TMI Tax Updates - e-Newsletter
October 31, 2019

Case Laws in this Newsletter:

GST Income Tax Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. DEMURRAGE CHARGES TO BE INCLUDED IN VALUATION?

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. India’s marine exports to China heading for USD 1 billion mark

2. CCI receives combination notice under green channel scheme, relating to acquisition of equity stake in Hero Future Energies Global Ltd and non-voting compulsorily convertible preference shareholding in Hero Future Energies Private Ltd. by Abu Dhabi Future Energy Company P.J.S.C. - Masdar, on 28th October, 2019

3. PFRDA permitted now Overseas Citizen of India to enroll in NPS at par with Non-Resident Indians

4. CSR is a true manifestation of Bapu’s Trusteeship Philosophy: President of India

5. Finance Minister Releases Commemorative Coin on Paramahansa Yogananda to Mark his 125th Birth Anniversary

Notifications

DGFT

1. 27/2015-2020 - dated 28-10-2019 - FTP

Amendment in Export policy of Onions

GST - States

2. S.O. 393 - dated 25-10-2019 - Bihar SGST

Seeks to amend Notification No. S.O. 212, dated the 08th May, 2019

3. 45/2019-State Tax - dated 9-10-2019 - Chhattisgarh SGST

Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the quarters from October, 2019 to March, 2020.

4. 44/2019-State Tax - dated 9-10-2019 - Chhattisgarh SGST

Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020

5. Order No. 05/2019-State Tax - dated 24-10-2019 - Delhi SGST

Delhi Goods and Services Tax (Fifth Removal of Difficulties) Order, 2019

6. Order No. 04/2019-State Tax - dated 24-10-2019 - Delhi SGST

Delhi Goods and Services Tax (Fourth Removal of Difficulties) Order, 2019

7. 73/2018–State-Tax - dated 24-10-2019 - Delhi SGST

Seeks to amend Notification No. 50/2018-State Tax, dated the 5th September, 2019

8. 61/2018- State Tax - dated 24-10-2019 - Delhi SGST

Seeks to amend Notification No. 50/2018-State Tax, dated the 5th September, 2019

IBC

9. IBBI/2019-20/GN/REG049 - dated 25-10-2019 - IBC

Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2019

Circulars / Instructions / Orders

Companies Law

1. 13/2019 - dated 29-10-2019

Relaxation of additional fees and extension of last date in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013

Central Excise

2. 1073/06/2019 - dated 29-10-2019

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

Highlights / Catch Notes

GST

• Tamarind Fruit Classified Under Tariff Heading CTH 08109020 as "Fresh" Due to Lack of Drying Process.

  Case-Laws - AAR : Classification of goods - Tamarind Fruit obtained from the farmers - When a specific Tariff heading is available, there is no necessity to follow further interpretative rules. In the case at hand, the applicant has stated that the Tamarind fruit' purchased by the farmers do not undergo any process of drying either by sun or industrial process and is hence, classifiable under CTH 08109020 as Tamarind, fresh'.
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• GST Law: Time of Supply for Continuous Services Like Property Rent Defined by Section 13(2)(b.

  Case-Laws - AAR : Time of supply of services - continuous supply of services - renting of immovable properties - where no invoice is issued or payment is received - Time of supply is determined by Section 13(2) (b), as the earliest of the date of provision of service, which is the end of recurrent period specified in the agreement after which the rent/license fee is to be paid and the date of receipt of payment, whichever is earlier.
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Income Tax

• Excise duty paid under protest is deductible u/s 43B, but reimbursement is taxable u/s 41.

  Case-Laws - AT : Excise duty paid under protest is eligible for deduction u/s 43B - the amount received towards reimbursement of excise duty from its distributor is a trading receipt which is taxable under the provisions of Section 41
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• Bank Loan Repayment Not 'Diversion of Income'; Cannot Deduct Principal from Property Sale Proceeds in Capital Gains Calculation.

  Case-Laws - AT : Computation of capital gains - deduction towards repayment to bank loan which was treated as NPA by the bank - the consideration from sale of property to the extent of principal component of loan adjusted by the bank cannot be treated as ‘diversion of income by overriding title’ and was thus not deductible from the total consideration accrued to the assessee from sale of property.
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• Assessee Proves Share Application Source and Nature, Meets Section 68 Requirements; No Additions Imposed.

  Case-Laws - AT : Addition u/s. 68 - both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants - No additions
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• Income Tax Commissioner Can Revise Orders u/s 264: No Time Limit for Assessee Applications, One-Year Limit Suo-Motu.

  Case-Laws - HC : Revision u/s 264 in favor of assessee - It is manifest that only suo-motu power of the Commissioner under Section 264 of the IT Act, is restricted against an order passed within one year, whereas no such restriction is imposed on the Commissioner to exercise his power in respect of an order, which has been passed more than on year, if such revisional power is sought to be invoked at the instance of the Assessee by making an application under Section 264 of the IT Act.
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• Prior period expenses can offset taxable income without proving a direct link between them, providing tax relief.

  Case-Laws - HC : Prior period expenses adjustment against the prior period income - once the prior period income is held to be taxable, the prior period expenditure also should be allowed to be set off and the assessee is not obliged in law to indicate any direct or indirect nexus between the prior period income and prior period expenditure.
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• Stock Registers Alone Insufficient for Rejecting Books; No Evidence of Unrecorded Sales or Purchases Found by Assessing Officer.

  Case-Laws - AT : Suppression of production/sales - the books of accounts cannot be rejected if the assessee does not maintain the stock registers until and unless it is coupled with other defects such as sales/ purchase outside the books of accounts. But in the instant case, there was no such conclusive finding by the AO.
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• Assessee Can Claim Depreciation on Car Registered in Director's Name if Assessee is Beneficial Owner.

  Case-Laws - AT : Depreciation on car - the assessee is eligible for depreciation on the car purchased by it but registered in the name of the director as the assessee is the beneficial owner of such car.
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• Deduction u/s 80JJAA: No Distinction Between Salary and Wages for Software Industry Employees Providing Technical Services.

  Case-Laws - AT : Deduction u/s.80JJAA - Whether there is any distinction between salary and wages and whether monies paid to a person working in software industry cannot be termed as “Wages”? - There is no distinction - the employees employed in software development industry render technical services and not services in the nature of supervisory or management character - Deduction allowed.
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• Taxpayer Denied Deduction u/s 10A for Unbilled Revenue Due to Lack of RBI Extension Approval.

  Case-Laws - AT : Deduction u/s 10A - export turnover being unbilled revenue, which was yet to be billed - assessee raised invoice in March 2008 that is end of subsequent financial year, for which assessee do not have any permission from RBI regarding extension of time. - No relief granted to assessee.
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• CSR Spending Approved for Enhancing Local Community Conditions and Building Goodwill in Business Operation Areas.

  Case-Laws - AT : Expenditure on CSR - expenditure was incurred in the areas where business operations of the assessee company were carried out in order to promote social economic condition of the local community living and in order to win the goodwill of the local people - Claim of expenditure allowed.
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Corporate Law

• Deadline Extended for Filing Forms MGT-7 and AOC-4 Under Companies Act, 2013; No Additional Fees Applied.

  Circulars : Relaxation of additional fees and extension of last date in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013
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IBC

• India's Insolvency Regulations Amended to Boost Professional Standards and Accountability.

  Notifications : Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2019
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Central Excise

• Sabka Vishwas Scheme 2019 Offers Taxpayers Relief on Central Excise and Service Tax Disputes with Penalty Waiver

  Circulars : Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
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Case Laws:

• GST

• 2019 (10) TMI 1205
  Classification of goods - Tamarind Fruit obtained from the farmers - whether classified under HSN 0810, as fresh fruit , since the product does not undergo any process of manufacture or undergo any value addition? - HELD THAT:- The applicant is engaged in procuring tamarind fruit from the farmers across Tamilnadu and supply them to the processing units. As stated by the applicant, tamarind is not dried by them or the by the farmers and is supplied as such without sun drying - the Tamarind, fresh is classified under CTH 0810 90 20 and Tamarind, dried is classified under CTH 0813 40 10. Thus, Tamarind fresh and Tamarind dried are two different products classified under two different tariff headings. The task at hand is to determine what is to be classified as Fresh and what is to be classified as Dried . In the case at hand, the applicant has explained the nature of their product as -the farmers collect ripened tamarind fruits by shaking and smacking the branches using long clubs/ poles.; As the fruits fall to the ground the outer shell gets cracked and come in contact with soil deposits from the ground.; they are buying these fruits from the farmers and supply to the processing units as such, where these fruits will be subjected to processes such as removal of remnants shells, outer fibrous ribs, removal of other impurities like sand/soil, removal of seeds and finally drying them and generate wads of tamarind The applicant has further stated that the tamarind fruits obtained from farmers are not sun dried. The applicant raises Bill of Supply/invoice on purchase of Tamarind Fresh from the farmers who are unregistered under GST. There are specific headings Tamarind fresh-08109020 and Tamarind dried-08134010 in the Tariff and as per the Explanatory notes (HSN), dried fruits classifiable under 0813 are those falling under CTH 0806 to 0810, prepared by either direct drying in the sun or by industrial processing. As per General Rule of Interpretation Rule 1, Classification shall be determined according to the terms of the headings and if it cannot be done then the classification is to be arrived at following the further rules. Tamarind fresh and Tamarind Dried are specific tariff headings and what constitutes Dried fruit is clarified in the Explanatory notes(HSN) - When a specific Tariff heading is available, there is no necessity to follow further interpretative rules. In the case at hand, the applicant has stated that the Tamarind fruit purchased by the farmers do not undergo any process of drying either by sun or industrial process and is hence, classifiable under CTH 08109020 as Tamarind, fresh .

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• 2019 (10) TMI 1204
  Time of supply of services - continuous supply of services - renting of immovable properties - principles of natural justice - HELD THAT:- In respect of renting of immovable property there is no real completion of supply of service, except what is specified in the contract. The lessee receives the service of renting throughout their stay on a continuous basis. The payments are periodic as determined by the lease agreement usually monthly or annually. Therefore, for contracts for renting of immovable properties where the period of the lease/ actual stay is more than three months, as is the case here, the service is a continuous supply of service. The license has expired and not in force but the licensee continues to be in Possession and occupation of the immovable properties - HELD THAT:- When the license is expired and there are provisions made in the lease agreement regarding continued supply of service as in the case of the lease agreement with Customs, the supply of service is a continuous Supply of Service as defined in Section 2(33). However, if there is no such provision made in the agreement it can be said that the supply is not under a contract and therefore, in such cases, the supply no longer qualifies under the definition of continuous supply. In respect of continuous supply of service, as per Section 31(5), the tax invoice should be raised on or before due date of payment if said due date is ascertainable from the contract. It is seen that in all cases the Rent Claim Advice issued by the applicant contains a due date of payment of the demand raised in the same - in case where the contract contains provisions for continued supply of service even after expiry, it is a continuous supply of service - Accordingly, in cases where there is a provision in contract for continued supply of services after expiry or termination of the contract, the invoice is issued with the period prescribed in Section 31 (5) and the Time of supply is determined by Section 13(2) (a), as the earliest of the date of issue of invoice or Rent Claim Advice by the supplier and the date of receipt of payment. In respect of cases where there is no such provision regarding continued supply of service after expiry of contract, it can be said that no such contract exists. However, there is still a supply of service of renting of the immovable property. As per Rule 47 of the CGST/TNGST Rules, the invoice should be issued within thirty days from date of supply of service - In the instant case the applicant issues RCA on monthly basis for the rent/ fee pertaining to a specific month. If such RCAs are issued within thirty days after the end of recurrent period specified in the agreement after which the rent/license fee is to be paid ,for which the rent is being sought, it can be said that they are issued within the prescribed period as per Section 31 (2) and the Time of supply is determined by Section 13(2) (a), as the earliest of the date of issue of invoice or Rent Claim Advice by the supplier and the date of receipt of payment as the invoice is issued within the period prescribed. If the RCAs are issued more than thirty days after the end of the month for which the rent is being sought, it can be said that they are not issued within the prescribed period and the Time of supply is determined by Section 13(2) (b), as the earliest of the date of provision of service, which is the end of recurrent period specified in the agreement after which the rent/license fee is to be paid and the date of receipt of payment, whichever is earlier. The license is in force, but the licensee does not pay the periodical license fee to them as provided in the license agreement - HELD THAT:- If the invoice is issued after such due date of payment, the Time of supply is determined by Section 13(2)(b), as the earliest of the date of provision of service which is the end of the period (monthly/annual etc. ) specified in the contract and the date of receipt of payment, whichever is earlier. If payment is not received, the time of supply shall be the date of provision of service which is the end of recurrent period specified in the agreement after which the rent/license fee is to be paid. The license is in force, but the licensee pays a portion of the agreed license fee by them under the expired license agreement - HELD THAT:- The question is wrongly worded as if the license is in force, the licensee could not be paying any amount under the expired license agreement. The applicant means to ask regarding the case where the license is in force and instead of receiving the full consideration, they only get a partial amount as payment. In these case too, it will apply as the date of payment of full consideration is the date of reckoning of the date of payment.

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• Income Tax

• 2019 (10) TMI 1199
  Deduction eligible u/s 43B - excise duty paid under protest - security deposit from a customer - HELD THAT:- The settled legal position of law is that liability to pay tax arises by virtue of the charging section alone though quantification of the amount payable is postponed, as held in the case of Kesoram Industries amp; Cotton Mills Ltd. v. CWT [ 1965 (11) TMI 41 - SUPREME COURT] and then again in the case of Setu Parvati Bayi v. CWT [ 1967 (12) TMI 4 - SUPREME COURT] . Similar was the view in the case of Chatturam v. CIT [ 1947 (4) TMI 8 - FEDERAL COURT] that liability to tax does not depend on assessment; that ex hypothesis has already been fixed : the assessment order only quantifies the liability which is already definitely and finally created by the charging sections [Ishwarlal Parekh v. State of Maharashtra [ 1968 (5) TMI 1 - SUPREME COURT] Therefore the fact that in the absence of an assessment order or absences of entries in the books of accounts is no bar to claim as deduction of excise duty of tax. The excise duty is attracted the movement the activity of manufacturing is complete. Therefore crystallization of liability is established in the year of manufacturing. Admittedly, during the year under consideration, the goods were not manufactured. However, since the excise duty is allowable as deduction on payment basis under the provisions of Section 43B of the Act, though the liability is pertaining to earlier years, the excise duty paid is allowable as deduction under the provisions of Section 43B of the Act. Similarly, the amount received towards reimbursement of excise duty from its distributor M/s. Roshan Commercial Private Limited is a trading receipt which is taxable under the provisions of Section 41 of the Act in the light of the judgment of Hon ble Supreme Court in the case of Chowringhee Sales Bureau P. Ltd vs. CIT, [ 1972 (10) TMI 4 - SUPREME COURT] - Decided against assessee.

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• 2019 (10) TMI 1198
  Computation of capital gains - deduction towards repayment to bank loan which was treated as NPA by the bank - Doctrine of overriding title - implication of SARFAESI Act on the doctrine of diversion of income by overriding title - consideration from sale of property to the extent of principal component of loan adjusted by the bank - assessee failed to make payment to the secured creditor within the period specified in the notice issued under Sub-section (2) of Section 13 of the SARFAESI Act - Deduction of full value of consideration arising from the transfer of mortgaged capital asset by the Kotak Mahindra Bank, which took over the possession of the said asset under the provisions of the SARFAESI Act, 2002 - Whether entire sale consideration, which is received by the Kotak Mahindra Bank from the transfer of mortgaged assets under the provisions of section 13 of the SARFAESI Act, will not be chargeable to Income tax in the hands of the assessee on the principle of diversion of income by overriding title ? - difference between the learned Members constituting the Division Bench HELD THAT:- Borrower defaults in repayment of loan or instalment and the secured creditor issues the notice specified in Sub-section (2) of Section 13 of the SARFAESI Act, the right of the borrower with respect to the secured asset gets restricted, and he is not allowed to part with the secured asset without the prior approval of the secured creditor - On non-repayment of loan or instalment amount within the period specified in the notice issued under Sub-section (2) of Section 13 of the SARFAESI Act, all the rights in the secured asset get vested with the secured creditor and the borrower has no right in the said asset. The borrower is not free to decide even the way in which the secured asset shall be parted with. It is the sole discretion of the secured creditor as to how the secured asset shall be dealt with. This right in favour of the secured creditor is created by virtue of SARFAESI Act; and, this has been interpreted by the learned representative for the assessee to say that the mortgaged property vested with KMBL and, therefore, the property was sold by KMBL in its own right. In the present case the assessee defaulted in repayment of loan to KMBL and KMBL classified the account of the assessee as Non-Performing Asset which is the precondition before issuing notice under Sub-section (2) of Section 13 of the SARFAESI Act. The assessee was thus issued notice under Subsection (2) of Section 13 of the SARFAESI Act dated 30.11.2009. The assessee failed to make payment to the secured creditor within the period specified in the notice issued under Sub-section (2) of Section 13 of the SARFAESI Act. Thus, by virtue of Sub-section (4) of Section 13 of the SARFAESI Act, KMBL was vested with the option to sell the secured asset, which is represented by plots, in the present case. KMBL invoked the SARFAESI Act and accordingly took possession of the plots, sold them and recovered the amount of loan liability outstanding from the assessee. The situation can also be seen de hors the SARFAESI Act. The assessee in the present case availed mortgage loan from KMBL and, one of the condition was that if the assessee defaults in repayment of loan and interest, the mortgaged property will be sold by KMBL to recover the outstanding loan and interest amount from the assessee. The assessee and KMBL, both were aware of this fact at the time of advancing of loan by KMBL to the assessee; and, the assessee voluntarily chose to enter into such an arrangement wherein property owned by it was mortgaged to the bank as security; admittedly, assessee agreed to the condition of disposal of the property by KMBL in case of default in repayment of loan by it. This arrangement, even without force of any law, was clear and unambiguous. Thus, it was only a voluntary action on the part of the assessee to enter into such an obligation and assessee was not compelled by law or any other obligation beyond it s control to enter into such an arrangement. Once that is so, any action taken by KMBL to enforce it s right to recover the amount which, in the present case, is right to sell the property to recover amount cannot be said to be transaction beyond the control of the assessee. Thus, the amount recovered by KMBL can by no stretch of imagination be treated as diversion of income by overriding title . The principle of diversion of income by overriding title applies when the transaction is beyond the control of the assessee due to which assessee has to make commitment to either divert it s income or part with income earned by it in a particular manner. SARFAESI Act merely provides a recovery mechanism and nothing else. The SARFAESI Act cannot be interpreted to mean that it has created right of diversion of income by overriding title . There is only a mere application of the sale proceeds realised on sale of plots towards the discharge of outstanding loan liability of the assessee. Assessee cannot claim any part of such application as deduction for the purpose of computing Capital Gain in terms of Section 48 of the Act. Sale of property to the extent of principal component of loan adjusted by the bank cannot be treated as diversion of income by overriding title and was thus not deductible from the total consideration accrued to the assessee from sale of property. So far as the instant dispute is concerned, the legal position prevailing prior to SARFAESI Act is also germane even after the enactment of SARFAESI Act. The law laid down by the Hon ble Courts with respect to diversion of income by overriding title and deduction to be claimed under Section 48 of the Act while computing the income from Capital Gains, which are discussed by the ld. Judicial Member and also relied upon by the ld. DR, are still good law, and is fully applicable in the instant case. In the present case there was no diversion of sale proceeds by overriding title, but on the contrary, there is only a mere application of the sale proceeds realised on sale of plots towards the discharge of outstanding loan liability of the assessee. I also hold that assessee cannot claim any part of such application as deduction for the purpose of computing Capital Gain in terms of Section 48 of the Act. Agree with the view taken by the learned Judicial Member that the consideration from sale of property to the extent of principal component of loan adjusted by the bank cannot be treated as diversion of income by overriding title and was thus not deductible from the total consideration accrued to the assessee from sale of property. The decision arrived at by learned Judicial Member is the correct view - Decided against assessee.

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• 2019 (10) TMI 1197
  Addition u/s. 68 - unexplained share capital/share premium as the assessee has failed to prove the identity, creditworthiness and genuineness of the transaction - main plank on which the AO made the addition was because the directors of the share subscribers did not turn up before him - HELD THAT:- Share subscribing companies are duly assessed to income tax. The Ld AR had placed on record the copies of the assessment orders framed in the cases of several of the share subscribing companies, as noted above. It therefore cannot be disputed that the share subscribing companies are not in existence. From the assessment orders, it is noted that the share subscribing companies are duly assessed to income tax and their income tax particulars together with the copies of respective income tax returns with their balance sheets are already on record. CIT(A) had categorically stated that the scrutiny assessments were framed on the share subscribing companies for the Asst Year 2012-13 which shows their existence is genuine and transactions carried out by them were the subject matter of examination by the income tax department in scrutiny proceedings. This fact has not been controverted by the Revenue before us. We may gainfully refer to the judgment in the case of Pr. CIT Vs Paradise Inland Shipping (P) Ltd [ 2017 (11) TMI 1554 - BOMBAY HIGH COURT] wherein deleted similar addition on similar set of facts made on account of unexplained cash credits and the SLP filed by the Revenue against the judgment has been dismissed by the Hon ble Supreme Court. Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO s record. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified - no addition was warranted u/s 68 - Decided in favour of assessee.

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• 2019 (10) TMI 1196
  Revision u/s 264 in favor of assessee - Principal Commissioner or the Commissioner to exercise the revisional jurisdiction over any order other than the order to which Section 263 applies - Delay in filing return - Revision filed by the petitioner herein within one year from the date of rejection of their rectification return - Assessee having not filed revised return within the time stipulated under Section 139(5) - HELD THAT:- No doubt Section 139(5) provides for filing a revised return within one year for correcting any mistake. It is true that the petitioner has not exercised such option within such time. However, the petitioner filed a rectification return after receipt of intimation under Section 143(1). It is true that there is a delay in filing such return. But the said rectification return was rejected on 24.10.2017 and immediately, within one year, the petitioner approached the Commissioner under Section 264 of the IT Act, and filed the revision. Since the Commissioner is empowered to entertain the revision under Section 264 of the IT Act, against any order other than the order to which Section 263 applies, the revision filed by the petitioner herein within one year from the date of rejection of their rectification return, is certainly maintainable and consequently, the Commissioner ought to have exercised his power and considered the relief sought for by the petitioner and pass the order to that effect, more particularly, when he has found that the Assessee had committed the error inadvertently and that the expenditure claimed by the Assessee under the head Total Compensation to Employees is also supported by the certified copy of Profit and Loss Account . When the Commissioner is approached by the Assessee within one year from the date of an adverse order passed against the Assessee, the Commissioner is empowered and entitled to look into the grievance of the Assessee and pass such order thereon notwithstanding the fact that the Assessee has not approached the Assessing Officer within the time stipulated for filing the revised return. If such technical objection is allowed to stand in the way of the Commissioner in exercising his jurisdiction/power under Section 264, it would certainly, result in defeating the very purpose and object of granting such ample and wider power to the Commissioner under Section 264 As per revenue exercise of power and granting the relief to the Assessee under Section 264 is subject to the provision of the Income Tax, Act and therefore, the Assessee herein, having not filed revised return within the time stipulated under Section 139(5) of the IT Act, is not entitled to the relief even under Section 264 - Revenue by making such contention, is sought to justify the collection of excess tax over and above the tax payable by the Assessee, even though they admit that only due to inadvertent mistake, a wrong entry was made by the Assessee with lessor figure of the relevant expenses than the actual expenses met out. At this juncture, it is relevant to note that Article 265 of the Constitution of India specifically states that no tax shall be levied or collected except by authority of law. Therefore, both the levy and collection must be done with the authority of law, and if any levy and collection, later are found to be wrong and without authority of law, certainly, such levy and collection cannot withstand the scrutiny of the above constitutional provision and thus, such levy and collection would amount in violation of Article 265 of the Constitution of India. Therefore, it is apparent on the facts and circumstances of the present case, that a mere typographical error committed by the Assessee cannot cost them payment of excess tax as collected by the Revenue. Certainly, the denial for repayment of such excess collection would amount to great injustice to the Assessee. Even though the Statute prescribes a time limit for getting the relief before the Assessing Officer by way of filing a revised return, in my considered view, there is no embargo on the Commissioner to exercise his power and grant the relief under Section 264 of the IT Act. It is manifest that only suo-motu power of the Commissioner under Section 264 of the IT Act, is restricted against an order passed within one year, whereas no such restriction is imposed on the Commissioner to exercise his power in respect of an order, which has been passed more than on year, if such revisional power is sought to be invoked at the instance of the Assessee by making an application under Section 264 of the IT Act. Writ Petition is allowed and the impugned order is set aside. Consequently, the matter is remitted back to the respondent for considering the claim of the petitioner and pass appropriate orders

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• 2019 (10) TMI 1195
  Prior period expenses adjustment against the prior period income - ITAT took the view that once the assessee offers prior period income, then the expenditure incurred under the different heads should be given set off against that income and only the net income should be added - HELD THAT:- ITAT committed no error in holding that once the prior period income is held to be taxable, the prior period expenditure also should be allowed to be set off and the assessee is not obliged in law to indicate any direct or indirect nexus between the prior period income and prior period expenditure. TDS u/s 195 - non -deduction of TDS while remitting such payments to the non- residents - HELD THAT:- Where the payment is in the nature of reimbursement, there is no element of income involved, and therefore, no tax is required to be deducted at source. Having regard to the settled position, the assessee was not liable to deduct the tax at source on such payments and hence, the ITAT committed no error in answering the second question as proposed by the Revenue in favour of the assessee. Eligible profit for deduction u/s 10B - unrealized export turnover is to be excluded from the export turnover but refrained from excluding the same from the total turnover - HELD THAT:- The aforesaid issue is now settled by the decisions of CIT vs. HCL Technologies Ltd [ 2018 (5) TMI 357 - SUPREME COURT] while computing deduction under Section 10A if the export turnover in numerator is arrived at after excluding certain expenses, the said expenses should also be excluded from the total turnover in denominator. Benefit of exemption as contemplated u/s 10B - HELD THAT:- Dividend income, profit on sale of fixed assets, profit on sale of investments, excess provision return back, duty drawback and interest income could be said to have direct nexus with the income of the business of the undertaking. Although it may not partake the character of profit and gain from the sale of article, yet it could be termed as an income derived from the consideration realized by the export articles. In view of the definition of income from profits and gains incorporated in sub section (4), the Tribunal committed no error in granting the benefit of exemption, as contemplated under Section 10B.

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• 2019 (10) TMI 1194
  Unexplained investment in Gold Jewellery u/s 69 - HELD THAT:- CIT(A) after examining the affidavit and evidence furnished and after calling for a remand report from the AO, accepted the assessee s contention with regard to the gold received at the time of marriage and also in the possession of the father-in-law of the assessee. However, in respect of the gold allegedly belonging to the mother-in-law of the assessee Smt. E. Padmavathamma is concerned, he did not accepted the contention of the assessee as at the time of search, Smt. Padvavathamma was residing with her son at Kurnool and the gold belonging to her mother-in-law was in the locker at Kurnool. Since she was not residing with her son at Hyderabad, entire jewellery could not have been kept in the locker at Hyderabad. He therefore, confirmed the addition to the extent of Rs. 14,55,000/-. Though the learned Counsel reiterated the submissions made before the authorities below, we are not convinced with the ownership of the jewellery of Smt. E. Padmavathamma as the jewellery found at the time of search was without any corroborative evidence. Therefore, ground of appeal No.3 against such addition is rejected. Addition u/s 56(2)(vii)(c)(i) - shares were allotted to the assessee without any or valid consideration - HELD THAT:- A loan cannot be considered as a benefit received by the assessee without any consideration. In view of the above, what can be brought to tax is only the lease rental receivable by the assessee for the relevant financial year. The AO is therefore directed to compute the lease rental in the respective relevant A.Ys and bring it to tax. As regards amount as retained towards the TDS brought to tax as income from other sources , the addition to that extent is confirmed. Similarly in the A.Y 2012-13, it is only lease rental that is liable to be taxed. As regards the sale consideration of Rs. 24,17,976 is concerned, the assessee has claimed it to be sale consideration on sale of agricultural land. AO is therefore, directed to verify whether the said land was recorded was agricultural land both at the time of the purchase of the property and also at the time of the sale and if it is found to be recorded as agricultural land, then the sale consideration cannot be brought to tax in A.Y 2012-13. Therefore, the grounds of appeal for the A.Ys 2011-12 and 2012-13 against the additions are partly allowed for statistical purposes.

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• 2019 (10) TMI 1193
  Addition u/s 14A read with rule 8D under normal computation of income - MAT computation of income under section 115JB - HELD THAT:- We hold that the disallowance of the expenses u/s 14A read with rule 8D cannot be made in absence of exempt income. Hence we do not find any reason to interfere in the order of the learned CIT (A). Disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction of the Hon ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. [ 2014 (11) TMI 1169 - CALCUTTA HIGH COURT] Disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently - There is no mechanism/ manner given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/ determine the expenses with respect to the exempted income. However, we find that there are judgments on the issue which mandates that the disallowance of the expenses cannot exceed the exempt income i.e. CIT Vs. Vision Finstock Ltd. [ 2017 (7) TMI 1277 - GUJARAT HIGH COURT] or only those investments should only be considered for the purpose of the disallowance which have resulted the dividend income. We are also conscious to the fact that the above judgments were rendered in connection with the income determined under normal computation of income but to our mind the same principles can also be applied to the case on hand. It is because, the provisions of section 115JB of the Act require to make the disallowance of the expenditure related to any income to which section 10 applies other than section 10(38) - we hold that the expenses incurred in connection with the exempted income cannot exceed the amount of such exempted income under the provisions of section 115JB of the Act. Accordingly, we limit the disallowance of the expenses to the extent of exempt income which is NIL in the case on hand. Thus no disallowance of the expense is warranted under section 115BJB of the Act. Hence the ground of appeal of the Revenue is dismissed. Suppression of production/sales after rejecting the books of accounts under section 145(3) - AO has compared the production of the tiles shown by the assessee with the companies available in the public domain accordingly held that there was suppression in the production shown by the assessee which was further sold outside the books of accounts - HELD THAT:- AO has rejected the book results of the assessee based on the finding that there was less production of tiles in comparison to the companies available in the public domain and non-maintenance of production registers properly. In the light of the above facts, the AO invoked the provisions of section 145(3) of the Act and thereby he has made certain upward additions on account of suppressed production which was sold outside the books. In our humble understanding, the consumption ratio of raw material having bearing on the production shown by the other concern engaged in a similar activity cannot be a criterion to reject the books. It is because the consumption/production of a concern depends upon various factors such as quality of raw materials, production process/ methods, machinery used, labour employed, factory infrastructure, quality of output and the scrap generated etc. But the AO has not brought all these facts on record whether the assessee and the comparable entities were working under similar conditions. Therefore we disagree with the finding of the AO. Admittedly, the assessee revised the details of the consumption of raw materials used in the production of tiles and marbles. But we note that final revised details furnished by the assessee were supported by purchase bills, goods receipt, lorry receipts, reconciliation statement, gate pass etc as placed on pages 95 to 254 of the PB. AO did not point out any defect in the revised details of the consumption of raw materials furnished by the assessee. Therefore in our considered view, the books of accounts of the assessee cannot be rejected until and unless the AO points out the specific mistakes. We also note that the books of accounts cannot be rejected if the assessee does not maintain the stock registers until and unless it is coupled with other defects such as sales/ purchase outside the books of accounts. But in the instant case, we note that there was no such conclusive finding by the AO. AO cannot reject the books of accounts for the reasons as discussed above in a situation where the assessee does not maintain the stock register. Accordingly, we note that the reasons which were based by the AO for rejecting the books of accounts are not sufficient enough and cogent to reject the books of accounts. Accordingly, we conclude that once the books of accounts of the assessee are not liable to be rejected then its book profit should be accepted in the given facts and circumstances. Depreciation on car - HELD THAT:- From the preceding discussion we note that the payment for the purchase of the car was made by the assessee though the same was registered in the name of the director. This fact can be verified from the assessment order as well as CIT (A) order. Thus it is clear that, the assessee was the beneficial owner of the car and accordingly it was eligible for claiming the deduction for the depreciation on such car. We hold that the assessee is eligible for depreciation on the car purchased by it but registered in the name of the director as the assessee is the beneficial owner of such car. Hence the ground of appeal of the Revenue is dismissed.

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• 2019 (10) TMI 1192
  Deduction u/s.80JJAA - Deduction in respect of employment of new workmen - whether manufacture of computer software tantamount to manufacture of an article or thing ? - whether persons working in software industry can be said to be Workmen for the purpose of Sec.80JJAA? - according to the Assessee it had paid additional wages to new regular workmen employed by the Assessee in the relevant previous year and that it satisfies all the other conditions laid down in the provisions of Sec.80JJA - According to the AO in normal parlance manufacture of computer software is not akin to manufacture of an article or thing and that is the reason why a specific provision has been made in Sec.10B, Sec.10(15) and 72A of the Act - HELD THAT:- Assessee has to be regarded as an Industrial Undertaking engaged in manufacture of article or thing, even going by the reasoning given by the AO. We are also of the view that the term Industrial Undertaking having been defined in the Act, though for a different statutory provision, can be a guiding factor to the intention of the legislature to apply that definition to statutory provision in which the said term has not been defined. In the absence of any contrary intention emanating from attending circumstances or for any other reasons, adopting the definition given in the Act, would be more appropriate. Whether the employees employed in software industry can be said to be Workmen , the Bangalore Bench of ITAT has already settled this issue in the case of Texas Instruments (India) Pvt.Ltd. [2006 (12) TMI 405 - ITAT BANGALORE] held that Software Industry has also been notified as Industry for the purpose of Industrial Disputes Act, 1947 by the State of Karnataka and that the employees employed in software development industry render technical services and not services in the nature of supervisory or management character Whether there is any distinction between salary and wages and whether monies paid to a person working in software industry cannot be termed as Wages ? - There is no distinction sought to be made in the provisions of Sec.80JJAA of the Act and the reason assigned by the AO for considering remuneration received by a person employed in software industry as Salary and not Wages , is without any basis. In our view such distinction sought to be made by the revenue authorities for denying the claim of the Assessee for deduction u/s.80JJAA of the Act is unsustainable. Assessee should be allowed deduction u/s.80JJAA of the Act, subject to quantification of the sum to be allowed as deduction by the AO after due opportunity to the Assessee.- Decided in favour of assessee.

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• 2019 (10) TMI 1191
  TP Adjustment - Comparable selection - HELD THAT:- Referring to Software design and development service segment being technical support services provided by assessee to its AE s companies functionally dissimilar with that of assessee need to be deselected from final list Comparability is to be carried out on broad object of benchmarking international transaction and according to law laid down under section 92B of the Act, read with rule 10 B (2) Income tax Rules, 1963. Comparables must be similar in material aspects and must be compared on basis of products/services characteristics, functions undertaken, assets used and risk assumed. Merely because certain comparables has been upheld for its exclusion/inclusion by various decisions, does not ipso facto lead to exclusion/inclusion in a given set of facts. In our considered opinion, exclusion/inclusion of any comparables must be strictly analysed on basis of FAR, in accordance with rule 10 B (2). We also are of opinion that comparables selected must be for relevant year which is to be compared and unless contemporaneous data as section 92D read with Rule 10 D (4), is not available for a relevant year, multiple year data should not be used. Treatment of royalty paid by assessee to its AE - HELD THAT:- It is observed that assessee has placed substantial evidence which was not before the authorities below. We are therefore inclined to set aside this issue back to Ld.TPO/AO, for determination of this issue in the light of these documents vis-a-vis the agreement entered into by assessee with its AE under which the royalty has been paid. - Set aside this issue back to Ld. TPO to verify the issue on basis of documents filed by assessee and to establish true nature of transaction regarding payment of royalty by assessee to its AE. Ld.TPO is directed to verify details and if necessary called for any further documents in order to establish the true nature of the transaction regarding the payment of royalties by assessee to its AE and consider the claim of assessee as per law. Deduction u/s 10 A - export turnover being unbilled revenue, which was yet to be billed - HELD THAT:- Before us assessee has not been able to establish that RBI extended time period to receive income arising out of export of services declared during the year under consideration. In decisions relied upon by Ld.AR in case of Tech Mahindra R D Services Ltd [ 2018 (5) TMI 1081 - ITAT MUMBAI] assessee therein received income within 6 months of invoice being raised and therefore this Tribunal held that revenue should be included in export turnover and also the total turnover. In the facts of present case, assessee raised invoice in March 2008 that is end of subsequent financial year, for which assessee do not have any permission from RBI regarding extension of time. We are therefore unable to concur with the argument advanced by Ld.AR. Accordingly this ground raised by assessee stands dismissed. Deduction u/s 10A - Exclusion of telecommunication expenses while computing deduction - HELD THAT:- It is observed that, Hon ble Karnataka High Court in case of CIT vs Tata Elxsi Ltd [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] on identical issue held that telecommunication expenses is to be included while computing deduction under section 10 A of the act as it is directly linked with earning of income. Ld CIT DR has not brought before us any contradictory/distinguishable facts in respect of present case before us - we direct Ld.AO to include telecommunication expenses while computing exempt income u/s10A of the Act.

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• 2019 (10) TMI 1190
  Reopening of assessment u/s 147 - addition of bogus expenditure - original assessment order was passed by the Assessing Officer under scrutiny proceedings - whether information received from the Investigation Wing of the Department for reopening the assessment has been justified or not ? - HELD THAT:- In the present case, it cannot be said that the Assessing Officer had initiated reassessment proceedings on the borrowed satisfaction of DCIT, Kolkata. From the reasons recorded, it is clear that the Assessing Officer had perused the material which had come to his knowledge and formed an opinion that income had escaped assessment for the failure of the assessee to disclose all material facts which are necessary for assessment. Information received from DCIT, Kolkata throws light on the truth fullness or otherwise of transactions with M/s. Sakshi Trade Links Pvt. Ltd. This information enabled the Assessing Officer to form belief that income escaped assessment. As stated by us (supra) at the initial stage of issue of notice u/s.148 of the Act, it is not necessary to go into the sufficing or of otherwise of the new material to make the addition. Therefore the information received from DCIT, Kolkata suggested that payment made to M/s. Sakshi Trade Link P. Ltd is bogus, the Assessing Officer formed belief that income chargeable to tax had escaped assessment and accordingly initiated reassessment proceedings. Therefore we uphold the validity of the reopening of the assessment and accordingly, allow ground No.2 raised by the Revenue. Addition of payments made to M/s. Sakshi Trade Link - In the present case, admittedly, there is no corroborative evidence brought by the Assessing Officer in support of the information received from DCIT, Kolkata. In the absence of such corroborative materials addition cannot be sustained, in the backdrop of legal position discussed above. Therefore, grounds of appeal challenging the deletion of addition of payment made to M/s. Sakshi Trade Link Pvt Ltd stands dismissed. Disallowance u/s 14A - HELD THAT:- In the present case, Indisputedly own and interest free funds are more than the investment made and therefore that the presumption should be drawn that investments are made out of own funds in view of the principle enunciated in above mentioned decisions. Therefore, no disallowance of interest under clause (ii) of Rule 8D can be made. As regards to the disallowance of administrative expenses under clause (iii), the law is settled to the extent that for the purpose of computing the amount of disallowance on clause (iii) of Rule 8D, only investments which yielded exempt income alone should be considered. Accordingly, we direct the Assessing Officer to compute the amount of disallowance under Rule 8D(iii) by considering the value of investments which yielded exempt income alone. In the result, ground No.2 filed by the Revenue is partly allowed for statistical purpose. CSR disallowance - CIT-A restricted the disallowance to 10% the expenditure incurred in cash - ao disallowed the amount only to the extent as expenditure was incurred in the nature of donation and renovation of college building etc - HELD THAT:- Admittedly, the expenditure was incurred in the areas where business operations of the assessee company were carried out in order to promote social economic condition of the local community living and in order to win the goodwill of the local people. The Hon ble Jurisdictional High Court in the cases of Madras Refineries Ltd [ 2003 (11) TMI 47 - MADRAS HIGH COURT] , Velumanickam Lodge [ 2009 (6) TMI 76 - MADRAS HIGH COURT] as well as Cholan Roadways Corporation Ltd [ 1997 (2) TMI 38 - MADRAS HIGH COURT] had held that the expenditure incurred on promoting social welfare of the local community and providing drinking water facilities, educational facilities cannot be regarded as expenditure wholly incurred outside the ambit of business of the assessee and allowed business deduction. Having regard to the ratio of the decisions, we are of the considered opinion that the decision of the ld. Commissioner of Income Tax (Appeals) is based on proper appreciation of facts - Decided against revenue Addition on account of discrepancy between the amount of receipt reflected in form 26AS and credited to P L account - CIT-A granted part relief - HELD THAT:- pparently there is discrepancy between the amount reflected in form 26AS and the amount shown in the Profit and Loss account. Assessee company offered an explanation as to how the discrepancies arose between the two. The ld. CIT(A) considering the explanation partly granted relief to the assessee. However, ld. CIT(A) had not discussed the fact situation as to how the income shown in Form-26AS had not accrued. Therefore, we are of the considered opinion that the matter should be remand back to the file of the Assessing Officer for denovo assessment Addition on account of payment made to subcontractor - AO made disallowance on the ground that subcontractor had not responded to the notice issued by the AO u/s.133(6) - CIT-A deleted the addition - HELD THAT:- There is no evidence to show that the amount paid to subcontractor is recycled back to the assessee and there is not even an allegation by the Assessing Officer to this effect. Nevertheless, the receipts from this contract was offered to tax and it is not the case of the Assessing Officer that assessee had incurred expenditure in executing the contract apart from the subcontract expenses. In the circumstances, we are unable to uphold the disallowance made by the Assessing Officer and accordingly do not find any reason to interfere with the order of the ld. CIT(A). Bogus purchases from Kolkata parties - HELD THAT:- Admittedly, purchases made by the assessee company was duly supported by bills and the payments were made through banking channels and assessee had discharged the initial onus of filing the name, address, copies of invoice, TIN and CST etc. The Assessing Officer had not brought any evidence on record to show that the amounts paid to the sellers was recycled back to the assessee and moreover, the Assessing Officer had not doubted the consumption of the materials brought. In the absence of this material evidence, no addition can be made towards alleged bogus expenditure - Decided against revenue Accrual of income - Addition made on account of accrued interest in respect of work done for Electrical Engineer, Rural Works II, Keonjhar - CIT(A) deleted the addition considering the fact that income was offered to tax in the immediate succeeding assessment year - HELD THAT:- No doubt each assessment year is a separate and distinct unit of assessment but the Assessing Officer had not brought any material on record to show that income had accrued to the assessee in terms of agreement of contract. Mere receipt of money does not constitute income and therefore we cannot uphold the addition to income. Addition made on account of subcontractor payment made to M/s. Preeya Earthmovers - disallowance made primary on the ground that subcontractor had not filed return of income - HELD THAT:- CIT(A) the addition deleted the addition by holding that mere non filing of return by the sub contractor would not itself can be reason to disallow the payment. The Assessing Officer had not disputed the actual work done by M/s. Preeya Earthmovers Allowable revenue expenditure - disposal of the ore and realization thereof - claims on quality from the buyers of the ore - HELD THAT:- It is not for the Assessing Officer to question the necessity of expenditure irrespective of the fact whether expenditure has resulted in profit or more income, as long as payment was made wholly and exclusively for business purpose, the same should be allowed as deduction. From the material on record, it can inferred that expenditure was incurred voluntarily indirectly to facilitate the carrying on of the assessee company as the expenditure was incurred on grounds of commercial expediency. The Hon ble SC in the case Gordon Woodrofee Leather Mfg vs. CIT [ 1961 (12) TMI 4 - SUPREME COURT] held that any expenditure expended on the ground of commercial expediency in order to indirectly facilitate the carrying on the business is allowable as deduction. Therefore the claim falls within the purview of the provisions of Section37(1) Allowability of legal expenses - allowable revenue expenditure - HELD THAT:- The law is settled to the extent that legal expenditure incurred in order to protect the business is allowable as revenue expenditure. In the present case as held by us (supra) it is an expenditure incurred to protect the business of the assessee company. Therefore we hold that the same is allowable as deduction without any hesitation.

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• 2019 (10) TMI 1189
  TP Adjustment - MAM - Cost Plus Method ( CPM ) OR Transactional Net Margin Method ( TNMM ) - Comparable selection - TPO/DRP did not accept the stand taken by the assessee and it considered engineering segment also as part of ITeS, despite a separate TP analysis having been carried out by the assessee in engineering services and ITeS - HELD THAT:- Engineering services segment should be considered as distinct from ITeS and comparable companies chosen accordingly. We hold and direct accordingly and set aside the orders of the DRP and remand the issue for fresh consideration by the TPO/AO in accordance with the above observations and in accordance with law, after affording opportunity of being heard to the assessee. Deduction u/s 10A - Exclusion of certain items of expenditure incurred in foreign exchange from the total turnover without excluding the same from the export turnover - HELD THAT:- Taking into consideration the decision rendered by the Hon ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd . [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that expenditure incurred in foreign currency should be excluded both from export turnover and total turnover. We are of the view that as of today, law declared by the Hon ble High Court of Karnataka which is the jurisdictional High Court is binding on us. Also upheld by HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT]

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• Service Tax

• 2019 (10) TMI 1203
  Imposition of penalty - service tax along with interest paid before issuance of SCN - service of commission from foreign based commission agents - reverse charge mechanism - N/N. 18/09-ST - HELD THAT:- Admittedly the commission paid to the foreign based agent was exempted if the same is less than 1% of the FOB value of the goods. However there were other procedural conditions also, subject to satisfaction of which the said exemption was to be extended. As such, in case the appellant would have claimed the benefit of the Notification in question they would have been entitled to the benefit of the same. The appellant cannot be said to be guilty of mala fide so as to invoke penal provisions against them - appeal allowed - decided in favour of appellant.

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• 2019 (10) TMI 1202
  Extended period of limitation - Commercial and Industrial Construction Service - intent to evade present or not - demand of service tax - HELD THAT:- The appellant is a Government organization and as held by this Tribunal in various cases allegation of intention to evade payment of service tax cannot be leveled against the Government organization. Therefore, the demand for the extended period of limitation is not sustainable. Further, for normal period of limitation the appellants were entitled for exemption under N/N. 26/2012 since they did not avail Cenvat credit since the appellant did not register themselves with the Service Tax Department. So to compute the service tax payable by the appellant, the matter needs to be remanded to Original Authority - the impugned order is set aside and matter remanded to Original Authority to re-compute service tax payable by the appellant within the normal period of limitation after allowing the exemption of 75% to the appellant - appeal allowed by way of remand.

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• Central Excise

• 2019 (10) TMI 1201
  Clandestine Removal - excesses of goods - PVC cables and wires - corroborative evidences or not - HELD THAT:- The entire case of the revenue is based on the entries made in the said loose papers and note pads which do not stand further investigated by the revenue. It is well settled law that allegations of clandestine removal cannot be upheld on the said basis, unless there is corroborative evidence on record. The revenue has not even been able to find out any such evidence - appeal dismissed - decided against Revenue.

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• CST, VAT & Sales Tax

• 2019 (10) TMI 1200
  Non-compliance with pre-deposit - Section 26 (6B)(c) of the Maharashtra Value Added Tax Act, 2002 - retrospective effect of amendment - HELD THAT:- The Registry is directed to place papers and proceedings of the present two writ petitions before the learned Chief Justice to obtain suitable directions to place the following questions of law for the opinion of the Larger Bench of this Court. The petitions placed on board after the reference is answered by the Larger Bench.

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