Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 23, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Articles
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seeking Direction to the respondents (GSTN) to make necessary changes in the portal so as to enable the petitioner to file returns - the mere fact that the respondents took time to process the said applications, and pass orders thereon approving the cancellation application as also granting the new registration, cannot be a reason to treat the interim period as one in which the petitioner cannot get the benefit of the compounding scheme which he had opted through its application for new registration. - petition allowed. - HC
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Confiscation of goods alongwith vehicle - Areca Nuts - If the writ applicant wants provisional release of the goods and the vehicle, it is always open for him to prefer an application before the concerned authority under Section 67(6) of the Act, 2017. - HC
Income Tax
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Grant of approval for exemption u/s.10(23C)(vi) - AOP - Since the AOP is recognised as a "person" for the purpose of Income Tax Act, 1961 and Section 10(23C) of the Act also grants exemption to a person engaged in deriving income from specified sources including the University or Educational Institution, covered by this provision and on these facts, there is no dispute before us that the appellant Educational Institution was duly registered with the State Registered Authorities and was only engaged in the educational activities. No reason to deny the exemption or registration under Section 10(23C) of the Act which was denied by the learned Chief Commissioner. - HC
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Limited scrutiny - Addition on account of cash borrowings from agriculturists and interest received on compensation in respect of agricultural land - - Any consideration of the details relating to the income from other sources is beyond the scope of this limited scrutiny, inasmuch as the reason for a limited scrutiny includes low income from other sources as compared to large value fixed deposits - AT
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Unexplained deposits - genuineness of gift received by the father from his daughter - As per the provisions of section 56 the father and daughter comes in the definition of relatives and there is no bar for giving or taking gift inter se by them. The amount has been transferred to the account of the assessee from bank account of the daughter of the assessee - Addition deleted - AT
IBC
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The Adjudicating Authority cannot prevent the distributing company from collecting electricity charges from the Corporate Debtor during CIRP. The relief sought is against the provisions of Insolvency & Bankruptcy Code, 2016. - Tri
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Initiation of CIRP - It can be concluded that the claim arising out of grant of licence to use immovable property does not fall in the category of goods or services including employment and is also not a debt for the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government, or any Local Authority, as defined under Section 5(21) of IBC, 2016. Thus, the amount claimed in the present petition is not an unpaid operational debt and therefore the Application cannot be allowed. - Tri
Wealth-tax
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Wealth tax assessment - the assessee cannot avail exemption for a plot of land, even if it is having an area of less than 500 sq. mts or less, if he had already claimed exemption of one house u/s 5(vi) of the Act. If the assessees have not claimed exemption of house, then they are entitled to claim exemption of either one house or part of a house or plot of land. - AT
Service Tax
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Rejection of application under SVLDRS - This writ petition also stands disposed of by requiring the petitioner to submit an application before the respondent authorities for correction to be made in the information provided in the Form SVLDRS-1 as regards the penalty imposed and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon. - HC
Case Laws:
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GST
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2020 (10) TMI 900
Refund of ITC - refund rejected without without issuing a Show Cause Notice in Form GST RFD-08 and without granting any opportunity of personal hearing - Principles of Natural Justice - HELD THAT:- In the instant case neither a show cause notice was issued nor opportunity of personal hearing was granted to the appellant before passing the order and also no reason for rejection was given. Passing of such non speaking order is against the principle of natural justice - Adjudicating Authority should have passed the speaking order by granting proper opportunity of personal hearing and detailing the factor leading to rejection of refund claim. The case of rejection shall be reconsidered by the adjudicating authority and a proper speaking order should be passed by following the principle of natural justice as provided under Rule 92(3) of CGST Rules, 2017 - Appeal allowed by way of remand.
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2020 (10) TMI 899
Seeking Direction to the respondents (GSTN) to make necessary changes in the portal so as to enable the petitioner to file returns - benefit of compouding scheme under new registration after cancellation of earlier registration - period from October 2018 to December 2018, January 2019 to March 2019, April 2019 to June 2019, July 2019 to September 2019, October 2019 to December 2019 and January 2020 to March 2020 - HELD THAT:- Inasmuch as it is not in dispute that the petitioner had applied for a cancellation of its earlier registration as early as on 22.05.2018 and had applied for a new registration on 19.06.2018, the mere fact that the respondents took time to process the said applications, and pass orders thereon approving the cancellation application as also granting the new registration, cannot be a reason to treat the interim period as one in which the petitioner cannot get the benefit of the compounding scheme which he had opted through its application for new registration. The delayed processing of the application submitted by the petitioner cannot be a reason to deprive the petitioner of the statutory benefit that he had claimed through the application in question. This writ petition is allowed by directing the respondents to make the necessary changes in the portal so as to enable the petitioner to file the returns for the period aforementioned without charging the petitioner any late fee or other charges on account of the delay occasioned by the respondent - petition allowed.
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2020 (10) TMI 898
Demand of GST alongwith interest and penalty - refund of penalty amount - Detention of vehicle alongwith the goods - HELD THAT:- While goods which were on their way from New Delhi to Gorakhpur being intercepted at Sikandara Toll Plaza by the mobile squad of the taxing authorities found the papers, accompanying the goods, not being in conformity, a show cause notice was given by the authorities and was served upon the driver of the vehicle in question and a reply was submitted. On the same day the penalty order was passed and was served upon the driver itself and the amount of tax demand as well as penalty was deposited by the petitioner on the same day i.e. 14.08.2018, pursuant to which the goods and vehicle were released. The petitioner neither in the present writ petition nor in the grounds of appeal before the first Appellate Authority had disclosed the fact that during which period the order dated 14.08.2018 was not reflected on the web-portal of the department and when did he came to know that the appeal could be filed offline. In the rejoinder affidavit filed by the petitioner it is only submitted that the demand order as well as penalty order dated 14.08.2018 was not uploaded but no specific denial has been made to the averment made by the department that all the orders are uploaded on the web-portal of the department and similarly the demand order as well as penalty order dated 14.08.2018 passed against the petitioner was also uploaded on the web-portal - Moreover, in the rejoinder affidavit the petitioner has tried to build up a case that the order was served upon the driver of the vehicle in question which will not amount to the service upon the petitioner. This assertion cannot be accepted as from the perusal of memo of the appeal it is clear that the date of communication of order has been mentioned specifically as 14.08.2018. As in the present case the petitioner was very well aware of the fact that against the penalty order dated 14.08.2018 he had the remedy of filing the appeal but the same was not availed within the statutory limit provided under Section 107 of the Act, but he has approached the first Appellate Authority after a delay of eight months on the ground that the web-portal of the department did not reflect the penalty order, while the same has been categorically denied by the department, to which the petitioner failed to respond with concrete answer, thus, no indulgence can be granted and the writ petition being devoid of merit is hereby dismissed .
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2020 (10) TMI 897
Confiscation of goods alongwith vehicle - Areca Nuts - writ applicant is here before this Court with a prayer that the goods and the vehicle may ordered to be released pending the confiscation proceedings - HELD THAT:- As the confiscation proceedings are pending, we are not inclined to grant any relief as prayed for at this point of time. It is expected that the writ applicant to participate in the confiscation proceedings and make good his case that no case for confiscation is made out. If the writ applicant wants provisional release of the goods and the vehicle, it is always open for him to prefer an application before the concerned authority under Section 67(6) of the Act, 2017. This writ application stands disposed of.
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2020 (10) TMI 896
100% EOU - Refund of unutilized ITC (Inputs Input Services) - zero rated supplies - period October to December-2017 - Circular No.110/29/2019-GST, dated 03rd October 2019 issued by CBIC - HELD THAT:- The appellant was required to file refund claim online in terms of Circular No.17/17/2017-GST dated 15.11.2017 and 24/24/2017-GST dated 21.12.2017 which provides that every refund should be filed online on common portal but the appellant has failed to file their claim online - the Appellant has not followed the proper procedure, as laid down in the above circulars dated 15.11.2017 and 27.12.2017 respectively, as they have filed the refund claim manually instead of online. The appellant has filed the said refund claim as revised claim in respect of the refund claims already filed vide ARN No.AA0811176066919 for the period of October-2017 to November-2017 for ₹ 0.00 and ARN No.AA081217780023B for the period of December 2017 for ₹ 1,77,03,367/-. Whereas, as per condition (b) of Circular No.110/29/2019-GST dated 03.10.2019 that No refund claims in Form GST RFD-01A/RFD-01 must have been filed by the registered person under the same category for any subsequent period . Thus, appellant has not satisfied the condition (b) of the said circular. Appellant not eligible for refund - appeal dismissed.
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2020 (10) TMI 895
Refund of GST - excess GST paid on canteen services to vendors during the period November-2017 to July-2018 - whether the appellant i.e. M/s Honda Motorcycle and Scooter India Private Limited, Bhiwadi is eligible for refund or not as per the provisions of Section 54 of the CGST Act, 2017 read with Rule 89 of the CGST Rules, 2017? HELD THAT:- As per Section 54(1) of the Central Goods and Service Tax Act, 2017 and as per Rule 89(1) of the Central Goods and Service Tax, 2017 for making a refund claim a person should first have to pay/deposit the tax with the government which is clear from the word any person . . paid by him means that any person who has paid the tax - In the instant case the GST has been deposited to the Govt. account by the Service Providers namely M/s Caterman Cuisine Concepts P Ltd., Tapukra, Bhiwadi and M/s ICS Foods P Ltd., RHB, Bhiwadi for the period November-2017 to July-2018 and not deposited by the appellant i.e. M/s Honda Motorcycle and Scooter India Private Limited, Tapukara Industrial Area, District-Alwar. It is an admitted fact on record that in the instant case the tax has not been paid by the appellant to the Govt. account. Therefore, they are not eligible to file the refund claim. The appellant is not eligible to file refund claim - Appeal dismissed.
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2020 (10) TMI 894
Permission to withdraw the appeal - refund of accumulated Input Tax Credit - Zero rated supplies - period July to March 2017-2018 - HELD THAT:- The appellant has now requested to allow them to withdraw their appeal. Since, the appellant has requested to allow them to withdraw their appeal, the appeal is allowed to be withdrawn and the instant appeal is dismissed as withdrawn.
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2020 (10) TMI 893
Permission for withdrawal of application - Revocation of cancellation of registration - non filing of returns timely - non submission of reply to the show cause notice within the time specified - HELD THAT:- The appellant has now requested to allow them to withdraw their appeal. Since, the appellant has requested to allow them to withdraw their appeal, they are allowed to withdraw their appeal. Appeal dismissed as withdrawn.
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2020 (10) TMI 892
Permission for withdrawal of appeal - revocation of GST registration - HELD THAT:- The appellant has now requested to allow them to withdraw their appeal - Since, the appellant has requested to allow them to withdraw their appeal, they are allowed to withdraw the appeal. Appeal dismissed as withdrawn.
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2020 (10) TMI 891
Detention of goods alongwith conveyance - supply or not - transfer of a going concern - detention of goods on the ground that E-way bill not produced - HELD THAT:- Section 7 of the CGST Act, 2017 defines the Scope of Supply, Section 7 (1) provides that 'Supply' includes activities such as sale, transfer, barter, exchange etc. made for a consideration in the course or furtherance of business. This implies that the activity undertaken shall be an action which takes place in the course of regular conduct of business, such as sale or it should have the effect of furtherance of the business. Therefore, the activity to be called as supply should be such that undertaking that activity shall amount to conduct of business or enhancing 'the business. The transfer of a going concern, either as a whole or an independent part thereof, for a lump sum consideration does not constitute an activity taking place in the course of business or furtherance of business. If transfer of going concern is considered as a part of business then it is a supply. To determine this, Section 7 (1A) provides that where certain activities or transactions constitute a supply in accordance with the provisions of sub section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule-II. Such transfer of fixed assets namely old computer system, tube lights, fan etc from its Bagru branch to Bayana Branch through vehicle no. RJ 34 GA 0200 is considered as a supply of goods rather the Stock Transfer. Hence GST is applicable and E way Bill is mandatorily required as per above provisions. On being seen the document i.e. Delivery Challan, the appellant was carrying along with the vehicle/goods on which the taxable value as well as applicable tax was very much shown but no where it was mentioned the Stock Transfer of goods - Appeal dismissed.
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2020 (10) TMI 890
Refund of GST - inverted tax structure - adjudicating authority had noticed that the appellant had wrongly taken Net ITC in RFD-01 which included ineligible ITC of Capital Goods - Allegation that the appellant has suppressed/mis-declared value of Net ITC resulting in excess claim of refund - Section 54 (3) of the CGST Act, 2017 - Refund under the provisions of receipt under deemed export - penalty - HELD THAT:- Refund of unutilized ITC in case of inverted tax structure, as provided in Section 54 (3) of the CGST Act, 2017 is available where ITC remains unutilized even after setting off of available ITC for the payment of output tax liability. Where there are multiple inputs attracting different rate of tax, in the formula provided in Rule 89 (5) of the CGST Rules, the term Net ITC cover the ITC availed on all inputs in the relevant period, irrespective of their rate of tax. Further, as per Para -14 of Circular No.79/53/2018-GST dated 31.12.2019 Section 54 (3) of the CGST Act provides that refund of any unutilized ITC may be claimed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Further, Section 2 (59) of the CGST Act defines inputs as any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. Thus, inputs do not include services or capital goods. Therefore, clearly, the intent of the law is not to allow refund of tax paid on input services or capital goods as part of refund of unutilized input tax credit. Accordingly, in order to align the CGST Rules with the CGST Act, notification No.26/2018-Central Tax, dated 13.06.2018 was issued wherein it was stated that the term Net ITC, as used in the formula for calculating the maximum refund amount under rule 89 (5) of the CGST Rules, shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both. Thus, both the law and the related rules clearly prevent the refund of tax paid on Input Services and Capital Goods as part of refund or Input Tax Credit accumulated on account of Inverted Duty Structure - appellant s contention that credit of Capital Goods along with Input Services also be included for the purpose of determination of Net ITC is not correct and rightly rejected by the adjudicating authority. Refund under the provisions of receipt under deemed export - HELD THAT:- The appellant was at his liberty to claim the refund under relevant provision of the law and he should have filed the claim under relevant provisions related to deemed export scheme. It can not be allowed at this stage, as there is no such provision under the rules, therefore appellant s demand can not be acceded and rightly rejected by the adjudicating authority - there are no force in the contention of the appellant and are not acceptable - appeal dismissed. Penalty proposed under Section 122 (1) of the Act - Scope of SCN - HELD THAT:- Adjudicating Authority can not travel beyond the scope of show cause notice. Any order passed by the adjudicating authority beyond the scope of show cause notice is not legal and liable to be set aside. Therefore, the penalty imposed under Section 122 (2) (b) is beyond the scope of show cause notice and is set aside. Appeal disposed off.
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2020 (10) TMI 889
Jurisdiction - appropriate forum to file appeal - Detention of goods alongwith conveyance - HELD THAT:- The adjudicating authority Sh Kailash Ram Jodhawat, STO, Circle-lll, Bhilwara has passed the impugned order on 04.02 2019 which is not in the jurisdiction of this appellate authority as well as the appellant also stated at the time of personal hearing that the appeal has been filed wrongly. Section 6(3) of the CGST Act specifically mandates that any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under CGST Act shall not lie before an officer appointed under the SGST or UTGST Act. Similar provisions exist in SGST/UTGST Act also. In this case, appeal shall lie before the jurisdictional authority of SGST, Hamirrgarh, Bhilwara. The appeal filed by the appellant is dismissed for the reason being beyond jurisdiction of this appellate authority.
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2020 (10) TMI 888
Release of Confiscated Goods - Department had made the case against the appellant on the ground that the Valid E-way Bill was not available with the conveyance at the time of interception - Penalty - HELD THAT:- The person in charge of the vehicle provided an e-way bill at the physical verification stage. After verification it was found that the said e-way bill updated with the conveyance No. RJ-14-GF-6831 at 05.27 PM. Hence, the valid e-way bill was not available with the intercepted vehicle at 05.19 PM i.e. time of interception and cleared impugned goods without e way bill and the person-in-charge of the vehicle provided an E-way Bill at the physical verification stage. The E- way- Bill No.731043011329 was got generated prior to the commencement of movement of the goods at 04.38 PM which was contained all details i.e. details of the goods, tax invoice number as well as the name of the buyer of the goods including his registration number under the GST Act; and the transport receipt of the transporter and packing list was also accompanying the goods. In so far as E-way Bill was not available with the conveyance at the time of interception at 05.19 PM, the appellant has explained and I also find that the vehicle of the Driver was carrying the E-way Bill No.731043011329 in which the vehicle registration number was shown RJ14-GF-9189 in place of vehicle registration number RJ-14-GF-6831 due to sudden change in vehicle plan by the transporter,' the transporter has placed another vehicle bearing Registration No. RJ-14-GF-6831 in place of Registration No. RJ-14-GF-9189. As soon as the mistake came to the notice of the appellant the same mistake was rectified by the appellant and got generated the E-Way Bill at 05.19 mentioning therein the vehicle registration number RJ-14-GF-6831 - thus, all the necessary statutory requirement under the provisions of CGST Act and Rules was fulfilled by the appellant except mentioning corrected vehicle number at the time of interception, though this mistake was corrected soon after it came to notice. Thus, there appears no ill intention to evade the tax and just mere technical mistake. Penalty - HELD THAT:- Though the appellant has made a error in mentioning the vehicle number they himself admitted that due to sudden change in vehicle plan by the transporter they could not change the vehicle number. Since the appellant himself admitted their mistake by not correcting the vehicle number. Therefore, they are liable for a penalty under Section 125 of the CGST Act, 2017 - Penalty upheld. Appeal allowed in part.
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2020 (10) TMI 887
Levy of tax and penalty - Detention of Goods - allegation that Some material/goods were found without invoice and E-way Bill and the rest of the material were also without valid E-way Bill as the vehicle number was different in the said E-way Bill - HELD THAT:- The adjudicating authority in impugned order dated 06.12,2018 no where mentioned that how much quantity was without invoice, without E-way bill and further no specific mention has been made in impugned order' about the rest of tree material/goods which was without valid E-way bill, only the adjudicating authority has mentioned in order that the vehicle number is different in the said E-way bill. The adjudicating authority in impugned order in the column Conveyance Number has mentioned RJ-32-GA-8579 whereas in the column details of conveyance detained has been mentioned as R3-14-GF-6858 whereas on perusal of order no such vehicle has been used by the appellant in movement of goods. From the above, it appeared that adjudicating authority while passing the order has not paid proper attention. The e-way bill shall not be valid for movement of goods by road unless the information in Part-B of FORM GST EWB-01 has been furnished except in the case of movement covered under the third proviso to sub-rule (3) and the proviso to sub-rule (5) - As per N/N.12/2018 dated 07.03.2018 in Rule 138 (3) third proviso which clearly states that where the goods are transported for a distance of upto 50 kms within the State from the place of business of the consignor to the place of transporter for Uther transportation, the supplier or the recipient, as the case may be, the transporter may not furnish the details of conveyance in Part-B of Form GST EWB-01, the appellant was not under an obligation to fill Part-B of the e-way bill, therefore, the appellant has not committed any error of law at the time of downloading e-way bill. There are no intention at the hands of the appellant nor the appellant was supposed to fill up Part-B giving all the details including the vehicle number before the goods are loaded in a vehicle, which is meant for transportation to the same to its transporter. Merely of none mentioning of the vehicle number in Part-B can not be a ground for seizure of the goods. Moreover, there is no loss of revenue. In this case, no reasons are assigned nor any discussion is mentioned in the impugned order of seizure by the adjudicating authority. It is obligatory on the part of adjudicating authority to pass an appropriate reasoned order. Penalty - HELD THAT:- The appellant has submitted copies of both the invoices along with E-way Bills mentioning there in all details in Part A except the corrected vehicle number in Part-B which they himself admitted that they could not change the vehicle number which is a technical error and which was not mandatory because the movement of vehicle was within the 50 Km area. Since the appellant himself admitted their mistake by not correcting the vehicle number and accompanied the E-way bill with wrong vehicle number along with the goods. They are liable for a penalty under Section 125 of the CGST Act, 2017. Appeal allowed in part.
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Income Tax
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2020 (10) TMI 886
Entitlement to claim deduction u/s.80IA - old unit situated at Tumkur, manufacturing electrical cables - Whether the assessee is entitled to claim deduction u/s.80IA of the Act, in respect of old unit situated at Tumkur, manufacturing electrical cables, which claim was not considered by taking into account the entire evidence recorded by the AO? - HELD THAT:- The aforesaid substantial questions of law which are involved in this appeal have already been answered in favour of the revenue by a Bench of this Court M/S. DEEPAK CABLES (INDIA) LTD. [ 2014 (6) TMI 1045 - KARNATAKA HIGH COURT] - Decided against assessee.
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2020 (10) TMI 885
TDS u/s 194J - payment made by the assessee with reference to the services - bifurcation of a composite payment - assessee in default u/s 201(1A ) - Tribunal held that provisions of Section 194J has to be applied only to the payments which assume the nature of fee for professional services and not on the entire composite payments, when the bill contains charges for various services rendered by the hospital, as such payment or for services rendered as a whole? - shifting the burden on the revenue to verify the payment of tax by the deductee on the payments received from the assessee in order to quantify the amount of default committed by the assessee - HELD THAT:- Substantial questions of law are answered as answered in M/S. TTK HEALTHCARE TPA PVT. LTD.[ 2020 (10) TMI 857 - KARNATAKA HIGH COURT] and the order of the Tribunal to the extent it directs bifurcation of payments made by the assessee with reference to the medical services only is hereby quashed. In the result, the appeal is partly allowed.
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2020 (10) TMI 884
Deduction u/s 80IA - only the profit making power generating unit of the assessee should be taken into account and not the loss making units in computing the total income of the assessee for its eligible business to allow deduction - HELD THAT:- As decided in E ASST. COMMISSIONER OF INCOME-TAX CIRCLE-11 (5) , BANGALORE [ 2020 (5) TMI 333 - KARNATAKA ] similar issue involved in this appeal is squarely covered by an order in the case of SWARNAGIRI WIRE INSULATIONS P. LTD. [ 2013 (2) TMI 202 - KARNATAKA HIGH COURT ] - Decided against revenue. Disallowance u/s 14A - Substantial question of law - HELD THAT:- CIT (Appeals) as well as the Tribunal has recorded a finding that the assessee has invested a sum of ₹ 26,61,011/- from its own capital and the claim of the assessee for an amount of ₹ 14,40,471/- under Section 14A of the Act has been remitted to the Assessing Officer to decide the claim in accordance with law. The aforesaid concurrent findings of fact recorded by the Tribunal by no stretch of imagination can be said to be either perverse or based on no evidence. No element of perversity has been brought to our notice, therefore, it is not necessary for us to answer the aforesaid substantial question of law.
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2020 (10) TMI 883
Grant of approval for exemption u/s.10(23C)(vi) - admitted fact that the assessee was granted permission to run the school by the Director of School Education Chennai since 1997 - HELD THAT:- We are not inclined to admit the present Appeal as we find that no substantial question of law arises in the present Appeal filed by the Revenue. The position of law is very clear. Undisputedly, the Assessee has been filing its Return of income as Association of Persons (Educational Institution) with the Respondent/Income Tax Department. Assessee (AOP) is also undisputedly covered by the definition of 'Person' as defined in Section 2(31) of the Act. Since the AOP is recognised as a person for the purpose of Income Tax Act, 1961 and Section 10(23C) of the Act also grants exemption to a person engaged in deriving income from specified sources including the University or Educational Institution, covered by this provision and on these facts, there is no dispute before us that the appellant Educational Institution was duly registered with the State Registered Authorities and was only engaged in the educational activities. No reason to deny the exemption or registration under Section 10(23C) of the Act which was denied by the learned Chief Commissioner. Tribunal has rightly discussed the relevant provisions of the Act and finding that the Appellant Educational Institution is undoubtedly, an Institution covered by the provisions of Section 10(23C)(vi) of the Act and therefore, as an AOP, it was entitled to exemption irrespective of the fact whether it had separate registration under other law as an Institution or Society or not. The requirement of the Applicant being a registered Body or juristic person is not there in Section 10(23C) of the Income Tax Act. The definition of 'Person' who is entitled to exemption under Section 10(23C)(vi) of the Act is clear enough and it specifically covers Association of Persons (AOP), which need not be a registered Body. The submission made on behalf of the Revenue that unless the Applicant under Section 10(23C) of the Act is independently registered, the Revenue may not have control over it is fallacious, since the Appellant/Assessee is admittedly filing its Returns of Income as AOP. Unless the finding of facts are given on the basis of evidence that the Assessee does not meet the parameters of Section 10(23C) of the Act, the exemption claimed by the Assessee cannot be denied on the ground that it does not have independent Memorandum of Association, Bye laws, etc. and this is not a sustainable ground to deny the exemption as required under Section 10(23C) of the Act and the definition of person under Section 2(31) as quoted above. Tribunal has not committed any error in reversing the order of the learned Chief Commissioner and directing the grant of exemption to the Appellant/Assessee under section 10(23C)(vi) - Decided in favour off assessee.
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2020 (10) TMI 882
Addition u/s 69 - unexplained investment made in purchase of land - ITAT deleted the addition - HELD THAT:- There is a concurrent finding of fact recorded by the two authorities, namely the CIT(A) as well as the Appellate Tribunal, that there is no material on record to prove conclusively that the investment made by the assessee had not been shown in the books of accounts. - Decided against revenue.
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2020 (10) TMI 881
Scope of Limited scrutiny - Addition on account of cash borrowings from agriculturists and interest received on compensation in respect of agricultural land - assessee is an agriculturist - Assessee treated the interest on compensation as additional compensation and shown as exempt income in his return of income - Assessee contended that the interest on an enhanced compensation granted under section 28 of the Land Acquisition Act is accretion to the value of land acquired and therefore, are non-taxable; and that the assessee being an illiterate and not conversant with the grievances of the Tax Law did not realise the implications in receiving the loan in cash - First contention of the assessee is that although the case was selected for limited scrutiny under CASS but the Ld AO did not concentrate only on the reasons for which case was selected for limited scrutiny but went on asking more more improved reasons without taking prior approval from the competent authorities HELD THAT:- Any consideration of the details relating to the income from other sources is beyond the scope of this limited scrutiny, inasmuch as the reason for a limited scrutiny includes low income from other sources as compared to large value fixed deposits. This reason takes into its fold the scrutiny of the income from other sources including the receipt of interest on enhanced compensation under section 28 of the Land Acquisition Act. AO did not step out the scope of enquiry in this matter. Addition of the interest on enhanced compensation received for acquisition of the agricultural property - In the case of Hari Singh [ 2017 (11) TMI 923 - SUPREME COURT ] while dealing with the similar question under identical set of facts under section 194LA of the Act, Hon ble Court set aside the matter to the file of the AO to examine the facts of the case and to apply the law as contained in the Income-tax Act. Hon ble Supreme Court specifically directs that in case the learned AO finds that the compensation was received in respect of the agricultural land, the tax deposited with the Income-tax Department shall be refunded to the assessee. Hon ble Supreme Court gave the above direction after noticing the decision in the case of Ghanshyam [ 2009 (7) TMI 12 - SUPREME COURT ] It does not admit of any doubt as to the nature of amount by way of interest u/s 28 of the Land Acquisition Act in the hands of the assessee or the applicability of the Income-tax Act to such amount. We therefore, do not find any reason to sustain the addition on this score in the absence of any dispute as to whether the interest received was under section 28 of the Land Acquisition Act. Such an addition cannot be sustained and the same is directed to be deleted. Addition when the assessee produced the bank statements of the creditors - It is an admitted fact that no bank statement of the assessee was produced before the authorities to demonstrate the fact of repayment. Ld. AR now seeks an opportunity of producing such material for the determination of just tax liability of the assessee. There was no opportunity for the authorities below to consider this fact of the repayment of loan through banking channels. Assessee now deserves to produce the bank statements to establish such a fact. In the circumstances, having regard to the plea that the assessee, only because of their ignorance as to the implications under the Income Tax Act, obtained the cash loans, we are of the considered opinion that this issue needs to be set-aside to the file of the learned AO for verification of said fact in the light of the material to be produced by the assessee to prove the fact of repayment. Set aside the findings of the authorities below on this aspect of addition of ₹ 85 Lacs and remand the issue to the file of the learned Assessing Officer for fresh consideration
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2020 (10) TMI 880
Depreciation u/s 32 claimed on self valued, unsubstantial intangibles declared as customers contract goodwill - HELD THAT:- Hon ble Supreme Court in CIT vs. Smiffs Securities Ltd. [ 2012 (8) TMI 713 - SUPREME COURT ] held that, goodwill is an asset under Explanation 3B to section 32 of the Act and is eligible for depreciation Hon ble Delhi High Court in Areva T D India Ltd. [ 2012 (4) TMI 79 - DELHI HIGH COURT ] has held that when goodwill in books of account comprises inter alia business claims, business information, business records, contracts, skilled employees knowhow has been purchased for a consideration to acquire the running business, it is comparable to a licence to carry out the existing transmission and distribution business of the transferor and in the absence of aforesaid intangible assets business, assessee would have to commence business from scratch. Effect of acquiring running business with tangible and intangible assets including goodwill and customer contracts are quite visible as turnover of the assessee has been increased during the year under assessment. Despite the fact that the assessee has given the complete details of agreement vide which tangible and intangible assets of running business of M/s. KPIT Cummins Infosystems Ltd. were purchased as per valuation report, AO has disallowed the depreciation on goodwill and customer contracts by ignoring the settled principle of law that goodwill / customer contracts duly recorded in the audited financials are eligible for depreciation being intangible assets under section 32 (1)(ii) of the Act. CIT (A) has rightly deleted the disallowance made by the AO by following settled proposition of law discussed in the preceding paras. Appeal filed by the Revenue is hereby dismissed.
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2020 (10) TMI 879
Adjustment u/s 145A - Whether unutilized CENVAT credit was to be included in the value of closing stock in pursuance to the provision of section 145A? - assessee has shown less income by not including unutilized CENVAT credit in the value of closing stock shown as on 31/03/2006 AO added the same to the total income of the assessee - HELD THAT:- The provisions of section 145A of the Act mandate to follow the exclusive method of accounting which requires to record the transaction of purchase, sales of the stock after including taxes incurred in relation to purchase/sales of goods. But in the case on hand we find that the assessee has not included such taxes in the amount of purchases, sales and closing stock. We note that if such taxes are included in the opening stock, purchase, sales and closing stock then there will not be any difference in the total income declared by the assessee. It is because such exercise is tax neutral in the given facts and the circumstances. Assessee has placed a chart in the paper book which is placed depicting the profit under both the method of accounting i.e. inclusive and exclusive method of accounting as provided u/s 145A of the Act. On perusal of the chart there is no difference in the profit declared by the assessee except a minor difference of ₹ 5091/- only. See PUNEET INDUSTRIES PVT. LTD. [ 2016 (6) TMI 1167 - ITAT AHMEDABAD] assessee was following exclusive method of accounting and the CENVAT was not debited or credited to the Profit Loss account and the aforesaid method has been consistently followed by the assessee in earlier and succeeding years - unavailed MOD VAT credit cannot be construed as income and there is no liability to pay tax on such unavailed MODVAT credit. - Decided against revenue.
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2020 (10) TMI 878
Revision u/s 263 - Deduction u/s. 80P(2)(a)(i) - HELD THAT:- Though there is justification for invoking powers u/s. 263 of the Act to make verification as to whether the principle of mutuality is satisfied in the case of assessee in Citizen Co-operative Society Ltd. [ 2017 (8) TMI 536 - SUPREME COURT ] the other directions contained in our view, is uncalled for. When the assessment is set aside for examination of the claim of assessee u/s. 80P(2)(a)(i) of the Act in the light of the decision of Hon ble Supreme Court in Citizen Co-operative Society Ltd. (supra) , the exercise to be done would be restricted to verification of nature of membership of the society as per the bye laws and as to whether the income derived by the assessee on which deduction u/s. 80P(2)(a)(i) has been claimed, is attributable to the business of providing credit facilities to its members. Assessment vis- -vis section 80P(2)(a)(i) would be a de novo assessment and the AO would be free to adopt his line of enquiry while deciding the issue in the set aside proceedings, limited to the ratio laid down by the Hon ble Supreme Court in Citizen Co-operative Society Ltd. (supra) uninfluenced by the directions of the Pr.CIT as contained in the impugned order in paragraph 3.3 . Accordingly, we modify the directions of the Pr. CIT in the impugned order as indicated above. Appeal of the assessee is partly allowed.
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2020 (10) TMI 877
Non genuine purchases - CIT- A restricted addition to 12.5% - HELD THAT:- We fully agree with Commissioner (Appeals) that under the given facts and circumstances, the entire purchases made by the assessee could not be disallowed but only the profit element embedded in such purchases can be considered for addition. No hesitation in upholding the decision of the learned Commissioner (Appeals) in restricting the disallowance to 12.5% of the alleged non genuine purchases. As rightly observed by Commissioner (Appeals), the purchases worth ₹ 39,88,556, made from Sharp Print having been proved through confirmation and supporting evidences, cannot be treated as bogus. Accordingly, we uphold the decision of learned Commissioner (Appeals) by dismissing the grounds raised by the Revenue.
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2020 (10) TMI 876
Estimation of income - bogus purchases - NP estimation - CIT-A directed the AO to estimate profit @12.5% on the disputed purchases - HELD THAT:- Assessee has filed before the AO copies of (i) bank statements for the financial year 2010- 11, evidencing the payments made to these parties; (ii) ledger account of all the parties; (iii) purchase invoices from these parties and (iv) sale invoices as issued by the assessee against the purchases made. AO could have made further verifications /enquiries. Without making any verification /enquiry, the AO has made the full addition. In such a situation like the above one, the Ld.CIT(A) has rightly relied on the judgment of the Hon ble Gujarat High Court in Bholonath Poly Fab (P) Ltd. [ 2013 (10) TMI 933 - GUJARAT HIGH COURT ] and directed the AO to estimate the profit @ 12.5% embedded in the disputed purchases - Decided against revenue.
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2020 (10) TMI 875
Reopening of assessment u/s 148 - non-issuance of notice u/s. 143(2) - HELD THAT:- Both the parties agreed that the issue of non-issuance of notice u/s. 143(2) of the Act may be set aside to the Ld. CIT(A) to decide the same as per law, after examining the assessment records and give adequate opportunity of being heard to the assessee. Non-issuance of notice u/s. 143(2) after examining the assessment records, and give full opportunity of being heard to the assessee, as per law. Even otherwise, after perusing the orders passed by the revenue authorities, we find that the revenue authorities have decided the issues in dispute against the assessee exparte and Ld. CIT(A) has not passed the speaking order on merits also. CIT(A) has not elaborately discussed the evidences filed by the assessee and decide the issues in a summary manner. Therefore, we are also of the view that the contentions raised by the Assessee in the grounds of appeal on merits also require re-adjudication at the level of the Ld. CIT(A). Assessee s Appeal is allowed for statistical purposes.
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2020 (10) TMI 874
Unexplained deposits - genuineness of gift received by the father from his daughter - plea of the assessee that the said amount was received by the assessee through cheque from his daughter as gift which was received to her from her mother-in-law through banking channel out of amount of the accident claim of daughter's first husband - HELD THAT:- As per the provisions of section 56 the father and daughter comes in the definition of relatives and there is no bar for giving or taking gift inter se by them. The amount has been transferred to the account of the assessee from bank account of the daughter of the assessee - Also not been disputed that the daughter of the assessee namely Dr. Richa has been settled at USA, therefore, the assessee could not produce her before the AO - assessee has further explained the source of the donor also that the said amount was received by his daughter from her mother-in-law on account of accident claim of her former husband. No justification on the part of the CIT(A) to disbelieve the claim of the assessee on the basis that the daughter of the assessee has also gifted some money to her mother also - It is to be seen in the assessment of the income of the wife of the assessee but that fact has no relevancy so far as the facts of the present case are concerned. The claim of the assessee has been denied by the CIT(A) merely on the basis of assumption, which, in our view, is not justified. Assessee has duly proved the source of deposit which admittedly has been transferred in to the account of the assessee though banking channel from the account of his daughter. No merit in the order of the CIT(A) and the same is accordingly set aside and the impugned additions stand deleted. - Appeal of the assessee stands allowed
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2020 (10) TMI 873
Reopening of assessment u/s 147 - case is reopened on the basis of information contained in audit objection - 'change of opinion' or 'fresh information' brought to the knowledge of AO - HELD THAT:- If there is an application of mind, it should be apparent from the material placed before the Tribunal. The VAT returns and details of purchases were available before the Assessing Officer at the time of original assessment proceedings under section 143(3) of the Act and no new material had come to the knowledge of the Assessing Officer to take recourse of the reassessment proceedings. Hence, it is merely a change of opinion and CIT (Appeals) has considered the issue in a right perspective. Even otherwise, as canvassed by AR that the tax effect is below the prescribed limit fixed by the CBDT and the Department should have not have filed appeal on this count. Thus confirm the order of the learned Commissioner of Income-tax (Appeals) that proceedings under section 147 of the Act are null and void and the addition is not sustainable. - Decided in favour of assessee.
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2020 (10) TMI 872
Exemption u/s 11 - rejecting the application for registration u/s 12A - applicant has merely submitted the MOA and no material has been provided that could throw light on the activities, if any, carried out by the applicant, as claimed in the trust deed - HELD THAT:- Submission of the assessee was that the assessee furnished the copies of balance sheet for the year ended on 31/3/2019, the details of tuition fees received, from the assessment year 2019-20, bank statement with Punjab National Bank for the financial year ended on 31/3/2019, the details of students in Mission Nursing School and the copies of receipt books for assessment year 2018-19 and 2019-20, before the ld. CIT(A). We, therefore, set aside the order of the ld. CIT (E) and restore the matter to his file with a direction to decide the issue afresh - Decided in favour of assessee for statistical purposes.
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2020 (10) TMI 857
TDS u/s 194J - payment made by the assessee with reference to the services - bifurcation of a composite payment - assessee in default u/s 201(1A) - Tribunal held that provisions of Section 194J has to be applied only to the payments which assume the nature of fee for professional services and not on the entire composite payments, when the bill contains charges for various services rendered by the hospital, as such payment or for services rendered as a whole? - shifting the burden on the revenue to verify the payment of tax by the deductee on the payments received from the assessee in order to quantify the amount of default committed by the assessee - HELD THAT:- What is covered and falls within the ambit of professional services are all services rendered in the course of medical profession or other professions. A corporate hospital offers services in the course of carrying on medical profession by the doctors who are associated with the hospital as consultants or as employees. The said doctors are professionals and income earned by them is professional income but Section 194J is attracted, not only when professional fee is paid for services rendered by the recipient but income/fee received by the recipient is towards services rendered in the course of carrying on medical profession. Thus payments/fee for the services specified should be to a person who is a resident and Section 194J is not confined to payments to the person who is a professional. - For the reasons assigned by the Delhi High Court in Vipul Medcorp TPA (P) Ltd. [ 2011 (9) TMI 85 - DELHI HIGH COURT] as well as a decision TTK HEALTHCARE TPA PRIVATE LIMITED [ 2020 (10) TMI 755 - KARNATAKA HIGH COURT] the substantial questions of law 1 and 2 are answered in favour of the revenue and against the assessee. Computation of interest under Section 201(1A) - computed upto the due date of return of income to be filed by the deductee or upto the date of filing the return of income - Proviso to Section 201(1A) of the Act requiring computation of interest till date of filing of the return by the payee was inserted by Finance Act, 2012 with effect from 01.07.2012. Thus, for a period prior to 01.07.2012 interest could be levied only upto the date of payment of taxes by the payee. In the instant case, the Assessment Year is 2007-08 i.e., prior to insertion of proviso to Section 201(1A) of the Act and therefore, the interest could be levied only upto the date of payment of taxes by the payee. Therefore, for a period prior to 01.07.2012, the question of burden of proof on the Assessing Officer in respect of filing of the return and payment of tax looses its significance and is rendered academic as the payer was only required to pay the interest till the date of payment of tax. Even otherwise, the aforesaid issue is no longer res integra and the same is covered by decision in Hindustan Coca Cola Beverage (P.) Ltd. [ 2007 (8) TMI 12 - SUPREME COURT] and decision of this court in SOLAR AUTOMOBILES INDIA (P.) LTD. [ 2011 (9) TMI 637 - KARNATAKA HIGH COURT] - Decided against assessee.
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Customs
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2020 (10) TMI 871
Application for early hearing - Confiscation - penalty - electronic item - case of appellant is that such item would become obsolete and non-useable if not released early - HELD THAT:- The issue involved in this appeal is not having any relation to the rate of duty of Customs or to the value of goods for the purpose of assessment that would prohibit the Single Member Bench to hear the appeal as contemplated in Section 129C(4)(b) of the Customs Act, 1962. On the other hand, it is concerned with the requirement of production of a certificate from BIS Authority for release of goods - Therefore, having regard to the fact that the goods are live consignment on which earliest possible hearing is to be afforded to the appellant, the early hearing application is allowed. List the appeal on 13th October 2020 for hearing.
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Corporate Laws
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2020 (10) TMI 870
Grant of Interim Relief - Amounts representing tax/Tax Deducted at Source (TDS) on the price of the FCDs and interest payable to the Respondent, which was required to be deposited in Court, is withheld - HELD THAT:- The purchaser s liability to pay this amount (namely, the Holdback Amount) into the treasury towards the tax liability of the seller is essentially a matter of their inter se agreement, which is contained in clause 4.5.1 of the SDPA. The payability of the tax for the consideration received under the SPDA may be a matter between the assessee i.e. (the Respondent seller) and the revenue, but so far as the deposit of the Holdback Amount into treasury towards the tax liability of the Respondent is concerned, it is certainly a matter as between the Respondent and its contracting counter party, namely, the Appellants. There is a clear obligation on the part of the Appellants to deposit the Holdback Amount into the treasury; Section 205 of the Income Tax Act has nothing to do with the same. As far as Section 9 of the Act is concerned, it cannot be said that this court, while considering a relief thereunder, is strictly bound by the provisions of Order 38 Rule 5. As held by our Courts, the scope of Section 9 of the Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protection as may appear to the court to be just and convenient , though such discretion has to be exercised judiciously and not arbitrarily. The court is, no doubt, guided by the principles which civil courts ordinarily employ for considering interim relief, particularly, Order 39 Rules 1 and 2 and Order 38 Rule 5; the court, however, is not unduly bound by their texts - In an appropriate case, where the court is of the view that there is practically no defence to the payability of the amount and where it is in the interest of justice to secure the amount, which forms part of the subject matter of the proposed arbitration reference, even if no case strictly within the letter of Order 38 Rule 1 or 2 is made out, though there are serious allegations concerning such case, it is certainly within the power of the court to order a suitable interim measure of protection. The deductor, both under the Income Tax Act and the contract between the parties (clause 4.5.1 of SDPA), is nevertheless required to deposit the amount deducted (the Holdback Amount) into the treasury. If no tax is payable, the deductee assessee would be entitled to refund of this amount. In any case, there is no way the deductor could retain the Holdback Amount. Appeal dismissed.
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Insolvency & Bankruptcy
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2020 (10) TMI 869
Direction to Respondents to keep the payment of the electricity bills of the Applicant in abeyance till either the (i) end of the moratorium period of the Applicant's insolvency proceedings as per the Hon'ble NCLT's Order dated 09.04.2019, or (ii) final disposal of the Writ Petition No. 38107 of 2014, whichever is earlier - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is not in dispute the Applicant / Corporate Debtor already filed writ petition in the Hon'ble High Court bearing Writ Petition No. 38107/2014. Thus already the Corporate Debtor moved the Hon'ble High Court even before CIRP started against Corporate Debtor. Having filed writ petition in the Hon'ble High Court and when matter is sub-judice, it is not open to the Applicant / Corporate Debtor to move the Tribunal again on the same issue. On this ground, the present applicable is liable to be dismissed. It is also true that the benefit if any given to the Corporate Debtor by the Government then suitable deposit to be made with the distribution company / R3 by the State Government concerned for extending the benefit. Till date, no such deposit is made with the Distribution Company. Therefore, the Adjudicating Authority cannot give any direction to the 3rd Respondent to extend a concession to the Applicant / Corporate Debtor. The issue whether the Applicant / Corporate Debtor is entitled for the concessions as per the policy and as per the G.O. referred to is a matter yet to be determined in the writ petition filed by the Corporate Debtor against the Government - the relief prayed by the Applicant to keep the monthly bills in abeyance cannot be granted since Applicant is bound to pay electricity charges raised for the consumption of electricity during CIRP. The Adjudicating Authority cannot prevent the distributing company from collecting electricity charges from the Corporate Debtor during CIRP. The relief sought is against the provisions of Insolvency Bankruptcy Code, 2016. Application dismissed.
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2020 (10) TMI 868
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - unpaid License Fee - Operational Creditor - existence of debt and dispute or not. Whether the unpaid Licence Fee arising out of Licence Agreement with regard to immovable property falls under the definition of Operational Debt as defined under the provisions of the Insolvency and Bankruptcy Code, 2016? - HELD THAT:- Only if the claim by way of debt falls within one of the three categories as listed above can such a claim be categorized as an operational debt. In case if the amount claimed does not fall under any of the categories mentioned as above, the claim cannot be categorized as an operational debt and even though there might be a liability or obligation due from one person, namely Corporate Debtor to another, namely Creditor other than the Government or local authority, such a creditor cannot categorize itself as an operational creditor as defined under Section 5(21) of IBC, 2016 unless it is established that such goods or services has direct relationship to input-output operations of the Corporate Debtor and hence disentitles such a person from maintaining an application for CIRP against the corporate debtor as an Operational Creditor. There seems to be some rationale in restricting only to Operational Creditors for Initiating a CIRP against a Corporate Debtor other than a Financial Creditor, Default committed to operational creditors in relation to payment of their debt definitely connotes that the Corporate Debtor is not even in a position to service their dues and run the day to day operations of the Corporate Debtor which is a clear pointer to its commercial insolvency warranting the process of insolvency being initiated and restructuring process being put in place. This Tribunal is refraining from going into the aspect where the immovable property in itself constitutes stock-in-trade of the corporate person and has a direct nexus to its input-output and being an integral part of the operation, In the instant case no such specific pleading to support such a contention has been placed on record by the petitioner, In fact even the Memorandum and Articles of Association of the Corporate Debtor has not been filed from which atleast the object for which the Corporate Debtor has been incorporated can be gathered, Thus, this Tribunal is of the view that lease of immovable property cannot be considered as a supply of goods or rendering of any services and thus cannot fall within the definition of operational debt'. In the present Application the claim of the Applicant has arisen out of a Licence Agreement whereby the Applicant had granted, to the Respondent, the right to use its immovable property to carry out business. It can be concluded that the claim arising out of grant of licence to use immovable property does not fall in the category of goods or services including employment and is also not a debt for the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government, or any Local Authority, as defined under Section 5(21) of IBC, 2016. Thus, the amount claimed in the present petition is not an unpaid operational debt and therefore the Application cannot be allowed. Application dismissed without costs.
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2020 (10) TMI 867
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is clearly seen from the material on record that the operational creditor raised invoice for a sum of ₹ 9,26,600/-. The operational debt itself is disputed by the corporate debtor. The corporate debtor also showed as to why and as to how the amount claimed towards professional charges is exorbitant. It has pointed out that the amount payable by it towards submission to West Bengal Labour Welfare Board is just ₹ 324/- page 27 (affidavit-in-reply) but the operational creditor in his invoice has claimed sum of ₹ 7,000/- towards labour welfare fees (page 19 of the application) - It is not necessary for us to go through all entries in detail. Suffice to say is that there appears genuine dispute in between the parties regarding the amount claimed towards operational debt. In the complaint, it is alleged that the operational creditor has withheld some of very vital and important documents of the corporate debtor, say as books of accounts, daily account files, IT files, VAT file, GST file, 2001 onwards, Bank statement files, TDS files, Digital signature files, etc. It appears that due to intervention of police, the operational creditor returned some of documents only. Hence, the corporate debtor filed the complaint against operational creditor in the Court ofCJM. Ld. CJM directed the police to register FIR and investigate the matter. We are not entering into that controversy as to whose claim is genuine. We only hold that there appears preexisting dispute pending in between the operational creditor and the corporate debtor about the amount of operational debt claimed and also about the deficiency of service rendered by the operational creditor. That dispute required thorough enquiry, which we cannot undertake in this proceeding of summary enquiry nature. Hence, we hold that this application is not maintainable. Application rejected.
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2020 (10) TMI 866
Directions to Respondent Bank to release, refund and transfer the amount of the fixed deposit along with accrued interest till date of payment, to the bank account of the Corporate Debtor - It is submitted by the RP that as per Section 18(1) of the IB Code, the RP is required to take control and the custody of any asset over which the Corporate Debtor has ownership rights as recorded in the Balance Sheet of the Corporate Debtor - HELD THAT:- It is a matter of record that the above said fixed deposits are of Corporate Debtor and once the CIRP is initiated the RP has to comply Section 18(1)(f) of the IB Code. This Adjudicating Authority hereby directs the Respondent Bank to release the aforesaid amount of ₹ 65,02,500/- to the account of the Corporate Debtor and/or pool amount, if any, opened/ maintained by the RP for the purpose of CIRP along with the interest to complete the CIRP. However, Commissioner of Customs, Mumbai/Asst. Commissioner of Customs, may claim their dues as Operational Creditor and put the same before RP for consideration. Application disposed off.
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2020 (10) TMI 865
Application for condonation of delay in filing restoration application - issuance of appropriate directions to the Resolution Professional to ensure the payment of dues of Applicant as Secured Creditors as provided under the provisions of the Part II, Chapter II of the Insolvency Bankruptcy Code 2016 - HELD THAT:- The dues of the Government, Central Government and/or State Government or any legal authority fall under the category of Operational Debt . That apart, the applicant is claiming that in view of the provision of section 48 of Gujarat Value Added Tax, 2003, he may be treated as Secured Creditor. This contention of the Applicant is also not maintainable in view of section 238 of the IBC. Any dues and services of the Government Departments are considered as Operational Creditor . Under such circumstances, even if, the Applications is/are restored by condoning the delay, the very purpose for which the IA has been filed is not going to succeed as they fall under the category of Operational Creditor as per the provisions of IBC. There are no merits in the application - application disposed off.
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2020 (10) TMI 864
Approval of Resolution Plan - Section 60(5)(b) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The corporate debtor invoked the Arbitration Proceedings against the applicant, even before initiation of CIRP and consequently in the books of corporate debtor, no liability towards applicant was shown and RP acted accordingly - In the instant CA the COC has already approved a resolution plan and that the CA filed by the RP seeking approval of this Adjudicating Authority for the said resolution plan is pending. The applicant is allowed to file its claim in terms of the sub-section (6) of Section 60 before the appropriate court of law or may file appropriate application against the corporate debtor if the resolution plan is approved and do not take proper care of the applicant - application disposed off.
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Service Tax
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2020 (10) TMI 863
CENVAT Credit - capital goods or inputs - Dumpers/trippers - time limitation - period in dispute is May, 2008 to March, 2009 - HELD THAT:- The present case can be disposed off on limitation itself without going into the merit of the case. The appellant have bonafidely availed the Cenvat Credit in respect of Dumpers/trippers and the details of the credit was declared in their ST-3 Returns. Moreover, on the query from the Range Officer, the appellant have submitted invoice wise details of credit which contained the Cenvat Credit taken on invoices of Dumpers/trippers also. Therefore, there is no suppression or wilful suppression of facts to take the undue benefit of Cenvat Credit on the part of the appellant. It is also observed that the issue involves interpretation of Cenvat Credit Rules - On the same issue number of judgments were passed wherein the tribunal has allowed the credit considering the same goods i.e. Dumpers/trippers as inputs. Thus, it is clear that there is no suppression of facts on the part of the appellant in availing the Cenvat Credit on Dumpers/trippers therefore, the entire demand raised beyond the normal period is time barred - appeal allowed - decided in favor of appellant.
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2020 (10) TMI 859
Rejection of application under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground of inadvertent mistake as regards the penalty imposed being not correctly stated in the SVLDRS-1 form - HELD THAT:- The issue as to whether an inadvertent mistake as regards the penalty imposed being not correctly stated in the SVLDRS-1 form, has been decided by this Court in its judgment ASSAM CRICKET ASSOCIATION VERSUS THE UNION OF INDIA AND 4 ORS., THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE PRINCIPAL COMMISSIONER, THE DESIGNATED COMMITTEE, ADDL. DIRECTOR GENERAL [ 2020 (6) TMI 38 - GAUHATI HIGH COURT] where it was held that When we look into the Scheme 2019, we do not find any provision which provides that a person upon whom a penalty is imposed would not be entitled to the benefit given under the scheme. Infact on the contrary the provision of the Scheme 2019may be such that the benefit of exemption, may even be applicable to the amount of penalty imposed, in which event, the petitioner assesse may be more benefited and would be entitled to a greater exemption if the amount of penalty was mentioned rather than not mentioning the penalty. This writ petition also stands disposed of by requiring the petitioner to submit an application before the respondent authorities for correction to be made in the information provided in the Form SVLDRS-1 as regards the penalty imposed and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon. The requirement of submitting application be made within a period of 15 days from obtaining the certified copy of the order and upon receiving of the application, the respondents shall pass an order on the same within a period of 2(two) months from the date of receipt of the application. Petition disposed off.
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Central Excise
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2020 (10) TMI 862
Refund in terms of N/N. 33/99-CE, dated 08.07.1999 - denial only on the ground that the claim was not filed within a reasonable time - other substantive requirement of expansion in the installed capacity has been complied with - HELD THAT:- The issue came up for consideration before the Tribunal in the case of Vernerpur Tea Estate vs. CCE, Shillong [ 2016 (4) TMI 17 - CESTAT KOLKATA] which was decided against the assessee on the ground of limitation since refund claim was filed after a period of 6 years - the decision of the Hon ble Gauhati High Court in the case of Vernerpur Tea Estate, being directly on the point, has to be respectfully followed in the instant case inasmuch as the basic criterion of increase in the installed capacity has been duly fulfilled by the appellant and therefore, there is no reason to deny the refund. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (10) TMI 861
Recall Petition - validity of sale notices - HELD THAT:- The assessment order itself attained its finality and writ petition, which was filed challenging the assessment order, was dismissed as withdrawn in the year 2016 itself, there is no reason to interfere with the sale notices only on the plea that a recall petition was filed by the petitioner for recalling of order of Writ Court dated 19.10.2016, which was filed on 05.03.2019. The said recall petition itself reflects that it was verified on 07.05.2018. The law is settled that one who slumbers over his right may not claim any equity also. In that view of the matter, we do not find any ground to entertain the writ petition. Petition dismissed.
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2020 (10) TMI 860
Principles of Natural Justice - case of petitioners is that that the Assessing Officer, who is a Quasi Judicial Authority, has not independently applied his mind while dealing with the impugned proceedings, but had adopted the averments and proposals of the Enforcement Wing/ISIC Authorities, who are their higher authorities - HELD THAT:- In view of the Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai, all the impugned proceedings in these batch of Writ Petitions, which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, are set aside and consequently, the matters are remanded back to the Assessing Officer. The Assessees are granted liberty to file their objections with all supporting documents, within a period of 30 days from the date of receipt of a copy of this order. On receipt of such objections, the Assessing Officer shall extend due opportunity of personal hearing to the Assessee/Representatives, if necessary through Video Conferencing and endeavor to conclude the assessment proceedings, atleast within a period of 12 weeks from the date of receipt of the objections. Petition allowed.
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Wealth tax
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2020 (10) TMI 858
Wealth tax assessment - Validity of reopening of assessment - sustaining the addition made by the AO under Wealth Tax Act - HELD THAT:- AO has mentioned in the assessment order that he has duly recorded the reasons and the same was served upon the assessee. This observation of the AO, in the absence of any other contrary material, has to be considered as true. Before us also, the assessee did not furnish any material to disprove the observations made by the AO. Accordingly, we agree with the view taken by Ld CIT(A) that the AO has followed correct procedure for reopening the assessment. Addition of value of plot and the value of construction under progress - CIT(A) took the view that the value of building under construction is not exigible to Wealth tax - HELD THAT:- A careful reading of the provisions of sec.5(1)(vi) would show that it provides exemption of one house or part of a house or a plot of land. Hence exemption shall be available only for any one of the items mentioned in sec.5(1)(vi) of the Act, i.e., either for one house or for part of house or for a plot of land. If the assessee have already claimed exemption of one house, then, in our view, they cannot claim exemption for plot of land separately in addition to the house. A proviso is not a separate or independent enactment as contended by Ld A.R, but it should be read along with the main provision as a whole, i.e., in construing an enactment containing a proviso, it is proper to construe the provisions together without making either of them redundant or otiose. A proviso must, therefore, be considered in relation to the principal matter to which it stands as a proviso. It cannot be considered as an independent provision foreign to principal provision itself. We hold that the assessee cannot avail exemption for a plot of land, even if it is having an area of less than 500 sq. mts or less, if he had already claimed exemption of one house u/s 5(vi) of the Act. If the assessees have not claimed exemption of house, then they are entitled to claim exemption of either one house or part of a house or plot of land. We do not find merit in the contentions of the assessee and accordingly reject the same. - Decided against assessee.
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