January, 2018 01/2020 - FD 03 CSL 2020(e) - dated 7-1-2020 - Karnataka SGST Seeks to bring into force certain provisions of the Karnataka Goods and Services Tax (Amendment) Act, 2019 Circulars / Instructions / Orders GST - States CIRCULAR No. 01/2020 - dated 19-1-2020 Detention of vehicles pertained to Parcel/ Transporting / Courier Agencies having GST registration - Further instructions issued TRADE CIRCULAR No. 01/2020 - dated 16-1-2020 Reverse Charge Mechanism (RCM) on renting of motor vehicles 34/2019-20 - dated 31-12-2019 Reverse Charge Mechanism (RCM) on renting of motor vehicles FEMA 18 - dated 23-1-2020 Investment by Foreign Portfolio Investors (FPI) in Debt 19 - dated 23-1-2020 ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt – relaxations Highlights / Catch Notes GST Classification of goods - Odomos - mosquito repellent cream - All the factors relevant for classification under the Customs Tariff lead to the classification of the Applicants' product "Odomos" under Heading No. 3808 91 91, be it the rules for interpretation of the said Tariff, the common parlance test, its chemical composition or its usage and way of working. Visit to Get Source Benefit of exemption - supply of services by way of leasing of goods transport vehicles without operators to GTA - It amounts to the transfer of the right to use the goods and taxable under Sl No. 17(iii) of the Rate Notification. Visit to Get Source Turnover limit for Composition Levy under GST - treatment of Ice Cream equally with Pan Masala - Praying for quashing the impugned recommendations of GST Council being void ab initio - legislative provision cannot be struck down as being arbitrary, irrational or unreasonable. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Visit to Get Source Income Tax Correct head of income - rental income received - Intention of the Assessee is also a material circumstance and the objects of Association, the kind of services rendered clearly point out that the Income is from Business. All the factors cumulatively taken demonstrate that the assessee had intended to enter into a Business of renting out commercial space to interested parties. Visit to Get Source Deduction/Exemption u/s 10(23C)(VI) - Secondary Education - Taking into consideration the activities taken by the petitioner’s institution, which is responsible for education up to secondary education in the State while carrying out its statutory liability and obligation, the notices issued as at Annexures-1, 2 and 3 describing it to be commercial activities, in our considered opinion, are not sustainable Visit to Get Source TP Adjustment - Rate of interest for the purpose of calculating working capital adjustment - AO/TPO, while giving effect to the directions of the DRP, were bereft of any power to change any aspect of the draft order save and except the direction of the DRP including the rate of interest to 14.61%. Visit to Get Source Penalty u/s 271B - failure to get the books of accounts audited u/s 44AB - addition made during the assessment proceedings on the basis of unaccounted sale cannot be regarded as the turnover for the purpose of Section 44AB because the documents relied upon by the A.O. are neither the part of books of account nor would substitute the books of account or constitute the books of account of the assessee regularly maintained. Visit to Get Source Assessment u/s 153A - action of the JCIT u/s 153D is to be regarded as perfunctory and mechanical in subversion of the spirit of Section 153D. Such symbolic approval is unfounded in law. As a corollary, in the absence of any valid approval u/s 153D, the respective assessment orders giving cause of action in the form of captioned appeals requires to be quashed on this score also. Visit to Get Source Disallowance on account of foreign tour and travel expenses - expenses Incurred by the Director of the assessee company when not proved to be incurred for business purpose of the assessee company, its addition cannot be made against assessee company rather its addition can be made against such Director in his individual capacity. Visit to Get Source Addition u/s 68 - AO has stated in the assessment order that the assessee has introduced its unaccounted cash in the form of share capital through racket of entry providers operated in New Delhi, however the said finding has not been corroborated by any material on record - Additions deleted. Visit to Get Source Estimation of net income from total ‘on money’ receipts - assessee had disclosed net profit of over 30% of total unaccounted ‘on money’ receipts - CIT(A) rightly concluded that in the totality of all the facts and circumstances, the amounts depicted in the diary even if taken to be true, the net amount of income from ‘on money’ receipts, earned out of books of accounts. Even then, no further additions are justified and thus rightly deleted the additions. Visit to Get Source Addition u/s 43CA - transfer of business assets / property - stamp value - A s a tolerance limit of 5% between the value adopted by the stamp valuation authority and the actual consideration received or accruing as a result of transfer of the asset (other than a capital asset), had been made available on the statute only vide the Finance Act, 2018 w.e.f A.Y. 01.04.2019, therefore, it would be absolutely incorrect to infer that prior to the aforesaid amendment a tolerance limit of 15% was already available and/or inbuilt in the said statutory provision. Visit to Get Source Revision u/s 263 - Bogus purchases - AO making disallowance @ 12.5% - the decision of the Assessing Officer in making addition applying the profit rate is in consonance with various judicial precedents available on the issue. - it cannot be considered to be an erroneous view as it is a possible view. Visit to Get Source Customs Benefit of Indirect Tax Dispute Resolution Scheme, 2016 - a discharge certificate was issued by the designated authority accepting the payment from the declarant as full and final settlement of the amounts due from the declarant - appeal were pending before Commissioner (Appeals) - the Commissioner (Appeals) was not justified in finding fault with the order of the designated authority and not accepting the same and proceeding to decide the appeal on merits. Visit to Get Source Imposition of redemption fine - section 125 of CA - goods in question have already been released in favour of the assessee on a bond - the mere fact that the goods were released on the bond being executed would not take away the power of the customs authorities to levy redemption fine. Visit to Get Source IBC Initiation of CIRP - Corporate Debtor or not - M/s. Homestead Infrastructure Development Pvt. Ltd. (Corporate Debtor) reached agreement jointly with 'M/s. Golden Peacock Residence Private Limited' have entered into the development agreement with 'M/s. Raheja Developers Limited' and for all purposes it is a joint venture with 'M/s. Golden Peacock Residence Private Limited' who is a subsidiary company and reached agreement with Respondent, but asked to pay the amount to 'M/s. Golden Peacock Residence Private Limited', we hold that the application under Section 7 against 'M/s. Homestead Infrastructure Development Pvt. Ltd.'- ('Corporate Debtor') is maintainable. Visit to Get Source Service Tax Refund of unutilized CENVAT Credit - Debiting the CENVAT account subsequent to the filing of the refund claim is only a procedural violation which cannot defeat the substantive right of the appellant to claim refund under Rule 5 of CCR, 2004. Visit to Get Source Benefit of reduced penalty u/s 78 - the appellant had failed to deposit 25% of the imposed penalty before the issuance of show cause notice or within 30 days of finalization of demand by the adjudicating authority - appellant could not be granted option to pay 25% (reduced) mandatory penalty under Section 78 of the Act. Visit to Get Source VAT Issuance of C-form - The petitioner cannot seek a direction to respondents No.1 to 3 to issue the ‘C’ Form for the Financial Year 2012-13 after over four years, when the transactions between the petitioner and respondent No.5 were not disclosed in the return filed by respondent No.5, and no rectification of the return was sought to be made within the period of limitation. Visit to Get Source Case Laws: GST 2020 (1) TMI 882 Classification of goods - Odomos - whether classified under Chapter 38 of Customs Tariff Act and is classified under HSN 3808 91 91 or otherwise? - challenge to AAR decision. Whether the order passed by the Authority for Advance Ruling is illegal and not sustainable because the authority ignored the comments submitted by the department in response to the Application filed by the Applicant? - HELD THAT:- The ruling has been given by the AAR by way of a speaking order and there is no evidence that it has been passed in an arbitrary manner. Therefore, the impugned Order passed by the Authority cannot be held unsustainable on this ground. Whether the impugned order is illegal as the same has not followed the binding precedent for the same product as decided by Hon'ble Allahabad High Court in the case of COMMISSIONER OF SALES TAX VERSUS BALSARA HYGIENE PRODUCTS LTD. [ 1985 (12) TMI 366 - ALLAHABAD HIGH COURT] ? - HELD THAT:- We have gone through the cited judgment of the Hon'ble High Court in the case of M/s. Balsara Hygiene Products Ltd. and observe that it was passed in the context as to whether the said product fell within the ambit of Entry No. 29 of Notification No.ST-II-5785/X-10(1)-80-U.P. Act XV /48-Order-81, dated 7-9-1981 issued under Section 3A of the U.P. Sales Tax Act, 1948. As far as the third issue raised by the Applicant is concerned, i.e., that the order of the AAR was based on extraneous considerations, we observe that the appellant has failed to detail such alleged extraneous consideration, nor do we find anything in the impugned order which may give rise to such an inference. We, therefore, disregard this ground, apparently being an unsupported and vague charge. Classification of product Odomos? - HELD THAT:- Undoubtedly, the description under Heading No. 3808 91 '91, i.e., Repellants for insects such as flies, mosquito is far more specific as compared to the description under the other heading under consideration, i.e., Heading No. 3004 90 99 which is Other (meaning medicaments other than all those explicitly specified in the other sub-headings of Heading No. 3004). Evidently, the latter heading is a residual classification while the former is specific and conforms to the description of the goods adopted by the appellants themselves for the purposes of packing as well as advertisement and publicity. The Hon'ble Supreme Court also, in their judgment in the case of HPL CHEMICALS LTD. VERSUS CCE, CHANDIGARH [ 2006 (4) TMI 1 - SUPREME COURT] ], have held that specific heading is preferable over residuary heading for classification. Therefore, in terms of the aforesaid rules for interpretation, Heading No. 3808 91 91 will prevail over 3004 90 99 . The appellant declare prominently on the packing of the goods under reference that it is mosquito repellent cream . The advertisement and publicity of these goods is also done as a mosquito repellent. It would also not be out of place to mention that the appellant's own website www.dabur.com, describes Odomos as a 'mosquito repellent' - the market identity in common parlance of the subject goods is as a mosquito repellent and their usefulness in preventing mosquito borne diseases (again derived from their characteristic quality of being a mosquito repellent) is of a subsidiary/ supplementary nature. Also, the substance DEET is mentioned in the schedule to the Insecticides Act, 1968 as an insecticide and by corollary, its improved version, i.e., NNDB would also be an insecticide. In this context, it is pertinent that mosquito repellents are classified at Heading No. 3808 91 91 of the Customs Tariff as a subcategory of insecticides. Thus, this again indicates that even by applying the yardstick of chemical composition, Heading No. 3808 91 91 is most specific for the classification of the subject product. All the factors relevant for classification under the Customs Tariff lead to the classification of the Applicants' product Odomos under Heading No. 3808 91 91 , be it the rules for interpretation of the said Tariff, the common parlance test, its chemical composition or its usage and way of working. Hence, Odomos is a mosquito repellent and has to be classified under Chapter Heading 3808 91 91 of the Customs Tariff Act. The ruling of AAR upheld. 2020 (1) TMI 881 Benefit of exemption - supply of services by way of leasing of goods transport vehicles without operators to GTA - classification of services - rate of tax - input tax credit - serial no. 22 (b) of Notification no 12/2017 CT(Rate) dated 28/06/2017 (corresponding State Notification No. 1136 - FT dated 28/06/2017) - HELD THAT:- The Applicant intends to lease out vehicles like trucks, tankers etc. that are designed to transport goods. The control and possession of the vehicle will be transferred to the lessee, who will engage operator and bear the cost of repair, insurance etc. It is, therefore, not classifiable under SAC 9966, which is restricted to rental services of transport vehicles with operator. Classification of service - HELD THAT:- The service is classifiable under SAC 997311 as leasing or rental services concerning transport equipment without operator. It amounts to the transfer of the right to use the goods and taxable under Sl No. 17(iii) of the Rate Notification. Input tax credit - HELD THAT:- Section 17(5)(a) of the GST Act does not allow input tax credit on inward supply of motor vehicles of a specific category (those meant for transportation of persons having seating capacity not exceeding thirteen persons). The restriction, therefore, does not apply to the goods transport vehicles. SI No. 17(iii) of the Rate Notification does not prohibit claiming input tax credit on the goods given on lease. 2020 (1) TMI 880 Maintainability of petition - availability of statutory remedy of appeal - section 107 of the GST Act, 2017 - HELD THAT:- As Statutory remedy of appeal is available to the petitioner, therefore, we are not inclined to accept the aforesaid submissions of learned counsel for the petitioner and grant liberty to the petitioner to challenge the said order under section 107 of the GST Act, 2017 and also after depositing the whole amount as per order dated 22.11.2019, file a copy of the receipt. Petition disposed off. 2020 (1) TMI 879 Enlargement on bail - wrongly availed input tax credit - HELD THAT:- In view of the undertaking submitted by the petitioner to fully cooperate with the investigating agency and provide the information/documents asked for by the investigating agency, this Court is of the opinion that the bail applications filed by the petitioner deserve to be accepted. Bail application allowed subject to condition imposed. 2020 (1) TMI 878 Turnover limit for Composition Levy under GST - treatment of Ice Cream equally with Pan Masala - Constitutional Validity of N/N. 8 of 2017 Central Tax and N/N. 14/2019 - Praying for quashing the impugned recommendations of GST Council being void ab initio - HELD THAT:- It is well settled that a legislative provision cannot be struck down as being arbitrary, irrational or unreasonable. No enactment can be struck down by just saying that it is arbitrary or unreasonable. While dealing with constitutional validity of a taxation law enacted by Parliament or State Legislature, the court must have regard to the following principles: (i), there is always presumption in favour of constitutionality of a law made by Parliament or a State Legislature (ii), no enactment can be struck down by just saying that it is arbitrary or unreasonable or irrational but some constitutional infirmity has to be found (iii), the court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as the Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence (iv), hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute or economic law and (v), in the field of taxation, the Legislature enjoys greater latitude for classification. The classification cannot be said to be without any rationale - petition dismissed. Income Tax 2020 (1) TMI 877 Revision u/s 263 - Exercise u/s 263 undertaken after a full-fledged exercise already been undertaken by the AO u/s 153A - HELD THAT:- Special Leave Petitions are dismissed on the ground of low tax effect 2020 (1) TMI 876 Revised return filed - audit report u/s 44AB - HELD THAT:- Assessee did not file any return accompanied by audit report pursuant to notice issued u/s 142 of the Income Tax Act. Hence, these appeals fail and are dismissed. 2020 (1) TMI 875 Disallowance u/s 14A - Applicability of the second proviso of Section 40 (a)(ia) to the Assessment Year 2010-11 - HELD THAT:- Delay condoned. Leave granted. 2020 (1) TMI 874 Penalty u/s 271(1)(c) - concealment of income or furnishing any inaccurate particulars - return was revised much prior to the date of issuance of notice under Section 153-C - AO has no-where recorded his satisfaction to the fact that the assessee has concealed the particulars of income or furnished any inaccurate particulars of such income - HELD THAT:- SLP dismissed. 2020 (1) TMI 873 Reopening of assessment u/s 147 - capital gain - main contentions is that the property in question though sold vide Deed of Transfer dated 30 March 2012, the cheque was encashed on 16 April 2012 , the possession was handed over on 20 April 2012 and the registration was completed on 20 April 2012 with documents supporting this contention - HELD THAT:- The order rejecting the objections of the Petitioner nowhere refers to any of these documents. The Assessing Officer has merely reiterated the reasons already supplied. The Petitioner has relied upon the decision in the case of Commissioner of Income-tax-2 v. Millennium Estates (P.) Ltd. [ 2018 (2) TMI 308 - BOMBAY HIGH COURT] to contend that for the purpose of capital gains, handing over of possession is of importance. Contention of the Petitioner, that there is no reason to believe that the income had escaped assessment, prima facie, holds merit. 2020 (1) TMI 872 Correct head of income - rental income received - income from business or Income from House Property - Tribunal held assessee had exploited its property commercially by way of complex commercial activities - HELD THAT:- The object of the Respondent Assessee is clearly to acquire, develop, let out the commercial complex. It is clear from the objects with which the assessee was incorporated to derive income from running and maintaining the shopping mall. The Respondent Assessee has provided even marketing and promotional activities and also organising various events and programs. This being done by the Respondent Assessee also in the context of the revenue sharing agreement copies of which have been placed on record. A perusal of one such agreement shows that the Appellant Revenue receives not only license fee of the amounts specified therein and percentage of net revenue. In some of the agreements the compensation is either license fee or percentage of net revenue, whichever is higher. Intention of the Assessee is also a material circumstance and the objects of Association, the kind of services rendered clearly point out that the Income is from Business. All the factors cumulatively taken demonstrate that the assessee had intended to enter into a Business of renting out commercial space to interested parties. The other income is only an income which is a dividend income from the deposits received from the Business income. Therefore, considering all these factors which have been enumerated above and referred to by the Tribunal, the findings rendered by the Tribunal on assessment of the factual position before it that the income in question has to be treated as Business Income cannot be called perverse assessment of facts, necessary test for such determination have been employed by the Tribunal. Therefore, the question of law as proposed has to be answered against the Appellant Revenue Unpaid service tax u/s 43B - HELD THAT:- It is an agreed position at the bar that the issue stands covered against the Appellant Revenue in view of the following decisions of Ovira Logistics P.Ltd [ 2015 (4) TMI 684 - BOMBAY HIGH COURT] , also it is informed that even SLP against the decision in the above case have also been dismissed by the Supreme Court. Also Tops Security Ltd. [ 2018 (9) TMI 799 - BOMBAY HIGH COURT] and Knight Frank (India) (P.) Ltd. - . [ 2016 (8) TMI 1096 - BOMBAY HIGH COURT] - Decided against Revenue. 2020 (1) TMI 871 Production activity for the purpose of 80H, 80I and 80IA - bottling of the gas into gas cylinders - whether no new production comes into existence in this process ? - HELD THAT:- Decision of the Supreme Court in the case of Commissioner of Income Tax vs. Hindustan Petroleum Corporation Ltd [ 2017 (8) TMI 197 - SUPREME COURT] is placed on record. It is a common ground that in view of this dicta of the Supreme Court, the substantial questions of law as framed will have to be answered against the Appellant Revenue. Disallowance u/s 14A - rule 8D applicability - HELD THAT:- As we proceed on the basis that principle laid down under Rule 8D of the Income Tax Rules, 1962 ought to have taken into consideration and applied in the case of the Respondent Assessee. The Assessment Year in question is 2003-04. The Rule 8D is held to applicable from the assessment years 2008-09 in the case of M/S. ESSAR TELEHOLDINGS LTD. THROUGH ITS MANAGER [ 2018 (2) TMI 115 - SUPREME COURT] - No substantial questions of law. 2020 (1) TMI 870 Deduction u/s 80 HHC - excluding from the total business income the Re-assortment charges and Labour Commission for the purpose of calculating deduction u/s 80 HHC - scope of amendment - Retrospectivity - Tribunal held that such charges are not includeble in business profits for the purpose of computation of special deduction under Section 80HHC accordingly the Appeal was allowed - HELD THAT:- The Assessment Year in question is of importance. The Assessment Year is 1991-92. The Section 80 HHC of the Act was amended with effect from 1 April 1992 and explanation was brought in the same. In the case of K.K. Doshi and Co. v. Commissioner of Income-Tax [ 2000 (8) TMI 74 - BOMBAY HIGH COURT] an issue arose before this Court whether the service charges constitute business income for the purposes of computing export profits under Section 80HHC. Prior to the amendment export profits included interest, commission, etc., which did not have element of turnover came to be included in the profit and loss account. By way of amended provisions in the Explanation (ba) to Section 80HHC of the Income Tax Act, 1961 it was no longer permissible to do so. The Court opined that there was no nexus between the profits on the one hand and the export activity on the other hand, which was necessary. The question of retrospective operation of the 1991 amendment to Section 80HHC arose for consideration of the Supreme Court in the case of P.R. Prabhakar v. Commissioner of Income-Tax [ 2006 (7) TMI 121 - SUPREME COURT] and disposed of the Appeal setting aside the order passed in K.K. Doshi (supra) holding that the amendment of 1 April 1992 is prospective in nature. In view of this dicta of the Supreme Court in the case of P.R. Prabhakar (supra) and K.K. Doshi (supra), 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. 2020 (1) TMI 869 N.P. determination - Tribunal holding that the net profit rate @ 8% was applied on the contract receipts but no deduction was allowed on account of depreciation - whether once the Appellate Tribunal had determined profit on the basis of net profit basis @ 8% of the contract value, it was no longer open for the ITAT to re-do computation on the 12.5% of net profit - HELD THAT:- Tribunal failed to apply the judgment rendered by this Court in the case of M/s. Shri Ram Jhanwar Lal [ 2008 (7) TMI 505 - RAJASTHAN HIGH COURT] nor the judgment rendered in the case of Jain Construction [ 1999 (9) TMI 26 - RAJASTHAN HIGH COURT] Present appeal is allowed to the extent of modifying the order of the Tribunal for determining the profit rate @ 8% instead of 12.5% on gross contract receipt as earlier determined by the Tribunal subject to allowing depreciation, interest and remuneration to partners. Accordingly, the appeal is allowed and the matter stands remitted back to the Income Tax Authorities concerned for recomputing the amount of tax. 2020 (1) TMI 868 Deduction u/s 10(23C)(VI) - Secondary education - petitioner is a body corporate constituted under the Board of Secondary Education Act and is an instrumentality of the State for imparting secondary education - HELD THAT:- The petitioner-Board of Secondary Education, Odisha is constituted under the Board of Secondary Education Act 10 of 1953 (for short the Act ), inter alia, to provide secondary education in the State of Odisha by preparing course for education in secondary preuniversity stage and to conduct examination for those, who have completed prescribed courses of study and to award certificates to successful candidates and also performing other statutory duties incidental thereto. Therefore, establishment of Board is only for imparting secondary education throughout the State of Odisha under Section 3 of the Act to regulate control and develop secondary education in the State of Odisha. The word Education has been used in Section-2(15) of the Income Tax Act in sense of systematic instruction, schooling or training and not in wide and extended sense according to which every acquisition of further knowledge. Imparting secondary education has never been treated as trade or business and the citizen of the country have a fundamental right of secondary education. Article 21 prescribes that every child/citizen of this country has a right to free education until he completes the age of 14. At the age of 14 one may complete Secondary Education and it is also a duty cast on a State to safeguard fundamental right of citizen which includes education up to the age of 14 years. Therefore, the sole existence of Board is to impart secondary education, which safeguards the duty cast on a State. Taking into consideration the activities taken by the petitioner s institution, which is responsible for education up to secondary education in the State while carrying out its statutory liability and obligation, the notices issued as at Annexures-1, 2 and 3 describing it to be commercial activities, in our considered opinion, are not sustainable as the issue is covered by the decision in the case of Rajasthan Hindi Granth Academy v- Deputy Commissioner of Income Tax [ 1999 (8) TMI 14 - RAJASTHAN HIGH COURT] - the assessee will be entitled for the benefit u/s 10(23)(iiiab). - Decided in favour of assessee. 2020 (1) TMI 867 TDS us 194C OR 194J - amounts paid to cable operators for channel placement fee - HELD THAT:- Amounts paid to cable operators for channel placement fee was subject to tax deduction at source under Section 194C of the Act and not under Section 194J of the Act as contended by the Revenue. See CIT v. Star Den Media Services (P.) Ltd. 2019 (1) TMI 1703 - BOMBAY HIGH COURT] and CIT v. NGC Network (India) (P.) Ltd [ 2014 (10) TMI 365 - BOMBAY HIGH COURT] Disallowance on account of advertising, marketing and publicity expenses incurred by the assessee for promotion of its channels - Allowable business expenses - foreign sister concern of the assessee is benefited by these expenses - HELD THAT:- Tribunal held that once it is not disputed that the expenses were primarily incurred for the purpose of business, incidental benefit to some other party from such expenses, would not reduce the allowability of such expenditure as a deduction. This more particularly when the same has been incurred in the course of and for the purpose of business. The impugned order of the Tribunal held that the 100% expenditure by way of marketing and publicity expenses are allowable as expenses deductible u/s 37(1) of the Act. See M/S. STAR INDIA P. LTD. [ 2009 (3) TMI 990 - BOMBAY HIGH COURT] and NGC. NETWORK (INDIA) P. LTD. [ 2014 (10) TMI 365 - BOMBAY HIGH COURT] 2020 (1) TMI 866 TP Adjustment - Rate of interest for the purpose of calculating working capital adjustment - HELD THAT:- TPO vide his order giving effect to the directions of the DRP changed the rate of interest for the purpose of calculating working capital adjustment from the originally accepted 9.86% to 14.61%. - AO passed the draft order on 28.11.2016 by considering the adjusted margins of the comparables with the working capital adjustment on the basis of rate of interest at 9.86%. The assessee assailed the draft order before the DRP on certain issues other than the rate of interest for computing the working capital adjustment. The DRP gave certain directions but did not direct to alter such interest rate either suo motu or at the instance of the assessee. Once the position was so, the rate of interest at 9.86% attained finality as the draft order was passed with such a rate of interest. AO/TPO, while giving effect to the directions of the DRP, were bereft of any power to change any aspect of the draft order save and except the direction of the DRP including the rate of interest to 14.61%. Having themselves accepted such a rate of interest up to the stage of passing the draft order, the AO/TPO ceased to exercise any jurisdiction to re-examine the earlier view and enhance it at the time of giving effect to the direction of the DRP, when the same was not a part of the direction. We direct to consider the rate of interest at 9.86% for calculating the working capital adjustment for benchmarking the international transaction in question, as was originally accepted. Adjustment to account for differences in the depreciation cost of the Appellant vis- -vis comparable companies selected by the Appellant - Additional ground raised - HELD THAT:- Dispute is not about granting any adjustment on account of difference in the quantum of depreciation as such or percentage of such depreciation to a common base but only towards difference in the rates of depreciation on similar asset(s). We agree with this proposition as has been approved in several decisions including a recent decision in M/s. Vishay Components India Private Limited vs. ACIT [ 2020 (1) TMI 618 - ITAT PUNE] . It is, therefore, held that no adjustment can be allowed if there is difference just on account of the quantum of depreciation or percentage of depreciation to a certain base. An adjustment should be allowed in the computation of profit of the comparables only if there is a difference in the rate of depreciation as charged by the assessee vis-a-vis the comparables on the same asset(s). We, therefore, set-aside the impugned order and remit the matter to the file of AO/TPO for a fresh determination of the ALP of the international transaction in accordance with our above directions. 2020 (1) TMI 865 Penalty u/s 271B - failure to get the books of accounts audited u/s 44AB - additions towards unaccounted sales - computation of turnover - HELD THAT:- As decided in VINAY AGRAWAL VERSUS ITO-1 (2) UJJAIN [ 2019 (11) TMI 97 - ITAT INDORE] relying on ATYA PRAKASH MUNDRA VERSUS INCOME TAX OFFICER, KISHANGARH. [ 2019 (2) TMI 157 - ITAT JAIPUR] held that addition made by the Assessing Officer during the assessment proceedings on the basis of unaccounted sale cannot be regarded as the turnover for the purpose of Section 44AB of the act because the documents relied upon by the A.O. are neither the part of books of account nor would substitute the books of account or constitute the books of account of the assessee regularly maintained. Books of account maintained by the assessee in regular course of business cannot be substituted by the material gathered by the Assessing Officer in the course of some survey in the case of third party though the said material may be relevant evidence for making the addition to the income of the assessee. Hence, in view of the facts and circumstances and following the earlier decision of this Tribunal, the penalty levied U/s 271B of the Act is deleted. - Decided in favour of assessee. 2020 (1) TMI 864 Reopening of the assessment u/s 147 - validity of reasons to believe - notice after four years - HELD THAT:- No failure on the part of the assessee to disclose all primary facts. The A.O. has not specified as to in which manner there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under appeal. Therefore, proviso to Section 147 of the I.T. Act would apply in favour of the assessee. In the present case, the notice under section 148 have been issued after 04 years and no new and tangible material has been brought on record at the time of reopening of the assessment and the A.O. wanted to correct the error in the original assessment order passed by the A.O. while initiating the re-assessment proceedings, we are of the view that reopening of the assessment is not valid in the facts and circumstances of the case. Considering the totality of the facts and circumstances of the case, we do not find any justification to sustain the reopening of the assessment. - Decided in favour of assessee. 2020 (1) TMI 863 Protective assessment in the hands of the assessee - Bogus Purchases - statement recorded at the back of assessee - HELD THAT:- Addition on protective basis was made on the basis of statement of Shri Aditya Chirman, Director of M/s. Safeco Projects Pvt. Ltd. A.O. did not get any information as to in whose case substantive addition have been made. This fact is also not clarified by the D.R. during the course of arguments. The other addition of ₹ 22,28,600/- is made on the basis of statement of some entry provider of bogus bills. Even his name is not mentioned in the assessment order. It, therefore, appears that both these statements were used against the assessee for making the additions. It is not clear from the Order whether such statements were provided to assessee for explanation or any right of cross-examination have been given to assessee to cross-examine these witnesses. In this view of the matter both the parties rightly suggested that the matter may be directed to the file of A.O. for re-consideration of the issues. In this view of the matter, we set aside the Orders of the authorities below and restore both the additions to the file of A.O. with a direction to re-decide the same by giving reasonable, sufficient opportunity of being heard to the assessee. 2020 (1) TMI 862 Exemption claimed u/s. 54F - non completion of the house within the time specified - HELD THAT:- It is a fact on record the assessee has made the investment in the land and construction of the house as discussed above which evidences that the assessee has substantially complied the provisions of section 54F of the Act. Thus, any delay in the completion of the construction of the house will not debar the assessee from claiming the exemption provided under section 54F Assessee has substantially complied the provision of section 54F of the Act by acquiring the piece of land and commencing construction thereon. It is also pertinent to note that the amount invested by the assessee in the acquisition of land and construction of house was exceeding the amount of the sale consideration received by the assessee on the sale of plot as discussed above. Thus, it is not the case of Revenue that the investment made by the assessee is less than the amount required to be invested under the provisions of section 54F of the Act. Accordingly, we set aside the finding of the learned CIT (A) and direct the AO to delete the disallowance made by the AO. As such the exemption claimed by the assessee under section 54F of the Act is accepted. Hence the ground of appeal of the assessee is allowed. Addition u/s 57 - Assessee has earned interest income from the FDRs and deposits with the firms during the year and the assessee has claimed interest expenses against such interest income - addition u/s 14A - AO rejected the contention of the assessee by observing that the assessee did not furnish any documentary evidence to justify that interest bearing funds were used in interest bearing deposit and advance - HELD THAT:- Assessee failed to justify whether the interest expenses were incurred against the interest income. Accordingly, the AO made the disallowance of such interest expenses in the absence of sufficient documentary evidence and further observed that the assessee has earned dividend income which is exempted from tax but no disallowance was made by the assessee under the provisions of section 14A read with rule 8D of Income Tax Rules. As such the AO was of the view that the borrowed fund has been utilized in making the investments which are giving rise to the exempted income. The view taken by the AO was subsequently confirmed by CIT (A). Admittedly, there was no disallowance made by the authorities below under section 14A read with rule 8D of income tax rule against the dividend income which is exempted under section 10(34) of the Act. Thus, in our considered view no disallowance of such interest can be made for the interest expenses under the provisions of section 14A read with rule 8D. Whether the impugned interest expense has been incurred by the assessee against the impugned interest income - onus lies on the assessee to furnish the sufficient documentary evidence in support of his contention. But he failed to do so before the authorities below. Though in our considered view, the assessee has failed to furnish the necessary documentary evidence, but in the interest of justice and fair play we are inclined to give one more opportunity before the AO to raise his points of contentions. Accordingly, we remit the ground of appeal of the assessee to the file of the AO for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for the statistical purposes. 2020 (1) TMI 861 TP Adjustment - AMP expenses addition - international transaction - assessee complains that there is no material on record to support the conclusion of the Ld. TPO that the transaction of incurring the AMP expenses amounts to international transaction in terms of section 92B and therefore, such adjustment is not tenable - HELD THAT:- These international transactions are identical all through the years and for the assessment year 2008-09 this issue was dealt with by the Hon ble jurisdictional High Court and by way of the decision reported in [ 2015 (12) TMI 1188 - DELHI HIGH COURT] Hon ble High Court held that there does not exist any arrangement or undertaking between the assessee and the associated enterprises in connection with incurring of the AMP expenses. Thus we hold that the transfer pricing adjustment cannot be sustained and has to be deleted we accordingly allow grounds No. 3 to 3.21. Alternative disallowance on account of expenses incurred for AMP - Case of the assessee is that for promotion of the sales of products produced/traded and marketed in India, the assessee had incurred such an expenditure; that the said expenditure was incurred at the local level to ensure the availability and visibility of the products - HELD THAT:- As gone through the order of the Hon ble High Court wherein it was held that merely because there is an incidental benefit to Whirlpool USA, it cannot be said that the AMP expenses incurred by the assessee were for promoting the brand of Whirlpool USA. It was further held that the fact that somebody other than the assessee is also benefited by the expenditure, should not come in the way of an expenditure being allowed by way of deduction under section 10 (2) (xv) of the Income Tax Act, 1922 and therefore the Hon ble High Court held the issue in favour of the assessee. We also find from the orders in assessee s own case for assessment years 2009-10 to 2014-15 that the Tribunal followed the above decision of the Hon ble High Court. Disallowance of R D expenses, addition on the basis of Form 26AS and disallowance on the basis of an AIR information - HELD THAT:- DRP directed the Assessing Officer to allow the R D expenditure not eligible for weighted deduction under section 35(2AB) as deduction u/s 37. We do not find anything illegal or irregular in such a course adopted by the Ld. DRP for the assessment year 2014-15 and we deem it just and proper to extend a similar treatment to the case of the assessee for this year also. We therefore direct the Assessing Officer to allow the deduction under section 37 (1) of the Act of the Act. Addition on the basis of form 26AS - Tribunal in assessee s own case for assessment year 2010-11 to 2014-15 we find that on the assessee reporting to have possessing all the relevant information to reconcile the difference between the income recorded in the books of accounts vis a vis form 26AS, the Tribunal took a view to direct the Assessing Officer to tally the data base of Revenue in the light of details to be filed by the assessee. In consonance with the view taken by the Tribunal for the earlier assessment years on this issue, we set aside the issue to the file of the Assessing Officer for a similar exercise and the assessee is directed to produce the relevant documents before the Assessing Officer. Ground No. 6 is therefore, allowed for statistical purpose. Addition on the basis of AIR information - AO held that the assessee has not been able to provide the supporting documents to establish the genuineness of the transaction and therefore the said sum is liable to be added to the income of the assessee - As submitted on behalf of the assessee that the assessee had located the relevant supporting documents and when a similar question had arisen in the earlier assessment years from 2010-11 to 2012-13, the Tribunal set aside the matter to the file of the Assessing Officer for verification of information/documents to be submitted by the assessee and to take a view. This factual statement by the Ld. AR is not controverted by the Ld. DR. We therefore, taking a similar view set aside the issue to the file of thelearned Assessing Officer with a direction to the assessee to produce the relevant information/documents before the Assessing Officer and the Assessing Officer to verify the same and decide the issue afresh Addition being the expenditure on account of the expenditure amount paid to the employees of the assessee at the time of marriage of their daughters - HELD THAT:- We deem it just and necessary that the allowance of this expenditure in the earlier years needs verification vis a vis the details furnished by the assessee. We therefore set aside the issue to the file of the learned Assessing Officer to carry out such an exercise of verification. Disallowance towards foreign tax credit - HELD THAT:- Set aside this issue to the file of the Assessing Officer with a direction to the assessee to produce the requisite certificate before the learned Assessing Officer, on which the learned Assessing Officer will take a fresh view after verification. 2020 (1) TMI 860 Reopening of assessment u/s 147 - Non-accounting of interest income on loan even though the management of the company considered it good and recoverable - HELD THAT:- Re-assessment has to be based on fulfillment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the AO. Hence, after 1.4.1989, the AO has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. In reassessment proceedings, the AO took the stand that the assessee company has not accrued interest on the loan of ₹ 228.38 lakhs , therefore income has escaped assessment. We note that the issue relating to accrued interest on the loan of ₹ 228.38 lakhs has already been examined by AO during the original assessment proceedings u/s 143(3) of the Act, hence it is not a new tangible material therefore reassessment proceedings is bad in law and not valid in the eye of law. We note that in the case of Indian and Eastern Newspaper Society Vs. CIT [ 1979 (8) TMI 1 - SUPREME COURT ] wherein it was held that an error discovered on a reconsideration of the same material (and no more) does not give AO power to assume jurisdiction to make reassessment. The aforesaid view on the above proportion has been reiterated by the Apex Court in A.L.A. Firm vs. CIT [ 1991 (2) TMI 1 - SUPREME COURT ] CIT(A) failed to appreciate that the A.O. has already made the scrutiny assessment u/s.143(3) in the assessee`s case and looked into all details and documents including audited balance sheet and Tax Audit Report submitted to him and has made several additions on the basis of said Balance sheet and Tax Audit Report. From the reasons recorded (Page-3 of Paper Book) it is clear that the assessment has been reopened on the basis of Clause-18 of Schedule-22(B) of Notes on Accounts given in the Balance sheet. The said balance sheet and clause-18 alleged by the A.O. was already before the A.O. during the original assessment proceedings and has been examined by him. There was no new material so as to believe that the income chargeable to tax has escaped assessment. Therefore, it is abundantly clear that in the assessee`s case under consideration there is no any tangible material to reopen the concluded proceedings, as the issue relating to accrued interest on the loan of ₹ 228.38 lakhs had already been examined by AO during the original assessment u/s 143(3) of the Act, which was completed on 31.03.2006, hence we quash the reassessment proceedings. - Decided in favour of assessee. Accrual of income - Addition as notional interest on loan - Whether no interest was accrued or receivable by the assessee on the said loans - HELD THAT:- We note that Hon`ble Supreme Court in the case of UCO Bank [ 1999 (5) TMI 3 - SUPREME COURT ] has held that tax should be imposed on the real income. We note that ld Counsel placed before the Bench the resolution of Board of Directors of the assessee company which clearly states that recovery of the interest is doubtful therefore interest had not been accrued by the assessee company. We note that there is no real accrual of interest to the assessee-company in respect of the loan advanced by it. Considering the bad financial position of the debtor companies, the management of the Company decided not to charge interest on the loans w.e.f. 01.04.2000 as mutually agreed with the loan debtor ( vide Board Resolution noted above). Therefore, we find force in the argument of the ld. Counsel and addition made by the A.O. for notional interest on loan given is hereby directed to be deleted. - Decided in favour of assessee. 2020 (1) TMI 859 Assessment u/s 153A - period of limitation - absence of any incriminating material found in the course of search u/s.132 or not? - approval of the draft assessment orders by superior authority without fulfillment of pre requisites of Section 153D - Whether the AO was justified in passing the assessment order hurriedly without waiting for expiry of at least the date on which a compliance to the questionnaire issued was sought? - HELD THAT:- On appraisal of the facts and circumstances of the case and peculiarities of the instant case and having regard to the long line of judicial precedents in similar circumstances including Pr.CIT vs. Shreelekha Damani [ 2018 (11) TMI 1563 - BOMBAY HIGH COURT] , Geetarani Panda [ 2018 (7) TMI 1888 - ITAT CUTTACK] , Rishabhbhai Buildwell P. Ltd. [ 2019 (7) TMI 365 - ITAT DELHI] , AAA Paper Marketing Ltd. [ 2017 (4) TMI 1371 - ITAT LUCKNOW] and Indira Bansal [ 2018 (2) TMI 1858 - ITAT, JODHPUR] we find no hesitation to hold that the action of the JCIT under s.153D of the Act is to be regarded as perfunctory and mechanical in subversion of the spirit of Section 153D of the Act. Such symbolic approval is unfounded in law. As a corollary, in the absence of any valid approval under s.153D of the Act, the respective assessment orders giving cause of action in the form of captioned appeals requires to be quashed on this score also. We find merit in the legal proposition canvassed on behalf of the assessee. It is not in dispute that the assessment pertaining to assessment years in question viz. AYs. 2009 10, 2010-11, 2011-12 2012-13 stood concluded either under s.143(1) or under s.143(3) of the Act and not eventually pending at the time of search. Thus, assessment for these 4 years will not get abated in consequence of search. In the backdrop of these pertinent facts, we straightway notice that the scope of assessment under s.153A of the Act in respect of concluded and unabated assessments is circumscribed by the condition that additions/ disallowances must have some rational connection with the incriminating material against the assessee detected in the course of search. The scope of assessment under s.153A of the Act in respect of concluded and unabated assessment is thus narrower in its sweep as held in long line of judicial precedents of different jurisdictions. additions/disallowances under s.153A of the Act towards unabated assessments are permissible only where incriminating materials are found in search showing unaccounted income. In the absence of any reference to such seized documents in the assessment order and in view of the overwhelming reference to unsubstantiated tax evasion petition obtained in November 2016 post search, the action of the AO towards making additions in respect of concluded assessments towards undisclosed income is contrary to the judicial dicta. Accordingly, we are of the view that various additions/disallowances made by the AO are clearly beyond the scope of authority vested under s.153A of the Act owing to absence of any incriminating material or evidence deduced as a result of search in so far as completed assessments are concerned. As noted, no reference of such incriminating material, if any, is found in any of the assessment orders for the purposes of making various additions/disallowances. Additions/disallowances made in assessments framed under s.153A of the Act in respect of captioned assessees pertaining to AYs. 2009-10 to 2012-13 are thus required to be quashed on this score too. The assessments/re-assessments pending on the date of search i.e. AY 2013-14 to 2015-16 which stood abated by operation of law will however be governed by normal assessment powers under s.153A Addition u/s 2(22)(e) - receipt of loans and advances by the assessee from K. D. S. Contractors P. Ltd. in which both the Directors of the assessee company viz; Tripta Sharma K. D. Sharma holds substantial interest in both the companies - HELD THAT:- Recipient assessee not being a registered shareholder cannot be taxed under the deeming fiction of Section 2(22)(e). See DAISY PACKERS PVT LTD. [ 2015 (7) TMI 253 - GUJARAT HIGH COURT] - Additions under the deeming fiction of Section 2(22)(e) of the Act requires to be deleted on this first parameter itself i.e. the assessee not being shareholders of the lender company cannot be taxed under s. 2(22)(e) of the Act. There is a considerable force in the alternative argument raised on behalf of the assessee that while considering accumulated profits of the company for the purposes of additions under s.2(22)(e) of the Act for the assessment years in question, the payment made by the lender company which stood disallowed in the earlier years is required to be adjusted and consequently, accumulated profits of the lender company would stand reduced to the extent of disallowances carried out by the AO in the earlier assessment years. When a loan by a company to a shareholder in the manner set out in section 2(22)(e) is treated as a deemed dividend, it is to be treated as payment out of accumulated profits of the company. Hence, the addition under s.2(22)(e) of the Act for a given assessment year is required to be made having regard to the adjusted accumulated profits available with the lender company. 2020 (1) TMI 858 Disallowance of interest u/s 14A - HELD THAT:- Provisions contained u/s 14A of the Act, AO has not recorded his satisfaction as required u/s 14A(2) that the working given by the assessee is not correct. Hon ble High Court of Delhi in case of Maxopp Investment Ltd. vs. CIT [ 2011 (11) TMI 267 - DELHI HIGH COURT] held that, it is incumbent upon the AO to record satisfaction as to the working given by the assessee that no expenses have been incurred by it to earn the dividend income . In view of the matter, we are of the considered view that addition made by the AO and confirmed by the ld. CIT (A) u/s 14A is not sustainable, hence ordered to be deleted. Addition u/s 36(1)(iii) - disallowance of interest - disallowance has been confirmed rejecting the contention of the assessee that the impugned advances have been made out of business expediency - HELDTHAT:- In view of the financials brought on record by the assessee company discussed in the preceding para, we are of the considered view that since transactions are pertaining of business of shares/future/option of securities advances having been given on account of commercial expediency of the group companies, disallowance made by the AO and confirmed by the ld. CIT (A) u/s 36(1)(iii) is not sustainable, hence ordered to be deleted Disallowance on account of foreign tour and travel expenses - expenses incurred by Director of assessee company which are pertaining to his travel to Australia and New Zealand on the ground that Shri Saurav Arora is neither Director nor employee of the assessee company and assessee company has not conducted any transactions with Australia and New Zealand Stock Exchanges - HELD THAT:- From the perusal of the reply filed by the assessee company before the ld. CIT (A), extracted in para 7.2 of the impugned order, assessee company has failed to prove the purpose for which foreign tours have been carried out by Shri Saurav Arora. Emails brought on record by the assessee company also failed to explain the purpose of foreign visits. Perusal of the foreign detail given by the assessee company, available at page 50 of the paper book, also does not disclose the purpose and result of the foreign visits. We are of the considered view that expenses Incurred by Shri Saurav Arora, Director of the assessee company when not proved to be incurred for business purpose of the assessee company, its addition cannot be made against assessee company rather its addition can be made against Shri Saurav Arora in his individual capacity. In these circumstances, addition of ₹ 4,48,911/- made in the name of assessee company is not sustainable, hence ordered to be deleted. TP Adjustment - addition on account of arm s length price value of the interest receivable on loans outstanding in the name of Jaypee Singapore Pte Ltd. against which the assessee has shown nil interest - HELD THAT:- AO has no authority to re-characterize the transaction of making investment by the assessee company in equity shares of subsidiaries as a loan; secondly, OECD Guidelines also discourage restricting of legitimate business transaction; thirdly, when the AO has not come up with specific finding that the transaction in question is a sham transaction, he cannot treat the transaction of capital infusion by the assessee company as a loan and to charge the interest thereon on notional basis; and fourthly, in the absence of any specific finding by the AO that any income has arisen from international transaction, TP provisions contained in Chapter-X of the Act do not apply. Section 92(1) of the act says that income arisen from international transaction is a condition precedent for application of Chapter-X of the Act. Consequently, we are of the considered view that addition made by the AO and confirmed by the ld. CIT(A) on account of arm s length price of value of interest receivable on loans outstanding in the name of Jaypee Singapore Pte Ltd. is not sustainable, hence ordered to be deleted - Decided in favour of the assessee. 2020 (1) TMI 857 Exemption u/s 11 - Cancellation of registration u/s 12AA - assessee is actively involved in commercial activities with profit element and no charitable purpose is involved - HELD THAT:- We are of the opinion that the decision based on the granting of Registration under Section 12A is crucial and whereas the CIT (Appeals) has confirmed the action of Assessing officer, though Registration u/sec 12A of the Act is pending before the Tribunal. We found the CIT(Appeals) has passed the order on 25.2.2014, But the co-ordinate Bench of Tribunal in [ 2015 (7) TMI 198 - ITAT BANGALORE] setting aside the cancellation of Registration under Section 12AA of the Act by DIT (Exemptions) was passed on 10.4.2015. Hence the assessee could not get the order on hand at the time of hearing before the CIT(A). We considering the facts, circumstances, submissions and the decision of the co-ordinate Bench in setting aside the cancellation of Registration under Section 12AA of the Act are of the opinion that the decision making has to be considered afresh based on the Registration u/sec 12A. Accordingly, we set-aside the order of CIT(A) and to meet the ends of justice, Restore this issue to the file of CIT(Appeals) to adjudicate afresh considering the Registration under Section 12AA of the Act available to the assessee and pass Reasoned and speaking order. - Decided in favour of assessee for statistical purposes. 2020 (1) TMI 856 Reopening of assessment u/s 147 - Jurisdiction of ITO Ward 4(1), Jaipur in issuing the notice - legal entity holding two PAN - as per assessee assessment order has been passed in wrong name and address and there is non-application of mind by the Assessing officer while recording reasons before issuance of notice u/s 148 - change in name of company - Addition u/s 68 - HELD THAT:- There has been only a change in name of the entity and besides that, there is no change in the corporate identity of the assessee company. It is therefore not a case where the assessee company ceases to exist and/or amalgamated with any other existing/new entity. Therefore, it is not a case where the notice u/s 148 has been issued and assessment u/s 143(3) r/w 147 has been completed in the name of non- existent entity. Notice u/s 148 dated 27.03.2015 has been issued in name of Shree Silica Products Private Limited (PAN No. AACCS4046D) and the assessee company had earlier filed its return of income for A.Y 2009-10 on 30.03.2010 in name of Badaya Ispat Private Limited (PAN No. AADCB4084H). Therefore, it is a strange to note that the same legal entity has been holding two PAN numbers though in two different names and both continue to exist in Income Tax Department database as on the date of issuance of notice u/s 148 and passing of the assessment order u/s 143(3) r/w 147 of the Act. Under section 139A of the Act, it has been provided that No person who has already been allotted a permanent account number under the new series shall apply, obtain or possess another permanent account number. Therefore, where the assessee is prohibited from applying for a new PAN where a PAN has already been issued to it, the fact that such a new PAN has been applied and thereafter issued, to our mind, the new PAN and filing of return of income doesn t confer any jurisdiction to the Assessing officer over such matter with such new PAN and the Assessing officer with earlier PAN continues to exercise jurisdiction over the assessee company. In the present case, therefore, the ITO Ward 4(1), Jaipur continues to exercise jurisdiction over the assessee company and not ITO Ward 1(1), Jaipur. Therefore, we donot find any infirmity in the action of ITO Ward 4(1), Jaipur in issuing the notice u/s 148 and completing the assessment u/s 143(3) r/w 147 of the Act. It is a case where no return of income has been originally filed by the assessee company and on perusal of reasons, we find that the Assessing officer has received tangible information from Investigation wing that the assessee has obtained accommodation entries basis which he has come to believe that income to the extent of ₹ 45 lacs has escaped assessment. There is a linkage between the material and formation of belief that income has escaped assessment. At the stage of recording reasons, the Assessing officer has to record his prima facie opinion that the income has escaped assessment. It is not the case of the assessee company that the details of the transaction recorded by the Assessing officer was not correct or false in terms of name of entity, nature of transaction and the amount involved. In the instant case, where the Assessing officer has received information that the assessee has obtained accommodation entries, the same constitute a tangible material and basis examination thereof, where he has held that income has escaped assessment, we donot see any infirmity in the action of the Assessing officer in exercising jurisdiction u/s 148 Addition u/s 68 - Communication received from DIT (Inv.)-II, New Delhi wherein the certain details have been given regarding bogus accommodation entries obtained by the assessee company BUT by the time of issuance of notice u/s 148 on 28.03.2015, the assessment in case of all these three entities were already completed on 28.03.2013 and in the assessment so completed, there is no finding that these entities have provided any accommodation entries to the assessee company. Investment made by these three entities in the assessee company was accepted as genuine investments. Therefore, once the assessee company has furnished necessary documentation as we noted above and the assessment in case of these share holder entities have been completed whereby there is no finding recorded by the Assessing Officer that they have provided accommodation entries to the assessee company and investment thus made have been accepted as genuine investment, we find that no adverse view can be taken in the hands of the investee assessee company u/s 68 Assessing Officer has stated in the assessment order that the assessee has introduced its unaccounted cash in the form of share capital through racket of entry providers operated in New Delhi, however the said finding has not been corroborated by any material on record and therefore, the said finding recorded by the Assessing Officer cannot be accepted in absence of clear linkage/nexus established by the Revenue that the money belonging to the assessee company has been advanced and routed back in the form of share capital. Addition so made by the Assessing Officer u/s 68 of the Act is hereby directed to be deleted - Decided in favour of assessee. 2020 (1) TMI 855 Estimation of net income from total on money receipts - assessee had disclosed net profit of over 30% of total unaccounted on money receipts - Assessment u/s 153C -AO while making the additions had basically relied upon the some loose documents seized during the survey AND small diary impounded at the office of the assessee and noting therein - HELD THAT:- It is an undisputed fact that survey action u/s.133A was carried out at the office premises of Anupam Group wherein during the course seven small pocket diaries were recovered from the premises. And the same were confronted by recording statement of u/s.132(4) wherein it was admitted that these represents net profit from on money receipts or different purchases of the group which were not recorded in the regular books of accounts and was net earnings after all expenses. The unaccounted income accepted by the assessee was duly disclosed in the returns filed subsequently in all the cases, except in the case of assessee firm, the income as disclosed for the firms/projects has been accepted in-toto by the AO. There is sufficient evidence in the case of Shri Jayantilal Mulchand Patel in the form of documents and statement u/s.132(4) of the I.T.Act which confirm that the transactions in the property as true for determining his total income. Even the presumption of correctness is attached with the statement so recorded u/s.132(1)(a) of the I.T.Act which has not been rebutted or uprooted by the assessee. Revenue/Department has also failed to prove that the said Shri Jayantilal Mulchand Patel acted as a broker by leading any independent evidence, and failed to recover any documents depicting the transactions as such. The statement and affidavit on Shri Jayantilal Mulchand Patel has been used by the Revenue without affording an opportunity of cross-examination to the assessee. CIT(A) had rightly concluded that without deciding the evidentry value of the documents seized from the said Shri Jayantilal Mulchand Patel and statement or affidavit for examining the case from a different angle. CIT(A) rightly concluded that in the totality of all the facts and circumstances, the amounts depicted in the diary even if taken to be true, the net amount of income from on money receipts, earned out of books of accounts. Even then, no further additions are justified and thus rightly deleted the additions. We are also in agreement with the decision of PANNA CORPORATION [ 2014 (11) TMI 797 - GUJARAT HIGH COURT] wherein it was held that the estimation of net income from total on money receipt is justified and profits of the assessee's business as a builder should be estimated by applying net profit rate of 15 percent of the total consideration as per the sale agreements and also on the on money received by the assessee. Considering all we are of the view that although the AO has determined the total income at ₹ 9,02,77,106/-, thus taking into account that in the Return of Income a fair amount of income (net profit of over 30%) from such total receipts has already been shown by the assessee i.e. amount of ₹ 3 crores. Thus, no further additions are justified. We see no reason to interfere into or divert from the findings so recorded by the ld.CIT(A), accordingly ground no.1 of Revenue is dismissed. 2020 (1) TMI 854 Bogus purchases - case of purchases made from unverifiable parties - not a case of simple trading but it is a case of contract wherein the purchases were supposed to be consumed - CIT(A) after rejecting the books of account estimated the profit at 30% of the impugned expenses/purchases - HELD THAT:- Under Income Tax Act only real income can be taxed by the Revenue. We may further note that even if the transaction is not fully verifiable, due to any circumstances beyond the control of the assessee, the only taxable is the taxable income component. And in order to fulfill the gap of revenue leakage the disallowance of reasonable percentage of such purchases can meet the end of justice. Similar view was taken by Hon ble Bombay High Court in CIT Vs Hariram Bhambhani [ 2015 (2) TMI 907 - BOMBAY HIGH COURT] that revenue is not entitled to brought the entire sales consideration to tax, but only the profit attributable on the total unrecorded sales consideration alone can be subject to income tax. Considering the aforesaid factual and legal discussion and the submission of ld. AR of the assessee that average Gross Profit for four preceding year declared by assessee were 13.01%. For the year under consideration, the assessee has declared Gross Profit at 20.26%, if the further disallowance @ 30% of the total purchases/expenses is upheld, the Gross Profit of assessee would be increased drastically i.e. more than 36%, which is unrealistic. Therefore, considering the totality of the facts and to avoid to possibility of revenue leakage, we are of the view that if the disallowance of alleged purchases/expenditure is restricted to 10%, that would meet the end of justice. - Decided partly in favour of assessee. 2020 (1) TMI 853 Addition u/s 43CA - transfer of business assets / property - stamp value - applicability of tolerance limit of 5% - difference in consideration received in respect of agreement to sale executed during the year and brought to tax as per revenue recognised on percentage completion method - as per assessee difference between the value adopted by the stamp valuation authority and the actual sale consideration received by the assessee on the transfer of the aforesaid property works out to 9.56% i.e less than 15%, therefore, no addition of the impugned difference HELD THAT:- As long as the difference between the value adopted by the stamp valuation authority and the actual consideration received or accrued to the assessee on the transfer of the asset (other than a capital asset) is not in excess of five percent, then such difference is to be ignored and the profits and gains on transfer of the asset has to be worked out on the basis of the actual consideration received or accruing to the assessee. In case, the aforesaid claim of the assessee that if the difference between the value adopted by the stamp valuation authority and the actual consideration received or accruing as a result of transfer of the asset (other than a capital asset) does not exceed 15%, then no addition would be called for u/s 43CA is accepted, then we are afraid that the same would render the aforesaid proviso to Sec. 43CA(1) as had specifically been made available on the statute vide the Finance Act, 2018 w.e.f A.Y. 2019-20 would be rendered as meaningless. A s a tolerance limit of 5% between the value adopted by the stamp valuation authority and the actual consideration received or accruing as a result of transfer of the asset (other than a capital asset), had been made available on the statute only vide the Finance Act, 2018 w.e.f A.Y. 01.04.2019, therefore, it would be absolutely incorrect to infer that prior to the aforesaid amendment a tolerance limit of 15% was already available and/or inbuilt in the said statutory provision. In our considered view, if that would have been so, then there would have been no requirement for incorporation of the proviso to Sec. 43CA (1) of the Act. On the basis of our aforesaid observations, we are of the considered view, that the contention of the ld. A.R that as the difference of ₹ 4,48,350/- between the value adopted by the stamp valuation authority and the actual consideration received as a result of transfer of the aforesaid property works out to 9.56%, i.e less than 15%, therefore, the same was to be ignored and no addition was called for in the hands of the assessee, does not merit acceptance and is resultantly rejected. We thus in terms of our aforesaid observations, finding no infirmity in sustaining of the addition by the CIT(A), uphold his order. - Decided against assessee. 2020 (1) TMI 852 Unexplained cash credits u/s 68 - assessee s finances and operations do not justify the share premium, but the entire share premium raised has been diverted in paying off long term loan of the assessee - lifting of corporate veil - contention of the assessee that the issue of compliance of Section 78 of the Companies Act, 1956 or diversion of share premium cannot be considered - HELD THAT:- The assessee-company, having raised share premium, has diverted the same in paying off long term loans. The mandate of the decision DURGA PRASAD MORE [ 1971 (8) TMI 17 - SUPREME COURT] is duly applicable. Hence the submission of the learned counsel of the assessee that utilisation of share premium amount in paying off loans is irrelevant is not legally sustainable. It is also settled law that substance prevails over form. It is undisputed that share premium amount has been actually utilised for paying off loan. Furthermore, we note that the transaction is between group concerns. Assessee submitted that these concerns belong to a reputed group and they are not fly by night operators. This makes it amply clear that for paying off the loan of the assessee-company, a group company has accommodated by introducing money in the form of share premium. In substance, it is not at all share premium. It is, in fact, a misuse of the corporate veil. Assessee-company has no obligation to pay back the amount received as share premium in any event. However, we also find that in this regard learned counsel of the assessee has made various submissions which interest of justice demands that this aspect of adjudication needs to be remitted to the file of the Assessing Officer. The Assessing Officer shall examine this aspect in view of our observation and the Hon'ble Apex Court s decisions referred above. The Assessing Officer shall also consider the submissions of the learned counsel for the assessee and give the assessee proper opportunity of being heard. Appeal of the assessee is allowed for statistical purposes. 2020 (1) TMI 851 Revision u/s 263 - Bogus purchases - AO making disallowance @ 12.5% - HELD THAT:- Hon'ble Jurisdictional High Court in Mohommad Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] has held that even if the purchases are found to be bogus, however, the entire purchases cannot be added if the sales are not doubted or disputed. The Hon'ble Jurisdictional High Court held that in such circumstances, the addition can be made by applying the gross profit rate of normal purchases. Thus, in our considered opinion, the decision of the Assessing Officer in making addition applying the profit rate is in consonance with various judicial precedents available on the issue. Therefore, it cannot be considered to be an erroneous view as it is a possible view. Moreover, the allegation of learned Principal Commissioner that the Assessing Officer has overlooked the material on record and has not made any enquiry which ought to have been made, appears to be on wrong assumption of facts, hence, not tenable. In view of the aforesaid, we hold that in the given facts and circumstances of the case, the assessment orders passed cannot be held as erroneous and prejudicial to the interests of Revenue. That being the case, exercise of power under section 263 of the Act to revise the assessment orders is neither justified nor valid - Decided in favour of assessee. 2020 (1) TMI 838 Depreciation on tangible assets denied - addition on the basis of statement recorded during the survey proceeding u/s. 133A - whether on the basis of survey conducted by the Income Tax Department claim of the assessee for depreciation should be allowed or not? - HELD THAT:- When we specifically asked about the payment made in order to purchase machinery. Ld. A.R. shown us the payment detail and they were made through banking channels and relevant details of the said payment were shown to us and list of suppliers with invoices of machinery purchased were also submitted before the lower authorities. And ledger account of M/s. Vimpsan Precision Pvt. Ltd. was also submitted before the lower authorities. Apart from that reconciliation chart of plant and machinery with Dalal Mott Macdonald report were also submitted to the effect that machines were very much there and inspection was duly carried out by the surveyor. And Valuation Report certificate dated 26.05.2003 wherein before granting loan IDBI Bank carried out inspection and Valuation Report was duly prepared wherein details of all the machines were given. Assessee requested AO to carry out the physical inspection of the machines. But ld. A.O. did not bother to inspect the same for the reason that ITAT did not give him direction to physically inspect the machines wherein in department appeal filed before the ITAT directed the ld. A.O. that he shall pass reasoned order by giving reasonable sufficient opportunity to the assessee considering the valuation report of Dalal Mott Macdonald and the evidences produced by the assessee for purchase of tangible assets. As we can see, ld. A.O. did not bother to carry out the physical inspection and valuation report of Dalal Mott Macdonald and did not consider evidences such as photograph of the plant and machinery submitted before the ld. A.O. in pursuant to the ITAT direction. We draw support from the case of CIT vs. S. Khader Khan Son [2013 (6) TMI 305 - SC ORDER ] wherein has held that only on the basis of statement recorded during the survey proceeding u/s. 133A cannot be basis of addition. - Decided in favour of assessee. 2020 (1) TMI 837 Revised return filed - audit report u/s 44AB - HELD THAT:- In light of the decision of the High Court of Himachal Pradesh, Shimla [ 1997 (5) TMI 24 - HIMACHAL PRADESH HIGH COURT] pertaining to assessment year 1988-1989 dated 05.05.1997,it must necessarily follow that the revised return dated 10.02.1994 filed by the appellant-assessee for the concerned assessment year 1988-1989 accompanied by audited accounts and the audit report under Section 44AB of the Income Tax Act ought to proceed further and be taken to its logical end by the Assessing Officer expeditiously. We direct accordingly. Besides this, nothing more is required to be said in this appeal except to reiterate that the assessment be proceeded on its own merits in accordance with law, including to consider all just exceptions available to the assessee. 2020 (1) TMI 836 Revised return filed - audit report u/s 44AB - HELD THAT:- In light of the decision of the High Court of Himachal Pradesh, Shimla [ 1997 (5) TMI 24 - HIMACHAL PRADESH HIGH COURT] pertaining to assessment year 1988-1989 dated 05.05.1997,it must necessarily follow that the revised return dated 10.02.1994 filed by the appellant-assessee for the concerned assessment year 1988-1989 accompanied by audited accounts and the audit report under Section 44AB of the Income Tax Act ought to proceed further and be taken to its logical end by the Assessing Officer expeditiously. We direct accordingly. Besides this, nothing more is required to be said in this appeal except to reiterate that the assessment be proceeded on its own merits in accordance with law, including to consider all just exceptions available to the assessee. Customs 2020 (1) TMI 850 Benefit of exemption N/N. 64/88-Cus dated 1st March 1988 - import of Theratron-Phoenix Cobalt-60 (electro therapeutic apparatus) - HELD THAT:- There are no reason to interfere with the impugned order - Appeal dismissed. 2020 (1) TMI 848 Classification of goods - Kapok - whether Kapok could not be classified under heading 53.05 or not? - HELD THAT:- There is no finding in the order of the Tribunal as to whether the observations of the Commissioner (Appeals) that Kapok could not be classified under heading 53.05, are correct or not. No appeal was filed by the Respondents on this count. The question would now remain whether the Kapok could be classified under heading 14.04. The argument that the Commissioner (Appeals) in the appeal can never look into a different entry is belied by the proviso to Section 128A of the Act. However, a procedure is laid down in the said proviso. A prior notice and time limit is contemplated. The contention of the Appellant that such a notice, even if it is issued, was beyond time even on the date the Commissioner passed the order can be made by the Appellant before the Commissioner (Appeals) in the remanded proceedings. Therefore, the learned Counsel for the Respondent is right in contending that a question of law as proposed does not arise from the impugned order. - appeal disposed off. 2020 (1) TMI 846 Imposition of redemption fine - section 125 of CA - goods in question have already been released in favour of the assessee on a bond - HELD THAT:- the mere fact that the goods were released on the bond being executed would not take away the power of the customs authorities to levy redemption fine. However, tribunal has recorded that, It is also on record that the goods were not physically available for confiscation. Redemption fine was not to be imposed in lieu of confiscation of any goods where the goods are not physically available to be redeemed. The learned Tribunal has erred in holding that the cited case of the Hon'ble Supreme court in the case of WESTON COMPONENTS LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 2000 (1) TMI 45 - SC ORDER] referred is distinguishable. This observation written by hand by the learned Members of the Tribunal, bearing their initials, appears to be made without giving any reasons and details. The said observation of the learned Tribunal, with great respect, is in conflict with the observation of the Hon'ble Supreme Court in the case of Weston Components. Decided in favor of revenue. 2020 (1) TMI 840 Benefit of Indirect Tax Dispute Resolution Scheme, 2016 - a discharge certificate was issued by the designated authority accepting the payment from the declarant as full and final settlement of the amounts due from the declarant - appeal were pending before Commissioner (Appeals) - Misdeclaration of imported goods - imported Shredded Stainless Steel Scrap Grade 304 - HELD THAT:- There is no dispute that the appellant filed a declaration before the authorized officer in terms of the Indirect Tax Dispute Resolution Scheme, 2016. In terms of the provisions of Section 214, an assessee is required to make a declaration before the designated authority. The said declaration has to be acknowledged and in terms of sub-section 4 of the said section, on receipt of proof of payment of tax interest and penalty under sub-section 3, the designated authority would pass an order of discharge of dues referred to in sub-section 3. The said sub-section 3 requires payment of penalty equivalent to 25% of penalty imposed upon in the impugned order. In terms of Section 216, upon passing of an order under sub-section 214(4), the appeal pending before Commissioner (Appeals) shall stand disposed of and the declarant shall get immunity from all proceedings under the Act. In terms of section 216 of the scheme, the appeal pending before Commissioner (Appeals) was to be disposed of accordingly and the Commissioner (Appeals) was not justified in finding fault with the order of the designated authority and not accepting the same and proceeding to decide the appeal on merits. The Original Adjudicating Authority is directed to give consequential relief to the appellant in terms of the discharge certificate given by the designated authority - appeal allowed. Insolvency & Bankruptcy 2020 (1) TMI 842 Constitution of 'Committee of Creditors' - settlement agreement - HELD THAT:- As the parties have reached the settlement and the 'Committee of Creditors' was not constituted, in exercise of powers conferred under Rule 11 of the NCLAT Rules, 2016, we set aside the impugned order - petition disposed off - appeal allowed. 2020 (1) TMI 841 Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - dispute regarding the operational debt payable - existence of dispute or not - HELD THAT:- Hon'ble Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017 (9) TMI 58 - SUPREME COURT] after setting out some of the sections of the Code, laid down the scheme of the Code, came to financial and operational creditors triggering the Code against a corporate debtor and held that The Code gets triggered the moment default is of rupees one lakh or more. The Corporate Insolvency Resolution Process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. In the light of the Hon'ble Supreme Court Judgment and the provisions thereof as enshrined in Insolvency Bankruptcy Code, 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 (20) of Section 5 of the Code - From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default. Further, as per the Bank Statement produced by the applicant, it reveals that the corporate debtor made some payment on 07.03.2017, hence the claim is also not time barred. The Application filed by the Applicant on 8th February, 2019 is complete in all respect. Application admitted - moratorium declared. 2020 (1) TMI 839 Maintainability of application - initiation of CIRP - Corporate Debtor or not - HELD THAT:- From the allotment letter, demand notice, allotment letter and receipt, we find that there is a joint venture between 'M/s. Homestead Infrastructure Development Pvt. Ltd.'- and 'M/s. Golden Peacock Residence Private Limited' and, therefore, the Appellant cannot take the plea that 'Homestead' is not a 'Corporate Debtor'. M/s. Homestead Infrastructure Development Pvt. Ltd. (Corporate Debtor) reached agreement jointly with 'M/s. Golden Peacock Residence Private Limited' have entered into the development agreement with 'M/s. Raheja Developers Limited' on 24th July, 2012 and for all purposes it is a joint venture with 'M/s. Golden Peacock Residence Private Limited' who is a subsidiary company and reached agreement with Respondent, but asked to pay the amount to 'M/s. Golden Peacock Residence Private Limited', we hold that the application under Section 7 against 'M/s. Homestead Infrastructure Development Pvt. Ltd.'- ('Corporate Debtor') is maintainable. Appeal dismissed. Service Tax 2020 (1) TMI 845 Benefit of reduced penalty u/s 78 - failure to pay within stipulated time - service tax and interest has already and duly been paid even before issuance of the show cause notice - Appellant had also sought option to pay 25% (reduced) mandatory penalty under Section 78 of the Act as the said option was not given to the appellant at the lower levels - HELD THAT:- In the present case, the appellant had failed to deposit 25% of the imposed penalty before the issuance of show cause notice or within 30 days of finalization of demand by the adjudicating authority - learned tribunal rightly came to the conclusion that appellant could not be granted option to pay 25% (reduced) mandatory penalty under Section 78 of the Act. Appeal dismissed. 2020 (1) TMI 844 Refund of unutilized CENVAT Credit - Violation of Condition 2(h) of the Notification No. 27/2012-CE dated 18.06.2012 - denial of refund on the ground that proof of debit of the amount was not submitted - HELD THAT:- It is not open to the Department to examine the eligibility of CENVAT credit while adjudicating the refund claim application, since in such matters of admissibility, the Department has mandated to take recourse under Rule 14 of the CCR. Further, the rejection of entire refund claims only on the ground of violation of Condition 2H of Notification No. 27/2012 is also not sustainable in law. Since, the appellants have debited the CENVAT account but only after filing the refund claim. Debiting the CENVAT account subsequent to the filing of the refund claim is only a procedural violation which cannot defeat the substantive right of the appellant to claim refund under Rule 5 of CCR, 2004. Refund allowed along with interest on delayed refund - appeal allowed - decided in favor of appellant. Central Excise 2020 (1) TMI 843 Valuation - printing and engraving charges - inclusion of extra charges collected by the appellant through debit notes in the assessable value - whether the appellant have availed credit in respect of manufacture of Printed Plastic Packing Bags? - Claim of benefit of exemption notifications 4/97-CE and 5/98-CE where no credit is availed - HELD THAT:- The show cause notice itself admitted that the appellant have availed modvat credit on inputs such as granules used in Lay Flat Tubing. As regards other inputs, whether the credit is availed or otherwise, the same was not produced by the appellant before the Adjudicating Authority in the de-novo adjudication - if the appellant have not taken any credit on inputs used in the manufacture of Printed Plastic Packing Bags, even though the credit was availed on the inputs used in the manufacture of intermediate product Lay Flat Tubing, they are entitled to exemption notifications 4/97-CE and 5/98- CE. Since the non-availment of modvat credit on all the inputs used in Plastic Bags was not established, the matter needs to be remanded only for this limited fact to be verified - appeal allowed by way of remand. CST, VAT & Sales Tax 2020 (1) TMI 849 Refund along with interest - Delhi VAT Act - principles of unjust enrichment - HELD THAT:- The concerned respondent authorities are directed to decide the claim of refund of this petitioner in accordance with law, rules, regulations and Government policy applicable to the facts of the case and also keeping in mind the principle of unjust enrichment as propounded by Hon ble Supreme Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [ 1996 (12) TMI 50 - SUPREME COURT] as early as possible and practicable. Petition disposed off. 2020 (1) TMI 847 Issuance of C-form - failure to issue C-form for certain supplies - stand taken by respondent Nos. 1 in their counter-affidavit is that the C Forms have not been issued to respondent No. 5 due to non-inclusion of particulars of the purchases made by respondent No.5 from the petitioner No. 1 in its returns filed with the Department for the relevant period 2012-13 - applicability of time limit as provided in Section 28 of the DVAT Act - HELD THAT:- The respondent No.5 is an undertaking of the GNCTD, and respondents No.1 to 3 are also GNCTD, and thus, the omissions made by respondent No.5 could not be a ground for respondents No.1 to 3 not to issue the C Forms, has no merit. This is for the reason that respondent No.5 though an undertaking of the GNCTD, is an assessee under the law and is bound by the same discipline of law as any other entity would be, whether or not, the same is an instrumentality of the State. The provisions of the DVAT Act and the CST Act apply to respondent No.5 with the same force, as they would apply to any other dealer or entity, and do not treat state instrumentalities differently. The petitioner cannot seek a direction to respondents No.1 to 3 to issue the C Form for the Financial Year 2012-13 after over four years, when the transactions between the petitioner and respondent No.5 were not disclosed in the return filed by respondent No.5, and no rectification of the return was sought to be made within the period of limitation. The respondents No.1 to 3 are directed to release C Forms to respondent No.5 with respect to purchases made by respondent No.5 from petitioner No.1 during the Financial Year 2012-13 - This direction shall, however, remain suspended till the Civil Appeals pending before the Supreme Court, are decided and this direction shall abide by the decision that the Supreme Court renders - petition disposed off.
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