Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 27, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
News
Notifications
GST
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59/2018 - dated
26-10-2018
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CGST
Time limit for making the declaration in FORM GST ITC-04 for the period period from July, 2017 to September, 2018 extended till the 31st day of December, 2018.
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58/2018 - dated
26-10-2018
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CGST
Seeks to provide taxpayers whose registration has been cancelled on or before the 30th September, 2018 time to furnish final return in FORM GSTR-10 till 31st December, 2018
GST - States
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CT/GST-14/2017/170 - dated
22-10-2018
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Assam SGST
Seeks to extend the last date for filing of FORM GSTR-3B for the month of September, 2018 till 25/10/2018 for all taxpayers
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FTX.56/2017/327 - dated
9-10-2018
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Assam SGST
Governor of Assam appoints the 1st day of October, 2018, as the date on which the provisions of section 52 of the Assam Goods and Services Tax Act, 2017 shall come into force
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FTX.56/2017/326 - dated
9-10-2018
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Assam SGST
Seeks to bring section 51 of the Assam GST Act (provisions related to TDS) into force w.e.f 01/10/2018
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FTX.56/2017/321 - dated
9-10-2018
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Assam SGST
Seeks to amend notification on Assam Authority of Advance ruling
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FTX.56/2017/315 - dated
9-10-2018
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Assam SGST
Assam Goods and Services Tax (Ninth Amendment) Rules, 2018
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FTX.56/2017/313 - dated
9-10-2018
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Assam SGST
Seeks to extend the due date for filing of FORM GSTR-1 for taxpayers having aggregate turnover up to ₹ 1.5 crores
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FTX.56/2017/260 - dated
9-10-2018
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Assam SGST
Seeks to waive the late fee paid for specified classes of taxpayers for FORM GSTR-3B, FORM GETR-4 and FORM GSTR-6
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J.21011/2(iii)/2018-TAX/Pt - dated
26-9-2018
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Mizoram SGST
CORRIGENDUM - NOTIFICATION NO. J.21011/1/2017-TAX/PART-I, DATED 11-7-2017
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23/2018-State Tax (Rate) - dated
26-9-2018
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Mizoram SGST
Seeks to insert explanation in the Notification No. 12/2017- State Tax (Rate), dated the 7thJuly, 2017
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Clarification on certain issues related to refund – Status of refund claim after issuance of deficiency memo and re-credit of electronic credit ledger - Allowing exporters who have received capital goods under EPCG to claim refund of IGST paid on exports.
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Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16 - CBIC issues details guidelines.
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Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor – Reg.
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Return of goods under GST - When to issue Credit note / Debit Note and situation where GST can be adjusted as per the provisions of law - though clarified in respect of return of time expired drugs or medicines, but applicable to other situations also.
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Central Government notifies the persons whose registration under the CGST Act has been cancelled by the proper officer on or before the 30th September, 2018, as the class of persons who shall furnish the final return in FORM GSTR-10 of the CGST rules till the 31st December, 2018
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Time limit for making the declaration in FORM GST ITC-04 for the period period from July, 2017 to September, 2018 extended till the 31st day of December, 2018.
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Levy of GST - Liquidated damages - Supply or not - point of taxation - tolerate an act - though in the agreement they may be giving this consideration, other names such as 'damages' or 'compensation' as thought proper by them, but these different nomenclatures in their Agreement would in no way change the actual nature of monetary "consideration" which would clearly be taxable for the supply of services.
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Profiteering - restaurant service - failure to pass the benefit of reduced rate of GST - Respondent had increased the average base price by 12.14% to neutralize the denial of ITC of 11.80% and such increase is commensurate with the increase in the cost of the product on account of denial of ITC. - Application dismissed.
Income Tax
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Eligibility for deduction u/s.54B - non fulfillment of mandatory conditions laid down - capital gain on transfer of land used for agricultural purposes not to be charged in certain cases - exemption was rightly denied.
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Capital gain - JDA - Transfer of capital asset - There is no document by which the revenue can come to the conclusion that there was delivery of possession. The mere fact that development of the property cannot be done without possession cannot be the basis to come to a conclusion that possession was delivered in part performance of the agreement for sale.
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Taxing the allotment of shares by VISA Inc. by invoking Section 28(iv) - bringing notional share price to tax - the word used in Section 28(iv) of the Act are ‘arisen from business’ where ‘arisen’ signifies that benefit itself must have arisen. It was held that mere issuance of shares does not result in any benefit.
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MAT - Interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB.
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Accrual of income - non realization of ‘Provision for surcharge’ - even though the assessee has been following mercantile system of accounting, since it is not real income, not chargeable to tax.
Customs
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Since the goods were transferred from appellant’s one EOU to another EOU unit under CT-3 procedure. No duty is required to be paid.
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Abatement of duty u/s 22 / Remission of duty u/s 23 - warehoused goods was inundated with flood water resulting in loss to the goods stored therein - revenue directed to refund of duty paid.
DGFT
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Procedure / documents for obtaining export authorisation for export of restricted items under Schedule 2 ITC(HS) Classification of Export and Import Items 2018
Indian Laws
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Dishonor of Cheque - Section 138 of the NI Act - the Court should not be exercised its discretion arbitrarily, it must be exercised judicially and judiciously as the case may be - there is no necessity to call the Income Tax Officer as a witness to take his evidence
IBC
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IBC is not intended to be substitute to a recovery forum. It is also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked.
Service Tax
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Supply of Tangible Goods Service - Renting of Bullock Carts’ during the harvesting seasons - mere activity of renting of bullock cart does not come within the purview of ‘Supply of Tangible Goods for use Service'
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Scope of SCN - Business Auxiliary Service or not - Since the demand confirmed under category which was not proposed in the SCN such demand cannot be sustained
Central Excise
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CENVAT Credit - input service - As per Rule 2(l), even though the ‘Construction Service’ was excluded but in the inclusion clause of definition, the services such as Modernisation, Renovation and Repair of the factory premises of manufacturer is still covered under the definition of Input Service.
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Procurement of inputs from a DTA unit under CT-3 procedure which was later returned back to the original supplier, on being found unfit for consumption - Demand of duty cannot sustain.
VAT
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Levy of penalty - as the mistake had crept in by the act of the respondent revenue themselves and therefore the respondent cannot seek any penalty
Case Laws:
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GST
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2018 (10) TMI 1339
Levy of GST - Liquidated damages - Supply or not - point of taxation - valuation of supply. - liquidated damages claimed and awarded to the Applicant under the arbitral award - Held that:- As per the terms and conditions of the agreement there was clearly an agreement between the applicant and SPL to tolerate an act or situation in case such act was done by the other or such a situation arose because of default on part of one or the other during the course of the project covered under the Association agreement and in case of default of terms of the agreement by one of the parties to this Association Agreement, the defaulting party was required to compensate the other party as per the terms and conditions of the Agreement - However we find that if there was further dispute in respect of the claims to be recovered/received by the one party from the other in view of violations or termination of the Agreement then they could approach the ICC for arbitration on the issue and to receive suitable amounts as claims cum consideration in view of the violations on the part of the party violating or defaulting on the Association Agreement. The consideration if any as received by the applicant after arbitration by the ICC would clearly qualify as 'supply' as per Sr. No. 5(e) of Schedule II of the CGST Act. In the present case as per details presented, it was found that there is a clear understanding or agreement between the parties in the present case to foresee and tolerate an act or a situation of default on the part of either of them for a monetary consideration which is actually a consideration received by them, though in the agreement they may be giving this consideration, other names such as 'damages' or 'compensation' as thought proper by them, but these different nomenclatures in their Agreement would in no way change the actual nature of monetary "consideration" which would clearly be taxable for the supply of services as per Sr. No. 5(e) of Schedule II of the CGST Act, 2018. Ruling:- The consideration that may be awarded to the applicant by the ICC would qualify as supply of service as per Section 5(e) of Schedule II of Section 7(1) of the CGST Act as per detailed discussions above in this regard. The provisions of Section 13 of the CGST ACT will determine the time of supply in cases of supply of services. In the subject case the liability of tax would arise on the applicant as per Sr.No.5(e) of Schedule II of Section 7(1) of the CGST Act and the time of supply would be determined as per the provisions of Section 13 of the CGST Act after the award of arbitration proceedings is given by the Arbitration Tribunal as administered by the ICC as per the Association Agreement by the parties to dispute, in the present proceedings. The value of supply of services will be actual liquidated damages cum consideration as decided and pronounced in the award administered by ICC.
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2018 (10) TMI 1338
Profiteering - restaurant service - failure to pass the benefit of reduced rate of GST - it was alleged that Respondent has not passed on the benefit of reduction in the rate of GST in restaurant service, when he had purchased "Hara Bhara Kabab Sub" - It was also alleged that the Respondent had increased the base price of the product from ₹ 130/- to ₹ 145/- when the GST was reduced from 18% to 5%. Benefit of rate reduction - Held that:- It is apparent from the facts of the case that the Respondent had increased the base price of his products to make good the loss which had occurred due to denial of ITC post GST rate reduction. It is further revealed that the Respondent had increased the average base price by 12.14% to neutralize the denial of ITC of 11.80% and such increase is commensurate with the increase in the cost of the product on account of denial of ITC. Therefore, the allegation of not passing on the benefit of rate reduction is not established against the Respondent. Profiteering of ₹ 452/- made on the supply of the products on 14.11.2017 - Held that:- The same can not be termed as profiteering in terms of section 171 of CGST Act, 2017 as there was no rate reduction on 14.11.2017 as the same had occurred w.e.f. 15.11.2017 only. Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant No. 1 and the same is accordingly dismissed - application dismissed.
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Income Tax
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2018 (10) TMI 1360
Accrual of income - non realization of ‘Provision for surcharge’ - Treatment to the surcharge accrued during the year on account of delayed payment of electricity bills by the consumers as income - assessee has been following mercantile system of accounting - Held that:- Issue answered against the revenue in view of the decision of this Court in titled The Commissioner of Income Tax, Hisar, Vs. Dakshin Haryana Bijli Vitran Nigam Ltd. Hisar, [2012 (7) TMI 340 - ITAT, DELHI]. Disallowance u/s 40(a)(ia) - non-deduction of tax on the payment of wheeling/transmission charges - Held that:- The order of lower authorities with regard to dis-allowance of expenses claimed of Wheeling and SLDC charges are set aside in the light of the observation of the Supreme Court in the case of CIT, Delhi Vs. Bharti Cellular Limited [2010 (8) TMI 332 - SUPREME COURT OF INDIA]. The matter is remanded back to the A.O. to decide the said issue afresh.
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2018 (10) TMI 1359
TDS u/s 194J - Addition u/s 40(a)(ia) - non-deduction of TDS on the payment of wheeling charges and the SLDC charges to the HVPNL - Held that:- The order of lower authorities with regard to dis-allowance of expenses claimed of Wheeling and SLDC charges are set aside. The matter is remanded back to the A.O. to decide the said issue afresh in view of the observations in UTTAR HARYANA BIJLI VITRAN NIGAM LTD. [2015 (7) TMI 1294 - ITAT CHANDIGARH]wherein matter was remanded back to the Assessing Officer for decision afresh in the light of the observation of the Supreme Court in the case of CIT, Delhi Vs. Bharti Cellular Limited (2010 (8) TMI 332 - SUPREME COURT OF INDIA )
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2018 (10) TMI 1358
Condonation of delay - reason for delay - bonafide reasons - Held that:- In the instant case, the Revenue has not established any mala fide reasons on the part of the appellant to belatedly file the appeal before the CIT (A). Even in the decision in the case of Vedabai (a) Vijayanatabai Baburao Patel [2001 (7) TMI 117 - SUPREME COURT] held that there is no hard and fast rule, which can be laid down while considering an application for condonation of delay. It was further held that Courts should adopt a pragmatic approach. The Tribunal, while concurring with the view taken by the CIT(A), held that the assessee and its Directors were guilty of negligence. No gross negligence on the part of the appellant especially in the light of the reasons assigned for filing the appeal belatedly, which have not been controverted by the Revenue. Therefore, we are of the considered view that the matter should not be shut down on technicalities and a liberal approach should be taken bearing in mind the reasons assigned by the appellant, as the assessee is a joint venture company controlled by the Government of Tamil Nadu and its DCEO, who is invariably in the cadre of IAS Officer, is being nominated by the Government and he has to take a decision to file an appeal. Delay condoned - Decided in favour of assessee.
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2018 (10) TMI 1357
MAT - Levy of interests u/s 234B and 234C while computing the MAT under the deeming provisions of Section 115JB - Held that:- Substantial question of law, has been decided against the assessee by the Hon'ble Supreme Court in the case of JCIT Vs. Rolta India Limited [2011 (1) TMI 5 - SUPREME COURT OF INDIA] as held Section 115JB is a self-contained code pertaining to MAT, which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment of advance tax in respect of tax payable under Section 115JB, it was liable to pay interest under Sections 234B and 234C of the Act. Interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB. For the aforestated reasons, Circular No. 13/2001 dated 9.11.2001 issued by CBDT has no application. - Decided against assessee.
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2018 (10) TMI 1356
Restoration of appeal - ITAT dismissed the appeal - Non-appearance of the petitioner or his advocate before ITAT - Held that:- We do notice a degree of negligence or lethargy on part of the petitioner in participating before the Tribunal. This may be on account of the petitioner's own volition or his authorized representative. Be that as it may, the petitioner simply cannot get away from the responsibility of not having assisted the Tribunal properly. We are inclined to allow the petitioner to appear before the Tribunal and argue his case. This is so for two reasons. Firstly, the Rule would require the Tribunal to hear the appeal on merits even if a party is absent. Instead, in the present case, the Tribunal has dismissed the appeal without order on merits. Secondly, when we are remanding the proceedings before the Tribunal for decision on merits, upon imposition of cost at least the petitioner may be allowed to argue the case.
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2018 (10) TMI 1355
Reopening of assessment - reopening beyond the period of four years from the end of relevant assessment year - sale consideration of ₹ 7 lacs and ₹ 4.75 lacs disclosed that the assessee for sale of two shops in Vyavasay Complex Shop No.FF1 and FF2 - reference to the Department of Valuation Officer ('DVO') - Held that:- We are informed by the advocates for the parties that pursuant to such liberty granted the AO had made a reference to the Department of Valuation Officer ('DVO') regarding the valuation of the properties in question. DVO has given his report on 18.9.2018, copy of which is tendered on record. This report confirms the valuation of the property at par with the sale consideration disclosing the sale deeds. Revenue agreed that there is no scope for making any additions in the hands of the assessee concerning the said transactions. Consequently therefore, fresh assessment would be completed without making any additions. Presumably because the Court did not permit the Assessing Officer to pass the final order same was not done. Under the circumstances, no purpose would be served in surviving this litigation. When the very basis for issuing the notice is knocked out by virtue of subsequent developments, we allow the petition setting aside the notice and put an end to the litigation keeping other questions raised by the Revenue open.
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2018 (10) TMI 1354
Income from sub-lease of land - to be assessed under the head “incomes from other sources” OR “business income” - Held that:- The assessee's business for development of Bio-Tech Park was already up and commenced, and therefore, it was held that the sub-lease income was assessable as business income. In fact, these orders of the CIT(A) were subjected to further appeal before the ITAT, which confirmed the orders of the CIT(A). Addition in respect of interest on borrowed capital utilized for construction of the property - CIT-A deleted the addition - Held that:- CIT(A) by following his own order in the case of the very same assessee for the A.Y. 2008-09, had deleted the addition made by the A.O. This decision of the CIT(A) was once again confirmed by the ITAT. For that A.Y. the ITAT held that if the interest is paid by the assessee on the capital used for acquiring or construction of the assets that are used for earning taxable income, then his claim for interest expenditure has to be allowed. The relevant finding of the Tribunal for the A.Y. 2008-09. ITAT held that there was no justifiable reason to interfere with the decision of the CIT(A).
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2018 (10) TMI 1353
Assessment framed without serving notice u/s 143(2) - denial of natural justice - assessment of agricultural income - Held that:- Though the assessee ultimately did not appear before CIT(A) and CIT(A) decided the appeal of assessee ex-parte, the Ld.CIT(A) recorded in his findings that appeal is decided on merits on the basis of documents on record. However, the Ld. CIT(A) without considering the documents on record passed the order in summary manner dismissing the appeal of the assessee without giving reasons for decision in the appellate order as required by section 250(6) of the Act. The assessee in the Paper Book has filed copies of the submissions and the documents from pages 6 to 82, which were filed before the AO. Despite the documents were part of the record, the Ld. CIT(A) without giving findings on the same documents dismissed the appeal of the assessee without giving reasons for decision on the same. The assessee also filed affidavit in the Paper Book in which it is affirmed that for the last date of hearing on 13.03.2018, no notice has been served upon assessee or his Counsel. Therefore, it appears to me that principle of natural justice have been violated in the matter. No findings have also been given by the authorities below as to whether the gross agricultural income is to be taxed or the net agricultural income to be taxed for the purpose of higher rate of tax. Therefore, order of the Ld. CIT(A) cannot be sustained in law. The matter requires reconsideration at the level of the Ld. CIT(A). Set aside the impugned order and restore the appeal of the assessee to the file of Ld.CIT(A) with direction to re-decide appeal of the assessee strictly on merits giving reasons for decision in the order by referring to all documentary evidences on record of assessment. Ld. CIT(A) shall give reasonable sufficient opportunity of being heard to the assessee and the AO.
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2018 (10) TMI 1352
Addition u/s 2(22)(e) - Flat purchased for providing residential accommodation to its Managing Director is a "Non-Business Transaction" of the appellant - cost of the flat that was provided as residential accommodation to the Managing Director is a deemed dividend within the meaning of Section 2(22)(e) - Held that:- The assessee company neither transferred the funds outside the company nor to the director, therefore, the provision of Section 2(22)(e) is not applicable to the facts of the case. Accordingly, we set aside the finding of the CIT(A) in this regard. Since the finding given by lower authorities attracting the provision of Section 2(22)(e) of the Act is not justifiable, therefore, ancillary claim is also not liable to be declined. So far as disallowance of repayment of loan installment is concerned the CIT(A) has deleted the disallowance subject to verification by the AO, we do not find any infirmity in the direction of CIT(A) for allowing verification. However, the claim of interest to the tune of ₹ 24,62,285/- is revenue in nature, therefore, is liable to be allowed. Accordingly, we allow the claim of the assessee company for such interest expenditure on bank loan taken for the purpose of the assessee business. So far as the claim of depreciation is concerned, we are of the view that the assessee is entitled to claim the depreciation @ 5% of the total value of the purchase of ₹ 34,72,037/-. The claim of the electricity charges has not been pressed by Ld. AR, therefore, the same is hereby dismissed being not pressed. Accordingly, the issues nos. 1, 2, 4 & 5 are hereby decided in favour of the assessee and against the revenue. Foreign travel expenses disallowance - Held that:- The assessee purchased the air ticket of jet airways from Mumbai–Newark-Mumbai on 20.10.2009. The assessee purchased the ticket in cash. A mail was found in which it was stated that the Jet airways detailed about the cash payment on 09 October. The contents speaks about the cash payment, therefore, the claim of the assessee was declined u/s 40A(3). The facts are not distinguishable at this stage. Moreover, no business expediency is on record in connection with the said transaction/travelling. CIT(A) has rightly confirmed the addition and in this regard the finding is not liable to be disturbed. Accordingly, this issue is decided in favour of the revenue against the assessee.
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2018 (10) TMI 1351
Ad hoc disallowance of advertisement expenditure - Held that:- Although the Ld. CIT (A) has made an ad hoc disallowance without pointing out any specific instance where the vouchers were not available and the Ld. Authorised Representative has also drawn our attention to the various documentary evidences filed in support of these expenses as available on pages 148,149,151,154, 155,169,171,174 and 176 of the paper book filed by the assessee, it would be in fitness of things that the issue be re-examined by the AO in this regard. Restore this issue to the file of the AO to be adjudicated afresh after duly considering the evidences which the assessee seeks to rely upon Disallowance of card acquisition expenses - Held that:- As decided in assessee's own case the assessee is entitled to treat the same as revenue expenditure in view of section 37(1) of the Act and the right to claim deferred revenue expenditure is given to the assessee and not to the revenue. DR also could not point out if there was any difference in the facts of the case in the impugned year and assessment year 2006-07. Accordingly, respectfully following the ratio of the judgment of the Hon’ble Delhi High Court in assessee’s own case for assessment year 2006-07. Taxing the allotment of shares by VISA Inc. by invoking Section 28(iv) - bringing notional share price to tax - Held that:- The case of the assessee finds support from the judgment of the Hon’ble Andhra Pradesh High Court in the case of CIT vs. K.N.B. Investments Pvt. Ltd.[2014 (10) TMI 253 - ANDHRA PRADESH HIGH COURT] wherein it has been held that the word used in Section 28(iv) of the Act are ‘arisen from business’ where ‘arisen’ signifies that benefit itself must have arisen. It was held that mere issuance of shares does not result in any benefit. We also note that the assessee has already paid short term capital gains at the rate of 30% on 86565 shares which were sold during the year under consideration. The taxability on the rest of the shares would arise only when such shares are sold. Accordingly, we hold that the lower authorities were not justified in bringing the notional share price to tax and further the CIT(A) had erred in confirming the addition as well as enhancing same to ₹ 26,37,01,571/-. Non granting TDS credit - Held that:- We restore this issue to the file of the AO for grant of TDS credit as per law after duly verifying the claim of the assessee and after giving due opportunity to the assessee to present its case.
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2018 (10) TMI 1350
Entitlement to deduction u/s 10A - Held that:- When the claim u/s 10B of the I.T.Act was sought to be denied, the assessee during the course of assessment proceedings claimed deduction u/s 10A of the I.T.Act. In the various mentioned cases, it was stated when claim u/s 10B of the I.T.Act is denied, the assessee’s alternative claim u/s 10A of the I.T.Act made during the assessment proceeding or before Appellate authorities has to be considered and granted, provided conditions are satisfied for such deduction, since both sections 10A and 10B of the I.T.Act are pari materia. In view of the above judicial pronouncement, we deem it appropriate to remit the issue to the Assessing Officer for fresh consideration. TPA - Erroneous exclusion of forward premium while computing the operating margin of the assessee (Transfer Pricing) - Held that:- As in assessee’s own case for the assessment year 2010-2011 Tribunal had restored the issue to the TPO with certain specific directions to place necessary evidence before the TPO to claim that premium on forward exchange contract is earned in the normal course of the business to hedge against fluctuations in foreign currency exchange rate and gains from such contract has to be considered while computing the PLI in the international transaction with the AE. It is ordered accordingly. Selection of comparable - Held that:- We find that the objections raised by the assessee have been disposed off by the DRP without passing a speaking order. The assessee has raised various contentions why the above mentioned companies are not comparable companies. The objections with regard to non-availability of segmental account details for the above comparables, presence of intangibles for above mentioned companies and failure to satisfy certain filters adopted by the TPO himself were not discussed in TPO’s order nor in DRP’s order. The DRP on its part has merely confirmed the TPO’s order without passing a speaking order. Therefore, we deem it appropriate to restore this issue to the files of the TPO
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2018 (10) TMI 1349
Gain from the sale of shares - to be assessed under capital gains or under business income - period of holding - intention of the assessee at the time of purchase of shares - Held that:- Period of holding may indicate intention to make investment. We also find that CBDT Circular no. 6 dated 29.02.2016 also comes to the aid of the assessee wherein it has been clarified by the CBDT that where the assessee treats the securities as investment and not has stock-in- trade in earlier years, the revenue is not permitted a contrary view. It is evident from this Circular that CBDT has given instructions to the Assessing Officers to treat capital gains on listed shares and securities held for a period of more than 12 months as income from capital gains if the assessee so desires. The dismissal of the Special Leave Petition of the department by in the case of Pr. Commissioner of Income Tax vs. Bhanuprasad D. Trivedy (HUF) (2018 (7) TMI 1236 - SUPREME COURT OF INDIA) also comes to the aid of the assessee wherein the Hon ble Apex Court upheld the Hon ble High Court s impugned order that intention of the assessee at the time of purchase of shares is paramount. - Decided against revenue.
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2018 (10) TMI 1348
Rectification of mistake apparent from the record u/s. 254(2) - ITAT has been guided by Explanation 5A to section 271(1)(c) - Held that:- Nowhere in the order of the ITAT there is a mention that ITAT is following Explanation 5A to section 271(1)(c). In our considered opinion, this assertion of the ld. Counsel of the assessee is not apparent from the order of the ITAT. Consideration of this limb of the argument of the ld. Counsel of the assessee would fall under review and reconsideration of a co-ordinate bench order, not permissible u/s. 254(2). Another mistake apparent from the record as submitted that during the course of hearing, it was submitted before the ITAT that the A.O. has not specified the limb of concealment of income or furnishing of inaccurate particulars of income under which he is intending to initialise penalty proceedings and, hence, the levy of penalty ought to be deleted. For this the assessee submits that the ITAT has recorded the submissions of the assessee that the A.O. has not recorded any satisfaction regarding the concealment of income for furnishing of inaccurate particulars of income. We find that the assessee is totally incorrect in his assertion that there was any issue before the ITAT that the order passed u/s. 271(1)(c) is bad inasmuch as a specific limb has not been specified. This is clearly an afterthought. ITAT has erred in observing that the assessee’s explanation that they have voluntarily filed revised computation of income cannot be accepted. We find that it is submitted by the assessee that the assessee has inadvertently missed out in including the sum of ₹ 18,05,000/- as in the return of income. In this regard, we note that this issue was duly noted by the ITAT and has not been accepted. If the ITAT does not accept any submission of the assessee, by no stretch of imagination can be considered as mistake apparent from the record in the order of the ITAT liable for rectification u/s. 254(2). Another plank of the assessee’s argument is that the loose sheet found cannot be considered as “any money, bullion, jewellery or other valuable article or thins” as contemplated in the concerned section. Hence, it is claimed that no penalty is leviable on such unsustainable addition. We find that on this issue the assessee is clearly seeking review of the order of the ITAT not permissible u/s. 254(2). Thus from the above discussion, we find that the issues pointed out by assessee do not fall under the realm of mistake apparent from the record liable to be rectified u/s. 254(2)
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2018 (10) TMI 1347
Disallowance of warranty claim - allowability of provision made by assessee for warranty expenses within warranty period - allowable deduction - Held that:- The payments which were due to assessee, were being withheld by IAF against warranty claims. Undoubtedly, it is the liability of assessee as per contract to provide warranty within stipulated period to the customer i.e. IAF. Thus where there was engine failure within warranty period, then as per terms of agreement and since the enquiry had been completed in 2006, the assessee which was following mercantile system of accounting, had accounted for the said claim of warranty under the head ‘Provision for Warranty’. Such claim made by the assessee under the provisions of the Act was duly allowable as deduction in the hands of assessee, applying the ratio laid down in Bharat Earth Movers Vs. CIT [2000 (8) TMI 4 - SUPREME COURT]. It may also be reiterated that other claim of warranty provision of about ₹ 48 lakhs had been allowed by Assessing Officer. - Decided in favour of assessee
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2018 (10) TMI 1346
Initiation of proceedings u/s. 153C - unexplained expenditure in lands u/s.69C - seized papers from the premises of Jai Corp Group and others as relied upon for making additions in the hands of the land aggregators whose names appeared in the said documents - seized document which forms the basis of the present proceedings - Held that:- The seized papers seized from the premises of Jai Corp Group and others cannot be relied upon for making additions in the hands of the land aggregators whose names appeared in the said documents. It is not the case of the Revenue that the judgments/decisions delivered in the cases of appeals involving M/s. Arpit Land Pvt. Ltd., M/s. Lavanya Land Pvt. Ltd. and Harsha Land Private Limited [2017 (2) TMI 553 - BOMBAY HIGH COURT] etc. do not relate to such land aggregators. These names also appeared in the said seized papers along with the name of the assessee. On similar facts, the Hon’ble Jurisdictional High Court in the case of CIT Vs. Arpit Land Pvt. Ltd., as well as in the case of M/s. Ambit Reality Pvt. Ltd., held that the said seized documents cannot be held to be belonging to the assessee. - Decided in favour of assessee.
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2018 (10) TMI 1345
Capital gain - JDA - Transfer of capital asset - year of assessment - transfer of legal position of the property - Assessee submitted that there was no possession delivered in part performance in the manner contemplated by Sec.53A of the Transfer of Property Act and therefore there was no transfer during the relevant previous year - Held that:- The clause in the JDA regarding possession clearly states that what is given is not possession contemplated u/s.53A of the Transfer of Property Act and that it is merely a license to enter the property for the purpose of carrying out development. Further, the subsequent MOU dated 16.8.2006 and delivery of legal possession on 22.4.2006 clearly shows that there was no transfer within the meaning of Sec.2(47)(v) during the previous year relevant to AY 2006-07. Therefore, invocation of the provisions of Sec.2(47)(v) in the facts and circumstances of the present case on the basis of clause-1 of the JDA, was not proper. The possession in the present is traced to the joint development agreement which is in the nature of permissive possession and not possession in part performance of agreement for sale. There is no document by which the revenue can come to the conclusion that there was delivery of possession. The mere fact that development of the property cannot be done without possession cannot be the basis to come to a conclusion that possession was delivered in part performance of the agreement for sale in the manner laid down in Sec.53A of the Transfer of Property Act. Thus we hold that there was no transfer during the previous year relevant to AY 2006-07. Therefore, capital gain on transfer of the property cannot be assessed in AY 2006-07. - Decided in favour of assessee.
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2018 (10) TMI 1344
Disallowance u/s 14A - quantification of notional expenses as per Rule 8D - Held that:- The Tribunal has considered all the grounds raised by the assessee and also the Tribunal has relied on the various firms decisions of the higher authorities and considered the quantification of notional expenses for disallowance as per Rule 8D. No merit in the Miscellaneous Petition of the assessee and the same stands dismissed.
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2018 (10) TMI 1343
Disallowance u/s 14A - Assessee had not claimed exempt income - Held that:- CIT-A had deleted the disallowance u/s.14A r.w.r. 8D relying on a decision of this Tribunal in assessee’s own case for assessment year 2010-2011. We also find that the Hon’ble Jurisdictional High Court in the case of Redington India Ltd vs. Addl. CIT [2017 (1) TMI 318 - MADRAS HIGH COURT] had held that Section 14A of the Act had no application when assessee had not claimed exempt income. - Decided in favour of assessee.
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2018 (10) TMI 1342
Eligibility for deduction u/s.54B - non fulfillment of mandatory conditions laid down - capital gain on transfer of land used for agricultural purposes not to be charged in certain cases - land should have been used for agricultural purposes at least from 24/03/2011 to 25/03/2013 but the land was not used for the agricultural purposes as the same was converted in to non agricultural land - assessee explained that 25% of undivided share of agricultural land was sold to Sanjay Keshavlal patel misused the power of attorney and converted agricultural land into nonagricultural and when it is come to notice to the assessee it was subsequently cancelled Held that:- It is undisputed fact that Sanjay K Patel was one of the confirming parties of sale of the land on 26th March 13 which demonstrate that Sanjay K Patel was one of the stakeholders along with the assessee and fully associated with the use and sale of the land. The assessee along with Sanjay Patel and other member of group were engaged in the business of colonization and they have placed scheme "Dolphin" in the land sold by assessee. The assessee has neither substantiated with any relevant material that that co-owner Sanjay K Pate has misused the power of attorney nor filed any evidence of any legal action taken against him for any unauthorized using of the power of attorney. Discrepancies were also noticed in the revenue records as evident from the letter dated 22nd March, 2016 of Mamlatdar affirming that the impugned land was a non-agricultural land and the Talati had inadvertently made entry of agricultural crop as jwar in the record. The assessee has been regularly filing income tax return but he has not reported any agricultural income in the return of income to prove that any agricultural income was earned by him. The aforesaid land was converted to non agricultural land on 26/05/2011 and the NA was cancelled only on 15/03/2013 just 11 days before its sale on 25/03/2013. In view of the above facts we observe that as per record the impugned land in question remained non agricultural land for the period 26/05/2011 to 15/03/2013. After considering the above facts, we are inclined with the findings of the Ld.CIT (A) that assessee has failed to fulfill the condition laid down in the provision of section 54B of the act pertaining to capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. Therefore, we consider that Ld. CIT(A) has correctly disallowed the claim of exemption u/s 54 B - decided against assessee
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2018 (10) TMI 1341
Revision u/s 263 - Addition being 12.5% of bogus purchase by A0 and not 100% - Held that:- De hors any examination or adverse inference on the sales, 100% disallowance of bogus purchase is not sustainable as per the explanation in the case of Nikunj Eximp Enterprises [2014 (7) TMI 559 - BOMBAY HIGH COURT]. Further for the defect in the purchase documentation, this tribunal in catena of decision has taken into account the various decisions including that from the Hon'ble jurisdictional High Court and has held that 12.50% of the bogus purchase if disallowed would serve the interest of the justice. We further note that the dismissal of the SLP by the Hon’ble Apex Court does not merge the dismissal of the SLP into the order of the Hon’ble Apex Court. Accordingly, in our considered opinion, the order passed by the ld. CIT is liable to be quashed As held in the case of Malabar Industrial Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME COURT] if there are two views possible and the A.O. has adopted one view, with which the ld. CIT is not in agreement, the order cannot be said to be liable to be visited with the revisionary order by the ld. CIT. Accordingly, the order under 263 passed by the ld. CIT is hereby quashed. - Decided in favour of assessee.
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2018 (10) TMI 1340
Addition u/s 40A - cash payment exceeding permissible limits - whether payment do fall under the exception provided under Rule 6DD of the IT Rules? - Held that:- No doubt the AO called the sale deeds and other details and assessment is completed under section 143(3) of the Act. When assessee has purchased the property in the name of M/s.Sritanuja Builders & Developers for total consideration of ₹ 59,10,000/-when assessee has paid ₹ 42,10,000/- in cash, AO ought to have been called the details and examined the issue whether section 40A(3) shall attracts or not. AO simply passed the assessment order in mechanical manner without examining the details of the property and the another property purchased by the assessee subsequently within 20 days, the assessment is completed. In our opinion, the order passed by AO is erroneous and also prejudicial to the interests of the Revenue. Therefore Commissioner has rightly appreciated the facts of the case and considered all the issues after calling the explanation from the assessee by considering the same, he passed the order and directed the AO to disallow the expenditure being a cash payment made to the land owners is in violation of the provisions of section 40A(3) as the said payment do not fall under the exception provided under Rule 6DD of the IT Rules - Decided against assessee.
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Customs
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2018 (10) TMI 1334
Abatement of duty u/s 22 of CA - warehoused goods was inundated with flood water resulting in loss to the goods stored therein - rejection of abatement on the ground that the damaged caused to the bonded goods was due to floods caused by rains and therefore cannot be considered as loss on account of the “accident” and therefore, abatement of duty also could not be considered. Held that:- From the facts of the present case, it is clear that the imported goods were damaged after the rain water flooded the petitioner’s warehouse - The surveyors report indicates that the goods had residual and salvage value at that time. Had the 1st respondent allowed the petitioner to clear the damaged goods then and there, duty on the abated value in terms of section 22 of the Customs Act, 1962 would have been sustainable - Request for clearance of the goods was also turned down by the 1st respondent on the ground that the request for waiver of interest was under active consideration by the 2ndrespondent in terms of the Public Notice - In the process, the goods lost their salvage value and later posed health hazard not only to the occupants of the petitioner’s bonded warehouse but also to the persons in the locality near the bonded warehouse. Under these circumstances, by an order of this court on 01.02.2003 the Court allowed destruction. Thus, the goods were never allowed to be cleared even on their abated value. In absence of home clearance of the imported goods into the Domestic Tariff Area, the clamour to appropriate of amount paid towards duty even on the abated value pales out. Remission of duty u/s 23 of CA - Held that:- Respondents ought to have suo motto taken steps to refund the amount as the petitioner became entitled for remission of duty under Section 23 of the Customs Act, 1962, as no duty was payable. Interest also cannot be demanded under the circumstances - Therefore, the amount of ₹ 35,35,220/- paid on 09.11.2017 by the petitioner, is directed to be refunded together with interest to the petitioner within six weeks from the date of this order subject to the petitioner satisfying that there is no unjust enrichment in terms of Section 27 of the Act. Petition are allowed with consequential relief by way of refund of the amount paid by the petitioner, subject to the petitioner satisfying that there is no unjust enrichment if refund is to be allowed.
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2018 (10) TMI 1333
Respondent Nos. 3 and 4 were directed to ensure that goods that may be given clearance shall be accounted and there should be information about importer that a litigation is pending in form of this petition - On the next date of hearing now fixed on 26.9.2018, compliance report of the order dated 7.2.2018 be placed on record.
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2018 (10) TMI 1332
Classification of imported goods - consignment of water filter fitting Reverse Osmosis (RO) Membrane - whether classified under CTH 84212120? - Held that:- The condition of provisional release appears to be financially tough on the part of the appellant and since the appellant is providing a bond of full value of seized goods and as the importer is a regular importer, it is proper to revise the above-mentioned conditions of the provisional release and allow the seized goods to be taken on provisional basis by complying with the following conditions:- (i) that the importer will furnish bond for the full value of the seized goods in a proper format of the bond prevalent in the Customs Department; (ii) at the time of the release of the goods the importer will make full payment of the duty assessed on the declared value of the import consignment; (iii) that as a security to the above-mentioned bond a bank guarantee of ₹ 5,00,000/- will also be submitted to the Customs Department. The bank guarantee shall contain the auto renewal clause. Appeals are allowed with the direction to the Customs Department that on compliance of the above conditions the goods may immediately be released to the appellant.
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2018 (10) TMI 1331
EOU - Clearance of goods from one EOU to another EOU - the goods were procured at nil rate of duty under N/N. 52/2003-Cus dated 31.03.2003 - Whether under the law, the appellant is entitled to clear duty free imported goods under N/N. 52/03-Cus? - Held that:- Para 4 of the notification states that the removal of the duty free goods is clearly permissible under the said notification in accordance with the provision of foreign trade policy - From the plain reading of para 6.15 of the foreign trade policy, it is clear that duty free imported goods are allowed to be transferred to another EOU. Since the goods were transferred from appellant’s one EOU to another EOU unit under CT-3 procedure. No duty is required to be paid. The lower authority have confirmed the demand mainly on the ground that in terms of N/N. 52/2003-Cus, the appellant are entitle for removal duty free imported goods from their EOU this contention of the department does not hold good. This issue were considered by this Tribunal in case of Vijaya shrimp Farms Ltd [2014 (5) TMI 331 - CESTAT BANGALORE] wherein the Tribunal has held that the transfer of goods imported to another EOU for use is permitted. The appellant are permitted to clear imported goods to their other EOU unit - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (10) TMI 1316
Interest on outstanding dues - Insolvency application pending before the NCLT - appellant submits that all amounts have been paid to the depositors within the extended period of time - Held that:- Learned counsel appearing on behalf of the respondent submits that penal interest is also attracted under Rule 17 at the rate of 18% per annum. Since the appellant has paid within the extended period of time, we do not agree to the same. It is, therefore, made clear that all amounts of interest at the rate of 12/12.5% per annum from the date of maturity till the actual payment should be released to the depositors notwithstanding any other impediment in the way. The amount to be disbursed to the depositors should be made within a period of twelve weeks from today. The insolvency application pending before the NCLT will be disposed of on its own merits without reference to the impugned judgment of this Court.
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Insolvency & Bankruptcy
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2018 (10) TMI 1337
Corporate Insolvency Resolution Process - NCLT held that there is a valid dispute - claim under Invoice Nos. 1-53 was specifically rejected by the Arbitral Council on the ground that it had become time barred - High Court of Punjab and Haryana while setting aside the remand order passed by the Additional District Judge did not hold that Invoice Nos. 1-57 are time barred - Held that:- Existence of an undisputed debt is sine qua non of initiating CIRP. It also follows that the adjudicating authority shall satisfy itself that there is a debt payable and there is operational debt and the corporate debtor has not repaid the same. Argument advanced by he respondent before this Court that the High Court of Punjab and Haryana while setting aside the remand order passed by the Additional District Judge did not hold that Invoice Nos. 1-57 are time barred and the respondent had a valid claim under those invoices cannot be countenanced. As of today, there is no award of the Arbitral Council with respect to invoices at Sl. Nos. 1-57. There is no order of any other court as well qua these invoices. In fact, Arbitral Council specifically rejected the claim of the respondent as time barred. It is pertinent to mention that respondent had moved an application before the Arbitral Council for determination of amount to be paid by the appellant. However, this application was specifically dismissed by the Arbitral Council as not maintainable. In a recent judgment of this Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT OF INDIA] this Court has categorically laid down that IBC is not intended to be substitute to a recovery forum. It is also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked. We allow this appeal and set aside the impugned order dated September 04, 2018 passed by the NCLAT.
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2018 (10) TMI 1336
Initiating Corporate Insolvency Resolution Process - outstanding amount due from the Corporate Debtor which has not been paid despite issuance of the demand notice - Held that:- Since the respondent failed in proving a pre-existing dispute, the next question is whether the Operational Creditor has succeeded in proving the compliance of Section 9 (5) of the IB code, 2016. To maintain an application of this nature, the Operational creditor has to prove that the Application filed under Section 9 of the IB Code, 2016 is complete, that there is no repayment of the unpaid operational debt, that the invoices of which the claim is made, has been received by the Corporate Debtor, and that there is no disciplinary proceedings pending against the proposed Resolution Professional. Here, in this case, no affidavit under Section 9(3)(b) has been filed because the Corporate Debtor has raised disputes. The dispute raised is found devoid of any merit. In compliance with Section 9(3)(b)(c), the Operational creditor has produced a certificate issued from its Bank dated 27-12-2017 by way of Supplementary Affidavit dated 01-02-2018. However, no name of the Insolvency Resolution Professional is proposed. Therefore, the question of compliance with Section 9(5)(i)(e) does not arise. All other requirements as per Section 9(5)(i)(a) to (c) are seen complied with and since the dispute raised is found not bona fide, this Application is liable to be admitted.
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2018 (10) TMI 1335
Corporate Insolvency Resolution Process - Approval of the ‘Resolution Plan’ - Held that:- Requirement of minimum seventy-five percent of the voting shares of the ‘Financial Creditors’ has been reduced subsequent to the passing of impugned orders dated 23rd November, 2017 and 27th November, 2017. From plain reading of Section 21 (8) (as it then was) it is clear that all the decisions of the ‘Committee of Creditors’ is required to be taken by a vote of not less than seventy-five percent of the voting shares of the ‘Financial Creditors’, including the approval of the ‘Resolution Plan’. Sub-section (8) of Section 21 being mandatory in nature, any plan which has not been approved by the ‘Committee of Creditors’ with voting shares of seventyfive percent, cannot be approved by the Adjudicating Authority as it will be against the provisions of Section 30(2)(e) of the ‘I&B Code’ which stipulates that the ‘Resolution Plan’ does not contravene any of the provisions of the law for the time being in force. Less than seventy-five percent of the voting shares of the ‘Committee of Creditors’ in the matter of approval of the ‘Resolution Plan’ being against the provisions of clause (e) of sub-section (2) of Section 30, it cannot be approved. We uphold the decision of the Adjudicating Authority, Mumbai Bench dated 23rd November, 2017 which is under challenge in Company Appeal (AT) (Insolvency) and set aside the impugned order dated 27th November, 2017 passed by the Adjudicating Authority, Hyderabad Bench, which are under challenge in Company Appeals (AT) (Insolvency). In the result, the Company Appeal (AT) (Insolvency) is dismissed and Company Appeals (AT) (Insolvency) are allowed and the case of ‘Kamineni Steel & Power India Pvt. Ltd.’ is remitted to the Adjudicating Authority for initiation of liquidation proceeding in terms of Section 33 read with Section 34 of the ‘I&B Code’ who is required to pass order immediately.
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Service Tax
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2018 (10) TMI 1327
Principles of Natural justice - Tour Operator and Air Travel Agent Service - quantum of tax discharged is incorrect - demand on the basis of gross value shown in the balance sheet and ST.3 returns on the differential amount - Held that:- All the submissions were made before the adjudicating authority as well as Ld. Commissioner (Appeals) but they have not considered the same and arbitrarily confirmed demand. The issue raised by Ld. Counsel needs to be considered, verified and thereafter, quantification of demand, if any remains to be decided. Therefore, both lower authorities have failed to arrive at the correct conclusion due to non consideration of the submission made by the appellant. Matter remanded to the adjudicating authority to pass afresh order after considering the issues raised by Ld. Counsel - appeal allowed by way of remand.
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2018 (10) TMI 1326
Scope of SCN - Business Auxiliary Service or not - ‘Trade Discount’ received from the media based on their turn over - whether the classification can be decided under a category which was not proposed in the SCN? - Held that:- SCN proposed the classification of the service under Business Auxiliary Service whereas the adjudicating authority decided the classification and confirmed the demand under the head of advertisement agency service - It is settled law that the adjudication order cannot travel beyond the scope of SCN. Since the demand confirmed under category which was not proposed in the SCN such demand cannot be sustained - appeal allowed - decided in favor of appellant.
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2018 (10) TMI 1325
Penalty - Valuation of Works Contract - erection, installation and commissioning service - repair and maintenance service - service tax on value of service portion and material cost consumed in providing the aforesaid service - N/N. 12/03-ST - Held that:- The Notification 12/03-ST is a conditional one. The appellant is required to establish that the material consumed in providing the output service has been sold to the service recipient, only in such condition the Notification 12/03-ST can be extended. Since, there are no documents produced by the appellant, we are of the view that the matter should be reconsidered only on the limited issue of availability of the exemption N/N. 12/03-ST - appeal allowed by way of remand.
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2018 (10) TMI 1324
Supply of Tangible Goods Service - Renting of Bullock Carts’ during the harvesting seasons for procuring sugarcane from fields - levy of service tax - Held that:- ‘Renting of Bullock Carts’ during harvesting seasons for procuring sugarcane from fields whether could be subjected to service tax under the category of ‘Supply of Tangible Goods Service’ has been settled by this Tribunal in favour of the assessee in the case of Bhima SSK Ltd. [2013 (7) TMI 98 - CESTAT MUMBAI], where it was held that mere activity of renting of bullock cart does not come within the purview of ‘Supply of Tangible Goods for use Service' - appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (10) TMI 1323
Penalty u/r 173 Q(1)(a) of Central Excise Rules, 1944 - demand of excise duty was set aside - Held that:- Since the penalty is in connection with the demand of Excise duty and same was set aside, the penalty should not be sustained. This issue has been dealt by Larger Bench of this Tribunal in the case of Godrej Soaps Vs. Commissioner of Central Excise Mumbai [2004 (10) TMI 112 - CESTAT, MUMBAI], wherein Larger Bench held that when demand gets dropped on any account penalty provision cannot survive against the assessee under Rules, 173 Q(1)(a) of Central Excise Rules, 1944. Penalty imposed under 173 Q(1)(a) is not sustainable - appeal dismissed - decided against Revenue.
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2018 (10) TMI 1322
Procurement of inputs from a DTA unit under CT-3 procedure which was later returned back to the original supplier, on being found unfit for consumption - case of the department is that once the non duty paid under CT-3 received by the 100% EOU there is no other option accepted either to use in the production or to discharge the Excise duty accordingly on the returned goods demand was confirmed. Held that:- In the transaction as per Rules, 6 provision thereof there is a clear proviso that in case the assessee found the goods to be defective or damage of un suitable or surplice to the needs of the manufacture. He may return the subject goods to the original manufacturer of the goods. According to this provision duty cannot be demanded from the appellant. As per the provision of Rules, 6 of Central Excise Confessional duty Rules, 2001, the demand of interest and penalty is not sustainable - appeal allowed - decided in favor of appellant
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2018 (10) TMI 1321
Valuation - related party transaction - application of Rule 8 and Proviso to Rule 9 of Central Excise Valuation Rules, 2000 - Revenue has raised the demand by loading 10% on the transaction value - Held that:- The department has not worked out that what is the actual cost of the manufacture, on the contrary the appellant have submitted a Chartered Accountant Certificate wherein the cost data was certified which shows that the value as per cost certificate is less than the value charged by the appellant to their customer. They have further obtained a certificate from Cost Accountant which has endorsed the certification of the Chartered Accountant regarding cost of manufacture plus 10% notional profit. When the appellant produced the Cost Accountant Certificate that will suffice - also there is no statutory provision in Valuation Rules that regarding cost of production, Cost Accountant Certificate has to be produced. In the present case, the department has not made any effort to bring on record that the cost of the product produced by the appellant is incorrect. Therefore, in absence of any evidence from the Revenue, the value adopted by the appellant cannot be disputed. Appeal allowed - decided in favor of appellant.
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2018 (10) TMI 1320
CENVAT Credit - input service - Construction Service or repair and maintenance service - scope of amendment in the definition of Input Service under Rule 2(l) of Cenvat Credit Rules - Held that:- There is no dispute that the credit is admissible in respect of Construction Services used for Repair and Maintenance. From the nature of service of the service provider, it is found that it is not a new construction of building but in the existing building some civil work was carried out. It is also observed that the service provider discharging the service tax liability by claiming abatement of 30% which is available on ‘Repair and Maintenance’. Therefore, the service provider is classifying the services under ‘Repair and Maintenance’ - As per Rule 2(l), even though the ‘Construction Service’ was excluded but in the inclusion clause of definition, the services such as Modernisation, Renovation and Repair of the factory premises of manufacturer is still covered under the definition of Input Service. Service of Repair and Maintenance are eligible for Cenvat credit - appeal allowed - decided in favor of appellant.
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2018 (10) TMI 1319
Rectification of Mistake - Revenue submits that the issue on merit involved in the present case is default in payment of excise duty in terms of 8(3A) of Central Excise Rules, 2002, whereas this tribunal mistakenly disposed off the appeal considering the issue involved is CENVAT credit on sales commission - Held that:- In the appeal number E/10782/2017, the issue involved is default in payment of monthly excise duty in terms of Rule 8(3A) Central Excise Rules, 2002, whereas the appeal was disposed of treating the issue as Cenvat credit under sales commission, therefore, there is a clear error in the order dated 24.11.2017 - the order dated 24.11.2017 is recalled and the appeal restored in its original number - ROM application allowed.
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CST, VAT & Sales Tax
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2018 (10) TMI 1318
Levy of penalty - entry tax paid was mistakenly credited by the respondent to the previous assessment year of the petitioner TNGST 2003-04 and the respondent in his final assessment order in proceedings TNGST 5721409/03-04, dated 26.05.2009, has refunded the said amount through Form 'C' - Held that:- It is an accepted fact that the mistake was committed by the respondent in crediting the entry tax in the assessment year 2003-04 instead of 2004-05. One cannot expect to remember in 2009 that the tax amount was not paid for 2004-05, as the mistake had crept in by the act of the respondent themselves and therefore, in my considered opinion, the respondent cannot seek any penalty for the assessment year 2004-05 even if the respondent found that there was arrears tax for the assessment year 2004-05. Penalty set aside - petition allowed.
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2018 (10) TMI 1317
Return of tax collected during search proceedings - refund the amount already recovered from the petitioner - quashing the statement of officer of petitioner-company - Held that:- Pursuant to the search, statements have been recorded and documents collected. Assessment proceedings are initiated but not yet completed. Till utilization of tax liability, it would not be open for the department to recover the tax. This is not to suggest that the department cannot take other means to protect the interest of the Revenue, if so, otherwise found necessary. The petitioner's last request for refund of the amount already recovered, we are not inclined to grant. The petitioner having issued the cheque and in lieu thereof deposit such cheque having transferred the money through RTGS the question of coercive recovery may assume some significance. The respondents are prevented from depositing remaining cheques of the petitioner collected during the search operations for realization and may be returned to the petitioner. The petitioner's remaining prayers are not granted - petition disposed off.
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Indian Laws
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2018 (10) TMI 1330
Dishonor of Cheque - re-transfer of shares in Demat Account - misappropriation of shares and money - offence u/s 420 of IPC - Held that:- There is no allegation in the complaint against applicants that they made any false representation of any nature to the complainant inviting him to deposit any amount with the company or regarding said transaction, therefore, from the complaint no offence of cheating under Section 420 of IPC is made out against the present applicants. This Court learned JMFC as well as learned XXII Additional Sessions Judge, Bhopal committed mistake in holding that the offence under section 420 of IPC is also made out against present applicants from the complaint. Petition allowed in part.
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2018 (10) TMI 1329
Dishonor of Cheque - Section 138 of the NI Act - Application under Section 311 of the Cr.P.C. filed by the applicants/petitioners rejected - Held that:- From reading of Section 311 of the Cr.P.C. it is manifested that it comes into operation at any stage to enable the Court to find out the truth by summoning any person as a witness or examined any person who has already examined for obtaining the proper evidence or just decision of the case. The Court should exercised the power under Section 311 of the Cr.P.C. when Court finds it essential to reached the conclusion of the case, but it can not be used to fill-up the lacunas and to give the benefit to any parties by delaying the trial. The petitioners have filed an application under Section 91 of the Cr.P.C. before the trial Court for calling the documents relating to Income Tax Return, Balance Sheets and Statements of the Bank Account of the complainant during the period of 01.04.2007 to 31.03.2009, which was rejected by the trial Court. Thereafter, in revision the learned Sessions Judge has allowed the application and made the observation that the documents can be called through concerning Department. From the decision form Hon'ble Apex Court in the matter of Natasha Singh [2013 (5) TMI 964 - SUPREME COURT OF INDIA] it is revealed that the Section 311 of the Cr.P.C. expressly provide the Court wide discretion to recall and re-examined any person, if his evidence appears to be essential to the just decision of the case and the Court should not be exercised its discretion arbitrarily, it must be exercised judicially and judiciously as the case may be - In the present case, it is not disputed that the Income Tax Officer had produced the documents before the trial Court in compliance of Section 91 of the Cr.P.C. In lack of the entries of disputed amount in the return, this Court of the opinion that there is no necessity to call the Income Tax Officer as a witness to take his evidence - This is not proper case, in which inherent jurisdiction can be invoked by this Court under Section 482 of the Cr.P.C. Therefore, the petition filed by the petitioners is deserves to be dismissed. Petition dismissed - decided against petitioner.
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2018 (10) TMI 1328
Application for review of Order - denial of petitioner’s request to be granted citizenship by naturalization in terms of Section 6(1) of the Citizenship Act, 1955 - extension of permission of stay also sought - denial of citizenship was mainly on the ground that petitioner was suspected to be indulging in drug trade. Held that:- For an alien to be granted citizenship by naturalisation, it would be necessary for the said person to qualify the conditions as set out in the Third Schedule of the Citizenship Act. One of the conditions specified therein is that the applicant be “of good character” (Clause (e) of the Third Schedule of the Citizenship Act) - It is also important to understand that as an alien, the petitioner is not entitled to the fundamental rights – other than Article 21 and to a limited extent Article 14 of the Constitution of India – guaranteed to a citizen of India. Indisputably, the petitioner does not have any inherent right to reside in India or to be accepted as the citizen of this Country. Accepting an application for naturalisation by the Central Government is a grant of privilege in exercise of its sovereign power. There is no definition of the expression ‘good character’ in the Citizenship Act. Undoubtedly, the Central Government has wide discretion in setting the standards for its satisfaction as to the good character requirement. However, the expression must be understood in the context of the statute. The standards to qualify the good character requirement must be reasonable and as expected of a good and responsible citizen espousing the values engrafted in the Constitution of this country. The impugned order does indicate sufficient reason why the petitioner’s application for naturalisation has been rejected. It is clear that the Central Government is not satisfied that the petitioner qualifies the good character requirement - this is a subjective decision and the Central Government (and not this Court) is required to be satisfied that the petitioner is qualified for naturalisation under the provisions of the Third Schedule of the Citizenship Act. This decision cannot be subjected to judicial review except on limited grounds. The said decision cannot be held to be arbitrary, capricious or whimsical and, thus, cannot be interfered with in these proceedings. Whether the petitioner would be rendered stateless as citizenship was not granted to her? - Held that:- Admittedly, the petitioner is a German National. Her parents are also German Citizens. The petitioner was born in Germany and had, admittedly, come to India in connection with a business relating to Indian handicrafts. She may have spent a considerable time in India, but a refusal to grant her citizenship by naturalisation does not render her Stateless as contended on her behalf. Petition dismissed.
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