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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter January 29, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Articles Neutralise alleged excess GST payments through credit note as refund application is time barred The State alone remains responsible for not providing smooth passage of traffic (SC). HIGH SEA SALES.NO IGST IS PAYABLE Revenue Authorities obligated to inform the assessee about the filing of an appeal on wrong GST portal News DGGI Gurugram officials bust nexus of 93 fake firms issuing fake input tax credit invoices of ₹ 491 crore, arrest one DGGI Ghaziabad officials bust bogus network of 275 firms involving fake invoices of more than ₹ 3,100 crore Appointment of Dr V Anantha Nageswaran as the Chief Economic Advisor Additional resources of ₹ 7,309 crore made available to States for undertaking power sector reforms SPMCIL sets up New Bank Note Printing Lines each at Currency Note Press, Nashik and Bank Note Press, Dewas RBI’s Pandemic Response: Stepping out of Oblivion (Keynote Address delivered by Michael Debabrata Patra, Deputy Governor, Reserve Bank of India - January 28, 2022 - at the C D Deshmukh Memorial Lecture organised by the Council for Social Development, Hyderabad) Central Board of Indirect Taxes and Customs celebrates International Customs Day, 2022 Notifications GST - States G.O. Ms. No. 22/2021-Puducherry GST (Rate) - dated 20-1-2022 - Puducherry SGST Amendment in Notification G.O. Ms. No. 11/2017- Puducherry GST (Rate), dated 29th June, 2017 G.O. Ms. No. 21/2021-Puducherry GST (Rate) - dated 20-1-2022 - Puducherry SGST Amendment in Notification G.O. Ms. No. 1/2017-Puducherry GST (Rate), dated 29th June, 2017 Income Tax 11/2022 - S.O. 357 (E) - dated 27-1-2022 - IT U/s 10(46) of IT Act 1961 - Central Government notifies , ‘West Bengal Electricity Regulatory Commission’, in respect of the specified income arising to that Commission Circulars / Instructions / Orders SEBI SEBI/HO/IMD-I/DF6/P/CIR/2022/009 - dated 27-1-2022 Introduction of Special Situation Funds as a sub-category under Category I AIFs DGFT Trade Notice No. 33/2021-2022 - dated 27-1-2022 Procedures for application for Tariff Rate Quota (TRQ) under FTA/CECA for FY 2022-23 Highlights / Catch Notes GST Levy of GST - Tapping/ extraction of Lisa/Resin from reserved forest, van panchayat and civil forest by the selected bidder/contractor - Tapping/ extraction of Lisa/Resin from private (Naap) land on the basis of permit issued by the applicant - The activity by contractor / individual permit holder is a composite supply and supply of goods i.e. Oleo Resin (Lisa) is the principal supply hence GST @ 5 % (2.5% + 2.5%) is payable. - AAR Visit to Get Source Levy of GST - Aahana Naturopathy Centre - simultaneous running a Resort namely “Aahana-The Corbett wilderness” - The supply of services provided by the applicant, which is a composite supply, has been classified under sub-heading No. 996311 under 'Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like'. The exemption at Entry No. 74 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 is applicable to services falling under the Heading 9993. However, the nature of services provided by the applicant is covered under the sub-heading 996311 - the exemption available at Entry No. 74 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28- 6-2017 is not applicable to the applicant. - AAR Visit to Get Source Classification of goods - rate of GST - Dry Powders containing Protein Powder with Vitamins & Minerals - Sub-heading nos. 3004 50 10 and 3004 50 20 cover “Haematinic and Erythropoietin preparations” and “Preparations of minerals and their supplements” respectively and sub-heading nos. 3004 50 31 to 3004 50 90 cover only “Preparations of vitamins” as described under these sub-headings. There is no mention of any substance which contains protein in any form. However, protein concentrates and textured protein substances are covered under chapter heading no. 2106. - Thus, the product “Dry Powder Containing Protein Powder with Vitamins & Minerals” being manufactured by the applicant under the name 'Protowits' is a Food supplement which is fit to be classified under HSN code 2106 with 18% GST rate. - AAR Visit to Get Source Classification of supply - Composite supply or not - The contract for supply of manpower for managing solid waste does not come under the definition of “Composite supply of Goods and Service” at Entry No. 3A of Chapter 99 as mentioned in notification number 12/2017 - The service of supplying of manpower for managing solid waste is covered under the “Function entrusted to a Municipality under article 243 W of the Constitution”. - Exempted from GST - AAR Visit to Get Source Income Tax Revision u/s 263 by CIT - allowability of ESOP expenditure - No hesitation in holding that assessee had rightly debited the ESOP compensation cost of ₹ 32.55 Crores in the year of vesting as an expenditure - the ld. PCIT had invoked revisionary jurisdiction based on incorrect assumption of fact. Apart from this, we also hold that adequate enquiries were indeed made by the ld. AO in the course of assessment proceedings. - Hence, we have no hesitation in quashing the revision order passed by the ld. PCIT in this regard. Accordingly, the grounds raised by the assessee on account of ESOP expenditure are allowed - AT Visit to Get Source Excess payment of sugarcane growers and Statutory Minimum Price (‘SMP’ ) / Fair and Remunerative Price (‘FRP’) - The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon’ble Supreme Court supra. - AT Visit to Get Source Addition based on statement recorded during the course of survey action u/s. 133A - AO proceeded with making of addition based on the mere statement given by the assessee u/s. 133A. It is not the case of the Department that, the discrepancy if any in the valuation of closing work in progress as on date of survey, still existed in the valuation of closing work in progress as on date of end of previous year, nor no addition can be made based on discrepancies, if any, in the valuation of work in progress in the middle of previous year. This approach of the Assessing Officer does not stand to the judicial scrutiny - AT Visit to Get Source Addition u/s 68 - additional income declared by the appellant in the course of survey action u/s. 133A - disallowing the sum of 6 crores debited to the profit and loss account under the head "WIP declared u/s. 133A survey - Assessee In any case, it is settled law that quoting a wrong section is not fatal to the assessment, if the addition is justified and warranted on the facts and circumstances of the case - AT Visit to Get Source Revision u/s 263 by CIT - We find that the assessment order qua the deduction under section 80(9)(2)(d) of the Act on account of interest earned from Surat Co-operative bank is not erroneous. Since the order is not erroneous, though, it may be prejudicial to the interest of the Revenue. Thus, the twin condition as provided in section 263 of the act is not fulfilled qua the income component of interest income earned on deposit with Surat Cooperative Bank; therefore, the order passed by the ld PCIT is set - AT Visit to Get Source Validity of assessment - absence of issuance of notice u/s. 143(2) within period of limitation - whether curable defect u/s 292BB - Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon’ble Supreme Court in various judgments. - AT Visit to Get Source TDS u/s 194A - assessee in default for non-deduction of TDS - Onus upon the assessee to furnish the CA certificates that the payee has paid necessary taxes on income credited by the assessee. However in the case on hand the assessee has submitted PAN of the payee and claimed that the payee has filed income tax return for the year dated 13-07-2009 - None of the authorities below verified the genuineness of the claim of the assessee. We are of the view that the proviso to section 201(1) in beneficial in nature hence the same should be applied in liberal manner - Matter restored back - AT Visit to Get Source TP Adjustment - classification of the assessee as a KPO by applying safe harbor Rules - classification of the assessee as a KPO by applying safe harbor Rules is totally out of context and does not get any support from the evidences before us. Therefore, the directions of the DRP as well as the observations made by the TPO and thereafter comparing the assessee company with that of high end KPO for benchmarking ALP determination of the comparables is not correct. - AT Visit to Get Source Customs Seeking a direction that the term “excisable goods” in Entry 107 of the Notification No.50/2017-Customs dated 30th June 2017 to include “taxable goods subject to tax under GST laws” - though the summons were issued, the petitioner did not bother to implead the DRI - The Directorate of Revenue Intelligence shall not take any coercive steps against the petitioner during the course of recording the statement as aforesaid. If the Directorate of Revenue Intelligence proposes to take any coercive steps, the same shall not be adopted without giving 7 days’ clear notice to the petitioner - HC Visit to Get Source Classification of goods - Bed Cover - revenue's claim is that imported goods is "polyester woven fabric” classifiable under CTH 54075490 - irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. - AT Visit to Get Source Classification of imported goods - interactive intelligent panel (automatic data processing machine) model – cloudtouch - the goods in question cannot be said to be merely projectors or monitor and, thereby, renders recourse to heading 8528 of the First Schedule to the Customs Tariff Act, 1975 to be inconsistent with the General Rules for Interpretation of the Import Tariff - it can safely be held that the revised classification does not bear the authority of law. - AT Visit to Get Source Corporate Law Claim of the workmen - Validity of award made by the Industrial Tribunal - The lay-off having been held to be unjustified and illegal by the Industrial Tribunal, what follows is that all the workmen who were not employed after lifting of the lock-out with effect from 15.04.2007 and were laid off, would be entitled to full wages, allowances and consequential benefits as directed by the Industrial Tribunal. Any amounts received by them towards lay-off compensation shall be adjusted. However, as observed above, the workmen would only be entitled to receive / recover their dues in accordance with the provisions of Section 53 of the Code. - HC Visit to Get Source Sale of property of the company to the third parties - oppression and mismanagement - it is quite clear that the even though the sales made in the years 2013 and 2014 were the subject matter of the proceedings before the National Company Law Tribunal filed under Section 241 and 242 of the Companies Act, neither the National Company Law Tribunal nor the National Company Law Appellate Tribunal would have power to set aside the sales. In the absence of such power, the bar under section 430 of the Companies Act, would not apply. - HC Visit to Get Source Service Tax Works contract services - it is prayed that since the proceedings initiated were based upon the information from Income tax Deptt., that the verification of the requisite documents was utmost necessary - Works contract services - it is prayed that since the proceedings initiated were based upon the information from Income tax Deptt., that the verification of the requisite documents was utmost necessary - Matter restored back - AT Visit to Get Source Central Excise SVLDRS - Seeking direction to accept the amount of tax which was returned inadvertently due to mismatch in the amount remitted - The natural course of conduct for the petitioners upon service of the said notices would have been to take up the matter with the department informing it that they have already paid the amount under the Amnesty scheme hence are now not liable for payment of any amount as demanded. However, the petitioners did not do so and were again on 22.06.2021 served with another demand notice for the aforesaid amount. Yet they did not take up the matter with the department - It is hence apparent that they are no bona fides on part of the petitioners in approaching this Court. - Petition dismissed - HC Visit to Get Source CENVAT Credit - Credit availed during the month of December, 2016 on the basis of invoices which were more than one year old from the date of purchase of inputs - bare perusal of Rule 3 Sub Rule (2) of Cenvat Credit Rules 2004 makes it clear that the appellant was entitled to claim Cenvat Credit with respect to the inputs contained in the final products lying in the stock on the date when the goods manufactured becomes excisable. In the present case the appellants goods post being manufactured in December, 2016 became excisable in December 2016 itself. Hence, the availment of credit on the inputs of such manufactured goods was very much available to the appellant. - AT Visit to Get Source VAT Recovery of credit availed by the petitioner - The petitioner is not entitled to credit availed by the petitioner beyond the period of limitation. Therefore, on merits as far as the demand of the input tax credit is concerned there is no case made out by the petitioner - HC Visit to Get Source Case Laws: GST 2022 (1) TMI 1114 Hearing of the petition - HELD THAT:- After arguing the matter for some time, Mr. Rastogi, learned counsel for the petitioner states that his client would cooperate with the respondents in response to the impugned summons annexed at pages 382 and 383 of the writ petition and will not seek any unnecessary adjournment. Statement is accepted. It is made clear that if the respondents propose to take any coercive steps against the petitioner based on the documents that will be produced by the petitioner and the evidence that would be led by the petitioner, the respondents shall serve the petitioner with clear seven days prior notice before taking any coercive steps - Writ Petition is disposed of. 2022 (1) TMI 1113 Seeking four weeks time to take instructions and to file affidavit in reply - HELD THAT:- The respondents are permitted to file affidavit in reply within four weeks from today and shall serve a copy thereof upon the petitioners advocate simultaneously. Rejoinder, if any, shall be filed within two weeks thereafter with a copy to be served upon the respondents advocate simultaneously. Place the matter on board for admission on 7th March, 2022. 2022 (1) TMI 1112 Challenge to certain provisions of the Integrated Goods and Service Tax Act, 2017 - HELD THAT:- The Petitioner is permitted to amend the petition to include the subsequent notice of demand issued by the Respondents. Leave is granted as prayed. Amendment to be carried out within one week from today. If there is any coercive action proposed by the Respondents, the Petitioner will be at liberty to apply for the interim relief after giving 48 hours notice to the Respondents. 2022 (1) TMI 1111 Rejection of refund claim - time limitation - exports made by the petitioner during April to August 2019 - petitioner had filed the refund claim belatedly on 20.09.2021 - Section 54 of the TNGST and CGST Act, 2017 - HELD THAT:- In an identical situation in the case of M/S. GNC INFRA LLP VERSUS ASSISTANT COMMISSIONER (CIRCLE) [ 2021 (11) TMI 973 - MADRAS HIGH COURT ] , this Court had allowed the writ petition by remitting the case back to the respondent to reconsider the refund claim of the petitioner therein on merits in the light of the order of the Hon'ble Supreme Court extending the period of limitation due to the outbreak of COVID-19 pandemic, in March 2021. This writ petition is disposed off by directing the respondent to pass appropriate orders on the refund claim made by the petitioner for the period between August 2019 i.e., on 20.09.2021 and dispose the same in accordance with law. 2022 (1) TMI 1110 Levy of GST - Tapping/ extraction of Lisa/Resin from reserved forest, van panchayat and civil forest by the selected bidder/contractor - Tapping/ extraction of Lisa/Resin from private (Naap) land on the basis of permit issued by the applicant - liability of GST on the department or the bidder? - applicable rate of GST - classification of HSN/SAC code for such activity - point/time of supply - amount on which GST to be paid - taxable amount will include all charges i.e. loading, unloading, tapping transportation charges or not - dedeuction of GST TDS by the department from the payment made to bidder - every contractor should be registered under GST working with the department for any types of activities or not - condition for deduction of GST TDS, if bidder has a contract less than 10 Lakh or unregistered person?. HELD THAT:- Tapping/ extraction of Lisa/Resin and its transportation to Motor Road Depot (Godown) is a composite supply and, hence applicable GST for composite supply is payable by the contractor. Tax rate of the principle supply will apply on the entire supply, since extracted goods i.e. Lisa/Resin is the principal supply and the transportation' of the same to the Motor Head Depot is another supply and the transportation cannot be done separately, if there are no goods - since the consideration to be paid to the contractor is decided before the performance of said supply of services it is assumed that all the expenses incidental to said supply of composite supply is part of such consideration. Rate of tax - HELD THAT:- Tax rate of the principle supply will apply on the entire supply, since extracted goods i.e. Lisa/ Resin is the principal supply and the transportation of the same to the Motor Head Depot is another supply and the transportation cannot be done separately, if there are no goods. We further find that once the Lisa/ Resin is deposited at the motor head depot (godown), total control and supervision is under the applicant i.e. the ownership of the goods is with the applicant, all the expenses incurred till such deposit, becomes part of taxable value of such composite supply - applicable GST is payable by the contractor / individual permit holder at the time of supply. For transportation of Lisa/Resin (which is under total control and supervision of the applicant) from Motor Head Depot (Godown) to Rail Head Depot (Kathgodam), a service provider is selected through a separate tender process. This is another service provided by the transporter to the applicant and applicable GST has to be paid by the service provider. Time of Supply - HELD THAT:- Sections 12, 13 14 of the CGST Act, 2017, deals with the provisions related to time of supply and as per section 31 of the CGST Act, an invoice for supply of goods needs to be issued before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods. However, in other cases, an invoice needs to be issued before or at the time of delivery of goods or while making goods available to the recipient. Hence time of supply in case of goods, will be earliest of the following dates, Date of issue of invoice by the supplier, If the invoice is not issued, then the last date on which the supplier is legally bound to issue the invoice with respect to the supply Date on which the supplier receives the payment. Deduction of TDS GST - HELD THAT:- As per section 51 of the CGST Act, 2017, a department or establishment of the Central Government or State Government, local authority, Governmental agencies and such persons or category of persons as may be notified by the Government on the recommendations of the Council, tax has to be deducted @ 2% of the payment made to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees (excluding the amount of central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice), hence TDS as applicable under the provisions of law has to be deducted by the applicant being a Government body while making payments for the supply of goods as well as services. Liability to pay GST - HELD THAT:- The liability to pay applicable GST at the time of final sale (after open auction) of Lisa/Resin lies with the applicant and all the expenses incurred from tapping/extraction to final sale including all incidental expenses namely loading unloading, transportation etc. form the part of taxable value. 2022 (1) TMI 1109 Levy of GST - Aahana Naturopathy Centre, wherein they are providing various services in the form of Nature cure (drugless cure) 8 Yoga therapies(Health care services) - simultaneous running a Resort namely Aahana-The Corbett wilderness - health care services or not - bundled services or composite supply of services - benefit of entry No. 74 of exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - to be classified under SAC Heading 9993 or not - HELD THAT:- The true and actual picture emerges that the consideration is solely dependent on the type of room/package opted by the customer, which also include facilities at Aahana Naturopathy Center along with the charges for fooding and lodging, excursion and other leisure, fun and frolic activities etc. (illustrative but not limited). And that there is no doubt and admittedly proves that these wellness facilities/ program of naturopathy/yoga at AAHANA NATUROPATHY CENTRE are provided at five star luxury wellness retreat and the same can be availed/ utilized by the customer/ client /guest, while holidaying with AAHANA THE CORBETT WILDERNESS and the customer/ client /guest need not find special time - This goes on to substantiate that the facilities of naturopathy at AAHANA NATUROPATHY CENTRE are not independent of the facilities at AAHANA THE CORBETT WILDERNESS, but is part and parcel of the packages offered by them to their customers/ guest, who come to the resort to relax, enjoy and to have fun and frolic etc., but not in any way for the specific purpose of treatment of any disease chronic or otherwise. The fact and the images indicates that the total consideration revolves around various factors viz. the package opted by the customer, type of room and whether single or double occupancy. This fact proves that the stay is mandatory and the charges of stay depend on the above factors. Thus, it is observed that the element of accommodation becomes the primary activity in the entire package. The entire package consists of more than one components of supply/ services and the wholesome package would not be possible without the services of fooding and lodging etc. In other words, the packages offered by the applicant are naturally bundled and would be aptly covered under the definition of Composite Supply. Further, the principal supply would be the accommodation services since the therapy can in no way be administered without accommodation. In fact, there is no option available for the customer to avail the wellness package without opting for the accommodation inside the resort - the accommodation service attains the nature of the principal supply and the other components attain the nature of ancillary services. Further it is a fact on record, which is a very important point in whole scenario, that the Aahana Naturopathy Centre is an unit of the applicant The Corbett Nature Reserve whose primary and main business activity is running a resort with the name Aahana-The Corbett wilderness , hence admittedly the resort run by the applicant is precursor of the principal supply and all other activities/ services provided by the applicant are ancillary in nature, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, which are naturally bundled to principal supply. In view of Section 8(a) of the CGST Act, 2017, it can be seen that a composite supply comprising of two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Therefore, in the instant case, the composite supply of services would be treated as a supply of accommodation service falling under Heading 9963 and specific Heading 9963 11 (Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like) as per Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017. The supply of services provided by the applicant, which is a composite supply, has been classified under sub-heading No. 996311 under 'Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like'. The exemption at Entry No. 74 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 is applicable to services falling under the Heading 9993. However, the nature of services provided by the applicant is covered under the sub-heading 996311 - the exemption available at Entry No. 74 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28- 6-2017 is not applicable to the applicant. 2022 (1) TMI 1108 Classification of goods - rate of GST - Dry Powders containing Protein Powder with Vitamins Minerals - whether the product merits classification under HSN 3004 50 or not - HELD THAT:- The product namely Dry Powder Containing Protein Powder with Vitamins Minerals under the name 'Protowits' is being manufactured by the applicant after obtaining the Licence from drug controlling Licensing Authority (Mfg.) of Uttarakhand. As per said Licence bearing no. 1/UA/SC/P-2001, aforesaid product has been licensed to be manufactured by the applicant being drugs specified in Schedule C and C(l) [excluding those specified in Schedule X] to the Drugs Cosmetics Rules 1943. But on perusal of said Schedule C and C(1), we find that product containing protein is not mentioned in the said schedules. The applicant has further claimed that the product approval has been granted in terms of Entry Serial No. 138 of the FDC (Fixed Dose Combination) List dated 12.07.2018 under Category C of the Drugs Cosmetics Act. On going through the said FDC list, it is found that SI. No. 138 of the said list does not cover the product which contains all the ingredients - the product namely 'Protowits' is not being manufactured as per FDC list. Sub-heading nos. 3004 50 10 and 3004 50 20 cover Haematinic and Erythropoietin preparations and Preparations of minerals and their supplements respectively and sub-heading nos. 3004 50 31 to 3004 50 90 cover only Preparations of vitamins as described under these sub-headings. There is no mention of any substance which contains protein in any form. However, protein concentrates and textured protein substances are covered under chapter heading no. 2106. Thus, the product Dry Powder Containing Protein Powder with Vitamins Minerals being manufactured by the applicant under the name 'Protowits' is a Food supplement which is fit to be classified under HSN code 2106 with 18% GST rate. 2022 (1) TMI 1107 Classification of supply - Composite supply or not - supply of manpower for managing solid waste - applicability of SI. No. 3A of Chapter 99 as mentioned in notification number 12/2017 - Central Tax (rate) dated 28th June 2017 as amended by Notification No 2/2018 - Central Tax (rate) dated 25th January 2018 - recipient of service i.e. Nagar Palika Parsihad, Muni ki Reti, Dhalwala - falls under the definition of local authority or a Governmental authority or a Government Entity or not - service/work is covered under the function entrusted to a Municipality under article 243 W of the Constitution or not? Composite supply of goods and services or not - HELD THAT:- From the definition of, Composite supply , it is seen that to fulfil the criteria of being a Composite supply there must be two or more naturally bundled goods or services or both or any combination thereof which can be supplied in conjunction with each other. But in the instant case only drivers with protective gears were supplied by the applicant. Further 'goods' are defined as every kind of movable property as relevant in the instant case. In the instant case the applicant has arranged only drivers to the service recipient and no movable property was supplied alongwith them. In the instant case only vehicle can be the movable property to be supplied alongwith. drivers as the drivers can use only vehicle and nothing than that. Safety kits/ protective gears are not separate goods to be used in driving the vehicles. These safety kits were made mandatory as a precautionary measures for the safety of manpower due to COVID pandemic during Kumbh Mela 2021 - These safety kits are not required in normal situation and therefore cannot be termed as 'goods' supplied during the course of supply of service. Therefore service of manpower supplied by the applicant does not fall under the definition of Composite supply of Goods and Service given at SI. No. 3 A of Chapter 99 as mentioned in Notification No. 12/2017 - Central Tax (rate) dated 28th June 2017 as amended vide Notification No. 2/2018 - Central Tax (rate) dated 25th January 2018. Whether Nagar Palika Parishad, Muni Ki Reti, Dhalwala, Tehri Garhwal is a local authority or not? - HELD THAT:- From the website of Nagar Palika Parishad, Muni Ki Reti, Dhalwala, Request For Proposal (RFP) and Letter of Award(LOA) issued by Nagar Palika Parishad, Muni Ki Reti, Dhalwala, it is found that the said Nagar Palika Parishad is engaged in the municipal work like Sanitation work of the various places of its municipal area, sewerage treatment and solid waste management etc. - therefore supply of manpower for this particular purpose of managing solid waste is also covered in relation to the function entrusted to a Municipality under article 243W of the Constitution of India . Whether the said contract is exempt from Goods and Service Tax in accordance with notification number 12/2017 - Central Tax (rate) dated 28th June 2017 as amended by Notification No. 2/2018 - Central Tax (rate) dated 25th January 2018? - HELD THAT:- In the instant case, the applicant has provided only manpower without any goods for completing the work entrusted under article 243W of the Constitution to Nagar Palika Parishad, which is a local authority, therefore it is found that the contract of supplying manpower for managing solid waste is duly covered under Entry No.3 of Chapter 99 mentioned in Notification No. 12/2017 - Central Tax (rate) dated 28th June 2017 and therefore exempted from payment of GST. Income Tax 2022 (1) TMI 1106 Validity of order u/s 143(3) read with section 260 - Penalty proceedings u/s 270A and 271AAC - personal hearing was rejected as there is no legal aspect to be heard and that the proposed additions are a matter of fact. - HELD THAT:- This Court in the case of Bharat Aluminium Company Ltd. [ 2022 (1) TMI 658 - DELHI HIGH COURT] has held that the use of the expression may in Section 144B(7)(VIII) is not decisive. Where a discretion is conferred upon a quasi judicial authority whose decision has civil consequences, the word may which denotes discretion should be construed to mean a command. Consequently, requirement of giving an assessee a reasonable opportunity of personal hearing is mandatory. It was further held that the classification made by the Respondent between the matters involving disputed questions of fact and questions of law by way of the Circular dated 23 rd November, 2020 is not legally sustainable. Consequently, the impugned assessment order, the demand noticeand the penalty proceedings under Sections 270A and 271AAC of the Act for the assessment year 2018-19 are quashed and the matter is remanded back to Respondent No.2 for a fresh decision, in accordance with law. 2022 (1) TMI 1105 Validity of National faceless assessment u/s 144B - respondent submits that the petitioner had an opportunity to request for a personal hearing by pressing the click option in the show cause notice which was ignored by the petitioner while filing reply to the show cause notice - HELD THAT:- Considering the fact that the mistake has arisen on account of the new system which has introduced a new method namely faceless assessment under the Income Tax Act, 1961 and considering the fact that the impugned order has been passed without following the principles of natural justice and considering the fact that the system is new and the assessee who may not be fully aware of the new system, the impugned Assessment order is quashed and the case is remitted back to the respondent to pass a speaking order within a period of three months from the date of receipt of a copy of this order. The impugned order which stands quashed by this Court shall be treated as a show cause notice issued to the petitioner. The petitioner shall filed appropriate written reply within a period of fifteen (15) days from the date of receipt of a copy of this order. The respondent shall thereafter pass a order within a period of seventy five (75) days thereafter. The respondent is directed to take appropriate instruction to the administrators of the portal to facilitate the fresh proceedings in terms of this order 2022 (1) TMI 1104 Denial of natural justice - violation of proviso to Section 270 AA(4) of the Income Tax Act by not giving opportunity of hearing without considering the petitioner s aforesaid application - HELD THAT:- As respondents/income tax authority could not satisfy this Court about fulfillment of the criteria/mandatory condition of affording opportunity of hearing to the petitioner/assessee before rejecting the application of the petitioner under Section 270AA of the Act. Considering the materials on record and submission of the parties, there is no use of keeping the writ petition pending and interest of justice will be sub-served if the impugned order dated 8th June, 2020 is set aside and directing the respondents/ assessing officer concerned to pass a fresh order by affording effective opportunity of hearing to the petitioner as per proviso to Section 270 AA(4) of the Income Tax Act, 1961. 2022 (1) TMI 1103 Addition u/s 68 - unexplained cash and treating part of agricultural income to be as income from undisclosed sources - contention of assessee that a sum of ₹ 10 lakhs was withdrawn by the assessee in February-2008 and it was introduced as a capital in April- 2009, the Ld.AO has rejected the explanation of the assessee for source of capital contribution simply for the reason that there is a time gap of 14 months and this amount must have been used for different purpose - HELD THAT:- To our mind, it is quite difficult to dig out the intention of an individual and his behavior. Every person cannot be brushed with one paint only, i.e. the claim of the assessee has been rejected simply on the notion that cash must have been used by the assessee for some other reason. But this argument can be applicable in the same manner on behalf of the assessee that cash must have been kept in safe custody for any contingency and then it was deposited after a gap of 14 months - there is nothing in the possession of the Revenue to disbelieve this claim of the assessee - we accept the contention of assessee and delete the addition to the extent of ₹ 10 lakhs out of the total addition made by the AO on account of unexplained cash credit. Assessee has shown agricultural income out of that Assessing Officer has disallowed 40% on account of expenditure incurred by the assessee - As all expenditure and labour input must be incurred by the person with whom assessee got the agricultural activity done. The Assessing Officer has not assigned any reason to disbelieve this aspect. There is no such standard disallowance provided in the Income Tax Act that whenever anybody claims agricultural income, then 40% would be disallowed out of them. Therefore, we do not find any justification for making addition of ₹ 1,20,000/-. This addition is deleted. Addition of expenses on vehicle under the head Depreciation and Petrol Expense - non business use of vehicles - HELD THAT:- Assessee has three motor cars and the same are in its business use. For personal use, assessee was using another car registered in personal name of the Karta of HUF and Two Wheeler registered in the name of his son. The copy of RC book of vehicles for the personal purpose are also produced to the Assessing Officer. Ld AO however have not appreciated the submission of the assessee and made an addition being 10% of the total expenses on vehicle under the head Depreciation and Petrol Expense. Also the appeal of the assessee in this regard with CIT(A) was dismissed. 2022 (1) TMI 1102 Capital gain computation - reference to the Valuation Officer under s.55A - CIT-A confirming the action of the AO in adopting the value of property as on 01.04.81 as per the report of the Valuation Officer instead of value thereof as on 01.04.81 as determined by the Valuation Officer u/s.55A(a) - HELD THAT:- As no claim was made by the assessee for forming any opinion as to existence of prescribed difference between value of asset as claimed by assessee and fair market value as relying on Hiaben Jayantilal Shah [ 2008 (4) TMI 292 - GUJARAT HIGH COURT] wherein it is held that Section 55A of the Act did not permit the authority to find out the fair market value of the property outside of the sale. Also in RANCHODBHAI C. PATEL [ 2020 (12) TMI 171 - ITAT AHMEDABAD] held that where in case of immovable property sold by the assessee determined by Valuation Officer lesser than value declared by the assessee as on 01.04.1981, in that case reference to the Valuation Officer under s.55A of the Act was not warranted and it was also mentioned that amendment brought in Section 55A of the Act w.e.f. 01.07.2012 by Finance Act, 2012, according to which, reference could be made by the AO to D.V.O. if value of immovable property determined by assessee was lesser than fair market value of property, is applicable prospectively and not retrospectively. As prior to 01-07-2012, no section 55A valuation if value of asset given by assessee was more than its market price - See M/S. PUJA PRINTS [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] - Appeal filed by the assessee is allowed. 2022 (1) TMI 1101 Reopening of assessment u/s 147 - notice u/s. 148 issued by the non-jurisdictional assessing officer - Computation of long-term capital gain -Co-ownership in property sold - whether assessee should get deduction of cost of acquisition considering 1/77th shares [ld. AO's version] or 1/7th [Assessee's version]. HELD THAT:- The assessee has made a change request on 16 September 2015 in the permanent account number AEDPT9529A wherein at serial number seven of the change in PAN data application he has mentioned the above address. To support that application assessee submitted as a proof of address AADHAR card. The notice issued u/s. 148 of the income tax act was at the same address, which was changed by the assessee, and stating the same permanent account number. Therefore, it is very strange that when the notice u/s. 147 of the income tax act was issued on 31st of March 2016, learned AO has mentioned correct address, which was changed by the assessee on 15 September 2015. Therefore from the addressee it was apparent that the learned assessing officer who issuing the notice u/s. 147 of the act does not have jurisdiction over that assessee. Despite this, the learned ITO ward 2 Gandhidham issued the notice. The assessee also put to the kind attention of the ITO Ward 2 Gandhidham vide letter dated 12 September 2016 that the jurisdiction of the assessee is at Mumbai and therefore his case may be transferred to the respective officer. Consequent to the request of the assessee on 17/11/2016 The Income Tax Officer 28(3)(4) Navi Mumbai issued notice u/s. 142(1) read with Section 129 of The Income Tax Act. Thus, it is clear that the ITO ward 2 Gandhidham did not have jurisdiction to issue notice u/s. 148 of the Act. Hence looking to the facts and circumstances of the case it is apparent that the notice u/s. 148 of the act is issued by the non-jurisdictional assessing officer and therefore not sustainable. More so for the reason that in the reasons for reopening of the assessment, the learned assessing officer has also mentioned the changed address of the assessee and despite this fact he did not apply his mind that whether he is having a jurisdiction over that assessee or not. We also failed to understand that how the approval u/s. 151 of the income tax act was given by the approving authority without verifying whether the learned assessing officer who issued the notice u/s. 148 of the income tax act has jurisdiction over the assessee to whom notices issued or not. With respect to the objection of the learned departmental representative that the ground of the appeal against the reopening of the assessment has been dismissed by the learned CIT - A and therefore the assessee now once again cannot agitate the same, is not acceptable in view of the specific cross objection filed by the assessee where the issue has been decided against the assessee by the learned CIT - A. Cross objections are also an appeal according to the provisions of Section 253(4) of the act. As the notice u/s. 148 of the income tax act is issued by the non jurisdictional officer same is not sustainable in law and therefore same deserves to be quashed and hence so quashed. Accordingly the cross objection of assessee is allowed. Computation of long-term capital gain - We find that the CIT - A has correctly held that the learned assessing officer has grossly failed in determining the sale of the appellant for the next cost of acquisition as on 1/4/1981 at 1/77 share of the appellant in 41 percent undivided right titles share and interest in the said property because of the reason that for the purpose of considering the sale consideration the share of the assessee is considered 1/7 and therefore the cost of acquisition should also be granted to the assessee in the same proportion. The view taken by the learned assessing officer of considering the sale consideration of the assessee considering assessee has 1/7 co-owner and granting the cost of acquisition to the assessee considering that assessee is 1/77th co-owner of the impugned property is completely devoid of any logic and contrary to the facts recorded in the assessment order itself. In view of this we do not find any infirmity in the order of the learned CIT - A in granting the cost of acquisition as deduction to the assessee considering 1/7th share in the property - Decided against revenue. 2022 (1) TMI 1100 Addition u/s 14A r.w.r. 8D - Assessee claimed that it has got huge internal accruals and interest free funds for making the investment and therefore, no disallowance should be made u/s. 14A - HELD THAT:- As decided in assessee's own case [ 2021 (5) TMI 667 - ITAT PUNE] both own funds and interest bearing funds are intermixed. Therefore, it becomes necessary to factually verify whether the entire investments were made only from interest free funds. We are of the considered view, therefore, in the interest of justice, this issue should be remanded back to the file of the AO for verification of investments made vis-a-vis interest free funds available with the assessee during the year under consideration. In view, thereof, we set aside the order of the Ld. CIT (Appeals) on this issue and remand the same back to the file of the Assessing Officer for adjudication after complying with the principles of natural justice as indicated hereinabove. Thus in the same parity of reasoning under the same set of facts and circumstances as also admitted by the parties herein, we set-aside the order of the ld. CIT(A) on this issue and remand the same back to the file of the AO for adjudication after complying with the principles of natural justice. Thus, the issue raised in the regular grounds of appeal related to the disallowance u/s. 14 is allowed for statistical purposes. Deduction paid towards Education Cess under Finance act while computing the taxable income under normal Provision of the IT Act - HELD THAT:- The Hon'ble High Court of Bombay in the case of Sesa Goa Ltd.[ 2020 (3) TMI 347 - BOMBAY HIGH COURT] was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act. Thus the issue of 'education cess' is an allowable expenditure as per provisions of Section 40(a)(ii) of the Act and placing reliance on the decision of the Hon'ble Bombay High Court (supra.), we direct the Assessing Officer to allow deduction in respect of Education Cess paid by the assessee. Accordingly, the additional ground of appeal No. 1 raised by the assessee is allowed. 2022 (1) TMI 1099 Revision u/s 263 by CIT - allowability of ESOP expenditure - HELD THAT:- Vesting period from the date of grant of each ESOP scheme is only one year and only the exercise period is four years from the date of vesting. We find that the decision of Biocon Ltd. [ 2013 (8) TMI 629 - ITAT BANGALORE] says that the discount premium should be claimed evenly over the vesting period. In the instant case, from the aforesaid disclosures made in the audited financial statements, it is very much evident that the vesting period is only one year. Hence, the entire discount premium had to be claimed as expenditure in the year of vesting. We find that no ESOP expenses are debited by the assessee in A.Y. 2013-14 which is accepted by the ld. PCIT itself and which fact is also staring from the audited financial statements of the assessee. Hence, the additional compensation cost on account of ESOP has been debited as 'expenditure' by the assessee in the year of vesting i.e. A.Y. 2012-13 rightly, which is also in consonance with the decision of the Hon'ble Special Bench of Bangalore Tribunal in the case of Biocon Ltd., We find that the ld. PCIT had erroneously proceeded based on incorrect assumption of fact that the vesting period of the claim is four years. As stated earlier the vesting period is only one year and the same falls in A.Y. 2012-13. No hesitation in holding that assessee had rightly debited the ESOP compensation cost of ₹ 32.55 Crores in the year of vesting as an expenditure which is in accordance with Special Bench decision of Biocon Ltd., and that the ld. PCIT had invoked revisionary jurisdiction based on incorrect assumption of fact. Apart from this, we also hold that adequate enquiries were indeed made by the ld. AO in the course of assessment proceedings. The law is now very well settled that the revision jurisdiction u/s. 263 of the Act could be invoked only for 'lack of enquiry' and not for 'inadequate enquiry'. Hence, we have no hesitation in quashing the revision order passed by the ld. PCIT in this regard. Accordingly, the grounds raised by the assessee on account of ESOP expenditure are allowed. Allowability of provision of interest u/s. 234D of the Act, while computing the demand payable u/s. 115JB - From the initial paragraph of this order, it could be seen that the scrutiny assessment was ultimately completed by the ld. AO u/s. 143(3) of the Act dated 17/05/2016 and ultimately the income was determined under normal provisions of the Act. We also find from the said order, that the tax payable under normal provisions of the Act was much more than the prescribed percentage of tax payable u/s. 115JB - Hence, the income was finally determined only under normal provisions of the Act by the ld. AO. The ld. AR argued that even there is some error in the computation of book profits and consequently in the computation of tax and interest thereon, when the income is ultimately computed under normal provisions of the Act, the mistake in computation of book profits u/s. 115JB of the Act would not cause any prejudice to the interest of the Revenue. We are unable to accede to this argument advanced by the ld. AO, in view of the fact that the interest u/s. 234D of the Act indeed partakes the character of income tax and the income tax demand is supposed to be added back while computing book profits u/s. 115JB of the Act under Explanation 1(a) to Section 115JB(2) of the Act while computing the book profits. Hence, the action of the ld. PCIT in invoking revision jurisdiction is upheld in this regard. Decided partly in favour of assessee. 2022 (1) TMI 1098 TDS u/s 194C - Payment to sub-contractors for hiring the vehicles either from them or arranged by them - addition u/s 40(a)(ia) - scope of amendment made to section 194C(6) - HELD THAT:- Insofar as the provision applies to the assessment year 2014-15, it requires the contractor to obtain the PAN details of the transport suppliers and after obtaining the PAN there is no need to deduct any TDS under section 194C, whereas w.e.f. 1/6/2015 the transport suppliers shall also furnish a declaration that he owns less than 10 carriages at any time during the financial year relevant to the assessment year - the provision as applicable up to 31/5/2015 does not bar the exemption to small or large transport operators and is only w.e.f. 1/6/2015, it was made applicable to the transporter owning less than 10 goods carriages at any time during the financial year for which the declaration was to be furnished. The impact of the amendment to this provision has been considered in the decisions relied upon by the assessee before the Ld. CIT(A). Apart from this there is no dispute that the assessee furnished the certificate from Chartered Accountant under the 1st proviso to sub-section (1) of section 201 of the Act in respect of the payments made. AO did not consider the provisions of section 194C as they stood prior to 1/6/2015 and applicable for the assessment year 2014-15 and since the assessee satisfied the conditions required, he is not liable for disallowance of the amount under section 40(a)(ia) - Since the Ld. CIT(A) followed the binding precedents in applying the pre-amended provisions to the case of the assessee it cannot be said that the Ld. CIT(A) committed any illegality or irregularity. We are of the opinion that such findings need to be upheld. Consequently we dismiss ground No. 1 of Revenue's appeal. Disallowance of vehicle running expenses - AO disallowed 25% of the vehicle running expenses on the ground that the assessee failed to produce the supporting evidences/bills and vouchers in support of this claim - HELD THAT:- AO did not spell out any basis to disallow 25% of the expenses. Ld. CIT(A), having considered the factual issue in the light of the nature of business of the assessee thought it fit to restrict the expense to ₹ 5 Lacs. The assessee does not prefer any appeal challenging the upholding of the disallowance of the expense to ₹ 5 Lacs. At the same time, Revenue also does not show how this restriction of the disallowance to ₹ 5 Lacs is unsustainable. Since the quantum of disallowance is a question of fact and the Ld. CIT(A) reached a conclusion having regard to the nature of business and other attendant factors, we find that it's not fair to interfere with the findings of the Ld. CIT(A). We, accordingly, declined to interfere with such findings. Ground No. 2 of Revenue's appeal is accordingly dismissed. 2022 (1) TMI 1097 Penalty u/s. 271(1)(C) - addition made u/s 40A(3), on account of cash deposit in the bank account as well as household existence - As argued assessee has not concealed any particulars of income nor furnished any inaccurate particulars - HELD THAT:- The assessee challenged the additions made by the Assessing Officer before the CIT(A) in quantum appeal but the appeal of the assessee was dismissed by the CIT(A) for non-prosecution it. The Varanasi Bench of this Tribunal [ 2021 (11) TMI 1018 - ITAT VARANASI] has set aside the issue to the record of the CIT(A) for fresh adjudication. Thus, it is clear that after the order of this Tribunal in quantum appeal the addition against which the penalty u/s. 27(1)(c) was levied by the Assessing Officer do not exist - Thus the matter is set aside to the record of the CIT(A) for deciding the same afresh as per the outcome of the quantum proceedings. Appeal of the assessee is allowed for statistical purpose. 2022 (1) TMI 1096 Excess payment of sugarcane growers and Statutory Minimum Price ( SMP ) / Fair and Remunerative Price ( FRP ) - Disallowance on account of portion of cane price in excess of Fair Rate Price ( FRP) - HELD THAT:- We find that on identical issue and on similar set of fact in SHREE KHEDUT SAHAKARI KHAND UDYOG MANDLI LTD. VERSUS INCOME TAX OFFICER, WARD-1, BARDOLI [ 2019 (8) TMI 1047 - ITAT SURAT] considering the decision of Hon ble Supreme Court in the case of CIT vs. Tasgaon Taluka S.S.K. Ltd., [ 2019 (3) TMI 321 - SUPREME COURT] wherein set-aside the impugned orders on this score and remit the matter to the file of the AO for deciding it afresh as per law in consonance with the articulation of law by the Hon ble Supreme Court in the afore noted judgment. AO would allow deduction for the price paid under clause 3 of the Sugar Cane (Control) Order,1966 and then determine the component of distribution of profit embedded in the price paid under clause 5A, by considering the statement of accounts, balance sheet and other relevant material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under this clause. The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon ble Supreme Court supra. Thus the grounds of appeal raised by assessee are restored back to the file of Assessing Officer to decide the issue afresh in accordance with law to follow the decision of coordinate Bench of this Tribunal in the case of Shree Khedut Sahakarai Khand Udyog Mandli Ltd. vs. Income Tax Officer, (supra). 2022 (1) TMI 1095 Disallowance u/s 14A r.w.r. 8D - Assessee is suo moto made the disallowance - HELD THAT:- We noted from the assessment order that the AO has recorded the finding that the assessee has not incurred any expenditure in relation to income which does not form part of total income and this finding is totally absurd whereas the assessee has incurred expenditure. As regards interest expenses, once the AO is unable to prove the nexus of expenditure with the investment made in instruments giving raise to exempt income, the presumption will come into play and presumption is that the assessee might have invested out of interest free funds available with it in the instruments giving raise to exempt income. Hence, this issue is squarely covered in favour of the assessee by the decision of Hon'ble Bombay High Court in the case of HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] - Respectfully following the order of Hon'ble Bombay High Court, we allow this issue of assessee's appeal. Administrative expenses disallowed under Rule 8D(2)(iii) - We noted from the assessment order that the AO has not recorded any subjective satisfaction and the so called satisfaction recorded by the AO is on totally wrong presumption that the assessee has not attributed any expenditure to exempt income, whereas the assessee has disallowed a sum of ₹ 11,85,570/- towards exempt income. Once the AO has not recorded satisfaction as envisaged under Rule 8D(2) of the Rules, the issue is in favour of the assessee in view of the decision of Hon'ble Supreme Court in the case of Maxopp Investments Ltd.. [ 2018 (3) TMI 805 - SUPREME COURT] . Issue decided in favour of the assessee as the AO failed to record satisfaction for making disallowance under Rule 8D(2) of the Rules. Hence, we delete the disallowance and allow this issue of assessee's appeal. 2022 (1) TMI 1094 Addition based on statement recorded during the course of survey action u/s. 133A - Disallowance under valuation of work in progress and Disallowance of expenditure partly supported by self made vouchers and not fully supported - HELD THAT:- On going through the statement recorded during the course of survey action u/s. 133A it is clear that from the questions posed to the appellant, the Assessing Officer had not brought any specific instance of discrepancies in the valuation of closing work in progress as well as any evidence in support of the bogus expenditure incurred by the assessee. It is a different matter as to why the assessee had agreed to make the addition, but the issue of valuation of work in progress as well as proof of genuineness of expenditure incurred, are pure questions of facts, which the AO should brought on record. AO failed to do so, but merely based on the statement given by the assessee, had proceeded to make the assessment and made addition. It is settled position of law that no addition can be made on the mere basis of the statement given by the assessee. Appellant had categorically stated before the Assessing Officer that there was no discrepancy in the valuation of work in progress, as well as no doubts as to the genuineness of expenditure incurred, inspite of this fact, the AO proceeded with making of addition based on the mere statement given by the assessee u/s. 133A. It is not the case of the Department that, the discrepancy if any in the valuation of closing work in progress as on date of survey, still existed in the valuation of closing work in progress as on date of end of previous year, nor no addition can be made based on discrepancies, if any, in the valuation of work in progress in the middle of previous year. This approach of the Assessing Officer does not stand to the judicial scrutiny. - Decided in favour of assessee. 2022 (1) TMI 1093 Penalty u/s. 271(1)(c) - AO disallowed the excess claim of deduction u/s. 36(1)(viia) on the ground that the assessee had not created the requisite provision - As argued AO was not able to prove that is a fit case for imposition of penalty either under the main part of section u/s. 271(1)(c) or under the deeming provisions of explanation 1 to section 271(1)(c) - HELD THAT:- On perusal of the assessment order, it will clearly suggest that, it is a case of mere disallowance of excess claim for want of creation of requisite provision which, in our considered opinion, does not tantamount to furnishing inaccurate particulars of income, nor can it be said that it is false claim. Therefore, the ratio of decision in the case of Reliance Petro Products Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] is squarely applicable to the facts of the present case. Also on perusal of the assessment order, it will clearly suggest that, it is a case of mere disallowance of excess claim for want of creation of requisite provision which, in our considered opinion, does not tantamount to furnishing inaccurate particulars of income, nor can it be said that it is false claim. Therefore, the ratio of decision of the Hon'ble Apex Court in the case of Reliance Petro Products Pvt. Ltd. (supra) is squarely applicable to the facts of the present case - no fallacy and illegality in the order of the Ld. CIT(A) deleting the penalty u/s 271(1)(c) - Decided in favour of assessee. 2022 (1) TMI 1092 Addition u/s 68 - additional income declared by the appellant in the course of survey action u/s. 133A - disallowing the sum of 6 crores debited to the profit and loss account under the head WIP declared u/s. 133A survey - Assessee submitted that addition has been made on estimated basis without 1st rejecting the books and assessee has actually declared as additional income, the sum of ₹ 6 crores declared during survey. He submitted that the additional amount of ₹ 6 corers, which has been debited to the profit and loss account as a stock declared in survey is duly reflected in the closing work in progress - HELD THAT:- We are inclined to agree with the submission of assessee that the veracity of the factual submissions made by him may be examined at the level of AO to resolve the issues in this case. Firstly, we note that as regards, the finding of the authorities that the profit declared is less than ₹ 6 crores will not be correct if the assessee submissions that before the debit of partners remunerations and interest on partners capital account the profit is more than ₹ 6 crore. Secondly, Ld. CIT(A) has rejected the assessee's claim that the increased figure of ₹ 6 crore reflected as declaration in survey by debit to stock in the profit and loss account is reflected in corresponding closing work in progress. CIT(A) has rejected the submission of assessee for having included the aforesaid sum of ₹ 6 crores in the closing work in progress on the basis of certification of the audited account, which did not show that the closing stock includes this increased figure. We find that this aspect can be verified by the AO. The components of closing work in progress are to be examined by him to arrive at the veracity of assessee's factual submission that closing work in progress includes this as a corresponding effect of stock of ₹ 6 core to declared in survey debited to profit and loss. As assessee submission regarding wrong application of section 68 is concerned, we are of the considered opinion that the said issue will arise only, if the above submissions of the Ld. Counsel of the assessee are not found to be correct by the AO. In any case, it is settled law that quoting a wrong section is not fatal to the assessment, if the addition is justified and warranted on the facts and circumstances of the case - Accordingly, we remit the issue to the file of AO. 2022 (1) TMI 1091 Conversion of limited scrutiny to a complete one - scope of enquiry under 'Limited Scrutiny' - HELD THAT:- The reason of the assessee's limited scrutiny herein was regarding the assessee's cash deposit in savings account(s) as more than the turnover only. And that the AO had duly taken note of the fact that the assessee had made huge cash deposits in his OD account whilst sending his proposal to the PCIT There is no material on record which could indicate the assessee to have either declared or explained source of his cash deposits made in the undisclosed bank account concerned. A perusal of the assessment order sufficiently reveals that it was only after the assessee's failure to explain source of his deposits and other issues that the AO sought for PCIT's approval in issue which stood accepted on 22.12.2016. We observe in this factual backdrop that the Assessing Officer's failure, if at all, in issuing notice of complete notice to the assessee between 22.12.2016 to 31.12.2016 was only a procedural one only which could not be held to have vitiated the entire assessment proceedings as a non-est one as held in the CIT(A)'s order under challenge. We therefore reverse lower appellate findings to this effect and restore the Revenue's sole substantive ground raised in the instant appeal back to the Assessing Officer for his afresh factual verification/adjudication qua all the issues following subject matter of complete scrutiny as per law within three effective opportunities of hearing. 2022 (1) TMI 1090 Revision u/s 263 by CIT - interest earned on short term deposit not immediately required in the business of assessee is assessable under the head income from other sources and no deduction under section 80P(2)(a)(i) - HELD THAT:- During the hearing of submission, assessee fairly conceded that the interest earned on such deposit with DGVCL may not be eligible for deduction under section 80P(2)(d) of the Act. Therefore, the order of ld PCIT is upheld to that extent. Other interest earned on deposit with Surat District Co-operative bank we find that deduction claimed qua this interest income is eligible for deduction under section 80P(2)(d) of the Act in view of the decision of this Bench in Bardoli Vibhag Gram Vikas Co.Op. Credit Society Ltd. [ 2021 (5) TMI 446 - ITAT SURAT ] We find that the assessment order qua the deduction under section 80(9)(2)(d) of the Act on account of interest earned from Surat Co-operative bank is not erroneous. Since the order is not erroneous, though, it may be prejudicial to the interest of the Revenue. Thus, the twin condition as provided in section 263 of the act is not fulfilled qua the income component of interest income earned on deposit with Surat Cooperative Bank; therefore, the order passed by the ld PCIT is set-aside to that extent. In the result, the grounds of appeal raised by the assessee are partly allowed on the primary submissions of the ld AR for the assessee. Appeal of the assessee is partly allowed. 2022 (1) TMI 1089 TDS u/s 195 - non-deduction of tax at source as royalty and /or FTS in respect of the payments made to Facebook and other entities - CIT(A) held that the advertisement expenses paid to Facebook and other entities constitutes use of industrial, commercial or scientific equipment under section 9(1)(vi) - HELD THAT:- CIT(A) has followed the decision rendered by Hon ble Karnataka High Court in the case of Samsung Electronics Co. Ltd [ 2011 (10) TMI 195 - KARNATAKA HIGH COURT] to decide the issues against the assessee. However the above said decision has since been reversed by Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence P Ltd [ 2021 (3) TMI 138 - SUPREME COURT] - The issue of granting license to use software was examined in the context of its taxability as royalty by Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence (supra) as held that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income-tax Act were not liable to deduct any TDS under section 195. As rightly pointed out by Ld D.R, we are of the view that the issues contested in all these appeals require fresh examination at the end of Ld CIT(A) applying the ratio of the decision rendered by Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence P Ltd (supra). Accordingly, we set aside the orders passed by Ld CIT(A) in all these appeals and restore all the issues to his file for examining them afresh - Grounds raised by assessee stands allowed for statistical purposes. 2022 (1) TMI 1088 Validity of assessment - absence of issuance of notice u/s. 143(2) within period of limitation - whether curable defect u/s 292BB - HELD THAT:- The jurisdiction by the Ld.AO is founded on issuance of notice u/s. 143(2). The notice u/s. 143(2) is a mandatory notice and is to be issued within the period prescribed under law. For year under consideration, limitation period expires within six months from the end of the Financial Year in which the return of income has been filed. In the present facts, the limitation period expired on 30.09.2013. Section 292BB of the Act contemplates situations of irregularities wherein the notice has been served to the assessee in time and in accordance with the provisions of this Act. The present case assessee has not received the notice u/s. 143(2) in time and therefore the argument raised by revenue cannot be appreciated. In case of Hotel Blue Moon reported in (2010) 321 ITR 362 [ 2010 (2) TMI 1 - SUPREME COURT ] wherein Hon ble Supreme Court held that an omission on part of the Assessing Officer u/s. 143(2) cannot be procedural irregularity and the same is not curable. As the notice was not issued within the period of limitation, the empathetic statement of law in the absence of issuance of notice u/s. 143(2) within the period of limitation by the revenue would therefore inure to the benefit of the assessee. Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon ble Supreme Court in various judgments. Accordingly, we hold the assessment order passed by the Ld.AO to be bad in law and the same is quashed.- Decided in favour of assessee. 2022 (1) TMI 1087 TDS u/s 194A - assessee in default under the provisions of section 201(1)/201 (1A) of the Act on account of non-deduction of TDS - HELD THAT:- The proviso to section 201(1) provides that the assessee shall not be deemed assessee in default provided if the payee has furnished the return of income u/s 139 of the Act after considering the income which was subject to the provisions of TDS and paid the tax on such income. To this effect, the assessee was to furnish the certificate from the qualified chartered accountant in the prescribed form. Admittedly, the contentions raised before us were also raised by the assessee before the learned CIT (A) but no benefit was extended by the learned CIT (A) to the assessee on the ground that the submission of the assessee was without the supporting evidence. Even before us, we do not find any documents supporting the contention of the assessee except the submission as discussed in the preceding paragraph. Onus upon the assessee to furnish the CA certificates that the payee has paid necessary taxes on income credited by the assessee. However in the case on hand the assessee has submitted PAN of the payee and claimed that the payee has filed income tax return for the year dated 13-07-2009 and declared gross total income of ₹ 1,71,031/- before claiming deduction under section 80C and 80D for ₹ 56,230/- which includes interest income credited by assessee bank. The claim of the assessee bank was very much verifiable by the revenue authority from the income tax record of the payee. None of the authorities below verified the genuineness of the claim of the assessee. We are of the view that the proviso to section 201(1) in beneficial in nature hence the same should be applied in liberal manner. In the case on hand the payee to whom interest income was credited by the assessee bank is an individual and arguably declaring very nominal income which is below the taxable limit. Thus in our understanding the fact that weather the payee has included the interest income in return of income can be easily verified. Therefore we set aside the issue to the file of the AO with the liberty to verify the fact that weather the payee has included the interest income in his return filed for the year or not and determine the issue accordingly. Hence, the ground of appeal of the assessee is allowed for the statistical purposes. 2022 (1) TMI 1086 Addition of gross profit - AO for adopting the gross profit figure as income and not allowing the claim of expenses made in the profit and loss account - HELD THAT:- We find that the assessee is carrying on business consistently. Since the tax audit report has been filed, the facts remain undisputed that the books of account are regularly maintained. In the profit and loss account, various expenses incidental to running the business have been claimed. These expenses are duly supported by the Audit Report. Looking to the consistent running of business of the assessee this action of the Ld. AO of disallowing all the expenses claimed in the profit and loss account was not justified. Ld. CIT(A) has rightly deleted the addition which calls no interference. Thus ground no.1 raised by the revenue stands dismissed. Addition u/s 68 for unsecured loan - HELD THAT:- We find that the assessee took, unsecured loan from existing loan creditors in other words those parties which have already given unsecured loan to the assessee in preceding years further gave loan to the assessee during the year. Nothing has been brought on record that whether identity, genuineness and creditworthiness of these cash creditors were ever disputed by revenue authorities in the preceding years as no such material was put forth by the Ld. DR. Remaining amount we find that out of this sum amount of ₹ 40,50,000/- was received and was repaid during the year itself and for the remaining amount of unsecured loan of ₹ 40,50,000/- was repaid in subsequent A.Y. 2006-07. Assessee had filed complete details of confirmation of account, copies of Income Tax Return of the cash creditors along with bank statements to explain the identity, genuineness and creditworthiness of all the alleged unsecured loans. Revenue authorities failed to find any discrepancy in these documents and even before us also Ld. DR could not file any evidence to challenge the evidences filed by the assessee. Under these given facts and circumstances of the case we find merit in the finding of Ld. CIT(A) and the same stands confirmed. Accordingly, ground no.2 3 raised by the revenue stands dismissed. Disallowance of purchase iron scrap - HELD THAT:- We find that the AO made the disallowance for want of verification of purchase. The assessee placed these details before the ld. CIT(A) who after going through the same and also in view of the details appearing in the audited financial statement deleted the disallowance of purchase of Iron Scrap - Before us Ld. DR failed to controvert the finding of Ld. CIT(A) which therefore, in our view needs no interference. Accordingly ground no.4 raised by the revenue stands dismissed. TDS u/s 194C - Addition u/s 40a(ia) of the Act for non-deduction of tax at source and the Motor Bhada Expenses - HELD THAT:- AO was supplied with the relevant details of the Motor Bhada Expenses claimed in the profit and loss account. Before the Ld. CIT(A) it was stated that none of the payment exceeded the limit provided u/s 194C i.e. ₹ 20,000/- per transaction and ₹ 50,000/- in aggregate for transaction with one party during the year. Further there is no adverse remark in the tax audit report and also Ld. CIT(A) has examined the documents to arrive at the finding that TDS was not deductible on the alleged expenses and this finding of Ld. CIT(A) remains uncontroverted by ld. CIT-DR, we therefore, find no inconsistency in the finding of Ld. CIT(A). Accordingly ground no.5 raised by the revenue stands dismissed. Addition u/s 68 of the Act for the sale consideration received from sale of capital asset - HELD THAT:- AO made the addition for the total sale consideration received from sale of land and also made addition for cost of acquisition of equity share - when the matter was carried before the Ld. CIT(A) the assessee had filed the details of cost of assets and calculation of capital gain and the same were found to be correct. We find that the ld. AO failed to allow the deduction for cost of acquisition of equity shares against the sale of securities and similarly failed to give deduction for cost of acquisition of land purchased during the F.Y. 1994-95 1991-92 as claimed in the computation of income. Since necessary enquiries were carried out by the ld. CIT(A) by calling remand report and examining documentary evidences before deleting the impugned addition, we find that Ld. CIT(A) has rightly examined the facts of this issue and the finding of Ld. CIT(A) remains uncontroverted before us by the Revenue authorities. 2022 (1) TMI 1085 TP Adjustment - adjustment on receivables - arms length price adjustment in the assessment order going by S.B.I s 14.45% interest rate; and that too, without adopting any segmental comparable in the assessee s segment of business support services - HELD THAT:- We note with able assistance of both the parties that the Transfer Pricing Officer s order has relied on assessee s alleged inter-company agreements executed with its associated enterprise only for determining the corresponding credit period in the business transactions as 30 days only. We thus make it clear that the learned lower authorities have not adopted any segmental comparable whilst arriving at the impugned adjustment. We quote Tecnimont Icb Pvt Ltd., Mumbai [ 2013 (9) TMI 595 - ITAT MUMBAI] and Sabic Innovative Plastic India Pvt Ltd [ 2013 (9) TMI 596 - ITAT AHMEDABAD] holding that an associate enterprise itself would not to be taken as a comparable since lacking the independent nature of an uncontrolled transaction in forming hallmark of Chapter X of the Act. We thus delete the impugned arms length price adjustment on receivables for this precise reason alone. Decided in favour of assessee. 2022 (1) TMI 1084 Delayed payment of employees contribution to PF and ESI - Contribution paid after the due dates prescribed in the relevant Statutes but before the due date of filing of return under section 139(1) - HELD THAT:- As the issue involved in the present appeal as well as the material facts relevant thereto are similar to the case of Lumino Industries Limited [ 2021 (11) TMI 926 - ITAT KOLKATA] wherein allow the claim of deduction in respect of employees contribution shares towards ESI, PF, by the assessee before the due date of filing of return u/s 139(1) - we respectfully follow the decision rendered by the Tribunal in the said case and delete the disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of delayed payment of employees contribution towards PF and ESI. - Decided in favour of assessee. 2022 (1) TMI 1083 TP Adjustment - classification of the assessee as a KPO by applying safe harbor Rules - AR submitted that the functional profile of the assessee has been accepted by the TPO and no case was ever made out by the TPO that the assessee is a KPO - HELD THAT:- It is pertinent to note that the Revenue at no point of time disputed the functions of the assessee company. The assessee company provides back office support services to AEs with the help of tools, infrastructure and training provided by the AEs which is different than the functions of the KPO. Besides this, the DRP has admitted that the Safe Harbour Rule will not be applicable in assessee company s case. Thus, classification of the assessee as a KPO by applying safe harbor Rules is totally out of context and does not get any support from the evidences before us. Therefore, the directions of the DRP as well as the observations made by the TPO and thereafter comparing the assessee company with that of high end KPO for benchmarking ALP determination of the comparables is not correct. Hence, Ground No. 4 is allowed. Comparable selection - E- Clerx Services Ltd - Functions performed by E-Clerx Services Ltd. takes the nature of high end analytical and research services which require manpower of specific qualifications, skill sets and domain knowledge in contrast to the Assessee rendering back office support services. E-Clerx Services Ltd. works on outsourcing model and outsources substantial amount of work. In the subject year, 22.07% of the total cost of the company that has been paid to the outside vendors for availing of IT enabled services. As such it cannot be compared to the Assessee which provides in-house back office services to AEs. Infosys BPO Ltd - This comparable company is a giant engaged in providing high-end integrated services by assisting its clients in improving their competitive positioning by managing their business processes in addition to providing increased value, whereas the Assessee engaged in providing IT Enabled services. Infosys BPO has high value of goodwill. Infosys BPO owns significant intangibles. Infosys BPO acquired Portland Group Pty. Limited during the FY 2011-12. The acquisition has enhanced the presence of Infosys BPO in high end sourcing and procurement space in Asia Pacific Region. Thus, this comparable company has to be excluded from the set of final comparables. Caliber Point Business Solutions Ltd. - This comparable company cannot be rejected only on the ground of different financial year ending. Company is functionally comparable, this fact has not been disputed by the TPO or the DRP. Caliber Point Business Solutions Ltd. was held comparable to the assessee and included in the final set of comparables by the Tribunal in assessee s own case in AY 2010-11. No distinguishing facts were pointed out by the Ld. DR related to functions for this year to that of A.Y. 2010-11. Hence, we direct the TPO/AO to include this comparable company in final set of comparable. Jindal Intellicom Ltd.- The assessee is not a high-end KPO. Jindal Intellicom Ltd. passes all the filters applied by the TPO and it is functionally comparable to the assessee. In fact, in preceding year 2011-12, the said comparable company was accepted by the TPO/DRP and the functions remain same. No distinguishing facts were brought on record by the Ld. DR. Hence, we direct the TPO/AO to include this comparable company in final set of comparable. Erroneous treatment of foreign exchange gain/loss as non-operating by applying Safe Harbour Rules - HELD THAT:- It is pertinent to note that foreign exchange fluctuation is inextricably linked with the assessee s business operation. The foreign exchange gain was on account of difference in the exchange rate prevailing at the time of invoicing payment for the inter-company billing as well as Difference in exchange rates prevailing at the time of transaction and as on 31.3.2012 for the amount outstanding at the end of the year. In fact, the DRP has admitted that the Safe Harbour Rules do not apply in assessee s case. Thus this Ground is allowed. 2022 (1) TMI 1082 TP Adjustment - adjustment of AMP - international transaction or not? - case of the assessee has been that the primary engagement of the assessee is in manufacturing operations and the AMP expenditure incurred by it is to the benefit of its operations in India - HELD THAT:- The alleged excessive AMP expenditure does not fall in the category of international transaction and therefore the adjustment made by the Revenue on account of incurrence of AMP expenses is not sustainable in law, and set aside the orders of the authorities below. We, however, in consonance with the view taken by the Tribunal in assessee s own case for the assessment year 2011-12, as in the Hon ble jurisdictional High Court [ 2018 (12) TMI 1852 - ITAT DELHI ], restore the matter to the file of the learned Assessing Officer to act in accordance to be given in the pending matters. We accordingly, allow ground No. 2 of assessee s appeal. Disallowance of professional fees on account of short deduction of TDS - HELD THAT:- This issue is no longer res integra and squarely covered by the decision in the case of CIT vs. M/s SK Tekriwal .[ 2012 (12) TMI 873 - CALCUTTA HIGH COURT ] and also the decision of PV Rajagopal [ 1998 (4) TMI 127 - ANDHRA PRADESH HIGH COURT ] as held that section 201 has 2 limbs one is that where the employer does not deduct the tax and the 2nd is where after deducting the tax fails to remit it to the government and there cannot be assumption that if there is any shortfall due to any difference of opinion as to the taxability of any item the employer can be declared to be an assessee in default. In view of this settled position of law we allow the ground of appeal. Disallowance of provision of stamp duty - HELD THAT:- The assessee incurred the stamp duty expenditure in respect of the instrument for 3 years, learned Assessing Officer was of the opinion that for each year of the 3 years, assessee is entitled only for 1/3rd of such an expense and on that premise, disallowed 2/3rd of the stamp duty. Ld. CIT(A) recorded a finding that in order to secure expenditure to be deferred Revenue expenditure, such an expense must result in a benefit in Revenue field and inasmuch as by incurring the stamp duty, the assessee does not get any enduring benefit of creation of a capital asset so as to have any enhanced income. We agree with this finding of the Ld. CIT(A) and dismiss this ground of appeal. 2022 (1) TMI 1063 Excess payment for sugar cane over and above SMP/FRP - CIT(A) directed the assessing officer to recompute the FRP on certain formula as per the order dated 22.12.2013 of Ministry of Consumer affair, Department of Food and Public Administration - HELD THAT:- We find that on identical issue and on similar set of fact in SHREE KHEDUT SAHAKARI KHAND UDYOG MANDLI LTD. VERSUS INCOME TAX OFFICER, WARD-1, BARDOLI [ 2019 (8) TMI 1047 - ITAT SURAT] considering the decision of Hon ble Supreme Court in the case of CIT vs. Tasgaon Taluka S.S.K. Ltd., [ 2019 (3) TMI 321 - SUPREME COURT] wherein set-aside the impugned orders on this score and remit the matter to the file of the AO for deciding it afresh as per law in consonance with the articulation of law by the Hon ble Supreme Court in the afore noted judgment. The AO would allow deduction for the price paid under clause 3 of the Sugar Cane (Control) Order,1966 and then determine the component of distribution of profit embedded in the price paid under clause 5A, by considering the statement of accounts, balance sheet and other relevant material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under this clause. The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon ble Supreme Court supra. Thus the grounds of appeal raised by assessee are restored back to the file of Assessing Officer to decide the issue afresh in accordance with law to follow the decision of coordinate Bench of this Tribunal in the case of Shree Khedut Sahakarai Khand Udyog Mandli Ltd. vs. Income Tax Officer, (supra). 2022 (1) TMI 1062 Disallowance on account of portion of cane price in excess of Fair Rate Price ( FRP ) - HELD THAT:- As decided in assessee's own case [ 2019 (8) TMI 1047 - ITAT SURAT] relying on TASGAON TALUKA S.S.K. LTD. [ 2019 (3) TMI 321 - SUPREME COURT] we restore the grounds of appeal raised by the assessee to the file of Assessing Officer to decide the issue afresh - In the result, appeal of assessee is allowed for statistical purposes in above terms. Customs 2022 (1) TMI 1081 Seeking a direction that the term excisable goods in Entry 107 of the Notification No.50/2017-Customs dated 30th June 2017 to include taxable goods subject to tax under GST laws - respondents states that though the summons were issued on 11th February 2021, the petitioner did not bother to implead the Directorate of Revenue Intelligence as party respondent and to impugn the summons issued by the said authority - HELD THAT:- Leave to amend is granted to impugn the summons annexed to the compilation of documents and other documents forming part of the said compilation. Leave to amend is also granted to implead the Directorate of Revenue Intelligence, Zonal Unit, Bangalore as party respondents to this petition. Amendment to be carried out within one week from today. The Directorate of Revenue Intelligence shall not take any coercive steps against the petitioner during the course of recording the statement as aforesaid. If the Directorate of Revenue Intelligence proposes to take any coercive steps, the same shall not be adopted without giving 7 days clear notice to the petitioner - Writ petition is disposed of. 2022 (1) TMI 1080 Classification of goods - Bed Cover - revenue's claim is that imported goods is polyester woven fabric classifiable under CTH 54075490 - HELD THAT:- The other appeals from the bunch have been disposed of vide this Tribunal s case MS SUNRISE TRADERS, JAI DURGA IMPEX, ALISHAN IMPEX, SATISH JINDAL, ADITYA LOOMTEX, TUSHAR TILAK, JMD TRADING CO, MOHIT SOIN, AJAY HIRALAL VIJ, JAI HANUMAN OVERSEAS, PANKAJ KUMAR KATARIA, PANKAJ KUMAR, SHREE SHYAM INTERNATIONAL AND TUSHAR GUPTA VERSUS C.C. -MUNDRA [ 2022 (1) TMI 468 - CESTAT AHMEDABAD] - it was held in the case that Since the revenue has not been able to discharge their burden of proof. Hence the classification of goods declared by the appellants cannot be disturbed. Appeal allowed. 2022 (1) TMI 1079 Principles of natural justice - plea for setting aside the impugned order is claimed to be rooted in the failure to remand - seeking restoration of the detriment visited on the respondent herein merely owing to the first appellate authority having decided the issue on merit as well as propriety - HELD THAT:- It has been admitted to in the first ground of appeal that it was by hasty and improper reading that the request from the importer for final disposal had been misinterpreted as waiver of show cause notice and of right to be heard in person. There is nothing on record to give credence to this explanation and it does appear odd that a review procedure that should have motivated seeking of appellate remedy against the original order has, instead, chosen to articulate a perspective merely for overcoming an unfavorable outcome - The first appellate authority cannot be faulted for not having considered a remand to the original authority that would serve no purpose other than prolonging the agony of the exporter without, in any way, gratifying the benefit denial mode that the customs authorities appear to have imbued themselves as far as the present dispute is concerned. Considering the narrative of the investigation undertaken by the jurisdictional authorities and the lack thereof which rendered the order of the original authority to be untenable in law, it is concluded that the impugned order is not lacking in legality and propriety - Appeal dismissed. 2022 (1) TMI 1078 Classification of imported goods - interactive intelligent panel (automatic data processing machine) model cloudtouch - covered by heading 8471 of First Schedule to Customs Tariff Act, 1975 or under 8528 5900 of First Schedule to Customs Tariff Act, 1975? - discharge of burden to prove - HELD THAT:- The heading deployed by customs authorities pertains to monitors and projector and, while the impugned goods may appear to have some of the characteristics of monitors , it is abundantly clear from the descriptions in the catalogue that these do contain a central processing unit and does operate on software that requires an input device which, though not be different from that for computers and other automatic data processing machines, functions on its own. Therefore, the goods in question cannot be said to be merely projectors or monitor and, thereby, renders recourse to heading 8528 of the First Schedule to the Customs Tariff Act, 1975 to be inconsistent with the General Rules for Interpretation of the Import Tariff. In accordance with the judicial decisions on discharge of the onus devolving on the assessing authority, and without going into the conformity of the description adopted in the bill of entry, it can safely be held that the revised classification does not bear the authority of law. Furthermore, as it is not controverted that the said exemption notification is available to all goods classified under heading 8471 of the First Schedule to the Customs Tariff Act, 1974, without examining the appropriateness of the tariff item, it is held that the duty liability discharged by the appellant suffices for the purpose of levy. Appeal allowed - decided in favor of appellant. Corporate Laws 2022 (1) TMI 1077 Claim of the workmen - Validity of award made by the Industrial Tribunal - Seeking restraint on respondents from proceedings against the petitioner-company pursuant to the award - company under Liquidation - rapid erosion of the Company's net wealth took place - settlement of workmen dues - HELD THAT:- It is not on record that what all orders were passed by the Industrial Tribunal after the order of the moratorium passed by the NCLT till the order of liquidation passed on 23.3.2018. However, the fact remains that the award of the Industrial Tribunal was made well after the order of liquidation dated 23.3.2018. Sub-section (5) of Section 33 of the Code prohibits the institution of any suit or other legal proceeding by or against the corporate debtor (in the present case, the petitioner-company) when a liquidation order has been passed subject to the proviso that the suit or legal proceeding may be instituted by the liquidator on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. This provision is also subject to the provisions of Section 52 of the Code that provides for the role of a secured creditor in liquidation proceedings. In view of the liquidation order passed by the NCLT on 23.3.2018, the order of moratorium passed under Section 14 ceased to have effect. Accordingly, further proceedings in the pending adjudicating case before the Industrial Tribunal was not barred after the order of liquidation passed by the NCLT - Under Section 238 of the Code, the provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Therefore, the distribution of the proceeds from the sale of liquidation assets are to be distributed in the order of priority as provided under Section 53 of the Code after determination of the claims by the Liquidator. In view of the manner of distribution of the assets of the company in liquidation as provided under Section 53 of the Code, the workmen's dues of the company in liquidation shall be made strictly in accordance with the priority, to the extent, and, in the manner provided in Section 53 of the Code - no negative evidence could have been led by the workmen in this regard. It is pertinent to note that in the testimony of the witness on behalf of the workmen, it was stated that all the workmen affected by lay-off used to visit the Head Office of the Establishment for recording their attendance and they are still doing so. Therefore, under the circumstances of the present case, this piece of evidence would suffice to demonstrate that the workmen were not gainfully employed elsewhere. It is pertinent to mention here that in paragraph no.19 of the writ petition itself it is reflected that around 2016 claims of workmen / employees were received, but on perusal of the books of accounts and record, the Liquidator admitted claims of 6337 workmen/ employees. Therefore the details of all the workmen of the petitioner-Company are with the Liquidator - the lay-off having been held to be unjustified and illegal by the Industrial Tribunal, what follows is that all the workmen who were not employed after lifting of the lock-out with effect from 15.04.2007 and were laid off, would be entitled to full wages, allowances and consequential benefits as directed by the Industrial Tribunal. Any amounts received by them towards lay-off compensation shall be adjusted. However, the workmen would only be entitled to receive / recover their dues in accordance with the provisions of Section 53 of the Code. Petition disposed off. 2022 (1) TMI 1076 Oppression and mismanagement - Sale of property of the company to the third parties - Maintainability of application - application under order VII Rule 11 (d) of the CPC seeking rejection of the plaints on the ground that the suits have barred by law - HELD THAT:- In the case on hand, the sales had taken place in the years 2013 and 2014 where the applications for oppression and mismanagement before the Company Law Board came to be filed in September 2016 which is well beyond three months period. Therefore, it is quite clear that the even though the sales made in the years 2013 and 2014 were the subject matter of the proceedings before the National Company Law Tribunal filed under Section 241 and 242 of the Companies Act, neither the National Company Law Tribunal nor the National Company Law Appellate Tribunal would have power to set aside the sales. In the absence of such power, the bar under section 430 of the Companies Act, would not apply. In T.Vinayaga Perumal Vs. T.Balan [ 2011 (4) TMI 1209 - MADRAS HIGH COURT ], this Court has noted the limitation on the power of the Company Law Board to set aside sales under Section 402 of the Companies Act. Sections 398 to 402 of the Companies Act, 1956, governs oppression and mismanagement. This Court had held that if the sale had happened three months prior to the presentation of the petition, the Company law Board will not have a power to set aside the same. The said Judgment would apply to the case on hand also, which is under Sections 241 and 242 of the Companies Act, 2013 which provide for oppression and mismanagement. There are no material irregularity or illegality in the order of the trial Court, dismissing the applications - revision dismissed. 2022 (1) TMI 1075 Sanction of the Scheme of Arrangement - Section 230(6) read with 232(3) of the Companies Act, 2013 - HELD THAT:- It is ordered that in case of any default including any Provisions of Income Tax Act in this respect of the Transferor Companies the Income Tax department, the ROC, West Bengal and all other Statutory Department shall be at liberty to initiate appropriate proceedings against the Transferee Company, which after the sanction of the scheme by this Tribunal is in any case responsible for the liabilities/non-compliance of the Transferor Companies also. Various directions regarding holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. 2022 (1) TMI 1074 Sanction of scheme of amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- On perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of section 230 and 232 are satisfied by the petitioner companies. The proposed Scheme of Amalgamation is bona fide and in the interest of the shareholders and creditors. Petition is allowed - The Scheme envisaging amalgamation of Perlcon Premix Private Limited, the Petitioner Transferor Company with Amol Minechem Limited, the Petitioner Transferee Company is hereby sanctioned. Insolvency & Bankruptcy 2022 (1) TMI 1073 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Appellant submits that the Appellant/Corporate Debtor is not the Principal Borrower but who issued a Guarantee which stood discharged from all the obligations by operation of Law, in terms of the Indian Contract Act, 1872 - time limitation - Right of Surety - Contract of Guarantee - Indian Contract Act, 1872 - HELD THAT:- This Tribunal significantly points out that when a Demand is made on the Guarantor and when the 1st Respondent/Bank had invoked the Bank Guarantee against the Corporate Debtor on 08.12.2014 and also issued a Demand Notice to the Corporate Debtor on 25.08.2017 and a Reply was furnished to the 1st Respondent/Bank by the Corporate Debtor on 27.09.2017 wherein at paragraph 2, the Corporate Debtor had stated in a crystalline and unequivocal term that it was required to pay to the Bank, due amount of ₹ 48.39 crores and also at paragraph 6 had made a request to the 1st Respondent/Bank not to initiate any action under IBC etc. and in the teeth of the Debt being not time barred against the Principal Debtor , the Limitation begins to run only cementing on the Demand made for the repayment of due amount as opined by this Tribunal . As a matter of fact, in the Reply dated 27.09.2017 of the Corporate Debtor addressed to the 1st Respondent/Bank, the Corporate Debtor had mentioned GNIC has failed to pay its dues to IDBI, as a result of which IDBI has invoked the abovementioned Guarantees and called upon Wizcraft to pay IDBI their due of ₹ 48.39 crores . Therefore, the aforesaid contents of Reply dated 27.09.2017 of the Corporate Debtor is an acknowledgement of liability . Also that a Debt liability of a person can be projected and enforced by a Creditor through initiation of numerous proceedings known to Law - If an Acknowledgement is valid, then, there is no fetter in Law whereby the liability against the particular person/entity can be enforced, in accordance with Law. In Law, an Acknowledgement of Liability merely extends the limitation period and does not create a new right of action . A Guarantor is one who Guarantees to perform the promise of or discharge the liability of a person for whom he stands Guarantee. In regard to any Debt incurred by Principal during the currency of Guarantee the Surety is liable as long as the Debt is recoverable from Principal . It does not matter that the Principal has kept the Debt alive by an acknowledgement under Section 19 of the Limitation Act, 1963 or by payments under Section 20 of the Limitation Act for, by these actions, there is no Renewal of Debt and no new Debt is created, which is not covered by Guarantee . As a matter of fact, the Debt remains the same, viz., the Debt Guaranteed and only the bar of time against recovery is postponed - An Agreement executed by a Guarantor is a separate and collateral contract distinct from the contract of debt between Principal Debtor and Creditor . It cannot be brushed aside that an Acknowledgement of Liability will save liability only against the person who acknowledges the liability. A Financial Creditor is entitled to initiate CIRP against a Guarantor or Surety although the Creditor holds enough security over the assets. A Surety has no right to dictate terms to the Creditor as to how he ought to make a recovery and pursue his remedies against the Principal Debtor at his instance - The Financial Creditor has the option of commencing the Insolvency proceeding against the Corporate Grantor only without even resorting to any legal proceeding against the Corporate Debtor . Admittedly, there is an undischarged live liability and the amount due to the Bank has not been paid by the Corporate Debtor/Guarantor of the Principal Debtor . For the undischarged live liability for which the Guarantor /Corporate Debtor has obliged by its three Corporate Guarantee Agreements dated 26.06.2009, 25.02.2010 and 14.01.2013, it is undoubtedly responsible for the liability of Principal Debtor - this Tribunal unhesitatingly comes to a consequent conclusion that the Guarantor had waived all rights as Surety and assumed more liability. As far as the present case is concerned, the Corporate Debtor through its Reply/letter dated 27.09.2017 addressed to the 1st Respondent/Bank had mentioned that it understood the GNIC/Principal Borrower had failed to pay its dues to IDBI (1st Respondent) of which the IDBI had invoked the Bank Guarantees and called upon the Corporate Debtor/Guarantor , to pay the Bank the dues of ₹ 48.39 crores and also the Corporate Debtor/Guarantor had requested the 1st Respondent/Bank not to initiate any action under the I B Code etc. and this Letter/Reply dated 27.09.2017 is an Acknowledgement of the Debt which extends the period of Limitation in conformity with Section 18 of the Limitation Act, 1963 - In order to sustain an Application under Section 7 of the Code, an applicant must satisfy the conscious of the Adjudicating Authority about the existence of Debt which is due from the Corporate Debtor . It is true that the Adjudicating Authority is to find out whether there is Debt and Default committed by the Corporate Debtor . Always it is open to the Corporate Debtor that a Default had not occurred. Moreover, it is open to the Corporate Debtor to point out that the Debt is not payable by it either in Law or in fact. In the instant case, the Corporate Debtor/Guarantor had committed Default , as per the ingredients of Section 3(2) of the Code. The Section 7 Application under the Code was filed before the Adjudicating Authority on 01.08.2019 by the 1st Respondent/Bank. Notwithstanding the fact that the Account of the Principal Borrower (Great Indian Nautanki Company Private Limited) was classified as Non-Performing Asset by the First Respondent/Bank in the instant case on hand, in regard to the Debt incurred by the Principal Borrower for the Loans availed by it and that the Corporate Guarantee Agreements dated 26.06.2009, 25.02.2009 and 14.01.2013 were executed by the Corporate Debtor /Promoter Company of the Principal Borrower and since there is an undischarged Live Liability , in that the Debt due and payable to the First Respondent/Bank was not paid by the Principal Debtor , by virtue of the aforesaid three Corporate Guarantee Agreements ( Corporate Guarantee ) , the Corporate Debtor is responsible for the liability of the Principal Borrower / Great Indian Nautanki Company Private Limited. This Tribunal keeping in mind of a primordial fact that the Debt Liability is arising from the Guarantee, which is due and payable as per the invocation of Corporate Guarantee by the First Respondent/Bank on 08.12.2014 and the Guarantee Agreements are Independent Rights , containing separate and reciprocal obligations and taking note of the fact that the Corporate Debtor had issued a Reply on 27.09.2017 to the Demand Notice of the First Respondent/Bank dated 25.08.2017, which is an Acknowledgment of Liability of the Corporate Debtor which extends the period of Limitation from 27.09.2019 to 26.09.2020 under the Limitation Act, 1963 (even though the Account of the Principal Borrower was classified as NPA on 29.07.2014) and as such, the Section 7 Application filed by the First Respondent/Bank on 01.08.2019 is well within the period of three year s Limitation Period as held by this Tribunal - the impugned order of admitting the Application filed by the First Respondent/Bank (under Section 7 of the I B Code, 2016) against the Corporate Debtor , by the Adjudicating Authority is free from legal flaws. Application dismissed. 2022 (1) TMI 1072 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Pre-Existing Dispute between the parties or not - amount due and payable - HELD THAT:- The facts of the present case need to be examined in the light of the law laid down by the Hon ble Supreme Court in Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT ] where it was held that So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. When there is no denial with respect to the email dated 22.02.2018 (reproduced in para 7) there are no substantial reasons given for raising the bills for the subsequent period when there is no documentary evidence on record that the services were rendered with respect to the Work Order subsequent to 22.02.2018. Therefore, the dispute raised by the Corporate Debtor is not a spurious or legally feeble argument but is substantiated by sufficient evidence. It is satisfied by the material on record that there is a Pre-Existing Dispute prior to the issuance of the Demand Notice‟ - the ratio of Mobilox Innovations Private Limited is squarely applicable to the facts of this case. There exists a dispute between the parties, we do not wish to go into the other issues raised regarding the Partnership Deed. Appeal dismissed. Service Tax 2022 (1) TMI 1071 Works contract services - it is prayed that since the proceedings initiated were based upon the information from Income tax Deptt., that the verification of the requisite documents was utmost necessary - HELD THAT:- Perusing the record specifically the letter which was received by Commissioner (Appeals) in his office on 27.01.2021 i.e. prior the pronouncement of the order under challenge on 17.02.2021, it is apparent that appellant did submit invoices and challans for the financial year 2013-14. The ld. Counsel has impressed upon that the challans as submitted were the challans with respect to the activity of job work services as were carried by the appellants and as were exempted under entry No.30 of Mega exemption Notification No.25/2012 - ST dated 20 June, 2012. Those documents are not been made the part of the present appeal. Neither have been provided by the Department. Hence, it is not possible to appreciate the deficiency based whereupon the Commissioner (A) has dismissed the appeal of the appellant filed before him. It is deemed a fit case to be re-considered by Commissioner (Appeals) in the light of all relevant documents as that of invoices, job work challans, requisite ledgers etc. - the present appeal stands allowed by way of remand. 2022 (1) TMI 1061 Seeking withdrawal of appeal - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- Since the issue has already been settled under the said scheme, the appeal is accordingly dismissed as deemed withdrawn. Central Excise 2022 (1) TMI 1070 Seeking direction to accept the amount of tax which was returned inadvertently due to mismatch in the amount remitted - Sab Ka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- It is well known that when an amount to the tune as is in the present case is transferred message is received by bank account holder either on the mobile or through E-mail. The same is the case when the transfer is declined and the amount is re-credited in the bank account. It cannot hence be assumed that the petitioners were not aware of the return of remittance having been made in their account. As per Rule 9 of the Sab Ka Vishwa (Legacy Dispute Resolution) Scheme, 2019 , designated committee on being satisfied of payment of amount in full as determined by it shall issue electronically a discharge certified under sub Section (8) of Section 127 of the Finance Act, 2019 within 30 days of the payment and submission of proof. Had the petitioners remitted the amount of ₹ 10,30,274/- on 30.06.2020, on an after 31.07.2020 they would have certainly made efforts for procuring a discharge certificate as aforesaid. However, there is absolutely no whisper in the entire petition as regards any effort to that effect having been made by the petitioners. As per the petitioners if they had made the payment they would have certainly insisted upon issuance of the certificate. The natural course of conduct for the petitioners upon service of the said notices would have been to take up the matter with the department informing it that they have already paid the amount under the Amnesty scheme hence are now not liable for payment of any amount as demanded. However, the petitioners did not do so and were again on 22.06.2021 served with another demand notice for the aforesaid amount. Yet they did not take up the matter with the department - It is hence apparent that they are no bona fides on part of the petitioners in approaching this Court. Their conduct manifestly shows that they were always aware of the return of the amount which was purportedly remitted by them. The submission of petitioners that the they are still ready and willing to deposit the amount along with interest up to date hence be granted the benefit under the scheme is also liable to be rejected as the same appears to be a mere after thought and an effort by them to wriggle out of the lapses on their part. In any case the Amnesty scheme has already come to an end hence no benefit under the same can be granted to the petitioners. Petition dismissed. 2022 (1) TMI 1069 CENVAT Credit - Credit availed during the month of December, 2016 on the basis of invoices which were more than one year old from the date of purchase of inputs - HELD THAT:- It is observed that the notice of hearing was issued by the Commissioner (Appeals) to the appellants for making themselves available for personal hearing before him. However, there is no documents on record proving the service thereof upon the appellant. The appellant was very much responding since the issuance of the SCN. He marked his presence before Original Adjudicating Authority as well. Accordingly, the submission of the appellant for not receiving the notice of personal hearing given by Commissioner (Appeals), that too, prior to the pronouncement of this order in appeal dated 30.04.2021 are opined acceptable. It is the settled law that mere issue or dispatch of notice is not the proof of service of the said notice. Hence cannot be held to be received by the recipient in absence of such proof of service. There is no denial apparent on record about appellant opting out from the Scheme of Cenvat Credit on 31.03.2016 with the reversal of credit lying with them at that time. There is also no apparent denial to the fact that the production initiated again by the appellant in December, 2016 - bare perusal of Rule 3 Sub Rule (2) of Cenvat Credit Rules 2004 makes it clear that the appellant was entitled to claim Cenvat Credit with respect to the inputs contained in the final products lying in the stock on the date when the goods manufactured becomes excisable. In the present case the appellants goods post being manufactured in December, 2016 became excisable in December 2016 itself. Hence, the availment of credit on the inputs of such manufactured goods was very much available to the appellant. Credit allowed - appeal allowed - decided in favor of appellant. 2022 (1) TMI 1068 Maintainability of appeal - non-compliance of mandatory provision regarding pre-deposit in terms of section 35F of Central Excise Act, 1944 - HELD THAT:- Admittedly, the appellant had not filed the amount of pre-deposit (₹ 11,400/-) at the time of filing his initial appeal before Commissioner (Appeals), against the aforementioned Order in Original. In terms of section 35 F of Central Excise Act, 1944 the appeal before Commissioner (Appeals) shall not be entertained by Commissioner (Appeals) unless the appellant deposits 7 % of the duty in dispute. The use of word shall in the said provision definitely makes the provision mandatory in nature - the Commissioner (Appeals) has committed no error while rejecting the appeal on the ground of non-compliance of the aforesaid provision vide the Order dated 3rd August, 2021. Simultaneously, it is also apparent on record that the appellant made the compliance of the said provision, subsequently. However, still the opportunity of being heard for disposing his appeal on merits was not considered by Commissioner (Appeals). The letter bearing No.2065/2021 dated 27.07.2021 as is found annexed on the record of this appeal shows that the Commissioner (Appeals) has not re-considered the issue despite that non-compliance of Section 35F was a procedural lapse and that the same has been made good by the appellant - In the present case, since the procedural lapse / the defect stands already cured by the appellant. This is deemed a fit case to be heard by Commissioner (Appeals) on its merit. Matter remitted back to the Commissioner (Appeals) to consider the merits of the appeal for a fresh adjudication - appeal allowed by way of remand. 2022 (1) TMI 1067 CENVAT Credit - capital goods/inputs of iron and steel items - MS channels, beams, bars, angles, channels, MS plates, etc. - denial of credit on the ground that these capital goods have been embedded to earth and hence becomes immovable property and lost character of the goods - HELD THAT:- Considering the fact that the matter which has been remanded on 20th June 2013 is still pending and thereafter, the issue has been considered by this Tribunal and finally settled in the case of M/S. MONNET ISPAT ENERGY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2016 (1) TMI 917 - CESTAT NEW DELHI] where it was held that the allegation in the show cause notice that steel items used by the appellant are neither components nor spares nor accessories is not sustainable. As the facts of the case are not in dispute that the steel items in question has been used for fabrication of the capital goods which has ultimately been used for manufacture of their final product, in that circumstances, it is held that the appellant are entitled to CENVAT credit on the items in question - appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2022 (1) TMI 1066 Validity of attachment orders - Recovery of Sales Tax - creation of charge over the property - rights by mutation of entries - HELD THAT:- The issue raised in the present writ application is no longer res integra in view of the pronouncement of this Court in the case of MANHARLAL HIRJIBHAI VIRDIYA VERSUS ASSISTANT COMMISSIONER OF COMMERCIAL TAX [ 2021 (10) TMI 809 - GUJARAT HIGH COURT ] where it was held that the auction of the residential property in question as illegal and bad in law and restrained the respondents from attaching or selling any private property of the Managing Director of the Company for realization of the aforesaid dues. The charge created by the State in the revenue records with respect to the subject property is set aside and both the orders of attachment are also hereby quashed and set aside - application allowed. 2022 (1) TMI 1065 Maintainability of petition - time limitation - writ petitions have been filed belatedly long after the statutory period of limitation for filing an appeal had expired under the provisions of TNVAT Act - HELD THAT:- One option available is to ask the petitioner to workout the remedy before the Appellate Authority and by asking the Appellate Authority to dispose the appeal on merits or in the alternative relegate the petitioner to give a proper reply before the respondent on terms. Considering the fact that the amount involved may or may not be liable to tax under the provisions of the Tamil Nadu Value Added Tax Act, 2006, as the amount which has been received by the petitioner was reportedly liable to tax under the provisions of the Finance Act, 1994, the impugned orders are set aside and the cases remitted back to the respondent to pass a fresh order on merits, subject to the petitioner depositing 30% of the disputed tax for each of the Assessment Year, within a period of thirty days from the date of receipt of a copy of this order. Petition allowed by way of remand. 2022 (1) TMI 1064 Recovery of credit availed by the petitioner - vires of Section 19(11) of the Tamil Nadu Value Added Tax Act, 2006 - it is submitted that impugned order has now been passed by the respondent after a lapse of 1 years and without the following principles of natural justice - HELD THAT:- The petitioner is not entitled to credit availed by the petitioner beyond the period of limitation. Therefore, on merits as far as the demand of the input tax credit is concerned there is no case made out by the petitioner - the petitioner is directed to pay the amount confirmed in the impugned orders for a sum of ₹ 70,720-00 and ₹ 2,84,642-00 for the respective Assessment Year - As far as the imposition of penalty which appears to be 200% of the amount confirmed in the impugned order is concerned the petitioner appears to have made out a case for interference. Principles of natural justice - HELD THAT:- Considering the fact that the petitioner's representation dated 29.08.2013 has not been considered by the respondent, while passing the order under Section 27(4) as it stood during the material period though did not specifically contemplate the benefit of personal hearing and also considering the fact that the order has been passed long after the notices were issued in view of the pendency of the writ petition and after the reply was filed by the petitioner vide reply dated 29.08.2013 which duly acknowledged by the respondent on 12.09.2013, the case is remitted back to the respondent to pass a speaking order within a period of forty five (45) days from the date of receipt of a copy of this order. These writ petitions stand partly allowed by quashing the impugned order in so far as the imposition of penalty is concerned. The petitioner shall pay the amount of tax/input tax sought to be recovered within a period of forty five (45) days from the date of receipt of a copy of this order.
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