Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 19, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Central Excise
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Classification of services - the applicant is not just preparing the document but performs activities on the day to day transactions of the Principal, like Screening of restricted parties, screening of orders, screening of shipments, maintenance of shipping documents, doing manual processing of transactions on HOLD, auditing of entries, Record keeping etc. - the activities of the applicant cannot be covered under the Service Code 998595 and hence covered under the Service Code 998599.
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Classification of services - filters manufactured solely and principally for use by/in Indian Railways and supplied directly to Indian Railways - The filters are classifiable under HSN Heading 8421 - The classification of the goods shall not alter on account of supply by distributor to Railways.
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Classification of supply - Transportation by own vehicles on the basis of Invoice(s) and E-way Bill without issuing the LR/GR by the Applicant Transporter - The applicant is a GTA service provider under GST Act and is not exempted from paying GST
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Applicable rate of Tax on different categories of Fabric - Refund of any accumulated credit of duty arising out of inversion of tax - raw silk and raw jute - The aforesaid controversy should specifically and pointedly be placed before the Council, preferably in the next meeting.
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Confiscation of goods or conveyance - imposition of penalty - non-production of invoice or the e-way bill - the impugned order is in breach of the principles of natural justice on two counts - remanded back.
Income Tax
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Enhancement of income by the CIT(A) - Prior period expenditure - settlement of disputed expenditure - It is at this stage that the liability to pay can be said to have finally arisen. Once the liability to pay arose in the year relevant to the assessment under consideration, the same has to be allowed as deduction.
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TDS u/s 194H from payment of bank guarantee commission to the bank - when there is no principal-agent relationship between the bank and the assessee, deduction of tax at source on commission or brokerage is not required for.
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Appeal filed against the deceased assessee - revised form no. 36 is filed belatedly - once the Tribunal has granted the leave to the revenue for filing the revised form no. 36, the appeal of the revenue is admitted for deciding on merits. The legal preliminary objection raised by the assessee is rejected.
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Revision u/s 263 - Claim of deduction u/s 54B - sale of agriculture land after plotting - the issue is not limited to the capital gain or business income but the issue is allowing the deduction u/s 54B without conducting a minimum enquiry by the AO whether the conditions prescribed u/s 54B are satisfied or not - Revision upheld.
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Claim of deduction of interest paid on interest bearing maintenance security deposit to the members - There is no prohibition in Section 57 (iii) under which deduction of interest is eligible to the assessee society.
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Penalty levied u/s 271A - applicability of section 44AD - profit showed at lower rate - Audit was conducted u/s 44AB - AO shall not resort to short cut method of applying provisions of section 44AD of the Act, when the turnover of assessee exceeds the prescribed limit u/s.44AD
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Additions on account of long term capital gains arising from transfer of land - GPA holder - when in the registered power of attorney no consideration has passed on from assessee to the original owner, there was no question of any transfer of property in favour of the assessee. - He has merely acted upon GPA - No additions in the hands of GPA holder.
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Unexplained cash - addition u/s 68 or 69A - If certain amount of cash is received from buyers which is then handed over to sellers, it is not the amount of receipt which can be added to the assessee’s total income but only the profit element embedded in the transaction.
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Addition as “salary income” instead of business income - The claim of the assessee is that the income earned by way of commission for expansion of business of the Principal - tax (TDS) has been deducted u/s.194H & 194D - Claim of the assessee allowed subject to verification of expenses.
Customs
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Recovery of duty drawback incentive availed at the time of export - power to reassess shipping bill - Respondent / Revenue is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007.
Central Excise
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CENVAT Credit - Duty Free Credit Entitlement (DFCE) certificates - The assessee is eligible for credit of the countervailing duty paid through debit in the DFCE certificates even prior to 17.11.2005.
Case Laws:
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GST
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2019 (10) TMI 670
Classification of services - Support Services or not - Intermediary services or not - back-end support services provided by the applicant to the Juniper Inc. under the agreement - whether classified under Tariff Heading 9985? - N/N. 11/2017 - Central Tax (Rate) dated 28.06.2017. HELD THAT:- The works that has been entrusted to the applicant by Juniper shows that the Juniper Inc has outsourced its works to the applicant and the applicant is providing his services either updating in the system and if the system is not able to process the work, then it has to do the -process manually and update the system. There is no interaction of the applicant with the third persons, either directly or indirectly and the applicant is only concerned with the work which has been entrusted to it on the system. The issue is whether the applicant is arranging or facilitating the supply of services between two or more persons. The terms of the agreement are verified and found that the applicant has outsourced a part of the activity of supply of services by Juniper Inc to his clients or recipients of such service, to the applicant and the applicant is providing the service in relation to the service provided by Juniper Inc. The exact meaning of the word facilitating has not been defined or explained in the Act or Rules. It is seen that the applicant is engaged in providing the services themselves. In other words there is no third person involved in providing services to Juniper or receiving from juniper where the applicant may have acted as the go in between. The applicant is thus not involved as an intermediary in terms of the contents of the statement of work provided by the applicant. Whether the services provided by the applicant to Juniper Inc would be classifiable as Support Services under the Tariff Heading 9985 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017? - HELD THAT:- It is very clear that the activities of the applicant is a support service provided to the recipient of services and are not covered under the Groups from 99851 to 99855. It is also not covered by the Service Code 998591 to 998594 and 998596 to 998598 - The nature of the works done is verified and found that it is not office administration work done for others on contract basis and hence they cannot be covered under Service Code 998594. Whether the services rendered can be covered under the term document preparation services ? - HELD THAT:- The contract agreement is verified and found that the applicant is not just preparing the document but performs activities on the day to day transactions of Juniper Inc like Screening of restricted parties, screening of orders, screening of shipments, maintenance of shipping documents, doing manual processing of transactions on HOLD, auditing of entries, Record keeping etc. Hence the activities of the applicant cannot be covered under the Service Code 998595 and hence covered under the Service Code 998599.
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2019 (10) TMI 669
Classification of services - filters manufactured solely and principally for use by/in Indian Railways and supplied directly to Indian Railways - whether classifiable under HSN Heading 8421 or under HSN Heading 8607 of the Customs Tariff? - classification of goods - filter alter if identical goods are supplied to a distributor instead of Indian railways directly, and the distributor in turn effects supply to Indian railways. HELD THAT:- Rail/ tramway locomotives and rolling stock are classifiable under Heading 8601 to 8603. The filters in the instant case are identifiable with the goods of the Chapter as contended by the applicant. Therefore plain reading of Section Note 2, as narrated above, indicates that filters appearing in heading 8421 cannot be considered as covered under Heading 8609 - Since filters are covered under Heading 8421 and these are not covered under the above exceptions, the same are not liable to be covered under Parts of Railway or Tramway locomotives or rolling stock. The items supplied by the applicant to Railways are Air filters for Electric locomotives, Air filters for Diesel locomotives, Car body filter and Lube oil and Fuel filter. The Air filters for internal combustion engines are specifically classified under heading 84213100, Oil filters under 84212300 and Air filters for electric locomotives under 84213990. Applying the rules of interpretation under Note 2 all these items, because they find specific heading under which they are placed by name, will continue to be classified under the same heading even if they are designed for specific or sole use in some machine. They would not liable to be classified under the heading of the machine. The goods made specifically for railways were covered under Headings 8312, 7308, 7613, 7611, 8409 and 3926. All these headings are not hit by the provisions of Note 2. Note 2 applies the restrictions in respect of items covered by Headings 84.01 to 84.79 only. Further the three conditions, as enumerated in Para 9.11, show that any parts made specifically for railways and not covered under headings 84.01 to 84.79 would invariably be covered by heading 8607. The exclusion is specifically for items under heading 84.01 to 84.79 and the item supplied by the applicant happens to fall under heading 8421. The filters are classifiable under HSN Heading 8421 - The classification of the goods shall not alter on account of supply by distributor to Railways.
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2019 (10) TMI 668
Classification of supply - Exempt supply or non-GST supply - Transportation by own vehicles on the basis of Invoice(s) and E-way Bill without issuing the LR/GR by the Applicant Transporter - applicability of Rule 42 of the CGST Rules 2017 in case where there is GST and Non GST Supplies and there is a common consumption of input and input services - N/N. 11/2017-Central Tax (Rate) Date 28.06.2017. HELD THAT:- While going through the contents of an e-way bill, it is found that, the Transport Document Number is nothing but goods receipt number. To issue an E-way bill, it is mandatory to mention the transport document number in Part A8, without mentioning the same, e-way bill cannot be issued therefore it is mandatory for GTA to issue the transport document and without issuing LR/ GR/consignment note, goods cannot be transported. Therefore the contention of the applicant of providing service without issuing LR/GR/consignment note is not correct and is not acceptable. The applicant is a GTA service provider under GST Act and is not exempted from paying GST and thus liable to pay GST as provided under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended) read with Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 (as amended) - Further, the Rule 42 of the GST Rules, 2017 defines the mechanism of manner of availing Input Tax Credit in cases where input or input services are partly used for effecting taxable supplies including zero rated supplies and partly for effecting exempt supplies. Where the goods or services or both used by the registered person partly for effecting taxable supplies including zero-rated supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies as per provisions and procedure prescribed under Section 17 (2) of GST Act read with Rule 42 of GST Rules, 2017.
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2019 (10) TMI 667
Applicable rate of Tax on different categories of Fabric - Refund of any accumulated credit of duty arising out of inversion of tax - raw silk and raw jute - HELD THAT:- From what has been argued by Mr. Shah, we are inclined to agree with his submission that the decision of the GST Council was to subject all fabrics at the rate of 5% taxation and it appears that the position stated in the affidavit filed on behalf of respondent No. 3 was only the proposal of the Joint Secretary (TRU-1), CBEC, which was not agreed to or approved by the Council. The aforesaid controversy should specifically and pointedly be placed before the Council, preferably in the next meeting. A copy of our order should also be circulated so that the controversy is brought before the Council. List on 11.02.2020.
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2019 (10) TMI 666
Provisional attachment of property - section 83 of the State Goods and Services Tax/Central Goods and Services Tax Act, 2017 - HELD THAT:- Issue Notice , returnable on 16th October 2019 . By way of ad-interim relief, the respondent No. 2 is directed to forthwith release the provisional attachment of the bank account of the petitioner maintained with the Axis Bank Limited, Kalol.
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2019 (10) TMI 665
Confiscation of goods or conveyance - imposition of penalty - non-production of invoice or the e-way bill - contravention to the provisions of sub-section (4) of section 130 of the CGST Act - Principles of natural justice - HELD THAT:- In terms of clauses (i) and (iv) of sub-section (1) section 130 of the CGST Act, the goods can be confiscated provided that the person supplies or receives goods in contravention of the provisions of the Act or the rules made thereunder with the intent to evade payment of tax; or contravenes any provisions of the Act and the rules made thereunder with the intent to evade payment of tax respectively. Insofar as clauses (ii) and (iii) are concerned, the very fact that the person does not account for the goods on which he is liable to pay tax under the Act; or supplies any goods which are liable to tax under the Act without having applied for registration, would be sufficient for ordering confiscation of the goods. Therefore, while making an order of confiscation under section 130 of the CGST Act, the officer adjudging it will have to state as to which clause of sub-section (1) of section 130 of the CGST Act is attracted in the facts of the said case. In the present case, the impugned order is totally silent as regards which provision of the Act or the rules has been contravened; which clause of sub-section (1) of section 130 of the CGST Act is attracted in the present case; and as to why the officer adjudging it has come to the conclusion that there is contravention of the provisions of the Act and the rules made thereunder with the intent to evade payment of tax. Sub-section (2) of section 130 of the CGST Act provides that the fine leviable shall not exceed the market value of the goods, less the tax chargeable thereon. It is, therefore, clear that the fine provided under the first proviso to sub-section (2) of section 130 of the CGST Act is the maximum fine leviable. Consequently, the proper officer adjudging the case is required to examine the seriousness of the contravention and impose fine accordingly. It is not as if in every case the proper officer should levy the maximum fine. The order of confiscation should, therefore, reflect due application of mind on the part of the proper officer to the quantum of fine imposed by him. In ASSISTANT COMMISSIONER, COMMERCIAL TAX DEPARTMENT, WORKS CONTRACT LEASING, KOTA VERSUS M/S SHUKLA BROTHERS [ 2010 (4) TMI 139 - SUPREME COURT] the Supreme Court has held that giving reasons in support of the conclusions arrived at is an ingredient of the principles of natural justice. Thus, the impugned order is in breach of the principles of natural justice on two counts: firstly, that though the matter was kept for hearing on 28.08.2019, the second respondent passed the impugned order on 24.08.2019 without affording any opportunity of hearing to the petitioner; and secondly, because the impugned order is a totally non-speaking order which does not reflect the reason as to why the proper officer has come to the conclusion that the goods and the conveyance are liable to be confiscated, which renders the order unsustainable - petition allowed by way of remand.
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2019 (10) TMI 664
Filing of Form GST TRAN1 - transitional input credit - Ms. Maithili Mehta, learned Assistant Government Pleader appearing for the respondent No.2, submitted that the representation made by the petitioner is still pending consideration before the respondent No.2 - HELD THAT:- Issue Rule, returnable on 13.11.2019.
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Income Tax
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2019 (10) TMI 663
Under valuation of closing stock - taking rate of Guar Seeds @19.53 per kg. as against the value taken by the assessee @ 9.49 per kg. as on 31.03.2010 - HELD THAT:- In the case of Alfa Laval India Ltd. v. DCIT [ 2003 (9) TMI 43 - BOMBAY HIGH COURT] it was held that the obsolete items were sold in subsequent year at a price less than 10 percent of cost the valuation made arbitrarily not justified. Considering the totality of facts and case laws and nature of goods, we are of the considered view that it would be reasonable and justifiable if average rate were applied for valuation of closing stock. We find that rate of opening stock was at ₹ 19.15 per kg. whereas closing stock was at ₹ 9.49 per kg. The average realization value is at ₹ 17.75 per kg. therefore, it would meet end of justice if average of 19.15+9.49+ 17.15= 46.14/3 = 15.83 per kg. may be adopted for valuation of closing stock as on 31.03.2010. Accordingly, the AO is directed to recalculate the closing stock by taking rate of ₹ 15.83 per kg. Thus, the Ground No. 1 to 4 are partly allowed. Whether if the closing stock is valued higher than shown by the assessee then Ld. CIT (A) ought to have given direction to the AO to adopt opening stock of subsequent year at the same figure as valued as on 31.03.2010 by the AO? - HELD THAT:- Since the closing stock is opening stock for next year. Therefore, as a corollary to increase in closing stock would lead to increase in opening stock of next year, therefore, the AO would take opening stock as on 1st April of next financial year as worked out on the basis of average rate as per our observation given herein above. Accordingly, this ground is allowed. Disallowance of salary payment in respect of person specified under section 40A(2)(b) - HELD THAT:- The Hon ble Gujarat High Court in the case GUJARAT GAS FINANCIAL SERVICES LIMITED. [ 2015 (7) TMI 743 - GUJARAT HIGH COURT] after considering the CBDT Circular 06.07.1968 held that where the payer and recipient are assessed at maximum marginal rate, then the payment may be treated as bonafide, hence, no disallowance under section 40A(2)(b) of the Act be made. In the light of above facts and circumstances, we are of the considered opinion that disallowance made under section 40A(2)(b) of the Act are not justified.
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2019 (10) TMI 662
Exemption u/s. 11(1) - charitable activity u/s 2(15) - HELD THAT:- We are of the considered view that the assessee is a charitable and non-profit institution and also found that assessee is not involved in any trade, commerce or business activity which attracts the mischief of the Proviso of section 2(15) of the Act and the assessee has been enjoying the exemption u/s. 11(1) and also u/s. 10(23C)(iv) in the past and accordingly following the principle of consistency the AO was rightly directed to allow the exemption to the assessee u/s. 11(1) of the Act with all the consequential benefits by the CIT(A). Hence, we do not find any infirmity in the order of the Ld. CIT(A), therefore, we uphold the same and reject the grounds raised by the Revenue and accordingly, dismiss the appeal filed by the Revenue.
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2019 (10) TMI 661
Enhancement of income by the CIT(A) - Prior period expenditure - settlement of disputed expenditure - It was observed that expenses pertaining to the immediately preceding assessment year could not be allowed as deduction against the income for the year under consideration - HELD THAT:- There is no dispute on the fact that the assessee did not record any expenditure on this issue in its books for the financial year relevant to the assessment year 2007-08 and accordingly no deduction was claimed in the preceding year on this score. It was only on the mutual settlement arrived at between the assessee and Kinetic Engineering Ltd. that the assessee depicted the amount of ₹ 124.53 lakh as expenditure and claimed deduction during the year. Under the mercantile system of account, a deduction is allowed when contractual liability to pay finally arises. Hon ble Delhi High Court in National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED) vs. CIT [ 2011 (6) TMI 14 - DELHI HIGH COURT] has held that a contractual liability is incurred when enforceable liability of the assessee to pay is determined. Unless there is a contrary separate provision, the amount becomes deductible at that time, even if it pertains to earlier years. When we view the facts of the instant case, it clearly emerges that the assessee did not accept the liability of ₹ 144.99 lakh on account of bills raised by Kinetic Engineering Ltd. for the A.Y. 2007-08. The dispute was finally settled in the year under consideration at a figure of ₹ 124.53 lakh. It is at this stage that the liability to pay can be said to have finally arisen. Once the liability to pay arose in the year relevant to the assessment under consideration, the same has to be allowed as deduction. We, therefore, overturn the impugned order and delete the enhancement of ₹ 124.53 lakh made by the ld. CIT(A) by treating it as prior period expenditure. Disallowance being, 50% of disallowance made by the AO on account of non-genuine labour expenses - HELD THAT:- Assessee furnished the details and rates at which job charges were paid by it to the sister concerns. Section 40A(2)(a) states that where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub-section, and the AO is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction. It is evident that the onus is on the AO to prove that the expenditure incurred by the assessee is excessive or unreasonable. CIT(A) has simply treated 50% of the same as excessive without showing as to how the same was so. In the given circumstances, we are satisfied that no addition is called for.
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2019 (10) TMI 660
Reopening of assessment u/s 147 - validity of reasons to believe - payment of purchases in cash - HELD THAT:- Same material which was considered by the AO in the original assessment order was again considered by the AO in the re-assessment order and based on that, the reassessment proceedings were finalized and income of the assessee was computed at ₹ 23,61,000/-. In our considered opinion, once the material/basis was considered and examined by the Assessing Officer in the original assessment proceedings, which is apparent from the finding recorded by the Assessing Officer in paragraph No.3, in our view, it is not permissible for the Assessing Officer for exercising powers u/s. 148 to reopen the assessment u/s. 147. Even in the original assessment, AO has also mentioned that the purchase vouchers were from unregistered concerns and self made and further mentioned that the payments for purchase of material and labour wages were made in cash. Once, the same material was available, then it was not open for the Assessing Officer to reopen the assessment. Case followed M/S. KELVINATOR OF INDIA LIMITED [ 2010 (1) TMI 11 - SUPREME COURT] - Decided in favour of assessee.
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2019 (10) TMI 659
Disallowance of expenses paid in cash - expenditure not open to verification - ad-hoc addition - HELD THAT:- Assessing Officer has passed order u/s 143(3) of the Act and has made the disallowance on ad hoc basis without pointing out any defect in the books of account of the assessee. He simply held that the expenses paid in cash were completely not open to verification and therefore, to cover up the possible leakage, 1/5th of the expenses have been disallowed. Such a disallowance is not warranted under the law as the Assessing Officer has to point out the specific voucher or expenses which he deems to be fit for disallowance. Addition on account of advertisement expenses - HELD THAT:- AO issued notices to 11 parties to whom the assessee had claimed to have paid advertisement expenses and such notices had returned back. AO has held that the bills produced by the assessee were not genuine as the notices had returned back. AO has further held that the notices were returned back with the remark that the address is not correct. However, find that assessee was not confronted with the fact of returning back of notices. Remit the issue back to the Assessing Officer who should redecide the issue after confronting the assessee and after hearing the assessee. As a result, this issue is allowed for statistical purposes. Disallowance out of interest expenses - HELD THAT:- Assessee had paid interest @18% to relatives as well as to non relatives. There is bound to be difference between the interest charged by the bank and the interest charged by private lender as for obtaining loans from bank, the assessee needs to maintain margin also and there are other expenses charged by bank in the form of bank charges, penalty etc. Therefore, the basis for disallowance made by the AO and confirmed by CIT(A) is not correct. It is not in dispute that assessee had made payments of interest after deducting tax at source and it is also not the case of the authorities below that loans were not utilized for the business purposes. Under these facts, see no reason in sustaining the disallowance. Accordingly, the order of learned CIT(A) is reversed and this ground of assessee is allowed.
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2019 (10) TMI 658
Reopening of assessment u/s 147 - addition u/s 68 - unexplained cash credit - HELD THAT:- Since the assessee had not shown the relevant transaction in the return of income therefore the AO has initiated proceedings u/s. 147 of the Act by issuing of notice u/s. 148 of the Act. In spite of giving number of opportunity the assessee has failed to make full compliance before in the assessment proceedings. Assessee has submitted only partial information before the AO which was considered and placed on the record. On account of not furnishing complete information and not making compliance to the notices issued the AO has completed assessment u/s. 144 r.w.s. 147 of the Act. Considering all we do not find any force in the ground of appeal of the assessee against confirming the assessment proceeding u/s. 144 r.w.s. 147 of the Act by the Ld. CIT(A) and the same is dismissed. - decided against assessee Addition u/s 68 - merely furnishing of a Xerox copy of common affidavit in respect of 58 cash creditors would not by itself prove that the cash credit have been actually obtained from such person and they had creditworthiness to lend this amount. As during the course of assessment proceedings the assessee has furnished incomplete information in respect of his claim of obtaining cash loan obtained from 58 persons. In spite of giving sufficient opportunity the assessee has failed to satisfy the creditworthiness of the creditors and genuineness of the transactions. We also consider that in the case of Pavankumar M. Sanghvi vs. ITO [ 2018 (2) TMI 1161 - GUJARAT HIGH COURT] sustaining the addition u/s 68 on account of the assessee s inability to prove the genuineness of the credit transactions. We do not find any substance in the plea of the assessee and consider that it was the bounden duty of the assessee to explain the nature and source of cash deposits found in his bank account as elaborated above - assessee has failed to explain the cash deposit made in his bank account with relevant supporting evidences to proof the genuineness and creditworthiness of his claim that impugned cash loan was received from 58 different persons. - Decided against assessee.
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2019 (10) TMI 657
Reopening of assessment u/s 147 - HELD THAT:- AO found that the assessee has not filed return of income for assessment year 2008-09. However, on the basis of the sale deed registered, the Assessing Officer issued notice u/s 148 for reopening of assessment. Therefore, this Tribunal is of the considered opinion that the AO has rightly reopened the assessment. Accordingly, the reopening is confirmed. Determination of sale consideration - HELD THAT:- It is not in dispute that the assessee is one of the co-owners among four others. In other words, the assessee s interest in the property is 1/5th. This Tribunal in the case of Shri S. Sathyamurthy, one of the co-owners, found that the sale consideration is only ₹ 25 lakhs. In view of the above decision of this Tribunal in one of the co-owner s case, the Assessing Officer is directed to compute the capital gains by adopting 1/5th share in ₹ 25,00,000/- on sale of property at Velachery, Chennai. Claim of deduction under Section 54F - Section 54F of the Act does not require filing the return of income before the due date under Section 139(1) of the Act. The requirement of Section 54F of the Act is that the assessee within a period of one year before or two years after the date of transfer took place, shall purchase or within a period of three years after the date, shall construct one residential house in India. If for any reason, the assessee could not appropriate the capital gain for purchase of new asset within one year before the date on which the transfer is originally took place or which is not utilised in purchase of new asset before the due date for filing the return of income under Section 139 of the Act, shall deposit in the appropriate account before the due date for filing return of income under Section 139(1) of the Act. Therefore, the Parliament in their wisdom does not provide any condition for filing of return of income before the due date provided under Section 139(1) of the Act. Wherever the Parliament feels that return has to be filed under Section 139(1) of the Act, they are so specific for the purpose of claiming benefit under that scheme. For the purpose of deduction under Section 54F of the Act, the Parliament specifically omitted to say that return of income has to be filed under Section 139(1) of the Act. Therefore, the observation of the Assessing Officer to reject the claim of the assessee is not justified. Now the assessee along with other co-owners, has invested in the very same property. This Tribunal in the case of Shri S. Sathyamurthy, one of the co-owners, also found that the assessee is eligible for deduction under Section 54F of the Act and the Assessing Officer was directed accordingly. In view of the decision of the co-ordinate Bench of this Tribunal, the present assessee is also eligible for deduction under Section 54F of the Act. Accordingly, the orders of both the authorities below are set aside.
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2019 (10) TMI 656
TDS u/s 194H from payment of bank guarantee commission to the bank - principal-agent relationship - HELD THAT:- When the bank has issued bank guarantee on behalf of the assessee there is no principal agent relationship between the bank and the assessee which is a mandatory condition for invoking the provisions contained u/s 194H and in these circumstances, the assessee was not liable to deduct tax at source u/s 194H from payment of bank guarantee commission to the bank. Moreover, bank guarantee commission also partakes the character of interest u/s 2(28A) of the Act and as such, exemption provided u/s 194A(3)(iii) is available to the assessee qua such payment. So, we are of the considered view that the CIT (A) has erred in not following the decision of Kotak Securities Ltd. [ 2012 (2) TMI 77 - ITAT MUMBAI] on the ground that it is not applicable having been pronounced before the issue of Notification No.56/2012 dated 31.12.2012 because ordinarily any provision of the statute has to be read having prospective effect and not having retrospective effect unless it is specifically provided. So, when there is no principal-agent relationship between the bank and the assessee, deduction of tax at source on commission or brokerage is not required for. Consequently, addition made by the AO and confirmed by the ld. CIT (A) is ordered to be deleted, thus the appeal filed by the assessee is hereby allowed.
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2019 (10) TMI 655
Levy of penalty u/s.271AAA - Assessee has admitted the undisclosed income in the statement recorded u/s.132(4) of the Act in the course of search - HELD THAT:- There is no dispute in respect of the first condition, i.e. that the assessee has admitted the undisclosed income in the statement recorded u/s.132(4) of the Act in the course of search. Answer to Qn. No.13 as has been extracted above clearly shows that the assessee has substantiated the manner in which he has derived this income and he has substantiated the manner in which it was derived being the commission income from various commission businesses. Admittedly, no further question has also been asked to further probe or into the issue, as obviously, the search has revealed the various business incomes and source of income of the assessee. Therefore, conditions Nos.2 3 have also been complied with. In respect of condition No.4, the fact remains that the assessee has disclosed quantities and substantiated the quantities and the variation in the assessment and the returned income is only on account of rates in respect of the gold jewellery. The quantum of the jewellery representing the undisclosed investment in the jewellery has not been varied and the rate which has been adopted by the assessee is not a rate, which is improbable or unsustainable. In fact, the assessee has given his explanation for adopting the rate of ₹ 1450/- as against ₹ 1,850/- mentioned in the statement recorded and even the rate of ₹ 1850/- as stated by the assessee to be the rate on the date of search, has also been discarded and the AO had adopted the rate of ₹ 1872/- which is again a higher figure. This has also been accepted by the assessee after the first appeal. The difference is also an admitted fact and taxes and interest in respect of addition representing the undisclosed income in respect of 27.645 Kgs of gold as disclosed by the assessee at ₹ 1450/- per gram, has also been paid by the assessee. Taxes on the same has also been paid by the assessee before filing of the return, thus, the condition No.4 also stands complied. This being so, we are of the view that no penalty u/s.271AAA of the Act is liable to be levied on the assessee and consequently, delete the penalty as levied by the Assessing Officer and confirmed by the ld.CIT(A). - Decided in favour of assessee.
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2019 (10) TMI 654
Accrual of income - Taxability of amount receivable towards drawback and amount of tax claimed as refund - whether refund as accrued to assessee or not - HELD THAT:- When the amount is paid, it is debited to advance account and when it is recovered from the customers, the advance amount is credited. Similarly, is the case in the case of works contracts and excise duty paid and sales tax. As regards to the duty drawback, it is submitted that the same is offered to tax as and when it is received, in the light of the decision of the CIT vs. Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] . The explanation offered by the assessee had not been controverted by the lower authorities but merely rejected the same without giving valid reasons. On the face of the explanation in respect of Item Nos.1 to 4, no addition is warranted. The disputed tax liability paid under protest does not constitute the income in the hands of the assessee. However, the AO had not gone into the issue in detail by undertaking the due process of verification with the evidence. Similarly, as regards to the duty drawback AO had not undertaken the exercise of verifying whether the due drawback had accrued to the assessee or not. Therefore, we are of the considered opinion that the issue may be restored to the file of the AO for de novo assessment on this issue. MAT - addition of provision for disputed claims to the book profit for the purpose of computing tax liability u/s.115JB - HELD THAT:- From the details on record the provision includes that the disputed tax liability and the provision made for disputed claims for ₹ 9.50 crs. and the provision of doubtful debts of ₹ 3.25 Crs. etc., undoubtedly these provisions cannot be considered as a provision for unascertained liabilities. However, from the perusal of the Assessment Order it is clear that the AO had not looked into the details and the nature of the provision made and simply added back to the book profit. Therefore, these issues are restored to the file of the AO for the purpose of due verification of the nature of the provision and decide the issue in accordance with the law. Appeal filed by the assessee is partly allowed for statistical purposes.
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2019 (10) TMI 653
Addition towards un-disclosed jewellery declared by the assessee during the search proceedings u/s 132 - HELD THAT:- Necklace was found during the course of search u/s.132(4) of the Act, which was offered as undisclosed income in the statement recorded u/s.132(4) of the Act. However, at the time of filing the returns in response to notice u/s.153A assessee did not offer the same to tax on the ground that the said statement u/s.132(4) of the Act was given under tremendous pressure and mental strain was wrong. The said diamond jewellery stood disclosed in the return of wealth of Mrs. Alpana Dangi wife of the assessee. The assessee also produced sale bills of the seller along with payment details. Thus, the assessee has completely explained the purchase of jewellery with reference to bills, vouchers and payment details. We are not in conclusion with the CIT(A) that the non disclosure was an after thought. In our opinion where assessee has offered the income in the statement recorded u/s.132(4) of the Act but when the same is explained with reference purchase bills and payment details then the same cannot be treated as un-disclosed income . The case of assessee is also squarely covered by the decision of CIT Vs. S.Khader Khan Son [ 2007 (7) TMI 182 - MADRAS HIGH COURT] wherein it has been held that the statement has no evidentiary value unless corroborating evidences are there to support the same. Even the case of assessee is fully supported by the Instruction F.No.286/2/2003IT(Inv-II) issued by CBDT which states no confession of additional income during the course of search and seizure and survey operations to be taken by the officers without credible evidences. The order passed by CIT(A) is wrong and can not be sustained. Accordingly we is set aside the order of CIT(A) and direct the AO to delete the addition so made. Appeal of assessee is allowed.
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2019 (10) TMI 652
Registration u/s 12A as a charitable institution - HELD THAT:- We are convinced that the vocational educational / training programme run by the appellant society are systematic programme imparting class room as well training with focus on employment generation. The education given by the appellant, in our view, can safely be said to be in the mode of systematic instructions / schooling or training given to the young in preparation for the work of life and, in our view, duly fall within the purview and scope of the term Education as used in section 2(15) of the Act. So far as the observation of the CIT(E) that the income of the assessee is not from voluntary donation or that the same cannot be said to be income from property held under the trust is concerned, we are not convinced with the above observation of the CIT(E) for rejecting the claim of the appellant trust. The appellant trust is reimbursed the amount spent by the Government for carrying out its education / training programme as per the skill development programme of the Government. Thus it can be safely said to be income generated from the activity of the appellant trust and the said activity as observed above, falls within the purview and scope of charitable purpose. It is not be case of the CIT(E) that the major or main activity of the appellant trust is towards commerce or business. The receipt of income, in our view, is in the course of carrying out of Educational activity of the assessee. Third objection raised by the CIT(E) is that the appellant could not corroborate the receipts towards the corpus funds from the members of the trust with bank entries. In our view, this cannot be ground for rejection of the application u/s 12A of the Act. The appellant has shown the receipts towards its corpus funds from the members of the trust and the same has been duly recorded in the books of account. It makes no difference if the receipts were received in cash or through banking channel. Moreover, whether the receipts are towards corpus funds or for application is to be seen at the time of assessment. So far as the expenditure on two cars the appellant has explained that the said cars are used by the society for its activities as the society members have to travel between Delhi and Chandigarh for meetings and review of its work done by the Central / State Government and further that the said expenditure is completely related to the activities and objects of the appellant society. The impugned order of the CIT(E) is set aside and the Ld. CIT(E) is further directed to grant registration to the appellant society u/s 12A read with section 12AA of the Act in accordance with the relevant provisions of the Act. Appeal of appellant society stands allowed.
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2019 (10) TMI 651
Assessment u/s 153A - validity of the assessment framed in the absence of any incriminating material found - HELD THAT:- We have gone through the order of the CIT(A) and have noted that the assessee had raised an additional ground before him vis- -vis the validity of the Assessment framed in the absence of any incriminating material found during the course of search. We have also noted that the assessee had made submissions in this regard also and have referred to various judicial decisions also. CIT(A) on this ground raised we find that the CIT(A) had not dealt with the issue at hand. There is no finding whether there was any incriminating material found or not during the course of search relating to the issue on which addition was made. There is no discussion in his order as to how the order was validly passed on the contention raised by the CIT(A). CIT(A), we find, has only reiterated his findings on the merits of the case. In view of the same, we consider it fit to restore the issue back to the CIT(A) to adjudicate the same afresh after going through the facts of the case giving specific findings on the issue. CIT(A) is directed to pass a speaking order.
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2019 (10) TMI 650
Appeal filed against the deceased assessee - revised form no. 36 is filed belatedly - HELD THAT:- In the case in hand, since the revenue was allowed to take the necessary steps, therefore, the delay in filing the Memorandum of Appeal against the legal heir of the deceased assessee has been found to be explained by the revenue due to inadvertent mistake and, therefore, even if the said revised form no. 36 is filed belatedly, the Tribunal is satisfied with the reasons and cause of delay explained by the ld. D/R. Accordingly, the delay in filing the form no. 36 is condoned. As regards the decisions relied upon by assessee, there is no dispute that the appeal filed against the deceased assessee is not covered under the provisions of section 292B and, therefore, the same is an invalid appeal liable to be dismissed. The appeal dismissed being invalid in limini due to the reason of impleading a deceased assessee cannot take away the right of the appellant to file a fresh appeal against the legal heir of the deceased assessee subject to the provisions of limitation and leave taken from the court. Hence once the Tribunal has granted the leave to the revenue for filing the revised form no. 36, the appeal of the revenue is admitted for deciding on merits. The legal preliminary objection raised by the assessee is rejected. The appeal of the revenue is directed to be listed for hearing on merits on 14th October, 2019. In the result, preliminary objection of the assessee is dismissed.
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2019 (10) TMI 649
Revision u/s 263 - Claim of deduction u/s 54B - sale of agriculture land after plotting to 19 persons - purchase of another agriculture land - HELD THAT:- It is a clear case of complete lack of enquiry on the part of the AO which renders the assessment order erroneous in so far as it is prejudicial to the interests of the revenue. We note that in the Sale Deed the description of the plot of land has been given with residential plot number situated in a newly developed residential colony, namely, Shanti Nath Nagar-II, Ajmer road, Kekri. This fact is also corroborated by the map of the said colony attached to the registered Sale Deed. Therefore, it is not a simple case of sale of the land by dividing into plots but the assessee has developed the land in question into a residential colony, namely, Shanti Nath Nagar-II. Once the land was converted into residential colony, it was no more an agricultural land in terms of section 54B therefore, even if the land sold is treated as capital asset, it has lost its character of agricultural land not being used for agricultural purpose and consequently the deduction u/s 54B cannot be allowed as the necessary condition prescribed in the said section is not satisfied. Since the ld. Principal Commissioner of Income Tax has set aside the assessment order to the record of the Assessing Officer for fresh consideration, therefore, we do not find any reason to interfere with the impugned order of the learned Principal Commissioner of Income Tax. The decisions relied upon by the ld. A/R of the assessee are entirely on different aspects where the land was sold by the assessee by dividing into plots and therefore, it was held that there was no change of character from capital asset to stock-in-trade. In the case in hand, the issue is not limited to the capital gain or business income but the issue is allowing the deduction u/s 54B without conducting a minimum enquiry by the AO whether the conditions prescribed under section 54B are satisfied or not. - Decided against assessee.
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2019 (10) TMI 648
Claim of deduction of interest paid on interest bearing maintenance security deposit to the members - HELD THAT:- Identical issues had come up before the Tribunal in the case of sister RWA of the assessee, namely, Belaire Condominium Association [ 2018 (5) TMI 240 - ITAT DELHI] the interest expenditure has been incurred wholly and exclusively for earning such interest income on Bank deposit. As per the Apartment buyers agreement there is an obligation on every buyer to make security deposit and there is corresponding obligation on the society to pay interest on such deposit. Thus, the contention of the learned AR that this interest expenditure has not been incurred to earn interest income is incorrect. The assessee society has paid interest each one after deducting tax at source. Thus, it is not a case of exemption on the principle of mutuality. Such interest paid by the assessee society is taxable in the hands of the Apartment owner. Interest expenditure is to be set off against the interest income. As regards the AO s contention that interest paid to member is not eligible deduction in the case of AOP under Section 40 (ba), we have perused the said Section. This clause excludes registered society from its applicability. Accordingly, this clause will not be applicable to the assessee society. Moreover, as rightly contended by the learned AR Section 40 (ba) is applicable while computing business income. This clause is not applicable while computing income from other sources. There is no prohibition in Section 57 (iii) under which deduction of interest is eligible to the assessee society. Accordingly, we direct the AO to delete the addition made on account of the interest. - Decided in favour of assessee
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2019 (10) TMI 647
Denying the claim of exemption to the assessee u/s 11 to section 13 - Whether assessee is carrying on the activity in the nature of trade, commerce or business or related activity in view of the proviso to section 2(15)? - taxability of one time membership fee - HELD THAT:- Admittedly, the entrance fee received from members i.e. onetime fee from new members and same is being recorded under corpus fund is being in the nature of capital receipt and this issue has been decided favour of assessee in the case of CIT vs. W.I.A.A. Club Ltd. [ 1979 (1) TMI 5 - BOMBAY HIGH COURT] held that entrance fee was a fee in the nature of return for vesting their right of membership and hence, the same would be in the nature of capital receipt not liable to tax. Similarly, the corpus donation taken towards corpus fund by the assessee and therefore eligible for the claim of exemption under section 11(1)(b) of the Act and hence, the corpus donation of ₹ 15,000/- cannot be taxed. Similarly, the entrance fee received by assessee being onetime membership fee of ₹ 5 lacs cannot be taxed. Hence, we hold that these two items are not taxable and assessee is allowable for exemption under section 11 of the Act. As we have already held in the first ground that the assessee is charitable institution and not hit by the provisions of section 2(15) of the Act i.e. the proviso, hence, we allow these grounds of assessee.
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2019 (10) TMI 646
Extension of stay - stay of demand for a further period of 180 days from today - Refund adjustment against the demand - HELD THAT:- Refund of ₹ 28 crores for AY 2015-16 will be adjusted against the demand of AY 2012-13 as the same could not be done presently for the reason that the refund exists on PAN No. AABCI0605H while the demand exists on PAN No. AAACW1663L in the name of erstwhile company. Hence, to resolve this aspect of refund, the AO is directed to take necessary action at his end. On this assessee has stated that the assessee has given consent for the same. Accordingly, we extend this stay of demand for a further period of 180 days from today, for both the years, on the following conditions: - (i) AO will resolve the issue of refund of ₹ 28 crores pertaining to AY 2015-16 and will grant this refund to the assessee. In turn, the assessee will deposit this amount of ₹ 28 crores relating to demand for AY 2012-13 within 7 working days from the date of receipt of the refund. (ii) AO will verify the refund for AY 2004-05, 2005-06 and 2007-08 and if there is refund arising out of the above assessment years then the same is to be adjusted against the demand of AY 2013-14. For this, the Revenue will inform the Tribunal after verifying how much is the refund for these assessment years pending and Tribunal in turn will require the assessee to give consent for adjustment of the same against the demand of AY 2013-14. (iii) The appeal is already fixed for hearing on 13.05.2019, which will remain the same and both parties will try to argue the matter, so that the same can be disposed off quickly. In term of the above, the stay is extended for both the years for further 180 days from today i.e. 01.05.2019.
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2019 (10) TMI 645
Scope of the limited scrutiny assessment - Tax credit (and receipts) in ITR is less than tax credit in 26AS - Disallowance towards opening balance included transport charges, brokerage difference, cash payments made u/s 40A(3), Off Dock dues and difference between bank statement and actual payments made for transport charges - HELD THAT:- AO undertook scrutiny to examine the aspects falling under tax credit (and receipts) in ITR is less than tax credit in 26AS . While doing so, he has made the impugned disallowances and hence the AO s action is well within his jurisdiction. However, the assessee pleaded that the impugned issues require re-examination afresh, which is not opposed by the Ld. DR. We deem it fit to remit these issues back to the AO for a fresh examination. The assessee shall place all the materials in its support before the AO and comply to the AO s requirements as per law. AO is free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assesssee on the material etc to be used against it and decide the matter in accordance with law. Assessee s appeal is treated as partly allowed for statistical purposes.
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2019 (10) TMI 643
Reopening of assessment u/s 147 - validity of reasons to believe - HELD THAT:- Assumption of jurisdiction on the basis of the reasons given by the Assessing Officer is entirely unfounded and unjustified. The notice issued to the Petitioner on 27 January 2014 to produce documents in connection with the assessment year 2012-13 called upon the Petitioner to produce acknowledgment of return, balance sheet, profit and loss account, tax audit report etc. Petitioner was called upon to submit return of income of the Directors along with other documents such as shareholding pattern, bank account details etc. The assessment order dated 13 March 2015 pursuant to the production of profit and loss account and other documents referred to these documents. In the assessment order it is stated that the Petitioner produced all the material that was called for and the Petitioner remained present through his Chartered Accountant to submit the documents. The total income of the Petitioner was computed with reference to the profit and loss account. Therefore, the profit and loss account was called for, was submitted by the Petitioner and was scrutinized. Thus, it cannot be said that there was any failure on the part of the Petitioner to produce all the material particulars. After considering the entire material the assessment order was passed. AO is now seeking to proceed on a mere change of opinion. All these factors and the need for jurisdictional requirement were brought to the notice of the Assessing Officer by the Petitioner. Yet, the AO ignored the same and proceeded to dismiss the objections and reiterated his decision to reopen the assessment - notice and the impugned order cannot be sustained. - Decided in favour of assessee.
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2019 (10) TMI 641
Recovery proceedings - non compliance with the rules of natural justice - HELD THAT:- In the instant case, the various queries raised by the department after perusing the reply given by the assessee to the notice issued under Section 143(2) of the Income Tax Act would clearly reveal that the department was only seeking for the documents that would substantiate the claim of the petitioner assessee for exemption in respect of a substantial portion of the income that was declared by him in the return. Ultimately, by Ext.P17 assessment order, all that the department did, was to deny the claim for exemption of the petitioner assessee, and while doing so, the department was not obliged to grant any hearing to the petitioner over and above the opportunities that had already been extended to the petitioner to respond to the specific queries raised by the department. There cannot be a mechanical application of the principles of natural justice in every case and the necessity of affording a hearing to an assessee, in order to comply with the rules of natural justice, must be examined on the facts of each case. No prejudice having been caused to the petitioner through the denial of a personal hearing since, although the petitioner has a case that he could have submitted additional documents, he ought to have done so within the time granted to him by the department and, further, no such documents have been produced in the writ petition. Resultantly, do not find Ext.P17 order to be vitiated by a non compliance with the rules of natural justice, or by any other jurisdictional error, so as to warrant an interference with the said order in these proceedings under Art.226 of the Constitution of India. The writ petition in its challenge against the said order and Ext.P18 demand notice fails, and is accordingly dismissed. Petitioner would submit that he would require some time to move the appellate authority in an appeal against Ext.P17 order. Taking note of the said submission of the learned counsel for the petitioner, direct that if the petitioner prefers an appeal against Ext.P17 order, before the appellate authority, within six weeks from today, then the appellate authority shall consider and pass orders in the appeal, on merits, after hearing the petitioner. In order to enable the petitioner to move the appellate authority, direct that recovery steps for recovery of amounts confirmed against the petitioner by Ext.P17 assessment order/Ext.P18 demand notice shall be kept in abeyance for the above said period of six weeks.
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2019 (10) TMI 640
Loss incurred by the assessee in futures and options i.e. derivatives - speculative transaction - Whether the deeming fiction as per Explanation below section 73(4) of the Act in treating business of sale and purchase of share as speculative transaction can be extended to include business of buying and selling of futures and options? - HELD THAT:- The Tribunal has held in favour of the Revenue by placing reliance on the decision of this Court in Commissioner of Income-tax, Delhi-IV Vs. DLF Commercial Developers Ltd. [ 2013 (7) TMI 334 - DELHI HIGH COURT] Appellant does not dispute the fact that the aforesaid decision covers the questions of law raised by the appellant. He, however, submits that a special leave petition is pending before the Supreme Court from the decision of this Court in DLF Commercial Developers Ltd. [ 2013 (11) TMI 1759 - SC ORDER] wherein leave has been granted. He, further, submits that the issue is covered in favour of the appellant by several other decisions of the Calcutta High Court, the Madras High Court, the Gujarat High Court and the Bombay High Court. This submission is, however, disputed by learned senior standing counsel for the respondent/ Revenue. In any event, since this Court has already answered the questions of law raised by the appellant in DLF Commercial Developers Ltd. (supra), we are not inclined to hear this appeal.
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2019 (10) TMI 638
MAT Provisions of section 115JB applicability - assessee whom the proviso to sub-section (2) of Section 211 of the Companies Act, 1956 applies i.e., company which is not required to prepare its profit and loss account in accordance with Part II and Part III of Schedule VI of the Companies Act, 1956 - HELD THAT:- The issue has already been decided by a Division Bench of this Court in Kerala State Electricity Board, Thiruvananthapuram v. Dy. Commissioner of Income Tax, Circle 1, Thiruvananthapuram [ 2010 (11) TMI 127 - KERALA HIGH COURT] after interpreting the provisions under Section 115JB, against the Revenue. The said decision has been re-iterated by a Division Bench of the Bombay High Court in The Commissioner of Income Tax-LTU, Commissioner of Income Tax (IT)-3 v. Union Bank of India and Others [ 2019 (5) TMI 355 - BOMBAY HIGH COURT] after referring to the decision in KSEB (supra) In the light of the aforesaid pronouncements by the Kerala High Court as well as the Bombay High Court, the question of law raised by the Revenue does not arise, which is answered against them
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2019 (10) TMI 636
Disallowance of interest expenditure u/s 36(1)(iii) - interest expenditure allowable as a deduction u/s 57(iii) - HELD THAT:- Since the assessee intended to purchase a business premise from the funds borrowed, it can be very well concluded that the purpose for which these loans were obtained were business purpose only. It is noted that assessee could not find any suitable office, he invested these idle funds into FDRs to reduce the burden of interest cost to be borne on the borrowed funds and the funds are readily available to the assessee as when a suitable office is found for investment. It is a well settled law that revenue cannot sit in the armchair of a businessman to decide the reasonableness of a decision taken by a businessman. Here, in this case also, the AO has alleged that the borrowed funds were not for a business purpose while the assessee has clearly established the nexus between the purpose of business and the expenditure incurred. AO has wrongly disallowed the expenditure claimed by the assessee u/s 36(1)(iii) of the Act, by alleging that the interest expenditure were not directly related to the business of the assessee. Even otherwise, if the said expenditure is not allowable as a business expenditure, then the interest expenditure is allowable as a deduction u/s 57(iii) . During the year under consideration, the assessee had earned interest on FDR amounting to ₹ 13,41,303/- and a total expenditure on interest on loan and bank interest amounting to ₹ 14,90,125/- As per the language of section 57(iii) the expenditure which is wholly and exclusively incurred for the purpose of earning income chargeable under the head income from other sources, is allowed as deduction from the said income of the assessee. Thus, it can be concluded that there is a direct nexus between the income earned and the expenditure incurred which should allowable as a deduction u/s 57(iii) - Appeal of the assessee is allowed.
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2019 (10) TMI 634
Addition as salary income instead of business income - The claim of the assessee is that the income earned by way of commission for expansion of business of the Principal - tax (TDS) has been deducted u/s.194H 194D - HELD THAT:- Assessee could not substantiate its claim before the AO, therefore, the AO treated the commission receipt as income of the assessee from salary. CIT(A) relying on the decision of Kanwaljit Singh [ 2012 (12) TMI 168 - DELHI HIGH COURT] upheld the action of AO. Before us, the assessee produced ledger account of staff salaries, meeting expenses ledger account, business promotion expenses ledger account, rent and electricity charges ledger account etc. In respect of computation of income submitted by the assessee before the revenue authorities, he has himself considered ₹ 7,50,000/- under the head income from salary and rest amount has been taken as business income which is not accepted by the revenue authorities. The assessee has submitted profit and loss account in which he has shown commission received of ₹ 11,12,211/- and in the debit side he has debited some expenses which has not been examined by lower authorities. We also noticed that the assessee has been issued Form No.16 for the salary received and Form No.16A for the commission paid to the assessee in which the applicability rate of TDS has been deducted. The assessee submitted before us copy of ledger accounts which has not been considered by the lower authorities. In our opinion, to arrive the correct profit from the above activity carried out by the assessee, the expenses need to be verified on the part of the AO. Therefore, this issue is sent back to the file of AO for verification of expenses debited into the profit and loss account. Reasonable opportunity of being heard shall be given to the assessee and the assessee is directed to appear before the AO and cooperate in the assessment proceedings and he also directed to substantiate the expenses claimed with credible evidence before the AO. Accordingly, the issue raised by the assessee is allowed for statistical purposes.
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2019 (10) TMI 632
Unexplained cash - addition u/s 68 or 69A - HELD THAT:- The assessee has produced a summarised statement of the cash book before us. On going through the cash book, it is found that the assessee has recorded certain amounts with dates mentioning the name of the persons from whom cash was received. The assessee s case is that he received cash from prospective buyers of land and thereafter negotiated with the prospective sellers with a view to earn commission income. In addition to that, there are certain transactions of cash received which did not bear any name. Such transactions will have to be presumed as done by the assessee for his own purpose. Once the assessee has purchased and sold certain pieces of land for outside customers, it is only the profit element in such transactions which can be charged to tax. If certain amount of cash is received from buyers which is then handed over to sellers, it is not the amount of receipt which can be added to the assessee s total income but only the profit element embedded in the transaction. In so far as the assessee s own transactions are concerned, apart from profit element, there will be certain capital investment also going into the purchase of said pieces of land, which would also require addition. Total income for the years under consideration to be added on the basis of the unrecorded cash receipts found during the course of search is in three parts, viz., the first, being, the maximum cash balance of ₹ 28,71,458/- and ₹ 5,64,910/- for the years in appeal; the second, being, the part of profit element of ₹ 55,06,787/- on sale of plots amounting to ₹ 8.09 crore as relating to the two years under consideration, in addition to ₹ 1,52,969/- for the A.Y.2008-09 being extra profit sustained in the first appeal; and the third, being, profit of ₹ 14.07 lakh on remaining amounts of entries at Rs. ₹ 2.07 crore in the ratio of receipts of ₹ 2.08 crore and ₹ 7.95 crore for the A.Ys. 2007-08 and 2008-09 respectively. We, therefore, set-aside the impugned orders and remit the matter to the file of AO for examining and ensuring that these three elements are duly taxed in the total income of the assessee for the years under consideration. To the extent these three elements have been fully or partly offered by the assessee or sustained in the first appeals, suitable reductions should be made.
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2019 (10) TMI 631
Addition u/s. 68 on account of unexplained cash credit - HELD THAT:- The assessee has also not produced any credible evidence so that the creditworthiness of the share applicants can be proved. In view of this, we are of the opinion, that the assessee could not satisfy the one of the ingredients as envisaged in Section 68 for discharging his liability. Even before us also the assessee could not bring any cogent material that the assessee has fulfilled the ingredients of the provisions of Section 68 of the Act. The other contention of assessee is with regard to applicability of proviso to Section 68 of the Act effective from 01.04.2013. On careful perusal of both the assessment and appellate order, we do not find that any of the authorities below have questioned about the source of source to the assessee so as to apply the proviso to Section 68 of the Act. When the assessee itself unable to produce any documents viz. balance sheets, profit and loss account, etc. during the assessment proceedings, the AO has left no option but to hold that the creditworthiness of the investing company namely M/s On Track Trading Ltd. is not proved by the assessee resulting into adding the same u/s.68 of the Act, to which the CIT(A) has upheld the same. - Decided against assessee.
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2019 (10) TMI 630
Sale of scrap - Chargeability to tax - addition u/s 40A - HELD THAT:- Assessee was undertaking development of certain project and sole activity being carried out by the assessee was construction activity. The same is evident from the fact that WIP stood at ₹ 12.93 Crores at year-end. It is also undisputed fact that the assessee was following project completion method of accounting to offer income under the project. Therefore, the scrap generated out of construction / development activity, in our considered opinion was inextricably linked with assessee s main activity and therefore, the same would rightly go on to reduce WIP. Therefore, this addition would not be sustainable in law. The assessee has rightly deducted the same from WIP. On the similar analogy, the disallowance made by Ld. AO u/s 40A(3) @20% of cash expenditure would not be separate item of addition but since no expenditure has been claimed by the assessee during the year, the same would go on to reduce WIP account. Therefore, Ld. AO is directed to reduce the said disallowance of ₹ 3 Lacs from WIP account. Additions u/s 69C - HELD THAT:- Upon perusal of factual matrix, we find that total expenditure found to be incurred by the assessee was ₹ 37.67 Lacs. Out of this expenditure, the amount paid through cheques was ₹ 12.73 Lacs. The cash expenditure is stated to be made to the extent of ₹ 15 Lacs, for which the assessee has already been saddled with disallowance u/s 40A(3) @20%. This would leave unexplained balance of ₹ 9.94 Lacs. The same would stand confirmed in view of the fact that the source of the same remained unexplained. Hence, the addition to the extent of ₹ 9.94 Lacs stands confirmed. These grounds stand partly allowed.
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2019 (10) TMI 629
Rectification u/s 154 - disallowance u/s. 40 (a) (ia) for non-deduction of tax from lorry hire charges - HELD THAT- In the instant case passed the assessment order on 18.12.2007 u/s. 143 (3) determining the total income of the assessee at ₹ 10,71,080/- as against the returned income of ₹ 9,78,805/- wherein he disallowed certain expenses on estimate basis and made addition u/s. 43B. There is absolutely no discussion on the issue of disallowance u/s. 40 (a) (ia) for non-deduction of tax from lorry hire charges. We find the AO passed the order u/s. 154 on 29.03.2010 wherein he made addition u/s. 40 (a) (ia) CIT(A) quashed the rectification order passed u/s. 154 on the ground that assessee was not given any opportunity of being heard while enhancing the income u/s. 154 and further the issue is not a mistake apparent from record and is debatable issue and dependent on elaborate arguments and has to be established by a long drawn process of reasoning. No infirmity in the order of the CIT(A) quashing the reassessment proceedings. Admittedly there is no discussion on the issue of disallowance u/s. 40 (a) (ia) on account of non deduction of tax from lorry hire charges. Therefore, only course of action available was order u/s. 263 and the AO could not have assumed jurisdiction u/s. 154. We find the CIT(A) while quashing the rectification order passed by the AO has followed the decision of Hon ble Kolkata High Court in the case of Oil India [ 1989 (6) TMI 24 - CALCUTTA HIGH COURT] wherein the issue of rectification u/s. 154 vis-a-vis the disallowance u/s. 40 (a) (v) has been dealt with in detail. We are of the considered opinion that the CIT(A) was fully justified in quashing the rectification proceedings on the ground that the issue is not a mistake apparent from record and is a debatable issue and dependent on elaborate arguments and has to be established by a long drawn process of reasoning. The grounds raised by the revenue are accordingly dismissed.
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2019 (10) TMI 628
Additions on account of long term capital gains arising from transfer of land - short term capital gains arising from transfer of building - General Power of Attorney executed by Shri Umed Singh owner of the property was without any consideration - THAT:- The receipt is also executed by Shri Umed Singh in favour of Shri Vikas Shukla for sale of the above property for a sum of ₹ 2,50,000/-. Shri Umed Singh has also executed Registered General Power of Attorney in favour of assessee and given all the powers as a General Attorney to look into the property or to execute Registry or to purchase stamps or claim any refund etc. This General Power of Attorney is not subjected to any consideration. No amount has been paid by the assessee to Shri Umed Singh through this Registered General Power of Attorney. Therefore, General Power of Attorney executed by Shri Umed Singh owner of the property was without any consideration. The assessee later on as General Power of Attorney holder of owner of the property Shri Umed Singh executed sale deed in question in favour of her husband i.e. Shri Vikas Shukla in which it is specifically mentioned that sale consideration is earlier paid of ₹ 2,50,000/-, it means Shri Vikas Shukla has paid to Shri Umed Singh. It is also mentioned in the registered sale deed that amount of consideration of ₹ 2,50,000/- has already been received. It would mean that at the time of execution of the registered sale deed no consideration of ₹ 2,50,000/- passed on from Shri Vikas Shukla to the assessee. It would further mean that the sale consideration of property of ₹ 2,50,000/- has already been received by Shri Umed Singh being original owner of the property. These facts and material on record clearly suggest that the assessee acted as a General Power of Attorney Holder of the property in question on behalf of Shri Umed Singh original owner of the property. The right of assessee as a General Power of Attorney holder was not greater to that of the owner of the property i.e. earlier right in favour of Shri Umed Singh and later on right transferred in favour of her husband Shri Vikas Shukla. There was no justification for Ld. CIT(A) to doubt the Ikrar Nama executed between Sh. Umed Singh and Sh. Vikas Shukla because it is supported by the affidavit of Sh. Umed Singh and the receipt. If CIT(A) was having doubt over the same, he could have examined the marginal witnesses who have signed the agreement and the receipt in question. Further, when in the registered power of attorney no consideration has passed on from assessee to Sh. Umed Singh, there was no question of any transfer of property in favour of the assessee. Therefore, there is no question of her transferring the same property in favour of her husband for consideration. It is well settled law that entries in the books or capital account are not determinative of earning of income. It depends upon facts of the case. The real income only could be taxed as per law. Considering the totality of the facts and circumstances and the documents on record, it is clearly proved that Sh. Umed Singh has entered into an agreement to sale with Sh. Vikas Shukla for sale of property for a sum of ₹ 2,50,000/- which Sh. Vikas Shukla paid to Sh. Umed Singh. Documents to that effect were executed. The General Power of Attorney was executed in favour of the assessee so that assessee could registered the sale deed at appropriate time on behalf of Sh. Umed Singh in favour of her husband. Therefore, there is no transfer of capital asset from the side of the assessee, so as to attract provisions of long term capital gains and short term capital gains. There was no justification for authorities below to made addition in the hands of assessee on account of long term capital gains and short term capital gains. In this view of the matter, we set aside the orders of the authorities below and delete both the additions.
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2019 (10) TMI 627
Penalty u/s 271(1)(c) - HELD THAT:- Now when the very genesis for the imposition of the penalty had been vacated and is no more in existence as on date, therefore, the penalty u/s 271(1)(c) can no more survive on a standalone basis. As regards the contention of the D.R, that as the order of the Tribunal in SAIMANGAL INVESTRADE LTD. [ 2012 (12) TMI 442 - ITAT MUMBAI] has been assailed before the Hon ble High Court, therefore, on the said count, the present appeal may be kept in abeyance, we are afraid does not find favour with us. In our considered view, as the order of the Tribunal has not been stayed by the Hon ble High Court and thus holds the field, as on date, therefore, there arises no occasion for keeping the present appellate proceedings in abeyance. We thus finding no merit in the appeal of the revenue, we dismiss the same. - Decided against revenue.
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2019 (10) TMI 625
Penalty levied u/s 271A - applicability of section 44AD - HELD THAT:- Incriminating materials have been used for the purpose of determining the income of assessee, is not coming out. When the turnover of assessee exceeds the limit prescribed for the applicability of provisions of section 44AD then obviously provisions of section 44AD cannot be applied. In fact, a perusal of the provisions of section 44AD also clearly shows that the assessee could disclose a lower income, if he maintains books of accounts and is able to substantiate the claim of lower income. In the present case, there are records available from which the income of assessee could be reasonably determined. In any case even the audit of account u/s.44AB of the Act being the Audit report submitted by the Auditor are on the basis of the tally accounts maintained, and cash vouchers have been found in the course of search. True, the substantial effort would be required for determining the correct income, but that would not be ground enough for rejecting the books of accounts of the assessee and estimating the income directly. Even if estimation was to be adopted, then comparative study would have to have been done. Obviously, the assessee s accounts for the earlier and subsequent years could be based as comparative study. This being so, as the assessment has been done for estimating the income and CIT(A) has reduced the said estimate. The estimation itself is impermissible under law, especially in view of the fact that incriminating materials have been found in the course of search. Consequently, the assessment order and the impugned order of CIT(A) in respect of present appeals are set- aside and the issues in the appeals are restored to the file of AO for re-adjudication and for determination of the correct income of assessee on the basis of the materials available and found the course of search. The Assessing Officer shall not resort to short cut method of applying provisions of section 44AD of the Act, when the turnover of assessee exceeds the prescribed limit u/s.44AD - All the appeals of assessee are partly allowed for statistical purposes.
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2019 (10) TMI 624
Denial of credit for tax deducted at source - selection of year of assessment - HELD THAT:- What is material for sub-rule (1) is the beneficiary of credit for the TDS, being the person to whom payment has been made, which in the instant case is the assessee. The ld. CIT(A) has, in addition, relied on sub-rule (4) of Rule 37BA, which again provides that the credit for TDS shall be granted on the basis of information relating to deduction of tax at source furnished by the deductor. How, this rule prejudices the claim of the assessee is anybody s guess. Obviously, the information about the TDS by Ashok Leyland is not denied. Both the sub-rules simply provide for granting of the benefit of TDS. The point of time at which the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable . It is, ergo, abundantly clear from the mandate of Rule 37BA(3)(i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. Since the income of ₹ 84.10 lakh, on which tax of ₹ 8,41,050/- was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. - Decided in favour of assessee.
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Customs
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2019 (10) TMI 644
Grant of interim relief - production of valid Import Permit - HELD THAT:- By way of interim relief, it is directed that on a copy of the application made by the petitioners for issuance of an Import permit being produced with acknowledgement, the respondents will allow the consignment to be cleared within one week therefrom and which clearance will also be on required terms and conditions and without prejudice to their rights and contentions in the affidavit in reply. Stand over to 27th November, 2019.
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2019 (10) TMI 642
Recovery of duty drawback incentive availed at the time of export - power to reassess shipping bill - Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - Free on Board (FOB) value of the goods exported during 2007-08 to 2012-13 rejected - definition of export goods - application of Valuation Rules, 2007 to exported goods. HELD THAT:- It is apparent from the definition of export goods that the goods which have already been taken out of India do not remain export goods instead are referable as exported goods. The definition of imported goods makes things more than clear that goods which have already been cleared are not imported goods . Similarly, goods which have already been exported are no more export goods . In the definition part as well in the various Sections of 1962 Act and Rules made thereunder, we find that word imported goods or export goods has been used which shows true intention of the legislature. The transaction value of imported and export goods is the thumb rule to determine duty payable, however declared value may be rejected and proper officer may redetermine value applying Valuation Rules, 2007. Rule 1(3) provides that Valuation Rules, 2007 are applicable to export goods and not goods which have already been taken out of India. The declared value may be accepted or reassessed and in case re-assessed value is not accepted by exporter, proper officer has to pass speaking order - Thus, as per scheme of the 1962 Act, department is not remediless and courts are bound to interpret law as such. Courts while interpreting law can neither add nor subtract any word from the plain language irrespective of consequences. It is the legislature who has to rectify, repair or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. On plain reading of Section 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of export goods as defined under Section 2(19) of 1962 Act, thus Respondent cannot invoke Rule 6 8 of Valuation Rules, 2007 - Respondent in terms of Rule 16 of Drawback Rules, 1995 as well Valuation Rules, 2007 has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods. In the present case, goods in question stood exported thus impugned order is not sustainable. Petition allowed.
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2019 (10) TMI 639
Conddonation of delay of 3666 days in filing appeal - sufficient cause has not been shown to condone the delay - HELD THAT:- Having regard to the fact that substantial contentions are available for the appellant it is only appropriate to grant the appellant one more opportunity to file a better affidavit explaining the reasons for the delay. The matter should be remitted back to the Tribunal - appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2019 (10) TMI 623
Maintainability of petition - initiation of CIRP - Fast Track Resolution of the Corporate Debtor - Default in repayment - HELD THAT:- The Applicant has been able to successfully make out its case for Fast Track Resolution of the Corporate Debtor as per section 57(a) (b) of the Code. Application admitted.
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2019 (10) TMI 622
Maintainability of application - initiation of CIRP - Corporate Debtor committed a default for total outstanding amount - Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- On perusing the facts of the instant petition filed under Section 9 of the Code, there appears to be an existence of dispute regarding the default and debt in question due to the deficiency in the goods and/or services supplied by the Operational Creditor - Whereas, in the instant case, the Respondent had raised certain issues regarding the goods and/or services vide its reply notice dated 24.08.2018. On perusal of the said notice, we find that the Respondent had raised a conceivable dispute that would require further investigation. However, the Tribunal cannot enter into enquiry with regard to the disputed questions in a case filed under the IBC, 2016, which is summary in nature and the issues to be primarily decided basing on the principles of natural justice. The question of deficiency in the goods and/or services as claimed by the Respondent has to be examined in an appropriate proceeding in a case filed in accordance with the law and the issue cannot be adjudicated in the instant company petition - there is a dispute with regard to debt in question due to the alleged deficiency in the goods and/or services provided by the Respondent and thus it is not fit to be admitted. The present case is not a fit case to admit - petition admitted.
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2019 (10) TMI 621
Maintainability of application - initiation of CIRP - default in payment of instalments on the part of Corporate Debtor - existence of debt - HELD THAT:- In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the Corporate Debtor committed default in paying the financial debt to the Applicant. As can be seen from the Written Communication of the proposed Insolvency Resolution Process, no disciplinary proceedings are pending against him. In the instant case, the documents produced by the Financial Creditor clearly establish the 'debt' and there is a default on the part of the Corporate Debtor in payment of the 'financial debt' - there is existence of default and that the application under Section 7(2) of the Code is also complete in all respect. The petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - petition admitted - moratorium declared.
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2019 (10) TMI 620
Maintainability of application - initiation of CIRP - Corporate Debtor committed default - Section 9 of IBC, 2016, R/w Rule 6 of I B(AAA) Rules, 2016 - HELD THAT:- The instant Petition is filed mainly to recover the alleged an outstanding amount of rent for ₹ 41,53,754/- which arise out of lease deed dated 13.02.2013. The lease deed dated 13.02.2013 was executed between the Petitioner and the Respondent. It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP for justified reasons as per the Code. The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT ] has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum. The claim made in the instant Company Petition based on the expired Lease Deed as stated supra and that there is an alternative remedy available to the Petitioner to file Civil Suit to evict the tenant/Corporate Debtor and to recover alleged outstanding arrears of rent - Petition dismissed.
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Central Excise
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2019 (10) TMI 637
SSI Exemption - denial on the sole ground that the goods manufactured by them bear the brand of LIC making the appellant as ineligible for the said SSI exemption - HELD THAT:- The issue regarding the admissibility of SSI exemption benefit in the instant case is no longer res integra as has been decided by the co-ordinate benches of this Tribunal in series of decision incl. the decision in the case of Central Press Pvt Ltd vs. CCE, Kanpur [ 2018 (3) TMI 1540 - CESTAT ALLAHABAD ] for the very period in dispute. Time limitation - HELD THAT:- In the impugned show cause notice dated 23.03.2009 no evidence of any positive action has been shown to prove that the assessee has wilfully not paid the demanded duty amount. The only allegation that has been made is that after the withdrawal of the exemption notification 10/2003-CE dated 01.03.2003, vide Notification no. 10/2006-CE dated 01.03.2006, the assessee became liable to pay duty from 01.03.2006 from which date the instant demand has been raised - appeal remanded to the original authority to quantify the duty for normal period i.e. 23-3-2006 to 22-3-2007 and to appropriate the same towards the amount already paid. In absence of any positive action brought on record and in view of the circumstances which prevailed for non- payment of duty, the larger period of limitation is not available to the department in the instant case and therefore, the demand raised beyond the normal period of limitation is unsustainable. The demand of duty, interest and penalty cannot sustain and are therefore set aside - appeal allowed - decided in favor of appellant.
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2019 (10) TMI 635
Adjustment of CENVAT Credit - Duty Free Credit Entitlement (DFCE) certificates - N/N. 53/2003-Cus dated 01.04.2003 - It is the case of the department that the assessee could adjust Cenvat Credit only w.e.f. 17.11.2005 when the amendment was made to the aforesaid notification no. 53/2003 vide notification no. 97/2005-cus dated 17.11.2005 - HELD THAT:- The issue decided in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS LUPIN INDUSTRIES LTD [ 2017 (12) TMI 1021 - CESTAT MUMBAI] where it was held that Respondent is an exporter and is, thereby, entitled to a refund of taxes/duties on all inputs and it is the superfluous activity of collecting the additional duty for subsequent refund that would be the consequence of the proposition made on behalf of Revenue. It is noted that in the present case, the authorities have not disputed the customs exemption claimed by the assessee and therefore, it is not open to the authorities to dispute the availment of cenvat credit which is otherwise available in terms of the CENVAT Credit Rules, 2004, as also clarified vide circular dated 13.10.2006. In a similar case where the cenvat credit of SAD amount credit was sought to be denied to the assessee, which was paid by the assessee through DFCE licence, the Tribunal in TECUMSEH PRODUCTS INDIA PVT. LTD. VERSUS COMMR. OF C. EX., HYDERABAD [ 2010 (1) TMI 587 - CESTAT, BANGALORE] has held that the assessee was legally eligible for cenvat credit. The assessee is eligible for credit of the countervailing duty paid through debit in the DFCE certificates even prior to 17.11.2005 - Appeal allowed - decided in favor of assessee.
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2019 (10) TMI 633
Method of Valuation - clearance of tooth brushes in combo pack/bulk/naked condition to manufacturer of Toothpaste for free distribution - applicability of section 4 and section 4A of CEA - case of the department is that the tooth brushes so cleared were required to be assessed under Section 4A of the Central Excise Act, 1944. i.e. on MRP basis instead of transaction value - period February 2013-June 2017 - HELD THAT:- It can be seen that from Hon'ble Supreme Court judgment in the case of JAYANTI FOOD PROCESSING (P) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJASTHAN [ 2007 (8) TMI 3 - SUPREME COURT] where the issue is no longer res integra as the identical facts are involved in the present case, therefore, the tooth brushes supplied by the appellant which is not for retail sale but for free supply by the tooth paste manufacturer will not be valued under Section 4A in the hands of the appellant. The value adopted by the appellant under Section 4 is correct and legal which does not need any interference - Appeal allowed - decided in favor of appellant.
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2019 (10) TMI 626
CENVAT Credit - duty paying invoices - supplementary invoices - Rule 9(1)(bb) of Cenvat Credit Rules, 2004 - HELD THAT:- There is no dispute to the fact that appellant has paid service tax, even though pointing out by the auditors subsequently, but under reverse charge mechanism on receipt of services namely, security agency service and man power recruitment service. They have availed Cenvat credit on the basis of bank challans as proof of payment of service tax. The provisions of taking credit on such challans, is provided under Rule 9(e) of Cenvat Credit Rules, 2004 - In the present case, credit was not taken on supplementary invoices, bills challans and therefore, the provisions of Rule 9(1)(bb) is not applicable. Thus, in case of payment of service tax under reverse charge mechanism, Rule 9(1)(bb) will not apply - appeal allowed - decided in favor of appellant.
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