Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 1, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
GST - States
- 10076/CT/POL-41/1/2017-Policy - dated
1-8-2019
Issues related to GST on monthly subscription / contribution charged by a Residential Welfare Association from it's members.
Customs
- PUBLIC NOTICE NO. 15/2019 - dated
26-9-2019
Clarification regarding Duty Drawback allowed in cases of short realization of export proceeds due to bank charges deducted by foreign banks, issued by the C.B.I.T.& C., New Delhi, vide Circular No. 33/2019 - Customs dated 19th September, 2019
- PUBLIC NOTICE NO. 14/2019 - dated
24-9-2019
Clarification regarding applicability of All Industry Rates of Duty Drawback while fixing Brand rate of Duty Drawback in post GST Era issued by the C.B.I.T.& C., New Delhi, vide Circular No.24/2019- Customs dated 8th August, 2019
- PUBLIC NOTICE NO. 30/2019-cus - dated
18-9-2019
Revised Norms for Execution of Bank Guarantee under Advance Authorisation, DFIA and EPCG Schemes
- PUBLIC NOTICE NO. 13/2019 - dated
9-9-2019
Observation of Special IGST Refund Drive from 01.09.2019 to 22.09.2019
- PUBLIC NOTICE NO. 26/2019-cus - dated
6-9-2019
IGST Export Refunds week from 09.09.2019 to 21.09.2019 — Rectification of Invoice Mismatch [SB005], GSTN Number Mismatch [SB003], EGM Stuffing errors [SB002], Mismatch in Shipping Bill details [SB001], Gateway EGM Error [SB006]
- Trade Notice No. 05/2019 - dated
6-9-2019
Observation of a Refund Drive from 1st September to 22nd September, 2019
- Trade Notice No. 02/GST/LDH/2019 - dated
4-9-2019
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
Highlights / Catch Notes
GST
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Profiteering - project “Paramount Emotions” situated in GH-05A, Sector 1, Greater Noida - benefit of Input tax credit not passed on - reduction in the price of flat - section 171 of CGST Act, 2017 - assessee has apparently committed an offence u/s 171 (3 A) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty - NAPA
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Grant of regular bail - fraudulent availment and utilization of Input tax Credit - bail should not be granted in such like cases of economic offences merely on the ground that the accused was in the jail for a period of one year. - HC
Income Tax
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LTCG - Exemption u/s 54 - assessee and her husband purchased the new property in their son’s name - the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name.
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Validity of Notice u/s 143(2) - period of limitation - notice issued by an officer who had no jurisdiction over the assessee - Notice suffered from an inherent lacuna affecting his jurisdiction so the same could not be cured by having resort to the provisions of section 292B
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Condonation of delay - delay of 11½ years - on the basis of findings in the order for subsequent year, appeal was filed for earlier year before CIT(A) - it is noticed that the delay issue is a technical issue and the delay is not on account of lethargy on the part of the assessee or on account of any malafide reasons - Delay condoned.
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Addition on stock difference or understatement of sundry debtors - assessee has over stated the values by inflating the unit rates to increase the value of closing stock to the bank, but the quantity remained the same - there is no reason for making the addition on stock difference or understatement of sundry debtors.
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Penalty u/s 271D and 271E - violation of Sections 269SS and 269T - repeated mistake - penalty for earlier years was dropped - Tribunal fell in error in upholding the imposition of penalty by just observing that the Assessee ought not have repeated such a mistake and ought to have done the transaction only through Bank - HC
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Capital gain u/s 45(4) in partnership firm on retirement of a partner - dissolution/reconstitution of partnership firm - the provisions of Section 45(4) would not be attracted on the retirement of the two partners and consequential allotment of their share in the assets in the Assessee Firm - HC
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Exemption claimed u/s 10(25)(iii) - approved superannuation fund - The learned Tribunal was justified in upholding the exemption irrespective of the fact that the provision of the law, under which exemption was quoted, was not correctly mentioned by the assessee. - HC
Customs
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Clarification regarding Duty Drawback allowed in cases of short realization of export proceeds due to bank charges deducted by foreign banks
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Clarification regarding applicability of All Industry Rates of Duty Drawback while fixing Brand rate of Duty Drawback in post GST Era issued by the C.B.I.T.& C., New Delhi, vide Circular No.24/2019- Customs dated 8th August, 2019
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Refund of SAD - N/N. 102/2007-Cus - all conditions including the time limit within which the refund claim has to be filed must be fulfilled. - The refund applications of the importer beyond the time limit have been correctly rejected by the lower authorities.
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Valuation of imported goods - necessary software had to be embedded in the equipment - the Department was right in invoking principle under Note 4 to Section XVI of the First Schedule for classification and considering the imported items as part of one apparatus or machine to be classifiable under the heading appropriate to the function. - SC
Indian Laws
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Seizure and recovery of Contraband - poppy straw - The conclusion drawn by the High Court was completely unsustainable and the High Court erred in extending the benefit of acquittal to the respondent - SC
SEBI
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Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) (Amendment) Regulations, 2019.
Service Tax
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GTA Service - Demand of service tax on transportation of palm oil fruit - whether the same is a fruit entitled for the exemption - Any produce of a tree which is the result of ripened ovary, irrespective of nature of it being edible or not, amounts to fruit. - Benefit of exemption allowed. - AT
Central Excise
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Adjustment of duty excess paid and short paid - provisional assessment sought for many years, but not done - as there is no such provision in law, such relief cannot be granted.
Case Laws:
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GST
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2019 (9) TMI 1280
Detention of goods alongwith vehicle - In the detention order, the said Officer has stated that the driver as well as the authorised person is not present. - It was submitted that the detention of the goods of the petitioner which were being transported duly in accordance with law and were accompanied by a valid invoice and e-way bill is without authority of law - HELD THAT:- Issue Notice returnable on 30th September, 2019.
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2019 (9) TMI 1279
Attachment of bank accounts of petitioner - section 83 of the Goods and Services Tax Act, 2017 - HELD THAT:- Issue Notice returnable on 1st October, 2019.
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2019 (9) TMI 1278
Release of seized goods alongwith the truck - section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The second respondent is directed to forthwith release truck No. GJ-04-X-8728 along with the goods contained therein subject to the final outcome of the present petition.
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2019 (9) TMI 1277
Seizure of vehicle and two phones of petitioner - sub-section (2) of section 67 of the Central Goods and Services Tax Act/ Gujarat Goods and Services Tax Act, 2017 - HELD THAT:- Issue Notice to the newly joined respondent to explain as to under what circumstances and in exercise of which powers he has issued the impugned order dated 25.10.2018, returnable on 10th October, 2019.
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2019 (9) TMI 1276
Seizure of vehicle alongwith the goods - failure to generate E-way bill - section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The court is of the opinion that the petitioner may respond to the notice issued under section 130 of the CGST Act and submit its response thereto. It appears that the petitioner has already given a reply dated 19.09.2019, Annexure 'F' to the petition. Nonetheless, if the petitioner is desirous to make any further submissions, he may appear before the second respondent on 04.10.2019. The petition is partly allowed with a direction to the second respondent to forthwith release the truck along with the goods contained therein as the petitioner has already paid the amount of tax and penalty, subject to the final outcome of the proceedings under section 130 of the CGST Act and under other relevant statutory provisions.
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2019 (9) TMI 1268
Grant of regular bail - fraudulent availment and utilization of Input Tax Credit (ITC) - Section 68 of CGST Act, 2017 - HELD THAT:- This Court is of the considered view that though the petitioner is in custody since 4.7.2018, but taking into account the fact that the petitioner is involved in a case involving fraud of ₹ 19.50 Crores and the alleged offence is an ecnomic offence which requires to be dealt with seriously and mere long custody would not be a ground for releasing him on bail. Similar matter was also before Hon ble Apex Court inY.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION [ 2013 (5) TMI 896 - SUPREME COURT] , wherein it was observed that bail should not be granted in such like cases of economic offences merely on the ground that the accused was in the jail for a period of one year. Petition dismissed.
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2019 (9) TMI 1251
Profiteering - project Paramount Emotions situated in GH-05A, Sector 1, Greater Noida - benefit of Input tax credit not passed on - reduction in the price of flat - section 171 of CGST Act, 2017 - Imposition of penalty - HELD THAT:- The Applicant No. 1 had booked a flat with the Respondent in his project Paramount Emotions situated in GH-05A, Sector 1, Greater Noida and was allotted Apartment No. E301 in the Easy Tower of the project by the Respondent. It is also revealed that the Applicant No. 1 had filed a complaint on 19.06.2018 with the Uttar Pradesh State Screening Committee on Anti-Profiteering alleging that the Respondent had not passed on the benefit of ITC to him as per the provisions of Section 171 (1) of the CGST Act, 2017 and accordingly action should be taken against him. The DGAP has correctly assessed the additional ITC ratio as 2.42% and by applying this ratio to the payments made on or after 01.07.2017, has also correctly computed the profiteered amount as ₹ 3,69,26,963/- as has been mentioned in Annexure-18 of the Report This amount also includes profiteered amount of ₹ 15,231/- to be paid to the Applicant No. 1 and Rs. to all the other 1152 buyers. This Authority hereby determines the profiteered amount as ₹ 3,69,26,963/- in terms of Rule 133 (1) of the CGST Rules, 2017 and directs the Respondent to pass on the benefit of ₹ 15,231/- to the Applicant No. 1 and ₹ 3,69,11,732/- to the rest 1152 buyers as given in Annexure-18 of the DGAP Report, along with interest @18% per annum to all the 1153 recipients from the dates from which the above amount was collected by him from the buyers till the payment is made, in terms of Rule 133 (3) (b) of the above Rules. Imposition of penalty - HELD THAT:- It is evident that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his present project and resorted to profiteering in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus he has apparently committed an offence under section 171 (3 A) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty.
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Income Tax
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2019 (9) TMI 1272
Exemption claimed u/s 10(25)(iii) - approved superannuation fund - Approval and withdrawal of approval - the assessee is registered u/s 10(23AAA) as well as under Section 12A - HELD THAT:- Requirement of renewal of such approval granted by the concerned authority to the said Trust Fund, which is entitled to exemption under Section 10(25)(iii) of the Act. Therefore, this contention of the learned counsel for the Revenue is absolutely misplaced. There is no dispute that the assessee held this approval for the assessment period in question, viz., assessment years 2001-02 and 2003-04. The Tribunal has found that the assessee had already obtained approval under Section 10 (23AAA) of the year 1996 and registration under Section 12(A) of the Act subsequently and therefore the entire income would be exempted under Section 10(25)(iii) of the Act. The learned Tribunal, in our opinion, was justified in upholding the exemption in favour of the assessee irrespective of the fact that the provision of the law, under which exemption was quoted, was not correctly mentioned by the assessee. No justification for referring to the provisions under Section 10(23AAA) of the Act in this case. The provisions of Section 10(25)(iii) of the Act, under which the assessee claimed exemption in question, is clearly applicable to the approved superannuation fund and the assessee's Trust fund was duly approved by the competent authority in the present case. - Decided in favour of assessee.
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2019 (9) TMI 1271
Capital gain u/s 45(4) in partnership firm on retirement of a partner - dissolution/reconstitution of partnership firm - valuation of the assets and liabilities of the firm and allottment of assets among the retiring and continuing partners took place - reconstitution of a Partnership Firm, the asset transferred to the outgoing partner or amount paid to him attracts capital gains tax liability in the hands of the assessee/Partnership Firm or not in terms of Section 45(4) - HELD THAT:- As M/S. NATIONAL COMPANY VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX BUSINESS CIRCLE I [I/C] CHENNAI [ 2019 (5) TMI 354 - MADRAS HIGH COURT] there was only a reconstitution of the partnership firm by retirement of two partners and admission of another partner. The partnership firm continued. It must also be further noted that the assets of the firm originally belonged to the father of the retiring / continuing partners and there was only a division of the assets on retirement in accordance with their entitlement on the shares in the partnership. As pointed out earlier, the National Company was originally a sole proprietorship concern started by N.Munuswamy Mudaliar. It was in the business of construction and assets had been acquired even at that particular point of time. The two daughters and two sons-in-laws of N.Munuswamy Mudaliar were subsequently admitted as partners and on division of the assets, it can also be arguably pointed out that one daughter and one son-in-law were allotted a share which they were otherwise legally entitled to out of the holdings N.Munuswamy Mudaliar. We hold that the provisions of Section 45(4) would not be attracted on the retirement of the two partners and consequential allotment of their share in the assets in the Assessee Firm. We therefore answer the substantial question of law in favour of the Assessee and against the Revenue.
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2019 (9) TMI 1270
Rejection of books of accounts u/s 145 - Tribunal held that in the absence of any defect being pointed out in the records, the invocation of Section 145(3) was not proper - HELD THAT:- Tribunal found in the impugned order that the invocation of section 145(3) of the Act is unjustified as no defect was noted in the books of accounts to disregard the same. CIT(A) in his order while rejecting the Books of Account does not specify the defect in the record. The basis of the rejection appears to be best judgment of assessment done by him. The rejection of books should precede the best judgment assessment. On facts, the Revenue has not been able to show any defect in the Respondent s records which would warrant rejection of books and making a Best Judgment Assessment. Thus, on facts the view taken by the Tribunal is possible view Suppression of Sales - ITAT deleted the addition - HELD THAT:- Revenue has not made any reference even remotely that the Respondent had received amounts in excess of that shown in the agreements in respect of twelve flats which is not being accepted. The entire case of the Revenue is merely on suspicion. It is not the case of the Revenue that the Respondent made secret profits out of sale of the twelve flats. - Decided in favour of assessee.
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2019 (9) TMI 1269
Penalty u/s 271D and 271E - violation of Sections 269SS and 269T - repeated mistake - penalty for earlier years was dropped - HELD THAT:- Imposition of penalty depends upon the facts and circumstances of each case and if the Assessee can put forth a reasonable cause for accepting the deposits in cash then, such circumstances can be considered by the Assessing Authority to waive or reduce the penalty in question. In similar circumstances and for the same Assessee, the Assessing Authority himself entirely waived off the penalty for the preceding Assessment Year 1999-2000 Tribunal, in our opinion, fell in error in upholding the imposition of penalty by just observing that the Assessee ought not have repeated such a mistake and ought to have done the transaction only through Bank which method, in fact, as the learned counsel for the Assessee submitted, was adopted on 31.8.2001 on which date, the Bank Account was opened by the Assessee and therefore, it is only for this Assessment Year 2000-2001 which stands out and in respect of which the present Appeals are concerned. The law laid down in the decision of Vasan Healthcare (P) Ltd. v. Additional Commissioner of Income-tax, Chennai Range-2, Chennai [ 2019 (2) TMI 1000 - MADRAS HIGH COURT] is not applicable to the present case as the facts of the judgment in that case are distinguishable as there was no such fact of dropping penalty proceedings in the preceding year in that case. We are, therefore, inclined to take a lenient view in favour of the Assessee in the facts and circumstances of the case and are inclined to allow the present Appeals in favour of the Assessee on the ground that the for the preceding Assessment Year viz., 1999-2000, on the same set of facts and circumstances, the Assessing Authority himself dropped the penalty proceedings in question. - Decided in favour of assessee.
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2019 (9) TMI 1264
Addition on stock difference or understatement of sundry debtors - assessee has over stated the values by inflating the unit rates to increase the value of closing stock to the bank, but the quantity remained the same - HELD THAT:- Value of the stock declared in the books of accounts is as per the purchase bills and correctly reported. There was no difference in physical stocks declared to the bank and accounted in the books of accounts. The value of closing stock declared in the books of accounts was duly supported by the purchase bills. We also observe that the sundry debtors were also correctly reported and grouped in the books of accounts and no other evidence was brought on record by the department to controvert the above findings. The department did not make out a case of unaccounted stock or the suppression of trade debtors. The facts of the assessee s case are similar to the decision of M/S. SRI TARAKA JEWELLERS, NEW PARKASHAM BAZAR, NALGONDA [ 2013 (7) TMI 1091 - ANDHRA PRADESH HIGH COURT] and the decision of this Tribunal in the case of Thatavarthi Ramesh Babu [ 2017 (12) TMI 577 - ITAT VISAKHAPATNAM] . Therefore, respectfully following the view taken by Hon ble High Court and the ITAT, we hold that there is no reason for making the addition on stock difference or understatement of sundry debtors, hence, we set aside the order of the Ld.CIT(A) and delete the addition made by the AO. - Decided in favour of assessee.
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2019 (9) TMI 1263
Addition u/s 68 - income from unexplained sources - HELD THAT:- The assessee failed to explain nature and source of cash deposit in his Bank Account before the authorities below. The assessee for the first time contended before the CIT(A) that he is running a general store shop and cash has been deposited out of the sales made. The explanation of assessee is not supported any documentary evidences. When assessee made purchases out of the same Bank Account as per the contention of Learned Counsel for the Assessee through Banking channel, assessee could have produce purchase bills before the authorities below to show that it was in fact the business transaction of assessee. Assessee did not produce any evidence before the authorities below. Same is the position before the Tribunal that assessee did not produce any purchase bills to show that purchases were made through banking channel out of the same Bank account in which cash have been deposited. Therefore, there were no justification even to remand the matter back to the file of A.O. as is argued by the Learned Counsel for the Assessee. - Decided against assessee.
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2019 (9) TMI 1262
Reopening of assessment - Claim of exemption u/s 10A - HELD THAT:- It is clear from the reasons recorded that Assessing Officer clearly mentioned that the assessee made irregular claim of deduction/exemption u/s 10A and it is clear that on alleged wrong claim made by the assessee, the Assessing Officer reopened the assessment. Therefore it is established that without having any new material but on mere change of opinion, the assessment was reopened by the Assessing Officer, in our opinion, the assessment made thereon u/s 147 of the Act is not maintainable. Assessee filed objections questioning the reasons recorded for initiation of proceedings u/s 147 of the Act. On perusal of the assessment order, it is noted that nowhere the AO discussed about the objections raised by the assessee and without considering the same proceeded to reopen the assessment, is bad in law. Assessee filed all the details such as audited accounts, tax audit report u/s 44AB and required documents for claim of exemption u/s 10A of the Act in the original assessment proceedings itself and having accepted the same, the Assessing Officer cannot reopen the same assessment again by recording that the income has escaped by virtue of being making a wrong claim. It is also noted from the record that from Assessment Year 2001-02 to 2009-10, the claim u/s 10A of the Act were allowed except Assessment Year 2007-08 which is under consideration before us. Department of Revenue has been granting deduction u/s 10A to the assessee in earlier assessments as well as in subsequent assessments. Therefore, there was no new tangible material was brought on record by the Assessing Officer and in the absence of which the Assessing Officer is not entitled to reopen the assessment and it is merely a change of opinion - Decided in favour of assessee.
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2019 (9) TMI 1261
Computation of deduction u/s 10AA - HELD THAT:- AO reduced the aforesaid expenditure incurred in foreign currency for providing technical services outside India from the Export Turnover while computing the deduction u/s 10AA of the Act and accordingly determined the deduction u/s 10AA. There is no dispute that the assessee is entitled for deduction u/s 10AA of the Act in the instant case. CIT-A held that items that were excluded from export turnover should also be correspondingly reduced from total turnover also and hence it would not alter the claim of deduction u/s 10AA of the Act for the assessee. Hon ble Supreme Court in the case of CIT vs HCL Technologies Ltd in Civil [ 2018 (5) TMI 357 - SUPREME COURT] had held that items that were excluded from export turnover should also be excluded from total turnover. In view of this decision, we find no infirmity in the order of the ld CITA in this regard. Accordingly, the Ground No.1 raised by the revenue is dismissed. Carry forward of losses without setting it off against the income eligible for deduction u/s 10AA - HELD THAT:- High Court in the case of CIT vs Black Veatch Consulting P Ltd [ 2012 (4) TMI 450 - BOMBAY HIGH COURT] wherein it was held that section 10A is a deduction provision and not an exemption provision ; that section 10A benefit has to be given effect to at the stage of computing the profits and gains of business; that it is anterior to the application of the provisions of section 72 of the Act which deals with the carry forward and set off of business losses. As held that the deduction u/s 10A of the Act is to be allowed without setting off of carry forward unabsorbed losses and the depreciation from the earlier assessment year or current assessment year either in the case of non-STPI unit or in the case of very same undertaking. CIT-A for the year under consideration directed the ld AO to allow the carried forward of losses without setting it off against the income exigible for deduction u/s 10A. We find that similar views were endorsed by the Hon ble Supreme Court in the case of PCIT vs Rangsons Electronics Pvt Ltd [ 2017 (11) TMI 1047 - SC ORDER] and in the case of CIT vs Yokogawa India Ltd [ 2016 (12) TMI 881 - SUPREME COURT] - Decided against revenue
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2019 (9) TMI 1260
Condonation of delay - delay of 11 years - on the basis of findings in the order for subsequent year, appeal was filed for earlier year before CIT(A) - HELD THAT:- It is admittedly only on account of the said finding that the assessee has filed the appeal as there is no other alternative remedy available to the assessee. This being so, as it is noticed that the delay issue is a technical issue and the delay is not on account of lethargy on the part of the assessee or on account of any malafide reasons. This being so, applying the principles laid down by the Hon ble Supreme Court in the case of Collector, Land Acquisition vs. Mst.Katiji Ors [1987 (2) TMI 61 - SUPREME COURT ] the delay in filing of the appeal stands condoned. As the Ld.CIT(A) has not adjudicated the issues on merits, the issues in this appeal are restored to the file of the Ld.CIT(A) for adjudication on merits. Appeal filed by the assessee is partly allowed for statistical purposes.
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2019 (9) TMI 1259
Validity of Notice u/s 143(2) - period of limitation - notice issued by an officer who had no jurisdiction over the assessee - curable defect u/s 292B - HELD THAT:- It is an admitted fact that the assessee efiled the return of income on 14/09/2015 mentioning the address at Mohali, in the earlier years also, the returns of income were filed at the same address. Therefore the A.O. Ward-6(4) Mohali was having the jurisdiction upon the case of the assessee. In the present case the ACIT, Circle-1, Amritsar who was not having the jurisdiction over the assessee s case issued the notice under section 143(2) dt. 12/08/2016 therefore the said notice was beyond the jurisdiction. From the proviso to sub section 2 of Section 143 of the Act, it is clear that no notice under section 143(2) of the Act shall be served on the assessee after the expiry of six months from the end of the Financial Year in which the return was furnished. In the present case the assessee filed the return on 14/09/2015 and the Financial Year ended on 31/03/2016. Therefore the time available to issue the notice under section 143(2) was upto 30/09/2016 but the A.O. who was having the jurisdiction i.e; the ITO, Ward 6(4) Mohali issued the notice under section 143(2) alongwith the questionnaire under section 142(1) of the Act to the assessee on 22/05/2017. As notice under section 143(2) of the Act was not issued in prescribed time limit as per the proviso to section 143(2) of the Act by the A.O. having the jurisdiction upon the case of the assessee and the notice issued by the ACIT, Amritsar suffered from an inherent lacuna affecting his jurisdiction so the same could not be cured by having resort to the provisions of section 292B of the Act. Therefore the assessment framed under section 143(3) of the Act, by the A.O. without issuing the notice u/s 143(2) of the Act within the time limit prescribed in the proviso to section 143(2) of the Act was invalid and accordingly quashed. - Decided in favour of assessee.
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2019 (9) TMI 1258
Deduction on account of various expenses - HELD THAT:- As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that A.Y. 2009-10, we respectfully follow the order of the Tribunal for A.Y. 2009-10 [ 2018 (9) TMI 785 - ITAT KOLKATA] and restore the order of the Assessing Officer treating the income received by the assessee by way of service charges as income from house property. We also restore the issue relating the allowability of various expenses claimed by the assessee to the file of the Assessing Officer for deciding the same afresh as per the same direction as given by the Tribunal for A.Y. 2009-10. Long-term capital loss - disallowance of capital loss arising from the extinguishment of its interest in the shares of SSPL on liquidation - HELD THAT:- The assessee-company having received money as shareholder on the liquidation of a Company, sub-section (2) of section 46 is clearly applicable and the capital gain or loss is required to be computed by applying the said provision. Contention that the money was actually received by the assessee on 14.05.2008 and the capital gain or loss, if any, arising to the assessee was required to be computed as per the provisions of sub-section (2) of section 46 in A.Y. 2009-10 and not in the year under consideration, i.e. A.Y. 2010-11 - In the present case, SSPL was liquidated vide order dated 06.11.2009 and the order for strike off (liquidation) of SSPL having been passed on 09.11.2009, we are of the view that the capital gain or loss arising from receipt of money by the assesese-company as a shareholder on the liquidation of a Company was chargeable to tax as per section 46(2) in the year under consideration, i.e. A.Y. 2010-11. We, therefore, set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer to re compute the capital gain/loss chargeable to tax in the hands of the assessee-company as per the provisions of section 46(2). Ground No. 2 of the Revenue s appeal thus is treated as allowed for statistical purposes.
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2019 (9) TMI 1257
LTCG - Exemption u/s 54 - assessee and her husband purchased the new property in their son s name - HELD THAT:- The provisions of section 54 of the Act are beneficial and are to be considered liberally for reasonable bonafide cause but investment in residential property is mandatory which is not in dispute in this case. The Assessing Officer was not justified in rejecting the case law relied on by the assessee in the case of CIT v. Shri Kamal Wahal [ 2013 (1) TMI 401 - DELHI HIGH COURT] , wherein, it was held that the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. Claiming exemption under section 54(1) of the Act deals with transfer of a long term capital asset being building or lands appurtenant, whereas, section 54F of the Act deals with transfer of any long term capital asset not being a residential house, but both are coming under computation of income from capital gains. From the observations of the Assessing Officer, it is evident that he has not appreciated the complete findings given The issue is covered in favour of the assessee by the decisions of CIT v. Kamal Wahal [ 2013 (1) TMI 401 - DELHI HIGH COURT] , CIT v. V. Natarajan [ 2006 (2) TMI 136 - MADRAS HIGH COURT] , CIT v. Gurnam Singh [ 2008 (4) TMI 28 - PUNJAB AND HARYANA HIGH COURT] and moreover, the decision of DIT v. Jennifer Bhide [ 2011 (9) TMI 161 - KARNATAKA HIGH COURT] . Under these facts and circumstances, the long term capital gains taxed by the Assessing Officer stands deleted. Levy of short term capital gains - distress sale - AO proposed to adopt the guideline value as sale consideration as per section 50C - HELD THAT:- Admittedly, the provision of section 50C(1) of the Act reads as where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government [i.e., stamp valuation authority] for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessable shall, for the purpose of section 48 of the Act be deemed to be the full value of the consideration received or accruing as a result of such transfer. In this case, since the assessee has not opted for to refer her case for valuation to the Department Valuation Officer as per section 50C(2) of the Act, we are of the considered opinion that the Assessing Officer has rightly adopted the 50C(1) value as fair market value and determined the short term capital gain. - Decided against assessee
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2019 (9) TMI 1256
Bogus purchases u/s 69C - profit percentage at the rate of 25% on bogus purchases by CIT-A - HELD THAT:- CIT(A) has restricted the profit rate at the rate of 25%, which according to us is on higher side going by the nature of business of the assessee i.e. trading in Iron, Steel cement on semi-wholesale basis. We are in agreement with the contentions raised by the assessee before CIT(A) and according to us a profit rate of 25% is on higher side by going through the nature of the business of the assessee and the fact that the business of Iron, Steel Cement does not give higher profits. Even, the assessee has paid the VAT element on the bogus purchases. Hence, we direct the AO to recompute the income after applying profit rate at the rate of 8% of the bogus purchases and compute the income accordingly. The appeal of the assessee is partly allowed.
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2019 (9) TMI 1255
Bogus LTCG - Addition u/s 68 - HELD THAT:- AO has heavily relied upon the statement recorded from the director of NCL Research Financial Services Ltd during the course of search and the investigation wing of income-tax department, Kolkatta. It is also an admitted fact that the AO has relied upon said information in the show cause notice issued to the assessee dated 05-12-2016. The assessee has sought for information relied upon by the assessee in the form of statement of director of the company and also requested for cross examination of the person, who gave the statement vide letter dated 14-12-2016. All these are part of paper book filed by the assessee. When the assessee has specifically asked for statements, which are used against the assessee to draw an adverse inference and also requested for cross examination of the person, who gave the statement, it is the duty of the AO to provide such statements to the assessee and also to provide the opportunity of cross examination. In this case, inspite of repeated requests, the AO has failed to do so. Therefore, we are of the considered view that the assessment order passed by the AO suffers from jurisdiction and is in violation of principles of natural justice, consequently, liable to be quashed. Hence, considering the facts and circumstances of this case and also by following the decision of Hon ble Supreme Court in the case of Andaman Timber Industries vs Commissioner of Central Excise [ 2015 (10) TMI 442 - SUPREME COURT] and other decisions, we quash the assessment order passed by the AO and deleted addition towards unexplained credit u/s 68 of the Act. - Decided in favour of assessee
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2019 (9) TMI 1254
TP Adjustment - comparable selection - HELD THAT:- Entity namely M/s Suashish Diamonds Ltd. has been excluded on account of RPT filter. However, keeping in view the submissions made by Ld. AR that this entity has not crossed RPT filter, we deem it fit to restore the matter back to the file of Ld. TPO / Ld. AO to consider the RPT computations as submitted by AR before us. If the said comparable do not cross RPT threshold as suggested by Ld. AR, the said entity shall be included in the final list of comparable. ALP has to be applied only in relation to international transactions and not in relation to assessee s entire sales / turnover. The bench, at para 11, has also enumerated the mode of computation of the tolerance range of +5%. Taking a consistent view, we direct the lower authorities to re-compute the TP adjustment, if any, in the light of findings of Tribunal in AY 2007-08. Expenditure on computer software - allowable revenue expenditure - HELD THAT:- As decided in own case in AY 2007-08 insofar as the directions on account of AMC for maintenance of software given by the DRP is concerned, the same appears to be very reasonable and no interference is called for. However, with regard to other expenditure, the Assessing Officer is directed to verify this contention of the assessee, in the light of the decision of the Special bench of the Tribunal, Delhi rendered in Amway India Enterprises V/s DCIT [2008 (2) TMI 454 - ITAT DELHI-C] . Depreciation on Sony Viao Laptop - HELD THAT:- The assessee could not furnish any bill / voucher in support of the same and only filed credit card statement showing the payment of the same. Accordingly, depreciation of ₹ 0.54 Lacs claimed against the same was disallowed. DRP confirmed the same since the assessee failed to file requisite documentary evidences. We find that this ground would require no indulgence on our part since the assessee could not discharge the onus to substantiate the expenditure and secondly, this issue stood covered against the assessee by the order of Tribunal for AY 2007-08
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Customs
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2019 (9) TMI 1283
Smuggling - Betel Nuts - Provisional release of seized goods - N/N. 9/96 (NT) Cus, dated 22.01.96 issued under Section 11 of the Customs Act, 1962 read with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 - HELD THAT:- In the present case, since the Food Laboratory Report has found that the Betel Nut are not fit for human consumption, in the opinion of this Court, no fault may be found with the rejection of the request of the petitioners for grant of release. Sustainability of seizure - Learned counsel for the Union of India, Department of Customs has submitted that the developments so far may persuade this Court not to interfere with the seizure at this stage when the matter is still under investigation and a complete view may be taken as regards the foreign origin after obtaining a report from the accredited lab - HELD THAT:- This Court is of the considered opinion that in the given facts and circumstances of the case, where the matter is still under investigation and even some accredited labs have come into existence, this Court need not interfere with the seizure of the Betel Nuts at this stage and this issue be kept open for consideration at appropriate stage after the investigation is over and the respondents receive a report as regards the country of origin from an accredited lab within a period of three months by following the established procedures. Application dismissed.
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2019 (9) TMI 1282
Valuation of imported goods - necessary software had to be embedded in the equipment - cost of post import services - rejection of declared value - Classification with reference to Note 4 to Section XVI of the First Schedule - Rule 10A of the erstwhile Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - inclusion of cost of services - Rule 9(1) (e) (adding cost of services) of the erstwhile Custom Valuation (Determination of Price of Imported Goods) Rules, 1988 - provisional assessment not finalised - HELD THAT:- It is a matter of record that after considering the purchase order in the instant case, the Tribunal found that apart from supply of equipment, necessary software had to be embedded in the equipment before the supply was effected. The facts also disclose that out of 19 items indicated in the Bill of Entry, only 8 items were physically presented while the rest were already embedded in the main unit. These facts are not only reflective that the individual components were intended to contribute together and attain a clearly defined function as dealt with in Note 4 of Section XVI as stated above, but also indicate that software that was embedded through cards in the main unit, was not any post-importation activity. The value of the software and the concerned services were therefore rightly included and taken as part of the importation. The facts on record as stated above further disclose that the Department was therefore right in invoking principle under said Note 4 and considering the imported items as part of one apparatus or machine to be classifiable under the heading appropriate to the function. The submission advanced by the Appellant in that behalf therefore has to be rejected. Even if the governing rule is taken to be Rule 9 of 1988 Rules, there would be no difference in the ultimate analysis. Appeal dismissed.
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2019 (9) TMI 1274
Release of seized imported goods - Mini Booster Pump - rejection of declared value - HELD THAT:- The respondents should assess the duty payable on the goods after examination of the consignment, and since the petitioner has expressed his willingness to deposit the redemption fine and penalties at the time of clearance, without prejudice to its rights and contentions, we see no impediment in the said assessment being undertaken by the respondents for clearance of the goods. Petition disposed off with a direction to the respondents to make a fresh assessment of the duty payable by the petitioner.
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2019 (9) TMI 1266
Refund of SAD - N/N. 102/2007-Cus. dt. 14.09.2007 read with Notification No.93/2008 dt. 01.08.2008 - rejection of refund on the ground that the appellants have filed all these refund claims after the period of one year - Difference of opinion among various High Courts - HELD THAT:- The provisions for refund of Customs duty available under the Customs Act is under Section 27. The Hon ble High Court of Delhi in the case of SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2014 (4) TMI 870 - DELHI HIGH COURT] has taken a liberal view on interpreting the exemption notification and held that since the purpose of availing the SAD is to provide level playing field between the imported goods and the domestic goods, when the imported goods are resold on payment of VAT to the State Government, the exemption notification provides for refund of SAD. It may or may not be always possible for the importer to resell the goods and file the refund claim within time depending on his market conditions. Taking a liberal view, the Hon ble High Court held that refund is available without the limitation of one year indicated in the exemption Notification 102/97 after amendment. On the other hand, the Hon ble Bombay High Court in the case of M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA OTHERS [ 2017 (1) TMI 786 - BOMBAY HIGH COURT] has constructed the exemption notification strictly and held that all conditions including the time limit within which the refund claim has to be filed must be fulfilled. We also find that there is no order of the jurisdictional High Court of Madras. Judicial discipline requires us to follow the judgment of the Apex Court and interpret the exemption notification strictly as it has been drafted including the time limit within which refund applications have to be filed. We find that the judgment of the Hon ble High Court of Bombay in the case of CMS INFO System (supra)M/S. CMS INFO SYSTEMS LIMITED VERSUS THE UNION OF INDIA OTHERS [ 2017 (1) TMI 786 - BOMBAY HIGH COURT] is consistent and appropriate, syncs well with the ratio of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] , which is required to be followed. The refund applications of the importer beyond the time limit have been correctly rejected by the lower authorities - Appeal dismissed.
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Insolvency & Bankruptcy
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2019 (9) TMI 1265
Maintainability of petition - Initiation of CIRP - aggrieved person - Corporate Debtor defaulted in payment of financial debt - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Loan Agreement dated 24th September, 2015 which was reached between Odisha Slurry Pipeline Infrastructure Limited - ( Corporate Debtor ) and IDBI Bank Limited also show that a sum of ₹ 400 Crores was borrowed by the Corporate Debtor from Financial Creditor . The terms of repayment have been shown therein. Admittedly, the Corporate Debtor has failed to pay the debt - This apart, curiously, the Promoters/ Directors of the Odisha Slurry Pipeline Infrastructure Limited - ( Corporate Debtor ) who are aggrieved parties have not preferred any appeal under Section 61 of the I B Code . One of the Financial Creditors , namely- SREI Multiple Asset Investment Trust has challenged the order of admission under Section 7 who cannot be held to be an aggrieved person. No case has been made out by the Appellant - appeal dismissed.
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2019 (9) TMI 1252
Relevant date for completion of CIRP - period between the date of order of admission and the actual date on which the RP takes charge for completing the CIRP to count the total period of 270 days - HELD THAT:- It is pertinent to mention that CIRP was initiated by order of this Tribunal dated 30.8.2018 and IRP Mr R. K. Bhuta was appointed by the same order. After that, CoC decided to change the IRP, and Mr Ramchandra D. Choudhary was appointed as RP on the recommendation of the CoC. Till the appointment of new RP, IRP was looking after the work of the RP. Therefore, there is no justification for the exclusion of the period as IRP was discharging his duties as RP for completion of the CIRP. Application dismissed.
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Service Tax
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2019 (9) TMI 1253
GTA Service - Demand of service tax on transportation of palm oil fruit - whether the same is a fruit entitled for the exemption of N/N. 33/2004-ST dated 03.12.2004? - transport of fruits is exempted - HELD THAT:- Any produce of a tree which is the result of ripened ovary, irrespective of nature of it being edible or not, amounts to fruit. Admittedly, the product transported in the present appeal is palm oil fruit. The photographs as produced by the appellant during the arguments also support the opinion as formed. Thus, the fruit in question is very much covered by the notification. The adjudicating authorities below are therefore held to have formed a very rigid and narrow description of the fruit. Appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (9) TMI 1275
Maintainability of appeal - Appropriate forum - Applicability of N/N. 108/95-CE dated 28.08.1995 - HELD THAT:- The applicability of N/N.108/95-CE dated 28.8.1995 is subject matter of the appeal. Such notification has a direct bearing on the determination of the rate of duty for the purposes of assessment. Under the circumstances, in the light of the provisions of section 35G read with section 35L of the Central Excise Act, 1944, these appeals are not maintainable before this court. The appeals are disposed of as not being maintainable.
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2019 (9) TMI 1267
Refund of excess duty paid - provisional assessment sought for many years, but not done - CBEC No. 619/10/2002 dated 19.02.2002 - Extended period of limitation - HELD THAT:- It can be seen that the Circular though provides for finalization of values at a later date, essentially suggests provisional assessment in such cases. The appellants contend that they have approached the jurisdictional authorities for provisional assessment on a regular basis over the years. However, their request was not exceeded to by the authorities. Whatever be the Department s reason for not accepting provisional assessment, the ratio of the Circular would not be applicable to the appellants. Extended period of limitation - HELD THAT:- As the assessments were not provisional, the Department was not barred from issuing a demand for normal period. Consequentially, the Circular is not applicable to the instant case and the demand is sustainable for the normal period. Adjustment of duty excess paid and short paid - HELD THAT:- We find that as there is no such provision in law, we cannot extend any such relief. The Department as a case on merits and the appellants are liable to pay duty for the normal period - the case remanded to the Original Authority to compute the demand for normal period which shall be paid by the appellants - appeal allowed partly by way of remand.
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Indian Laws
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2019 (9) TMI 1281
Seizure and recovery of Contraband - poppy straw - Section 42 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - only two samples packets and one bag of poppy straw weighing 2.5 kg were produced and exhibited while the entire contraband material was not produced and exhibited. Whether the cases relied upon by the High Court state in unequivocal terms that in case of failure to produce the contraband material before the Court, the case of the prosecution is required to be discarded or not? HELD THAT:- Reliance placed in the case of JITENDRA ANR. VERSUS STATE OF MP. [ 2003 (9) TMI 709 - SUPREME COURT] relying on which the benefit of doubt was given and the accused was acquitted. The evidence of PW15 Surender Singh shows that from and out of 7 bags of poppy husk, samples weighing about 500 grams were taken out of each bag. Out of these 3500 grams thus taken out, two samples of 500 grams were independently sealed while rest 2500 grams were also sealed in a separate pouch. These samples were marked A, B and C respectively. The bags were also independently sealed and taken in custody and Exbt-5 seizure memo which recorded all these facts was also signed by the accused. Cross-examination of witnesses - HELD THAT:- At no stage even a suggestion was put to the witness that either the signatures of the accused were taken by fraud, coercion or mis-representation or that the signatures were not of the accused or that they did not understand the purport of the seizure memo. It would therefore be difficult to even suggest that the seizure of contraband weighing 223 kgs was not proved by the prosecution - In our view this fact stood conclusively proven. The conclusion drawn by the High Court was completely unsustainable and the High Court erred in extending the benefit of acquittal to the respondent - the view taken by the High Court is set aside and the order of conviction as recorded by the trial court against the respondent in its judgment and order dated 01.08.2015 is restored - appeal allowed.
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2019 (9) TMI 1273
Smuggling - Brown Colored Powdery Substance - Section 67 of NDPS Act - acquittal of accused - Testing of samples - HELD THAT:- It is pertinent to mention here that it is the duty of the courts, in the interest of justice, to understand that why the fresh samples were drawn on a date which was not in the knowledge of the petitioner/accused. Thus, raising a doubt on the entire process and bonafide case of the prosecution and that such discrepancy and illegality would ultimately result into the acquittal of the accused and therefore, there is no purpose of charging the accused and exposing them to the further harassment of trial which they have been facing since 03.12.2010. The order on charge dated 04.08.2017 is hereby set aside and the petitioners are discharged from the offences - petition is accordingly allowed with costs of ₹ 50,000/- to be paid by the Respondent in favour of Delhi High Court Legal Services Authority within 2 weeks from today, failing which, the Registrar General of this court shall ensure the recovery of the cost amount as per law.
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