TMI Tax Updates - e-Newsletter
October 4, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws

Articles

1. ASSESSMENT - BEST JUDGMENT METHOD

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Exchange Rates Notification No.72/2019

Notifications

Customs

1. 72/2019 - dated 3-10-2019 - Cus (NT)

Exchange Rates Notification No.72/2019-Customs (NT) dated 03.10.2019

2. 71/2019 - dated 1-10-2019 - Cus (NT)

Warehoused Goods (Removal) Amendment Regulations, 2019

3. 70/2019 - dated 1-10-2019 - Cus (NT)

Warehouse (Custody and Handling of Goods) Amendment Regulations, 2019

4. 69/2019 - dated 1-10-2019 - Cus (NT)

Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019

GST - States

5. 25/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Notified the following activities or transactions undertaken by the State Government Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee.

6. 24/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Amendments in the Government Notification of the Finance Department, Notification No. GST. 1019/C.R. 48/Taxation-1 [Notification No.07/2019- State Tax (Rate)], dated the 30th March 2019.

7. 23/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Amendments in the Government Notification of the Finance Department, Notification No. GST-1018/C.R.15(4)/Taxation-1[Notification No. 4/2018-State Tax (Rate)], dated the 25th January 2018.

8. 22/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Amendments in the Government Notification of the Finance Department, Notification No. MGST-1017/C.R. 103(12)/Taxation-1 [Notification No. 13/2017- State Tax (Rate)], dated the 29th June, 2017.

9. 21/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 12/2017- State Tax (Rate) to exempt services as recommended by GST Council in its 37th meeting held on 20.09.2019.

10. 20/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 11/2017- State Tax (Rate) so as to notify MGST rates of various services as recommended by GST Council in its 37th meeting held on 20.09.2019.

11. 19/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to exempt supply of goods for specified projects under FAO

12. 18/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 2/2019- State Tax (Rate) dated 7.3.2019 so as to exclude manufacturers of aerated waters from the purview of composition scheme.

13. 17/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 26/2018- State Tax (Rate) dated 31.12.2018, so as to exempt MGST on supplies of silver and platinum by nominated agencies to registered persons.

14. 16/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 3/2017- State Tax (Rate) dated 29.6.2017 so as to extend concessional MGST rates to specified projects under HELP/OALP, and other changes

15. 15/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 2/2017- State Tax (Rate) dated 29.6.2017 so as to grant exemption to dried tamarind and cups, plates made of leaves, bark and flowers of plants.

16. 14/2019-State Tax (Rate) - dated 1-10-2019 - Maharashtra SGST

Seeks to amend notification No. 1/2017- State Tax (Rate) dated 29.6.2017 so as to specify effective MGST rates for specified goods, to give effect to the recommendations of the GST Council in its 37th meeting dated 20.09.2019.

Income Tax

17. 76/2019 - dated 30-9-2019 - IT

Income-tax (11th Amendment) Rules, 2019

Circulars / Instructions / Orders

Income Tax

1. 29/2019 - dated 2-10-2019

Clarifications in respect of option exercised under section 115BAA of the Income-tax Act, 1961 inserted through The Taxation Laws (Amendment) Ordinance, 2019

GST

2. 112/31/2019 - dated 3-10-2019

Withdrawal of Circular No. 105/24/2019-GST dated 28.06.2019

3. 111/30/2019 - dated 3-10-2019

Procedure to claim refund in FORM GST RFD-01 subsequent to favourable order in appeal or any other forum

4. 110/29/2019 - dated 3-10-2019

Eligibility to file a refund application in FORM GST RFD-01 for a period and category under which a NIL refund application has already been filed

Customs

5. 35/2019 - dated 1-10-2019

Amendment in Import and Export Policy of electronic cigarettes

6. 34/2019 - dated 1-10-2019

Procedure to be followed in cases of manufacturing or other operations undertaken in bonded warehouses under section 65 of the Customs Act

7. Public Notice No. 40/2019 - dated 17-9-2019

IGST refund to exporters — Refund Drive

8. TRADE NOTICE NO. 03/2019 - dated 6-9-2019

IGST Export Refunds - extension in SB005 alternate mechanism and revised processing in certain cases including disbursal of compensation Cess

9. FACILITAION NO. 10/2019 - dated 5-9-2019

IGST Export Refunds - -extension in SB005 alternate mechanism and revised processing in certain cases including disbursal of compensation Cess

10. FACILITATION NO. 11/2019 - dated 4-9-2019

IGST refunds-mechanism to verify the IGST payments for goods exported out of India in certain cases

11. Trade Notice. 01/2019 - dated 26-8-2019

Clarification regarding applicability of All Industry Rates of duty drawback while fixing Brand Rate of duty drawback in post GST era.

12. PUBLIC NOTICE NO. 24/2019 - dated 24-8-2019

Information regarding withdrawal of Customs Staff from ICD, Thar Dry Port, Jodhpur w.e.f. 01.09.2019

13. PUBLIC NOTICE NO. 23/2019 - dated 23-8-2019

Clarification regarding applicability of All Industry Rates of duty drawback while fixing Brand Rate of duty drawback in post GST era

14. PUBLIC NOTICE NO. 18/2019 - dated 30-7-2019

Implementation of PGA eSANCHIT- Paperless Processing under SWIFT-Uploading of Licenses/Permits/Certificates/Other Authorizations (LPCOs) by PGAs

15. PUBLIC NOTICE NO. 20/2019 - dated 30-7-2019

Permission for carriage Of Customs Bonded Transshipment (Import) cargo from all Customs Airport of India to Jaipur Airport & Carriage of Customs Bonded Transshipment (Export) cargo from Jaipur Airport to all Customs Airport of India

16. Public Notice No. 08/2019 - dated 24-7-2019

Notification regarding timings of functioning in the Export Shed

17. PUBLIC NOTICE NO.17/2019 - dated 9-7-2019

Constitution of EXPERT TRADE PANEL for the purpose of valuation/examination work involving the import/export clearance of Diamonds, Precious and Semi-Precious Stones etc

Highlights / Catch Notes

GST

• Circular No. 105/24/2019-GST Withdrawn to Clarify GST Treatment on Post-Sales Discounts.

  Circulars : Withdrawal of Circular No. 105/24/2019-GST dated 28.06.2019 - doubts related to treatment of secondary or post-sales discounts under GST.
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• Taxpayers can file GST refund claims via FORM GST RFD-01 after a favorable appeal decision, ensuring all guidelines are met.

  Circulars : Procedure to claim refund in FORM GST RFD-01 subsequent to favourable order in appeal or any other forum
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• Taxpayers can file GST RFD-01 refund applications even after submitting a NIL application for the same period.

  Circulars : Eligibility to file a refund application in FORM GST RFD-01 for a period and category under which a NIL refund application has already been filed
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Income Tax

• Amendment to Rule 10CB Enhances Interest Calculation for Transfer Pricing, Ensures Global Compliance with Arm's Length Principle.

  Notifications : Income-tax (11th Amendment) Rules, 2019 - Amendments in rule 10CB.
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• Section 115BAA: Domestic Companies Can Opt for 22% Tax Rate, Conditions Apply, No Specified Deductions Allowed.

  Circulars : Clarifications in respect of option exercised under section 115BAA of the Income-tax Act, 1961 inserted through The Taxation Laws (Amendment) Ordinance, 2019
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• Court Deletes Additions u/s 68 Despite Assessee Failing to Prove Creditworthiness of Confirmed Loan Providers.

  Case-Laws - AT : Addition u/s 68 - Though the assessee may not be able to prove the creditworthiness of the creditors, but, the creditors have confirmed giving loans to the assessee for setting-up of the manufacturing unit. - Additions deleted.
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• Assessee's books rejection overturned; reasonable explanation for profit drop accepted, no extra tax imposed.

  Case-Laws - AT : Rejection of books of accounts - Fall in GP - variation in Power (Electricity) Consumption - assessee has given cogent explanation for the fall in G.P. as well as non-production of supporting documents. In the absence of any rebuttal or attempt by the Revenue, No addition can be made.
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• Coaching Institution Denied 12AA Registration for Lack of Formal Degree Education Under Income Tax Act.

  Case-Laws - AT : Charitable activity u/s 2(15) - the assessee is a coaching institution which is not imparting any formal education resulting in degrees awarded by the recognized schools/universities of India - assessee is not entitled for registration u/s 12AA
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• Court Limits Income Estimation to 6% Net Profit Rate for Liquor Business; Higher Rate Needs Strong Justification.

  Case-Laws - AT : Estimation of profit - Once the assessee was asked to show cause as to why 6% net profit should not be applied for estimation of income, the A.O. should not apply a higher rate (8%) until and unless some cogent and tangible reasons are shown for doing so. Accordingly, estimation of income from the liquor business is restricted to 6%.
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• Section 132(9B) of Income Tax Act: No Right to Request Return of Non-Seized Documents During Ongoing Assessments.

  Case-Laws - HC : Attachment of properties u/s 132(9B) - the petitioner is not entitled to seek for return of those documents which are not seized from its premises, more particularly, when it is stated that the assessment proceedings are still going on and not completed.
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• CIT(A)'s Authority to Delegate Stay Petition to AO Overruled u/s 251(1)(c) of Income Tax Act.

  Case-Laws - HC : Stay petition - Exercise the jurisdiction of CIT(A) to decide u/s 251(1)(c) - CIT(A) directed the assessee to file stay petition before the AO - order set aside.
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• Loan Waiver Not Taxed u/s 28(iv) of Income Tax Act; No Additional Tax Liability Imposed.

  Case-Laws - HC : Cessation of loan liability - Addition u/s 28 - at no point of time before the authorities under the Act, was it the Revenue’s case that the waiver of loan should be brought to tax u/s 28 (iv) of the Act. No such claim was made either as a principal submission or even in the alternative - No additions.
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• Reopening Income Tax Assessment After 4 Years u/s 147 Invalid If Based on Change of Opinion.

  Case-Laws - HC : Reopening of assessment u/s 147 after 4 years - Change of opinion - the reopening is bad as the same is not permissible, based on change of opinion. Consequently, the revenue cannot escape from the clutches of limitation.
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Customs

• Regulations Exempt Section 65 Warehouses from 2019 Amendments on Warehoused Goods Removal.

  Notifications : Warehoused Goods (Removal) Amendment Regulations, 2019 - Nothing contained in these regulations shall apply to a warehouse operating u/s 65
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• New Rules Enhance Warehouse Inventory Management, Security, and Compliance for Customs Goods in 2019 Amendment Regulations.

  Notifications : Warehouse (Custody and Handling of Goods) Amendment Regulations, 2019
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• 2019 Regulations Streamline Warehouse Operations, Ensure Compliance with Customs Laws, and Facilitate Trade in Bonded Warehouses.

  Notifications : Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019
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• New Amendments in Import & Export Policy for E-Cigarettes Affect Customs Regulations; Compliance with Updated Legal Standards Required.

  Circulars : Amendment in Import and Export Policy of electronic cigarettes
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• Late Fee Levied for Bill of Entry Despite No Delay Caused by Appellants' Actions.

  Case-Laws - AT : Levy of late fee - late filing of Bill of Entry - after obtaining the order of cancellation of earlier Bill of Entry, the new Bill of Entry has been filed within three days - From the facts it cannot be said that the appellants herein has committed any act or omission in causing delay in filing the Bill of Entry.
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• Exporter Penalized for Alleged Ketamine Export; Conclusion Based on Statements Lacks Substantive Evidence.

  Case-Laws - AT : Imposition of penalty - exporter of alleged goods - psychotropic substance - The movement of goods for export is through courier firms but nowhere the clearance of goods exported were doubted even though the export goods are subjected to testing and examination and especially in case of drugs. - only on the basis of statements, it cannot be concluded that the Appellant had exported 165 Kgs of Ketmaine HCL.
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• Penalty Contested: No Mens Rea in License Misuse, First Petitioner Not Liable for Penalty Payment.

  Case-Laws - HC : Imposition of penalty - As the licence is misused by the letter of authority holder, in the absence of mens rea which is an essential ingredient of the offence, the petitioner No.1 cannot be held liable to pay the penalty.
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Indian Laws

• Directors' Vicarious Liability: Resignations Unapproved, Accountability in Cheque Dishonor Cases Under Scrutiny.

  Case-Laws - HC : Dishonor of Cheque - Vicarious Liability of Directors - resignation of directors - Without having the approval and recommendation of the board of directors the Form No. DIR – 11 has been accepted by the Registrar of the Companies. There is no denial to the fact that, till date the names of the applicants are being shown as director in the companies record.
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IBC

• NCLT's Rejection of Section 7 Application Overturned; CIRP Initiated After Default Proven in Guarantee Agreements.

  Case-Laws - AT : Admissibility of application - initiation of CIRP - The appellant has succeeded in proving the existence of a default in terms of the guarantee agreements. The NCLT has committed error in rejecting the application filed under Section 7 of I&B Code by the appellant.
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Service Tax

• Revenue's Contradictory Orders in Adjudication Undermine Process, Forcing Appeals Despite Business-Friendly Claims.

  Case-Laws - HC : Passing such contrary orders, only seems to suggest that the entire adjudication proceedings are a mere farce. The attitude of the Revenue even at the level of the Commissioner is that the demand has to be confirmed and the relief if any, the party has to obtain from Appellate Authorities. This attitude brings to a naught to claim of the State that it is business friendly.
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VAT

• Tax Assessment Orders Must Clearly Justify Liability Changes or Turnover Modifications for Taxpayers.

  Case-Laws - HC : An order of assessment that casts a substantial liability upon an assessee should contain valid and acceptable reasons for effecting modifications/additions to the returned turnover and should speak for itself, in casting such liability.
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• Valuation of Goods for VAT: Own Expenses Not Included Without Legal Provision, Supported by Case Law.

  Case-Laws - HC : Valuation - inclusion of expenditure in the value - in absence of any legal fiction created by the Act to put a simple expenditure incurred on own account on the footing of a charge paid to another, that expense cannot be included in the value of goods.
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• Court Rules Weighment Slip Insufficient as Evidence of Sale for VAT and Sales Tax Purposes.

  Case-Laws - HC : Suppression of sales and purchases - Whether a Weighment Slip alone can become the evidence of sale specifically when the same contains only the weight? - HELD No.
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Case Laws:

• GST

• 2019 (10) TMI 92
  Provisional attachment order - proceedings under section 71(1) of the said Act - Inviting the attention to the provisions of section 83 of the GGST Act, it was submitted that the same does not contemplate provisional attachment in respect of proceedings under section 71(1) of the GGST Act. HELD THAT:- Issue Notice returnable on 1st October, 2019.

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• 2019 (10) TMI 91
  Filing of Form GST Tran-1 - Input Tax Credit - migration to GST regime - HELD THAT:- We direct the respondent to either open the online portal so as to enable the petitioner to file the rectified TRAN-I Form electronically, or to accept the same manually with correction, on or before 02.10.2019. The petitioner s revised claim be processed in accordance with law once the corrected GST TRAN I Form is filed - petition disposed off.

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• Income Tax

• 2019 (10) TMI 89
  Reopening of assessment u/s 147 after 4 years - Change of opinion - validity of reason to believe - HELD THAT:- In this case, it is relevant to note that neither the notice issued under section 148 nor the proceedings stating the reasons for reopening the assessment, has alleged anywhere that the assessee has failed to disclose fully and truly any material facts necessary for assessment. On the other hand, perusal of the reasons stated for reopening would only show that the AO wanted to change his opinion already arrived on the materials available on record. The decisions relied on by the learned standing counsel for the respondent which were rendered prior to 1989 Amendment, in my considered view, neither can be applied to the facts and circumstances of the present case nor would help the revenue in any manner, in view of the fact that in the subsequent decision rendered in Kelvinator s case [ 2010 (1) TMI 11 - SUPREME COURT] the law is now well settled by the Apex Court Therefore, the law laid down by the Apex Court in Kelvinator s case is squarely applicable to the facts and circumstances of the present case and thus, the reopening is bad as the same is not permissible, based on change of opinion. Consequently, the revenue cannot escape from the clutches of limitation. Such being the position, the reopening notice issued after the period of four years is undoubtedly, barred by limitation There is no dispute to the fact that the reasons for reopening were based on two heads namely, Asset Written Off and Factory Land Development Charges . It is not the case of the Revenue that the amount referable to those two heads were not at all shown in the profit and loss account. Assessee along with the return enclosed trading profit and loss account wherein the above two heads were specifically shown with the referable quantum of amount. Therefore, it is evident that the materials relevant to subject matter in issue for reopening, are already on record before the Assessing Officer. After perusing the return filed along with its enclosures, the Assessing Officer completed the assessment. Therefore, there is every reasonable presumption that the Assessing Officer has accepted the materials filed with returns except to the extent where he differed and stated so in his assessment order. If the issue is not specifically raised in the assessment order, it cannot be automatically presumed that such issue was not at all considered in the original assessment order. Consequently, if the Assessing Officer chooses to reopen the assessment based on such available materials, it would certainly amount to change of opinion only and cannot be called as an issue not raised or discussed, as contended by the learned counsel for the Revenue. Question as to whether the reasons for reopening the assessment would amount to change of opinion or not is to be considered and decided on the facts and circumstances of each case and therefore, the view expressed in one case based on the facts and circumstances of that particular case cannot be applied to another case to contend in either way, unless the facts and circumstances of both cases are one and the same. In other words, the question of change of opinion has to be considered and decided on case to case basis. Reopening of the assessment is bad in law as the same does not meet and satisfy the statutory requirement contemplated under Section 147 - Decided in favour of assessee.

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• 2019 (10) TMI 88
  Addition as income u/s 41(1) OR u/s 28 - cessation of loan liability - HELD THAT:- The Supreme Court in the case of Commissioner v/ s. Mahindra and Mahindra Ltd. [ 2018 (5) TMI 358 - SUPREME COURT] has held that sine-qua-non for application of Section 41(1) is that there should have been allowance or deduction claimed by the Assessee in any Assessment Year as a loss, expenditure or trading liability incurred by the Assessee. Subsequently, if any remission or waiver is granted in respect of which such an allowance/deduction has been claimed, then the Assessee is liable to pay t ax on the amount waived/ remitted under Section 41(1) of the Act. This, as the Court held is only to ensure that Assessee does not keep double benefit one by way of deduction and another by waiver of the amount, which has already been deducted in computing the tax; In this case admittedly, no benefit in respect of the loan has been claimed by the Respondent in respect of Rs. 4.11 Crores, in an earlier Assessment Year. Addition u/s 28 - at no point of time before the authorities under the Act, was it the Revenue s case that the waiver of loan should be brought to tax under Section 28 (iv) of the Act. No such claim was made either as a principal submission or even in the alternative. Therefore, it is not open for the Revenue to urge an issue which was not urged before the Tribunal. On this limited ground, the two questions as proposed are liable to be dismissed. The issue now stands concluded by the decision of the Apex Court in Mahindra and Mahindra (supra). In the above case, the Apex Court has held that, Section 28 (iv) of the Act can only apply where any benefit arises from a business or profession and such benefit is received other then in the shape of money. In this case, the waiver of loan is, in fact, found is on capital account. - Decided against revenue.

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• 2019 (10) TMI 87
  Stay petition - Exercise the jurisdiction of CIT(A) to decide u/s 251(1)(c) - CIT(A) directed the assessee to file stay petition before the AO - HELD THAT:- The operative portion of Ext.P4 is already excerpted in the preceding paragraph. Perusal of excerpted portion shows that the second respondent instead of exercising the discretion and power independently available to him under Section 251(1)(c) of the I. T. Act, more in the nature of an advice disposed of the stay applications vide order dated 29.08.2019 in Ext.P4. Without much deliberation, it can be recorded that the said exercise of jurisdiction or discretion by the second respondent is not within the square where discretion and jurisdiction are vested with him. This Court is convinced by the alternative submission made by the learned counsel appearing for the respondents. Hence, Ext.P4 common order is set aside. The matter is remitted to second respondent for consideration and disposal of Ext. P3 stay petitions in all the writ petitions preferably within two months from the date of receipt of a copy of the judgment. There shall be stay of coercive steps against recovery of amount which is impugned in the respective appeals for ten weeks from today.

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• 2019 (10) TMI 86
  Return of the seized documents - Warrant for attachment of properties u/s 132(9B) where period of limitation has already expired - HELD THAT:- As per section 132(9C) of the said Act, the provisional attachment made u/s 132(9B) of the said Act automatically ceased to have effect after the expiry of a period of six months from the date of the order referred to in sub-section 9B. Therefore, it is admitted by the 4th respondent that the order of attachment, impugned in this writ petition, ceased to have effect after 25.08.2018. When such being the factual and legal position, the first limb of the prayer in this writ petition has become infructuous. Return of documents - It is not the case of the petitioner that the documents sought to be returned have been recovered from the premises of the petitioner and on the other hand, it is the case of the Revenue that they were recovered from the premises of one V.K.Sasikala and others during search operation. Therefore, this Court is of the view that the petitioner is not entitled to seek for return of those documents which are not seized from its premises, more particularly, when it is stated that the assessment proceedings are still going on and not completed. The petitioner is also not entitled to the other limb of the prayer made in this writ petition. - Petition dismissed.

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• 2019 (10) TMI 85
  Default u/s 226(3) - attaching the petitioner s bank account and investment made in mutual funds - default and violation on the part of the petitioner of the interim order dated 11.03.2019 passed in the proceedings pending before the authorities - HELD THAT:- The fact that the petitioner is willing to deposit the arrears as well as undertakes to deposit the amount in future as well, the petition filed by the petitioner is disposed of with a direction to the effect that in case the petitioner approaches the authority concerned by filing such an application alongwith a copy of the petition and a copy of the order passed today, the authority concerned shall take the same into consideration and thereafter, in case the petitioner complies with the undertaking and statement made by him, consider restoring the interim order passed by the authorities on 11.03.2019. The petitioner may also approach the authorities for early disposal of the appeal as per the internal circulars of the department.

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• 2019 (10) TMI 84
  Reopening of assessment - non disposal of objections prior to completing the assessment under sub-section (3) of Section 143 read with Section 147 by AO - HELD THAT:- As relying on GKN DRIVESHAFTS (INDIA) LTD. VERSUS INCOME-TAX OFFICER AND OTHERS [ 2002 (11) TMI 7 - SUPREME COURT] only conclusion is that the order of assessment is bad in law as the same is made without deciding the objections of the appellant. Effect of the direction issued under Section 144A - Additional Commissioner did not direct the Assessing Officer to complete the assessment without deciding the objections filed by the appellant. When a direction is issued under Section 144A to the Assessing Officer to pass an appropriate order, he has to pass the appropriate order in accordance with law. While issuing a direction under Section 144A of the said Act of 1961, the Additional Commissioner could not have bypassed the well settled law and directed the Assessing Officer to act contrary to law. We may note at this stage that the learned counsel appearing for the appellant stated that the appellant is now not pressing the application made under Section 144A of the said Act of 1961. Therefore, in our considered view, the order passed under Section 144A of the said Act of 1961 does not affect the applicability of the principles laid down in the aforesaid decision of the Apex Court.

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• 2019 (10) TMI 83
  Entitlement to the claim u/s.80IB - as alleged petitioner/appellant is not engaged in any manufacturing activity and instead, it was only doing trading of mushroom powders in capsules - HELD THAT:- Issue decided in favour of the assessee in the assessee s own case [2018 (7) TMI 1733 - MADRAS HIGH COURT] wherein as held product which emerges after the process of manufacture is commercially a distinct commodity, can be of consumption as such containing a requisite amount of ingredients in the appropriate percentage, preserved in proper form as contained in the licence issued under the authorised enactments as well as the technical logo shared by the foreign company. - Decided in favour of assessee.

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• 2019 (10) TMI 82
  Reopening of assessment u/s 148 - whether the impugned notice issued by the respondent under section 148 of the Act is sustainable in law? - HELD THAT:- It is not in dispute that the income which is sought to be reassessed by virtue of the issue of the impugned notice under section 148 of the Act was already assessed and was the subject matter of appeal before the CIT(A). The matter is now pending before the ITAT. In such circumstances, the assessment which is sought to be reopened could be said to have merged with the order of Commissioner (Appeals). By virtue of the second proviso to section 147 of the Act, income involving matters which are subject matters of any appeal, reference or revision has expressly been taken out of the purview of the said section. In the circumstances, insofar as the income stated to have escaped assessment under the second ground is concerned, the same having been subject matter of appeal would not fall within the ambit of section 147 and as such the Assessing Officer lacks jurisdiction to reopen the assessment on the said ground. See NATIONAL DAIRY DEVELOPMENT BOARD VERSUS DCIT [ 2011 (3) TMI 1391 - GUJARAT HIGH COURT] - Decided in favour of assessee.

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• 2019 (10) TMI 81
  Disallowance of the deduction u/s 80IB( 10) - whether the appellate tribunal justified in remitting the matter to the AO, more particularly, when all the facts were on record before the appellate tribunal? - HELD THAT:- If the facts are on record, then the appellate tribunal is duty bound to look into the same and decide the matter accordingly. Remitting the matter without any justifiable reason will be nothing, but sheer waste of time. This tax appeal succeeds and is hereby allowed. The impugned order passed by the appellate tribunal is hereby quashed and set aside and the order passed by the CIT [Appeals] to the extent of eligible deduction under Section80IB (10) of the Act is concerned, is hereby affirmed. The three questions of law are answered accordingly in favour of the appellant assessee and against the revenue.

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• 2019 (10) TMI 80
  Reopening of assessment - admission of additional evidences - non disclosure of purchase of immovable property transaction exceeding Rs. 30 lakhs - AO has taken up the case for scrutiny and issued the notices u/s 143(2) and 142(1) - HELD THAT:- When there is a doubt regarding correctness of the contents of the paper book, it is obligatory on the part of the DR to send the paper book to the AO and ascertain the correctness of the documents placed in paper book. Though two years were lapsed after submission of the paper book, no such exercise was made by the department and no evidence was placed before us. Therefore, we are unable to accept the allegation that the documents from sl. 2 to 21 are false. DR should make allegation only with proper evidence, but not on assumptions or presumptions. Though it is mentioned in the assessment order or CIT(A) orders that the assessee has not furnished any details, she cannot simply allege that the documents are not within the knowledge of AO or CIT(A) since the documents in Sl.No.2 to 7 are nothing but the orders of the department or the appeals papers filed by the assessee. Therefore, it is clear that the DR has made argument without any basis or without any verification. Therefore, we reject the contention of the Ld.DR. In addition to the above the Ld.AR has argued that the assessee is a house wife carrying on small time business of sarees and completely dependent on her husband. AO completed the assessment ex-parte u/s 144 by issue of notices, in spite of the fact that the assessee is carrying on the business and the AO is vested with powers u/s 133A, no such exercise was done by the AO. Though the assessee did not respond to the notices issued by the AO, the AO also did not take any action for such non response which shows that the AO was also very considerate for the hapless position of the assessee. During the appeal hearing, the Ld.DR argued that if at all the case is to be remitted back to the file of the AO, the Bench must consider for imposing some costs against the assessee for her irresponsible attitude. From the order of the AO, we have noticed that the AO did not take any such recourse for non response, though the AO is vested with the powers u/s 271(1)(b) of the Act for levy of penalty. The AO also did not take any action u/s 133A / 131 to elicit information from the assessee. Therefore, we find no merit in the argument of the Ld.DR to impose the costs. This case needs to be considered on human approach and we find merit in the argument of the Ld.AR that with strained relations from her husband, there is genuine reason for not collecting information due to non cooperative attitude of her husband. From page No.35 of the paper book, it is evident that her husband has made the payments and the lands were registered in the name of his wife. This also supports the submission of the assessee that the funds were arranged by her husband for acquiring the properties. Therefore, in the interest of justice, we admit the additional evidence and we are of the considered opinion that in the facts and circumstances of the case, the case required to be remitted back to the file of the AO to redo the assessment denovo. Accordingly, the appeal is remitted back to the file of the AO with a direction to redo the assessment denovo after giving sufficient opportunity to the assessee. - Appeal of the assessee is allowed for statistical purpose.

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• 2019 (10) TMI 79
  Penalty u/s 271(1)(c) - additional income declared by the assessee in the return of income filed in response to notice u/s 153A on account of interest on FDR - HELD THAT:- The assessee has been regularly filing return of income u/s 139(1) of the Act and declaring income from house property and income from other sources. Though, there was a search in case of Moti Sons group on 31/10/2012, however, there was no incriminating material either found or seized disclosing any undisclosed income of the assessee as a result of search and seizure action. The assessee was covered by the search carried out u/s 132(1) and consequently the A.O. was bound to issue notice u/s 153A for all the six assessment years immediately preceding assessment year relevant to the previous year in which search is conducted. In response to the notice u/s 153A, the assessee filed return and declared additional income on account of interest on FDR. When there was no incriminating material found or seized during the course of search disclosing any undisclosed income on account of interest on FDR then the suo moto declaration of such income in the return of income filed U/s 153A of the Act would not attract the penal provision U/s 271(1)(c) of the Act. Assessee not declared the said interest income in the return of income filed U/s 153A of the Act then even if the A.O. in the course of assessment proceedings, detected such interest income on FDR and made addition on account of the interest on FDR, the addition so made by the A.O. would not sustain or survive due to the reason that the assessment for five assessment years out of the six under consideration were not pending as on the date of search and consequently the A.O. would have no jurisdiction to make the addition in absence of any incriminating material found or seized during the course of search revealing such income. Hence, when the addition on account of interest on FDR is not sustainable in law then the suo moto declaration of the income by the assessee would not amount to furnishing of inaccurate particulars of income or concealment of particulars of income rather it would be a bonafide explanation/cause for not furnishing income in the return of income filed U/s 139(1) - Penalty levied U/s 271(1)(c) of the Act for all the six years is deleted. - Decided in favour of assessee.

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• 2019 (10) TMI 78
  Trading addition by applying N.P. rate at 8% of liquor sale - HELD THAT:- When the A.O. proposed to estimate the income by applying net profit at 6% then adopting the net profit at 8% without giving the reasons for change of its stand and increasing the net profit percentage for estimation of the income is not justified. When the A.O. as well as the CIT(A) has not given any reasonable and proper basis for adopting net profit at 8% to estimate the income of the assessee from liquor business then the original proposed net profit at 6% as shown in the show cause notice and confronted with the assessee ought to have applied for estimation of the income. Once the assessee was asked to show cause as to why 6% net profit should not be applied for estimation of income, the A.O. should not apply a higher rate until and unless some cogent and tangible reasons are shown for doing so. Accordingly, estimation of income from the liquor business is restricted to 6%. Addition on account of agricultural income treated as income from other sources - HELD THAT:- the assessee was not able to substantiate the claim of agricultural income of Rs. 2,50,000/- declared in the original return of income. Once the assessment is framed based only on original return of income then the excess claim of agricultural income in the original return of income is a subject matter of scrutiny and enquiry. The assessee himself has admitted that actual agricultural income is only Rs. 90,500/-, therefore, the excess amount of agricultural income declared in the original return of income is liable to be added as income from undisclosed sources under the head income from other sources. Addition from the business of truck hiring - estimation as per the provisions of Section 44AE - HELD THAT:- A.O. has not disputed that the assessee has offered income under the provisions of Section 44AE of the Act in respect of the truck hiring business, however, in the process of applying the presumptive provisions U/s 44AE of the Act, the A.O. has estimated the income without citing any basis or criteria. Therefore, the income of the assessee is required to be estimated as per the provisions of Section 44AE of the Act. From perusal of the relevant record and particularly the registration certification of the vehicles, it is noted that all these vehicles owned by the assessee are heavy commercial goods vehicles, therefore, the income is required to be estimated @ Rs. 5,000/- per month per vehicle which comes to Rs. 3,00,000/-. Accordingly, the income of the assessee from truck hiring business is estimated at Rs. 3,00,000/- as against Rs. 3,50,000/- adopted by the A.O. Appeal of the assessee is allowed in part.

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• 2019 (10) TMI 77
  Registration u/s 12A - proof of charitable activity u/s 2(15) - CIT held that not imparting any education which has common element of any schooling is not entitled for registration u/s 12A of the Act, even there is no profit motive - HELD THAT:- Though the objectives of the Trust are charitable and the Trust is established in 2009-10 with the objects of running and developing Merchant Navy Educational Institution for the purpose of educational service to the public in general and more particularly to all the poor minority communities, SC, STs who are living in village, town, cities, who suffer from social and economic backwardness and thereby to pave way for their social and economic development. The assessee did not place any evidence to show that the assessee has got admitted the students as per the objects mentioned in the Trust Deed. AR did not place any evidence to establish the recognition of University Grants Commission or by the Govt. of India, or the state Boards for the courses offered by the assessee. The AMC is Australian Maritime College, Australia, which is not affiliated to any Indian Universities and it is stated to be affiliated to the University of Tasmania. Similarly, New Zealand Maritime school is also awarding the certificates. Sea World Maritime Academy is approved institution of AMC and New Zealand Maritime school as per the letter but not an affiliated institution of the universities in India. Therefore, it is observed from the facts of the case that the assessee is a coaching institution which is not imparting any formal education resulting in degrees awarded by the recognized schools/universities of India. We hold that the case of the assessee Trust is squarely covered by the decision of BIHAR INSTITUTE OF MINING AND MINE SURVEYING VERSUS COMMISSIONER OF INCOME-TAX [ 1993 (12) TMI 50 - PATNA HIGH COURT] and accordingly not entitled for registration u/s 12AA of the Act. - Decided against assessee

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• 2019 (10) TMI 76
  Penalty u/sec. 271(1)(c) - defective notice - non-striking of the irrelevant portion of the notice issued - whether notice issued under section 271(1)(c) is for concealment of income or furnished inaccurate particulars? - HELD THAT:- We find that the Hon ble High Court of Telangana A.P. in the case of Smt. Baisetty Revathi [ 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] has considered the very same issue and held that non-striking of the irrelevant portion of the notice issued u/sec. 274 is invalid. The very same judgment has been followed by the coordinate bench of this tribunal in the case of Konchada Sreeram [ 2017 (11) TMI 1164 - ITAT VISAKHAPATNAM] Therefore, respectfully following above referred to judicial precedents, we hold that the notice issued under section 271(1)(c) r.w.s. 274, dated 04/03/2014 is invalid - Decided in favour of assessee.

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• 2019 (10) TMI 75
  Rectification u/s 154 - estimation of income in respect of leased fish tanks - as assessee has not filed sufficient evidence to substantiate that he has taken fish tanks on lease, therefore, the Assessing Officer estimated the income as per the directions given by the ld. CIT(A) by treating it as his own land - HELD THAT:- In the 154 order passed by the Assessing Officer dated 04/04/2016, he gave a categorical finding that there is no mistake apparent on record to rectify his order passed on 07/07/2015. We have also gone through the order passed by the Assessing Officer and find there is no mistake apparent on record committed by the Assessing Officer to rectify the order. On appeal, the ld. CIT(A) confirmed the order of the Assessing Officer. After gone through the order of the ld. CIT(A), we find no reason to interfere with the order passed by him. Thus, this appeal filed by the assessee is dismissed.

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• 2019 (10) TMI 74
  Reopening of assessment u/s 147 - validity of reasons to believe - HELD THAT:- There is nothing on the basis of which it can be said that there was failure on the part of the assessee to disclose all material facts fully and truly. Infact we are unable to even find any allegation by the AO to the effect that there was failure on the part of the assessee to disclose all material facts fully and truly. Even at the time of hearing before us, it was not the case of the DR that the assessee has failed to disclose the material facts fully and truly. We hold that Revenue has failed to show that there was failure on the part of the assessee to disclose all material facts fully and truly. When the assessee has filed a return u/s 139 or in response to sections 142(1) or 148 of the I.T.Act and when an assessment order u/s 143(3) or u/s 147 has already been passed then the assessee enjoys statutory protection under proviso to section 147 from any action u/s 147 after the expiry of four years from the end of the relevant assessment years; unless income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to fully and truly disclose all material facts necessary for his assessment for that assessment year. Onus is on Revenue to show that there was failure on the part of the assessee to fully and truly disclose all material facts necessary for his assessment for that assessment year and in the instant case, Revenue has failed to discharge this onus. When it is not the case of the Revenue that there was failure on the part of the assessee to disclose all material facts fully and truly, Revenue cannot violate the statutory protection enjoyed by the assessee under proviso to section 147 of the Act. Statutory protection enjoyed by the assessee under proviso to section 147 of the Act was wrongly violated by Revenue. Therefore, we dismiss all the grounds of appeal in this appeal filed by the Revenue, and hold that the assumption of jurisdiction u/s 147 and initiation of proceedings u/s 147 r.w.s. 148 of the Act was erroneous in law For Coming to this conclusion, we take support from the order of the Hon ble jurisdictional High Court in the case of Bharti Infratel Limited vs. DCIT [ 2019 (1) TMI 1072 - DELHI HIGH COURT] held that when the proviso applies, the Assessing Officer must satisfy himself and state that there has been failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment - assessment proceedings u/s 147 / 148 cancelled - Decided in favour of assessee.

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• 2019 (10) TMI 73
  Weighted deduction u/s 35(2AB) - AR submitted, assessee is entitled to claim deduction of revenue and capital expenditure incurred towards research and development activity even if such activity is not carried out in the in house research and development facility of the assessee - HELD THAT:- Undisputedly, the research and development activity in respect of which the assessee has claimed deduction under section 35(2AB) of the Act were not carried out in assessee s own in house research and development facility. Therefore, the issue which arises for consideration is, whether the expenditure incurred for carrying out research and development activity outside by way of out sourcing or otherwise can be eligible for deduction under section 35(2AB) of the Act? As per the provision contained under section 35(2AB) of the Act, weighted deduction can be allowed in respect of expenditure on scientific research carried out in the in house research and development activity as approved by the prescribed authority. Therefore, going by the plain meaning of the words used in section 35(2AB) of the Act, only those expenditures which are incurred in the in house research and development facility are eligible for deduction. In fact, while dealing with identical issue in assessee s own case in the assessment years 2002 03 to 2004 05 [ 2012 (4) TMI 743 - ITAT MUMBAI] the Tribunal decided the issue against the assessee. However, while deciding the same issue in assessee s own case in assessment year 2007 08, the Tribunal has restored the issue to the Assessing Officer for fresh adjudication keeping in view various decisions cited by the assessee including the decision of the Hon ble Gujarat High Court in Cadila Healthcare Ltd. [ 2013 (3) TMI 539 - GUJARAT HIGH COURT] . Therefore, following the decision of the Tribunal in assessment year 2007 08, we are inclined to restore the issue to the Assessing Officer for de novo adjudication. While doing so, the Assessing Officer is also directed to examine the ratio laid down by the Hon ble Supreme Court in Commissioner of Customs v/s Dilip Kumar Co. Ors. [ 2018 (7) TMI 1826 - SUPREME COURT] TP adjustment on the provisions of corporate guarantee - HELD THAT:- The assessee itself has charged guarantee commission on the corporate guarantee provided to the AE @ 0.75%. The guarantee fee charged has been benchmarked by the assessee by obtaining a quotation from HSBC India which has been used as an external CUP. The method adopted by the assessee to benchmark the guarantee commission cannot be faulted with. It is necessary to observe, while deciding the appeal of the Revenue in assessee s own case in assessment year 2007 08, the Co ordinate Bench has held that guarantee fee charged @ 0.75% is at arm s length. It is relevant to observe, in various other cases involving similar nature of dispute not only the Tribunal but the Hon ble Jurisdictional High Court has held that arm s length price of guarantee fee can reasonably be fixed @ 0.5%. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals). This ground is dismissed. Allocate research and development expenditure to section 80IB and 80IC units - HELD THAT:- Commissioner (Appeals) having found that identical dispute has been decided by the Tribunal in favour of the assessee in the preceding assessment year, followed the same and directed the Assessing Officer not to allocate research and development expenditure to units eligible for claiming deduction under sections 80IB and 80IC of the Act. TDS u/s 195 - payment to non residents on account of pilot bio study, clinical research, etc., without withholding / deducting tax at source - disallowance made under section 40(a)(i) of the Act for failure to deduct tax at source - HELD THAT:- Both the parties have agreed before us that the issue has been decided in favour of the assessee by the Tribunal in the preceding assessment year. It is observed, while deciding the appeal arising out of an order passed under section 201 and 201(1A) of the Act in Assessment Year 2007 08 fastening liability on the assessee due to non deduction of tax under section 195 of the Act on similar payments made by the assessee to the non resident, the Tribunal in [2010 (7) TMI 1081 - ITAT MUMBAI ] has held that the payment made by the assessee to the non residents cannot be treated as fee for technical services. Hence, the assessee was not required to deduct tax at source under section 195 of the Act - Decided in favour of assessee.

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• 2019 (10) TMI 72
  Rejection of books of accounts - Fall in GP - variation in Power (Electricity) Consumption. - HELD THAT:- Business was stopped on account of some dispute amongst the Directors, which is cited as one of the reasons for the decline of the business and ultimately the bank took possession of the business. It is further seen that when para B relied upon by the ld. Sr.DR is considered alongwith the above explanation extracted also from the assessment order, it is seen that the conclusions referred to by the AO qua electricity bills are de-horse the explanation offered namely that over and above the electricity utilized from the electric company, electricity was stated to have been purchased from the private parties. No rebuttal or contrary fact has been referred to either by the AO or the CIT(A). Similarly, it is seen that yield of the finished goods claimed at 91.68% is on record which also has not been rebutted by the Revenue or the CIT(A). Consistently the assessee has given cogent explanation for the fall in G.P. as well as non-production of supporting documents. In the absence of any rebuttal or attempt by the Revenue to seek the relevant documents from the Bank, I find that estimated addition by resorting to tinkering with the G.P. rate on facts was not warranted in the peculiar facts of the present case. The addition made is, accordingly, directed to be deleted.

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• 2019 (10) TMI 71
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) failed to consider that the agricultural income is not a business income. Neither any expenditure has been claimed by the assessee in this regard. Hence, when there is no exempt income the disallowance is not permissible as the ratio laid down in the judgment passed by the Hon ble Jurisdictional High Court in the matter of Corrtech Energy Pvt. Ltd. [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] is thus applicable to the instant case. Thus we are of the considered view to delete the addition made by the Learned AO. The appeal is, therefore, allowed.

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• 2019 (10) TMI 70
  Reopening of assessment u/s 147 - validity of notice - Assessee as regards the reopening of assessment argued that the Joint Commissioner of Income Tax ( JCIT ) while giving satisfaction/approval to the reopening of the assessment has merely mentioned Yes unexplained credit under section 68 - HELD THAT:- No Law as to how satisfaction have to be recorded by the JCIT. It is a Proforma provided by the Department which is correctly taken care by the JCIT. Issue is covered in favour of the assessee by the order of ITAT Delhi Bench in the case of Sunil Agarwal [ 2018 (7) TMI 231 - ITAT DELHI] . Facts of this case are similar to the case of the assessee. Therefore, following the same decision, hold that initiation of reassessment proceedings under section 147 of the Income Tax Act, 1961, by the assessing officer and uphold by the CIT(A) is non-est in Law and without jurisdiction. Therefore, set aside the Orders of the authorities below and quash the reopening of the assessment. The appeal of assessee on this ground is allowed. Addition u/s 68 - The assessee did not have any business activity in the assessment year under appeal and no business income have been earned. It is, therefore, unbelievable that without setting-up a plant in previous year relevant to assessment year under appeal, the assessee would earn undisclosed income in the same year of establishment of manufacturing plant ? A manufacturing firm would take some time to earn profit after setting-up its plant. Though the assessee may not be able to prove the creditworthiness of the creditors, but, the creditors have confirmed giving loans to the assessee for setting-up of the manufacturing unit. Hence, it could be reasonably assumed that cash credit entries represented the capital receipts. though, the assessee is not able to establish the creditworthiness of the creditors. - Additions deleted.

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• 2019 (10) TMI 69
  Disallowance u/s 14A r.w.r. 8D(2)(iii) - Suo motu offered by the assessee - shares were held as strategic investments on which exempt income by way of dividend was earned - HELD THAT:- In order to maintain consistency as laid down by Hon ble Supreme court in the case Radhasoami Satsang v. CIT [ 1991 (11) TMI 2 - SUPREME COURT] , we decide the issue against the assessee. For Completeness, we would like to clarify that in the case of Maxopp Investment Limited v. CIT [ 2018 (3) TMI 805 - SUPREME COURT] has rejected the dominant purpose theory for invoking provisions of Section 14A of the 1961 Act and hence the contention of the assessee that shares were held as strategic investments on which exempt income by way of dividend was earned and hence provisions of Section 14A cannot be invoked lacks merit in view of aforesaid decision of Hon ble Supreme Court in the case of Maxopp Investment Limited(supra). Depreciation which was not claimed by the assessee in earlier assessment years prior to AY 2002-03 - HELD THAT:- We have observed that the assessee has not claimed depreciation in the earlier years prior to assessment year 2002-03 while computing its income under the 1961 Act. The AO has now taken into account depreciation which would have been allowable u/s 32 but was not claimed by the assessee while computing its written down value of the assets and income for all those years. We have observed that the tribunal while adjudicating appeal for AY 2012-13 in assessee s own case followed the decision in assessee s own case in Plastiblends India Ltd., v Addl. CIT [ 2017 (10) TMI 423 - SUPREME COURT] . In order to maintain consistency as laid down by Hon ble Supreme court in the case of Radhasoami Satsang v. CIT [ 1991 (11) TMI 2 - SUPREME COURT] we decide the issue against the assessee by following the above said decision of the tribunal in assessee s own case for immediately preceding assessment year 2012-13.

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• Customs

• 2019 (10) TMI 68
  Imposition of penalty u/s 4 I of the Import and Export (Control) Act, 1947 - Export House - utilization of licenses issued - It is the stand of the petitioner No.1 that it had no knowledge about the issue of subsidiary licences and it was not at all involved in any manner for the issuance of the said licences - HELD THAT:- The letter of authority holder had made request for re-validation and for issue of subsidiary licences. The Petitioner No.1 claims that it had not issued any letter of authority in favour of M/s. A.P. Trading Company and there is no evidence available on record to show this. The petitioner No.1 had given the licence to M/s. Veena Commercial Corporation. Therefore, unless it is shown or established that the import of the canalized item is at the instance of the petitioner No.1 or they are involved in some manner with the import or that the petitioner No.1 is in some way concerned with M/s. A.P. Trading Company in the matter of import of the canalized goods, in our opinion, imposing the penalty on the petitioners in the absence of mens rea is unsustainable. As the licence is misused by the letter of authority holder M/s. A.P. Trading Company, in the absence of mens rea which is an essential ingredient of the offence, the petitioner No.1 cannot be held liable to pay the penalty. Petition allowed.

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• 2019 (10) TMI 67
  Maintainability of appeal - compliance with the mandatory pre-deposit - section 129E of the Customs Act, 1962 - case of petitioner is that all the assets of the Petitioner and its group had been frozen - the prayer is that the Petitioner be allowed to withdraw such amounts as would meet requirements of pre-deposit under Section 129(E) of the Act - HELD THAT:- The petition is dismissed.

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• 2019 (10) TMI 66
  Seizure of goods - Betel Nuts - origin of goods - foreign origin or not - it was alleged that consignee of the goods is a non-existent entity having not found on the given address. HELD THAT:- The questions of law raised by the appellant herein has already been answered by this Court in the case of CUSTOMS, (PREVENTIVE) KENDRIA BHAWAN SECT-H VERSUS M/S MAA GAURI TRADERS, PROP. SHYAMAL BISWAS COLLEGE PARA [ 2019 (8) TMI 1043 - ALLAHABAD HIGH COURT ] where The report of the ARDF has also been held to be not reliable in as much as it could not be shown with any degree of certainty that the origin of the betel nuts could be established by testing in a laboratory, as is clear by the answer to the RTI query given by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala. We cannot take different view than already expressed by the coordinate bench of this Court. It is otherwise required to maintain judicial discipline - Appeal dismissed.

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• 2019 (10) TMI 65
  Imposition of Interest - Jurisdiction of Settlement Commission to consider the claim of the petitioner for waiver of interest - HELD THAT:- Reliance placed in the case of REXNORD ELECTRONICS AND CONTROLS LTD VERSUS UNION OF INDIA AND OTHERS [2008 (3) TMI 8 - SUPREME COURT] where Settlement Commission, has taken note of the provisions of Section 127 H and has exercised discretion concluding that interest upto 90% would be liable to be waived. It is deemed fit to remit the matter back to the file of the Settlement Commission to be decided afresh in accordance with law and in line with the judgment of the Supreme Court in the case of Rexnord Electronics - petition allowed by way of remand.

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• 2019 (10) TMI 64
  Imposition of penalty - exporter of alleged goods - psychotropic substance - Ketamine Hydrochloride - it was alleged that the Appellants were procuring the goods under fictitious firms name and were also clearing the same - impugned goods were exported - Goods not available for confiscation - imposition of redemption fine and penalty. HELD THAT:- The payment alleged to have been received by Appellant on account of export goods is also based merely upon hearsay. None of the payments could be linked to the Appellant Shri Sanjay. It is only statement of persons that payments were received on account of Sanjay but no other details are forthcoming as to how the same were related to Shri Sanjay. No person would permit any other person to receive payment in his account unless he is sure of any legal transaction. I also find that none of the buyers of the goods has been identified. No consignment alleged to have been exported has been brought on record. It is not appearing when the goods were exported, what mode of transportation was made, no shipping or airway bill linking with alleged exports is on record. There is no evidence as to how the Appellant paid for alleged receipt of Ketamine to the supplier. Shri Jayesh Vadaliya was not made even noticee even though he was the person alleged to be taking delivery of Ketamine and forwarding the same in name of fictitious firms. The movement of goods for export is through courier firms but nowhere the clearance of goods exported were doubted even though the export goods are subjected to testing and examination and especially in case of drugs. It is also not on record as to when and how the Appellant dealt with the impugned goods in transporting, packing the export consignments. In such case we find that only on the basis of statements, it cannot be concluded that the Appellant had exported 165 Kgs of Ketmaine HCL. Seizure of 25 kgs of Ketamine - HELD THAT:- No evidence has been brought on record to show that the Appellant was attempting to export the same. No evidence of Appellant having in contact with any foreign buyer for export of said quantity is on record. No export documents were prepared or no shipping bill airway bill was prepared. In such case it cannot be said that the Appellant was attempting to export the goods. The Appellants cannot be accused of export of 165 Kgs of Ketmaine HCL or of attempt to export 25 Kgs of Ketamine seized from Choudhary Roadways - The impugned order in as much as it relates to imposition of penalty on Shri Sanjay Manjibhai Gadhesariya and Shri Kishan Manjibhai Gadhesariya is set aside - appeal allowed.

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• 2019 (10) TMI 63
  Revocation of customs broker (CB) License - forfeiture of security deposit - Regulation 18 readwith Regulation 20 (7) of the Customs Brokers Licensing Regulations, 2013 - it has been alleged that the appellants have traded and dealt with forged duty credit scrips - HELD THAT:- As far as the initiation of fresh proceedings are concerned, we are of the considered opinion that there is no bar to initiate present proceedings by issuing show cause notice on the basis of a fresh investigation report received from DRI which involved eight new forged scrips which were not part of the offence report in earlier suspension and revocation of proceedings of custom broker license. The facts in the present case is almost identical and charges against CB in this case are also same as in the case of HLPL GLOBAL LOGISTIC PVT. LTD VERSUS CC, NEW DELHI [ 2019 (2) TMI 508 - CESTAT NEW DELHI] and these proceedings also arise out of the investigation report received from the DRI on the same forged scrips which were part of the said final order dated 01/02/2019. The revocation of CB license and imposition of penalty against the customs broker M/s HLPL Global Logistics Pvt. Ltd. have been quashed. The proceedings against the present appellant also cannot sustain in the present case - Appeal allowed.

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• 2019 (10) TMI 62
  Levy of late fee - section 46(3) of Customs Act, 1962 - late filing of Bill of Entry - high seas sale - HELD THAT:- The initial purchaser of high seas sales M/s. Vazhavilla Cashews, Kollam could not take delivery of the goods even though they had filed Bill of Entry on 12.8.2017. Therefore, the shipper identified another purchaser namely the appellant therein for clearing the goods. After filing an application for amendment of IGM and also after filing the request for cancellation of Bill of Entry which was ordered on 9.1.2018, the Customs Broker has filed the new Bill of Entry on behalf of the new consignee on 12.1.2018. Thus after obtaining the order of cancellation of earlier Bill of Entry, the new Bill of Entry has been filed within three days - From the facts it cannot be said that the appellants herein has committed any act or omission in causing delay in filing the Bill of Entry. The Tribunal in the case of Blueleaf Trading Company [ 2019 (5) TMI 672 - CESTAT CHENNAI ] had occasion to consider a similar situation wherein the late fee imposed was set aside. The late fee imposed is not legal or proper - appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 61
  Refund of SAD - import of marine diesel engines - time limitation - N/N. 102/2007-Cus dated 14.09.2007 as amended vide Notification No. 93/2008-Cus. - HELD THAT:- A cursory reading of the Notification No. 102/2007-Cus. and Notification No. 93/2008-Cus. would clearly reveal that in the public interest, such notifications were made by the Government of India and as discussed earlier, SAD was made applicable to counter balance CST/VAT and create a level playing field for domestic goods so that price difference between the locally manufactured goods and imported goods would not put the local manufacturer in a disadvantageous position. Admittedly CST, VAT are collected for distribution among the States, for which it is difficult to understand why SAD is introduced as a counter balance. It appears that only to maintain the price equilibrium, SAD has been introduced as a precautionary measure to provide coverage to indigenous goods. Having regard to the definition of relevant time given in Explanation (3) of Sub-Section (5) of Section 11B of the Central Excise Act, 1944 wherein time frame is stated to have run from the date on which refund is held to be payable, I am of the firm opinion that the same period of one year is to be computed from the date of payment of CST, VAT etc. upon sale of goods. It is a settled principle that Tribunal being creature of statute, cann t go beyond the provisions of law but there is no impediment on the part of the Tribunal to read into the law to provide meaning and clarify to the provisions of law for the purpose of making it virtually implementable. The refund application being filed within one year of such payment of sales tax i.e. on dated 16.03.2016, the same is to be treated to have been claimed within the period of limitation as contemplated in the amended Notification No. 93/2008-Cus. and the said refund is therefore to be allowed by the jurisdictional refund authority. The appeal modified to the extent of allowing refunds of SAD paid against three Bills of Entry dated 29.10.2014, 17.10.2014, 17.11.2014 except refund of the amount against which VST/CST was paid on 20.10.2014 - appeal allowed in part.

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• 2019 (10) TMI 60
  Duty Drawback - power of DRI to issue SCN - Rules 16 and 16A of the Customs and Central Excise Duties Drawback Rules, 1995 - HELD THAT:- The principal issue raised by the appellant in this case while challenging the imposition of penalty on each of them is that since DRI Officer is not a proper officer under Rules 16 and 16A of the Customs and Central Excise Duties Drawback Rules, 1995, therefore, the show-cause notice itself is not maintainable. The issue thus remains to be determined is whether the DRI officer has the power to issue show-cause notice under Rules 16 and 16A of the Customs and Central Excise Duties Drawback Rules, 1995 or not - appeal allowed by way of remand.

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• Insolvency & Bankruptcy

• 2019 (10) TMI 59
  Admissibility of application - initiation of CIRP - Corporate Debtor defaulted in repayment - existence of debt and default or not - HELD THAT:- There is debt and default and the Corporate Debtor has not discharged the obligation as per the terms of the Guarantee and, therefore, there is debt due as claimed by the Financial Creditor from the Corporate Debtor. The appellant has succeeded in proving the existence of a default in terms of the guarantee agreements. The NCLT has committed error in rejecting the application filed under Section 7 of I B Code by the appellant. Application allowed - moratorium declared.

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• 2019 (10) TMI 58
  Validity of Resolution plan - plan passed by the CoC of the corporate debtor - HELD THAT:- The Resolution Plan filed with the Application meets the requirements of Section 30(2) of I B Code, 2016 and Regulations 37, 38, 38(1A) and 39(4) of IBBI (CIRP) Regulations, 2016. The Resolution Plan is also not in contravention of any of the provisions of Section 29A. The Resolution Professional has also certified that the Resolution Plan approved by the CoC s does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed at pages 32 to 35 of the typed set filed with the Application. The Resolution Plan is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan including Resolution Applicant. While approving the Resolution Plan , as mentioned above, it is clarified that the Resolution Applicant shall pursuant to the Resolution Plan approved under Sub-section (1) of Section 31 of the I B Code, 2016, obtain all the necessary approval as may be required under any law for the time being in force within a period of one year from the date of approval of the Resolution Plan by this authority or within such period as provided for in such law - The order of moratorium dated 13.11.2018 passed by this Adjudicating Authority under Section 14 of I B Code, 2016 shall ceased to have effect from the date of passing of this Order. The approved Resolution Plan shall become effective from the date of passing of this Order.

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• 2019 (10) TMI 57
  Maintainability of application - initiation of CIRP - Corporate Debtor - Default in repayment of operational debt - HELD THAT:- Perusal of the replies of both the parties clarifies that there is an admitted default in repayment of the operational debt by the the corporate debtor, and therefore fit for admission. The default in payment of operational debt owned and debt became payable from the date of the invoice dated 04.02.2019 raised by the Applicant. Hence, the claim of the applicant is within limitation and the debt is not time barred - the present application is complete and the Applicant is entitled to claim its dues which are un-controverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. Hence, the present application deserves to be admitted. Application admitted - moratorium declared.

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• 2019 (10) TMI 56
  Maintainability of application - Initiation of CIRP - Corporate Debtor - pre-existing dispute or not - section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Appellant and the Corporate Debtor will jointly directed to pay a sum of Rs. 3 Lakhs in favour of the Resolution Professional Mr. Naren Sheth within 3 weeks failing which it will be open to the Interim Resolution Professional to bring this to the notice of the Appellate Tribunal or for recall of this order. In effect, order (s) passed by Ld. Adjudicating Authority appointing Interim Resolution Professional , declaring moratorium and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action taken by the Resolution Professional are set aside - Appeal allowed.

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• 2019 (10) TMI 55
  Admissibility of petition - initiation of CIRP - Corporate debtor - Section 9 of the Insolvency and Bankruptcy Code, 2016 - principles of res judicata - HELD THAT:- Petitioner stated the name of the insolvency professional and filed his written communication. Petitioner also issued demand notice as required by section 8(1) read with Rule 5 of the Rules and served the same on the respondent. There is an occurrence of default in repayment to the operational creditor by corporate debtor and the corporate debtor made default in making repayment of the said debt - Proposed Interim Insolvency Resolution Professional has made a declaration that no disciplinary proceedings are pending against him - the petition is admitted. It is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code. Petition admitted.

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• 2019 (10) TMI 54
  Admissibility of petition - initiation of CIRP - Time limitation - Section 12(2) and (3) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The present application by the RP under Section 12(2) of the Code is filed under instructions of the CoC by a vote of more than 66% of the voting share. Therefore, the conditions provided for by Section 12(2) of the Code are satisfied. We have also examined the minutes of the 3th meeting of CoC held on 08.05.2019 (agenda Item No. 9) and find that the Information Memorandum is stated to be prepared and Expression of Interest (EOI) if proposed to be issued. We are satisfied that the subject matter of the case is such that the CIRP cannot be completed within 180 days and we extend the period of CIRP by further 90 days from the date of expiry of 180 days computed from the date of admission of the petition under Section 9 of the Code. In the present case, we have granted extension of 90 days for completion of CIRP. Therefore, sufficient time is presently available for publishing form G, invitation of EOI and taking further steps for receipt of resolution plans and consideration of the resolution plans. The application for exclusion is therefore pre-mature and is not being examined presently and is not being presently acceded to. The RP should make determined efforts to ensure that the CIRP is completed within the extended time and in case of inability beyond his control, the RP will be at liberty to file application for exclusion which will then be considered on merits. Application disposed off.

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• 2019 (10) TMI 53
  Approval of Resolution Plan - Operational Debt within the meaning of Section 5(21) of I B Code or not? - HELD THAT:- The part of the impugned order passed by the Adjudicating Authority, relating to waiver of Income Tax is without jurisdiction. The debt of the Central Government or the State Government arising out of the existing law being Operational Debt , the question of asking for waiver does not arise as per the Resolution Applicant to decide how much to be paid to the Central Government or the State Government against the Operational Debt (Income Tax or G.S.T or any other statutory debt), which should not be less than the amount to be paid to the Operational Creditors in the event of a liquidation of the Corporate Debtor under Section 53. The part of the impugned order dated 14th September, 2018 is set aside - rest part of the impugned order approving the Resolution Plan is upheld - appeal allowed in part.

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• 2019 (10) TMI 52
  Approval of Resolution plan - Section 31 of the Insolvency and Bankruptcy Code, 2016 - statutory dues - same treatment to the Financial Creditors and the Operational Creditors or not - HELD THAT:- As we find that the proposed modified distribution of the Resolution Plan is in accordance with law and the same treatment has been given to the Financial Creditors namely- HUDCO , Asset Reconstruction Company (India) Ltd. , Syndicate Bank , Bank of Baroda and Central Bank of India (9%) of their dues and the Operational Creditors namely- Commercial Taxes Department, Government of Chhattisgarh , Central Excise Duty, Government of Chhattisgarh and Income Tax Department DCIT C Circle 3(1), Government of India (9%) of their dues to all the Operational Creditors , we accept the proposed modified portion of the Resolution Plan , as quoted above, and substitute the same in place of the original one. The Appellant is to make payment within one month from the date of the order of this Appellate Tribunal, as shown in the modified Resolution Plan . The orders passed by the Adjudicating Authority dated 8th 11th February, 2019 is upheld with modifications.

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• 2019 (10) TMI 51
  Admissibility of application - initiation of CIRP - Corporate Debtor - Section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The claim made by M/s. Ajanta Flat Owners Association having not supplied any goods nor given any services, cannot claim to be Operational Creditor and thereby, the application under Section 9 was not maintainable. Further, the Adjudicating Authority and the Interim Resolution Professional having been asked not to publish any notice in the newspaper normally the Committee of Creditors should not have been constituted by the Resolution Professional though it was informed it has been constituted - However, as we have held that the application under Section 9 was not maintainable and the parties have settled the matter, we set aside the impugned order dated 27th August, 2018 and dismiss the application under Section 9 filed by the Respondent- M/s. Ajanta Flat Owners Association . Application dismissed.

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• Service Tax

• 2019 (10) TMI 50
  Maintainability of petition - alternative remedy of filing appeal - freight charges - taxability - HELD THAT:- The two orders passed by the revenue are on the face of it contrary to one another. The order dated 28 February 2019 passed by the Commissioner of Central Tax GST, Thane holds that service tax on freight is a taxable service. On the above finding he confirms the recovery of an amount of Rs. 2.36 crores as Service Tax. On the other hand the Commissioner of GST, Mumbai (East) in his order dated 18 March 2019 holds that the freight charges are an exempted service. Thus as a result holds that the Petitioners are not entitled to Cenvat Credits of Rs. 11.37 crores and confirmed the demand on that basis. The revenue can obviously be right only on one of two counts and not on both counts i.e. either the impugned order dated 28 February 2019 is correct or the impugned order dated 18 March 2019 is correct. In fact passing such contrary orders, only seems to suggest that the entire adjudication proceedings are a mere farce. The attitude of the Revenue even at the level of the Commissioner is that the demand has to be confirmed and the relief if any, the party has to obtain from Appellate Authorities. This attitude brings to a naught to claim of the State that it is business friendly. There is no question of the Petitioner being driven to the filing of an appeal to the Appellate Authorities under the Act in respect of both the impugned orders - petition disposed off.

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• 2019 (10) TMI 49
  Refund of CENVAT Credit - input services used for export of output service - membership fees - insurance service - Krishi Kalyan Cess - Rule 5 of CCR - HELD THAT:- The appellant has availed the services for obtaining membership in NASSCOM. It is established from the argument as well as the facts that the appellant is required to take membership in such trade association so that it could help them to keep updated with the changed in the market - The Tribunal in the case of NORTHERN OPERATING SERVICE PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX BANGALORE SERVICE TAX- I [ 2017 (11) TMI 1105 - CESTAT BANGALORE] has allowed credit in respect of membership fees - the rejection of refund cannot sustain. Rejection of refund claim in respect of insurance services - HELD THAT:- The said services are availed by the appellant for meeting the loss that may result on account of any wrong decisions taken by the top most officers. This indemnification would help the appellant-company in cases of wrong decisions or wrong acts by the persons in the capacity as Directors and officers - the rejection of refund is unjustified and the same requires to be set aside. Rejection of refund of Krishi Kalyan Cess - it was held that the appellant has not debited in ST-3 returns - HELD THAT:- On perusal of the returns, it is seen that the appellant has in fact debited the amount for the said period. The rejection is wrong on facts - demand set aside. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 48
  Cargo handling service - demand of service tax - the demand was confirmed under the cargo handling service, the said order of the Tribunal was recalled in ROM application and appeal was listed for fresh hearing - extended period of limitation - HELD THAT:- Though the Department challenged the recalling of the order before the High Court but High court has dismissed the petition of the Revenue. Since the final order passed by the Tribunal is recalled, the appellant is at liberty to raise all the legal issues. Further in fact going by the principles laid in Section 65A of the Finance Act, 1994, the demand should not have been confirmed under cargo handling service because the essential character of the main activity in the present case is towards transportation charges which is Rs. 53/-pmt whereas loading and unloading, it is only Rs. 20/- pmt. Further we find that any composite service, the classification of the service should be made. The demand of service tax under cargo handling service in the present case is not tenable under law. Time limitation - HELD THAT:- In the first round, the period of dispute is December 2002 to June 2004 and the show-cause notice was issued on 07.05.2005 and during the said period, six months was provided for issuing the show-cause notice from the relevant date. Though the Department has invoked the extended period, Department has not brought any material on record to show that there was an intention to evade service tax on the part of the appellant because during the relevant time, this cargo handling service was introduced and a circular was also issued by the Department which clarified the position and the appellant entertained a bona fide belief that they are not liable to pay service tax under loading and unloading of cargo - the extended period has been wrongly invoked and entire demand is barred by limitation. The demands in both the cases on merits as well as on limitation is set aside - appeal allowed.

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• 2019 (10) TMI 47
  Validity of SCN - whether the SCN is validly issued on the Commandant and if not validly issued, whether the order-in- original is wholly without jurisdiction and a nullity? - HELD THAT:- The SCN is bad for non joinder of necessary party-The State of Rajasthan. Thus, the order-in-original is ab initio void and the same is declared a nullity. Appeal allowed.

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• Central Excise

• 2019 (10) TMI 46
  CENVAT Credit - input credit - suppression or contumacious conduct or not - extended period of limitation - HELD THAT:- The SCN is issued pursuant to audit and issue of audit report FAR No. 196/C.Ex./2010-11 and further FAR No. 324/CX/2010-11 relating to the period April, 2009 to May, 2011. Admittedly, the transactions are properly backed by invoices and recorded in the ordinary course of business. Admittedly, the statutory returns have been regularly filed. There is no case of misdeclaration in the returns. Thus, in the absence of conditions like suppression of facts or contumacious conduct, extended period of limitation is not available to Revenue. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 45
  Compounded levy scheme - manufacture of stainless steel pattas and pattis - the learned Commissioner (Appeals) confirmed the demand of duty on two additional machines, instead of four additional machines as proposed, or in other words, confirmed the duty on four machines - HELD THAT:- There is no evidence on record that the appellant have operated more than two machines in violation of the declaration. Further, the finding of the Commissioner (Appeals) is erroneous wherein he has observed that the appellant have no led any evidence to support that they have only operated two machines and not four machines, in contrary to its submission/ written submission. This finding cannot stand in view of the monthly declaration filed by the appellant at the end of each preceding month wherein they have declared the number of cold rolling machine employed as two. Further, Revenue has not brought any evidence on record that the appellant have operated more than two machines during the disputed period, in violation of their declaration. Thus, the SCN is presumptive having no legs to stand. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (10) TMI 44
  Suppression of sales and purchases - Whether a Weighment Slip alone can become the evidence of sale specifically when the same contains only the weight? - HELD THAT:- In absence of any prior enquiry made by the assessing officer from Sri Bankey Bihari Dharamkanta, Moradabad Road, the weighment slip register of that person recovered from the assesee could not be attributed to the assessee in absence of any other evidence to establish that the transactions found recorded in such register belonged only to the assessee. Whether mere installation of Generator at the business premises can authorize the authorities to levy tax on the presumed purchase of Diesel specifically when there is nothing on record which may indicate that the production activity has ever been carried out by the Generator? - Whether in absence of any evidence of sale of Reta the liability of tax can be fixed specifically when record reveals the applicant is not involved in the trading of Reta? - HELD THAT:- No addition could have been made on undisclosed purchase of diesel and undisclosed sale of sand in absence of any material, whatsoever. The matter is remitted to the assessing authority to pass appropriate order after affording due opportunity of hearing to the assessee - Revision allowed in part.

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• 2019 (10) TMI 43
  Valuation - inclusion of expenditure in the value - Whether in absence of any payment being made by the assessee to any person for transportation of coal, there could arise any rejection of the value of goods disclosed by the assessee or of addition on that account? HELD THAT:- The main part of the sub-section (h) of Section 2 of the Act reveals, only charges relating to transportation may be included in the value of goods. For a charge contemplated under Section 2(h) of the Act to arise, it must be in the nature of payment made by one person to another. It would be self-contradicted to accept that a person had charge himself for transportation done by him, of his own goods. Undisputedly, the sale of coal was completed at the collieries. Also, it is undisputed that the assessee transported the entire quantities of coal purchased by it from the collieries to its power plant through its railway line using railway wagons and rail engine owned by it - Therefore, there would never arise any charge for transportation paid by the assessee. What the assessee incurred was expense on own account. It could never be treated as a charge for transportation. Then, in absence of any legal fiction created by the Act to put a simple expenditure incurred on own account on the footing of a charge paid to another, that expense cannot be included in the value of goods. A perusal of the order of the Tribunal does not bring out any finding to the effect that the documents provided in support of the purchase price of coal were not worthy of credence. In absence of the pre-condition to invoke the explanation, the finding of the Tribunal is wholly erroneous and based on consideration extraneous in law - the direction of remand is unfounded and extraneous. The question of law is answered in negative, i.e. in favor of the assessee and the against the revenue - Revision allowed.

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• 2019 (10) TMI 42
  Deletion of penalties u/s 8-D(6) of the U.P. Trade Tax Act, 1948 - deduction of tax at source - Whether penalty under Section 8-D (6) could have been imposed on the assessee though it was not obliged to make deduction of tax at source under N/N. 2401 dated 27.4.1987? HELD THAT:- The applicability of Section 8-D (1) and therefore, requirement to make deduction of tax at source, had been created specifically with respect to payments made under contracts awarded by specified persons, namely, the Central Government, State Government, local authorities, a corporation or undertaking established under a Central or State Act or a company or a co-operative society, or club or firm or other association of person, whether incorporated or not. In the modern sense of the term, departed from it s origin, it is difficult to treat universities such as the assessee as a corporation or undertaking, especially in the context of the aforesaid taxing notification, that apparently seeks to identify different categories of persons, made liable to deduct tax at source. Used in that sense, the words corporation and undertaking clearly refer to status of the person as a corporation or an undertaking only, while university is primarily seen and understood as an educational institution and not a corporation or undertaking. Being a provision creating liability under a taxing status, it has to be strictly read and no other rule of interpretation is required to be invoked. Inasmuch as, the assessee being a university does not naturally or freely fall within the description of any of the persons specified under Clause (a) (e) of the Notification No. 2401 dated 27.4.1987. No attempt is to be made to force it to fit into description of any person made liable under the notification. Hence, the assessee was never required to make deduction of tax at source on payment made to its contractors. Therefore, no penalty was leviable on that count. Revision allowed - decided in favor of revisionist-assessee and against the respondent-revenue.

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• 2019 (10) TMI 41
  Grant of reduction in tax - rejection of books of accounts of revisionist - HELD THAT:- Though it is true that the Tribunal has first recorded findings to the effect that the assessee-manager/employee-Mahendra Kumar Pandey had not signed on the survey report and it did not appear to the Tribunal that he had made statement at the time of survey and further no physical verification of the stock was made yet it has also been inferred by the Tribunal that there was vast discrepancy in the disclosed stock of chhuwara being 7,147.38 kgs disclosed in the books and that noted by the survey authority at 10,250 kgs. In that regard, the Tribunal took note of the fact that the number of bags had been counted being 175 - Keeping in mind that and other factors that remained undenied, the Tribunal itself made an estimation of the undisclosed stock of that commodity at 2000 kgs. In the facts of the present case, the Tribunal itself found that there were 2000 ksgs of chhuwara that had not been accounted for. Besides that, there was material in the shape of loose parchas of wastage and dibbi . Therefore, it cannot be said that there was no basis for the estimation made by the Tribunal. Revision dismissed.

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• 2019 (10) TMI 40
  Levy of Turnover tax - machinery and equipments - purchase suppression - whether these equipments were owned by the petitiomer and were being deployed in the business of piling and other civil works in different locations/projects or whether they constituted capital assets that were being sold, generating taxable turnover? HELD THAT:- A declaration in Form F is required to establish stock transfer of goods under the CST Act. However, the production of an F form is not mandatory to establish the petitioners case. We are concerned with a State tax assessment where other materials are available to assist the officer in arriving at a proper conclusion regarding the true purpose abd purport of movement of goods. Thus, while a Form F would, had the same been filed in the CST assessment, support the petitioners stand, the absence of such Form cannot be fatal to the petitioners case if the petitioner is in a position to establish its case otherwise, on the basis of other evidences. The certificate of the Chartered Accountant has been rejected though unsupported no reasons have been attributed for such rejection. The reasoning in the order of assessment is not cast-iron as it should be particularly, in the light of some material that has been produced by the Assessee. It is too well settled a proposition that an order of assessment that casts a substantial liability upon an assessee should contain valid and acceptable reasons for effecting modifications/additions to the returned turnover and should speak for itself, in casting such liability - In the present case, the order of assessment is bereft of such reasoning. Petition remanded for fresh reconsideration.

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• 2019 (10) TMI 39
  Validity of assessment order - assessment year 2014-15 and 2015-16 - grievance of the petitioners in these writ petitions is that the impugned order of assessment was passed in each case without considering the objections filed by the petitioners in response to the notice of proposal - violation of principles of natural justice - HELD THAT:- The Assessing Officer has not referred to the objections filed by the petitioners dated 31.05.2019. Perusal of the objections filed by the petitioners, which is placed in the typed set of papers, would show that the petitioner made a detailed objection against the proposal. The Assessing Officer has not even referred to the said objections filed by the petitioners in the impugned orders of assessment. Therefore, it is evident that the impugned orders were passed totally by ignoring the objections raised by the petitioners and thus, it violates the principles of natural justice. The matter is remitted back to the Assessing Officer to redo the assessment after considering the objections raised by the petitioners and pass orders on merits and in accordance with law - Petition allowed by way of remand.

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• 2019 (10) TMI 38
  Re-assessment of revision - Section 10-B of the Trade Tax Act - principles of natural justice - HELD THAT:- Perusal of the order passed by the Tribunal dated 26.06.2012 reveals that the same has been adjudged upon by the Member, Commercial Tax Tribunal, who at the relevant time was himself competent authority and had passed the order in relation to the revisionist in exercise of powers under Section 10(b) of the Act by means of order dated 8th June, 2009 - The order impugned further indicates that an order under Section 10(b) of the Act was duly considered by the Tribunal and the assessment against the revisionist was upheld. The order of the Commercial Tax Tribunal dated 26th June, 2012 is set aside - The matters are remanded to the Commercial Tax Tribunal for hearing them afresh by a Bench of which Sri V.K. Singh is not a member - revision allowed by way of remand.

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• 2019 (10) TMI 37
  Levy of penalty - Local Body Tax imposed - goods imported into a local area for consumption, use and sale therein - petitioner is primarily engaged in providing information technology services to clients located in India and abroad - It is the case of the petitioner that it has fully satisfied this levy HELD THAT:- Rule 36 of the Maharashtra Municipal Corporations (Local Body Tax), Rules, 2010, according to the petitioner, provides for an appeal under sub-section (6) of Section 406 of the then Bombay Provincial Municipal Corporation Act, 1949 and now the Maharashtra Municipal Corporations Act, 1949. The argument before us is that insofar as the tax is concerned, that is already paid. The appeal is a composite one. As far as the argument of Mr.Saraf that an appeal could have been filed only against the penalty although the demand of tax is admitted and undisputed, we do not find any such stipulation in sub-section (6) of Section 406. Therefore, the preliminary objection to the maintainability of this writ petition cannot be sustained. The petitioner replied on 4th July, 2014 that by demand drafts of Rs. 5,95,094/- and Rs. 4,89,972/- of 10th March, 2014, part payment of local body tax for the period of April 2013 to January 2014 is made. The local body tax is thus cleared and if there is any liability in relation thereto, remaining to be cleared, the petitioner pointed out by its letter of 4th July, 2014 that they are not liable to pay any penalty. Thus, the tax is paid in full and there was no justification for levy of penalty. It is stated that the petitioner has paid the amount of tax. Petition allowed.

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• Wealth tax

• 2019 (10) TMI 90
  Wealth tax assessment - exclusion of land which is under litigation - HELD THAT:- When the compound wall construction had started, there is no reference in facts mentioned in the case (refer page 18). However, it is mentioned that even on 08.07.2007 and 09.07.2007, the construction work was disturbed by the defendants. Thereafter, the case was filed in F.Y 2007-08 relevant to A.Y 2008-09. But, before us, the AY pending for adjudication is A.Y 2006-07 and 2007-08. The dispute on title was started only in A.Y 2008-09. Therefore, it has no bearing on pending assessment years. Now the dispute is very much settled and in favour of the assessee. Therefore, the plea of assessee is rejected. Even though assessee had title but could not enjoy the property due to dispute. The asset is recognised as asset only when it is enjoyed by the assessee for the period subsequent to the disputed assessment years. Therefore, in our view, she should be allowed to get some concession - similar concession should also be extended to assessee. Therefore, we are directing A.O to allow the 500 Sq. mtr as deduction and balance can be brought to tax under WTA. Accordingly, grounds raised by the assessee are partly allowed.

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• Indian Laws

• 2019 (10) TMI 36
  Admissibility of criminal applications - Dishonor of Cheque - offence punishable under Section 138 r/w 141 of the Negotiable Instruments Act, 1881 - Vicarious Liability of Directors - resignation of directors - section 168 of Companies Act - HELD THAT:- Section 168 would make it abundantly clear that, the Director who wish to resign from his office, he / she has to give notice in writing to the company and the board shall on receipt of such notice, take note of the same and company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place fact of such resignation in the report of the directors laid in the immediately following general meeting of the company. In the present case, applicants have placed on record the copies of their letters addressed to the board of directors Hamara Doctor Limited wherein it is stated that, the applicants shall decided to resign from the post of Director from Hamara Doctor Limited with an immediate effect. However, there is no material placed on record to show the further steps taken by the said board of directors as contemplated under Section 168 of the Companies Act - The documents produced by the applicant only reveal that they have informed the Registrar of Companies (ROC) about their resignation and the same has accordingly recorded in the system, however the applicants have not produced form no. 32, which will reveal, whether the resignation of the applicants was accepted by the board of directors on behalf of the company and the company has accordingly informed and updated the Registrar of Companies about it. Therefore, it appears that, without having the approval and recommendation of the board of directors the Form No. DIR 11 has been accepted by the Registrar of the Companies. There is no denial to the fact that, till date the names of the applicants are being shown as director in the companies record. The documents placed on record by the applicants cannot be considered as uncontroverted or of impeachable character. Since said documents are disputed by respondent contending that, said documents do not fulfill the mandate of Section 168 of the Companies Act - As already observed if the averments in the complaint are read in its entirety an alleged offences are disclosed and therefore, as per settled principle of law the order of issuance of process needs no interference by the learned Magistrate. Criminal applications rejected.

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