Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 9, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
TMI SMS
Articles
News
Notifications
GST - States
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31/2018- State Tax - dated
4-9-2018
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Arunachal Pradesh SGST
Waives the late fee payable on FORM GSTR-3B, FORM GSTR-4, FORM GSTR-6
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29/2018- State Tax - dated
21-8-2018
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Arunachal Pradesh SGST
Amendment in Notification No. 28/2018 State Tax, dated the 10th August 2018
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28/2018- State Tax - dated
10-8-2018
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Arunachal Pradesh SGST
Extend the furnishing return in FORM GSTR-3B of the said rules for each of the months from July, 2018 to March, 2019
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27/2018- State Tax - dated
10-8-2018
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Arunachal Pradesh SGST
Seeks to prescribe the due dates for quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of upto ₹ 1.5 crores for the period from July, 2018 to April, 2019
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26/2018- State Tax - dated
6-8-2018
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Arunachal Pradesh SGST
Prescription of Certain Procedure for Obtaining GSTIN by Certain Tax Payers
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Bihar Ordinance No. 1-2018 - dated
5-10-2018
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Bihar SGST
THE BIHAR GOODS AND SERVICES TAX (AMENDMENT) ORDINANCE, 2018
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F-10-48/2018/CT/V(85) - 48/2018-State Tax - dated
10-9-2018
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Chhattisgarh SGST
Chhattisgarh Goods and Services Tax (Ninth Amendment) Rules, 2018
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F-10-47/2018/CT/V(79) - 39/2018-State Tax - dated
4-9-2018
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Chhattisgarh SGST
Chhattisgarh Goods and Services Tax (Eighth Amendment) Rules, 2018
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F-10-45/2018/CT/V (73) - dated
25-8-2018
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Chhattisgarh SGST
Corrigendum - Notification No. 19/2018-State Tax(Rate), dated 26-07-2018,
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F-10-45/2018/CT/V (72) - dated
25-8-2018
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Chhattisgarh SGST
Corrigendum – Notification No. 18/2018-State Tax(Rate), dated 26-07-2018
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Leg. 30/2018 - dated
28-9-2018
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Haryana SGST
THE HARYANA GOODS AND SERVICES TAX (AMENDMENT) ACT, 2018
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37/2018-State Tax - dated
29-9-2018
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Himachal Pradesh SGST
Specify conditions and safeguards for furnishing a Letter of Undertaking in place of a Bond by a registered person who intends to supply goods or services for export without payment of integrated tax.
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24/2018-State Tax - dated
29-9-2018
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Himachal Pradesh SGST
Notifies the National Academy of Customs, Indirect Taxes and Narcotics, Department of Revenue, Ministry of Finance, Government of India, as the authority to conduct the examination.
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21/2018-State Tax - dated
29-9-2018
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Himachal Pradesh SGST
The Himachal Pradesh Goods and Services Tax (Eleventh Amendment) Rules, 2018.
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S.O. No. 75-48/2018-State Tax - dated
4-10-2018
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Jharkhand SGST
The Jharkhand Goods and Services Tax (Ninth Amendment) Rules, 2018.
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S.O. No. 70-43/2018-State Tax - dated
4-10-2018
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Jharkhand SGST
Extend the furnish the period of details of outward supply of goods or services or both in FORM GSTR-1
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S.O. No. 69-23/2018-State Tax (Rate) - dated
4-10-2018
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Jharkhand SGST
Purpose of clarifying the scope and applicability of the notification of the Government of Jharkhand, in the Department of Commercial Taxes, No.12/2017- State Tax (Rate), dated the 29th June, 2017.
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KA.NI.-2-1897/XI-9(47)/17 - dated
27-9-2018
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Uttar Pradesh SGST
Amendment in Notification No. KA.NI.-2-854/XI-9(47)/17-U.P. Act-01-2017, Order-(21)-2017 dated 30 June 2017
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KA.NI.-2-1895/XI-9(47)/17 - dated
26-9-2018
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Uttar Pradesh SGST
Waives the late fee payable on FORM GSTR-3B, FORM GSTR-4, FORM GSTR-6
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Levy of GST - "Abhivahan Shulk" is different from toll tax and is covered under Service Code 9997 and to be treated as 'other services' and is liable for GST. The applicant is liable to pay GST @ 18%
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Levy of GST - services by way of granting Long Term Lease - upfront charges - ontention of applicant is correct i.e. the above such services are exempted from the GST, if fulfil all the conditions as mentioned in the notification.
Income Tax
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Extension of due date for filing of IT Return and Audit Report from 15.10.2018 to 31.10.2018 - However, interest u/s 234A shall be payable - order u/s 119 of the Act
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Charitable activity u/s 2(15) - the legislature did not desire the condition or restriction related to trade / commerce to be attached to the remaining activities which were defined or categorized as charitable purpose under sub-section (15) which includes the education.
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Powers of DRP u/s 144C - In the absence of any independent reasoning and finding, it should be construed that the Dispute Resolution Panel has not exercised its power and issued directions by following the mandatory requirements contemplated under Section 144C(6) and (7).
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Reversal of TDS having regard to reimbursement of allowance by LIC - Benefit of section 89(1) - The stereotypical approach adopted by the DCIT was clearly not warranted. What the Central Government or the State Government might permit their employees or officers under the employment or having authority of law cannot blindly be applied to other organisations – even to the Public Sector Units
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Reopening of assessment - Deemed dividend - the reopening of assessment was not a case of change of opinion, but it was a case where the assessee did not disclose fully and truly the material facts necessary for the assessment
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Lack and omission on the part of Income Tax officers - Once the officers could not justify their acts and solely because of the inefficiency of these officials, then, the superiors must initiate the requisite steps and if they include denial of any promotional or monetary benefits to such officials, then, even then such steps and measures be initiated in accordance with law. That is the minimal expectation of this Court.
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Adjustment of past demand with the refund - no proof in the official records of service of such demand - If demands are generated electronically as is now stated, then, equally that technology should enable them to generate proof and evidence of service and other procedural requirements being complied with. - Refund allowed with cost of ₹ 1.5 Lakhs.
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Capital gain - STCG or LTCG - Sale of property on which depreciation has been claimed - Land sold after demolition of building on such land - taxable as Long Term Capital Gains - Section 50 has no application.
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Reopening of assessment - scope of reasons recorded for reopening of assessment - allegation of non filing of return to disclose income from house property but actual the return was filed - reference to section 50C for valuation of property was not mentioned in the notice - Notice quashed.
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When incriminating material was seized on the basis of which different additions were made and the fact that the assessee has itself admitted the sale and then alleged return of the transformer oil in question, the ld. CIT (A) could not have arrived at the decision to delete the addition made by the AO.
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Levy of penalty - Even ld. CIT (A) in the impugned order has not preferred to clarify while confirming the penalty order (if the assessee has furnished inaccurate particulars or has concealed particulars of such income) rather upheld the penalty order passed by the AO in mechanical manner - No Penalty.
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Late filing fee under Section 234E - delay in furnishing the TDS statement to the Department - There cannot be levy of late fee u/s. 234E for the period prior to 01/06/2015, we are inclined to delete the levy of late fee u/s. 234E of the Act in all the cases.
Customs
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Classification of e-seals - electronic seals are seals only but with electronic add on (RFID) to detect security breach.
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Jurisdiction - Power of DGFT to amend the Foreign Trade policy - Director General of Foreign Trade has no jurisdiction to amend the Export and Import Policy. The impugned notification herein, has not been suggested to be clarificatory in nature - Notification quashed.
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Valuation of import consignments - cooling pads - rejection of declared value - price for enhancement ought to have been taken ₹ 180/- per kg. which was lowest range of contemporary price and not the average price of ₹ 220/- per kg.
Corporate Law
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Prima facie adverse opinion can be formed that the affairs of the company are being conducted with a view to defraud the creditors. - it is a fit case to direct Central Government to take steps to investigate in to the affairs of respondent company M/s. Surya Pharmaceutical Limited.
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Rectification of Register of members - this Petition is not a mere petition seeking rectification of entries in the register of members but it has got other collateral purposes namely, triggering Corporate Insolvency Resolution Process in respect of Respondent No.4. Therefore, this Tribunal is of the considered view that such contentious issues cannot be decided while exercising jurisdiction u/s.59 of the Companies Act.
State GST
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Family assistance scheme (in case of Accidental Death of a registered beneficiary) - For the Dealers/traders who are bonafide residents of Rajasthan, registered-in VAT/GST in Rajasthan and have been carrying on business for at least one year
Service Tax
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Rejection of VCES Declaration - pending issue under in any forum of litigation - assessee cannot retain the amount collected in the name of service tax - Provisions of Section 73 and Section 73A cannot be read in isolation for the purpose of VCES.
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Power to Audit under Service Tax - Declaration sought that sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 is arbitrary and in conflict with provisions of Section 72A of the Finance Act, 1994 - Interim stay granted.
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Utilization of CENVAT Credit for payment of Service Tax under reverse charge basis - Before 20/06/2012 there was no restriction upon the deemed service provider to pay the service tax liability from CENVAT credit.
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Increase in quantum of Penalty u/s 76 by subsequent issuance of SCN - The Department was well within its rights to file an appeal before the appropriate form if it was felt that there was an error in the order - the subsequent order being issued without authority of law is liable to be set aside.
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CENVAT Credit - If the contention of the Appellant-Revenue is to be accepted, then the payment made on output service is not payment of service tax, then in such a case, the credit taken stands reversed by payment made on output service.
Case Laws:
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GST
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2018 (10) TMI 349
Classification of goods - rate of tax - Coir Sheets / Rubberised Coir sheets or Blocks - Held that:- As the information given by the applicant is not sufficient enough to conclude the rate of tax applicable for the products they are referring to in their application, as “coir products (except coir mattresses)” are covered under schedule II and “coir mattresses whether or not covered” are covered under schedule III to Notification No.1/2017 2017-Central Tax (Rate), dated 28.6.2017 as amended , and even the mattress layers needs to be classified in the Tariff heading 9404 covered under Schedule III to the Notification referred above, the applicant has been asked during the time of personal hearing to produce copy of the product catalogue to decide the correct rate of tax applicable - If the product is being used in manufacturing Mattresses, then it attracts rate of duty applicable under schedule III of the Notification No.1/2017-Central Tax (Rate), dated 28.6.2017 as amended. Since the applicant has not produced the required information even after giving enough time, the issues raised in their application cannot be decided for want of information from their end and advance ruling cannot be given in this case. Application disposed off.
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2018 (10) TMI 348
Vires of Rule117 of the Central Goods and Services Tax Rules, 2017 or that of Section164 of the Central Goods and Services Tax Act, 2017 - The respondents shall file reply latest by 11.10.2018.
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2018 (10) TMI 346
Levy of GST - supply of goods namely 'Grit and Sand' - tax on Road Usage charges and Government fee paid by applicant to multiple Government Departments - GST on penalty paid on unaccounted stock of River Bed Material under serial number 5 of Reverse charge mechanism - availability of GST paid by applicant at the time of purchase or repairs including spares used by it for movement of goods in its place of business as input tax credit. Road Usage charges and Government fee paid by applicant to multiple Government Departments - Whether the same falls within the Exempted Government Services - Held that:- On the issue of 'Abhivahan Shulk', the applicant is liable to discharge GST Liability under Reverse Charge in terms of Serial no. 5 of N/N. 13/2017-CT(Rate) dated 28.06.2017 - the fee for ambient air monitoring has to be paid to the Uttarakhand environment protection control board, Haldwani is to safeguard the environment as well as general public from the negative impact of working of stone crushers and other pollution generating plants for which a prescribed amount of fee is levied by the State Board. Whether the said Board is a state government of local authority? - Held that:- UEPPCB is not State Government however covered under the definition of local authority in terms of Section 2(69)(c) of the Act - It is established that UEPPCB is a local Authority. The services rendered by local authority by way of any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution is also covered under /N. 12/2017-CT(Rate) dated 28-06-2017 - the functions under article 243W of the Constitution entrusted to municipality specifically mention 'protection of the environment and promotion of ecological aspects'. - It is evident that primary function of UEPPCB is also to safeguard the environment as well as general public from the negative impact of polluting generating plants - thus both the conditions namely services has to be provided by local authority and activity should fall under Article 243 of Constitution, has been fulflled, hence the said activity of UEPPCB is exempt in terms of serial number 4 o the N/N. 12/2017-CT(Rate) dated 28-06-2017 - therefore there is no liability of GST arises on the fee collected by UEPPCB in respect of said activity as the same is exempt service. Khanji sampada shulk - Held that:- The said Shulk is a consideration received by the State Department in lieu of services provided to the applicant for carrying river produce - further, the said services which are exempt from GST are notified vide N/N. 12/2017-CT(Rate) dated 28-06-2017 - the service in question rendered by State Government is liable for GST at 18% under service code 9997 and to be treated as 'other services' - the applicant is required to discharge GST liability under Reverse charge in terms of SL. 5 of N/N. 13/2017. Registration Fee - Held that:- The Regional Transport Office is a State Government Department and covered under definition of section 2(53) of the Act - services rendered by State Transport Office is covered under N/N. 12/2017 - the said registration fee is covered under exempt service under "Services provided by Central Government, State Government, Union Territory or Local Authority by way of - (a) registration required under any law for the time being in force" - accordingly, the services of registration rendered by State transport Office is exempt service and no GST payable on the same. GST Applicability on penalty paid by applicant on unaccounted stock by River Bed Material on the orders of District Magistrate to the Government Account under sl.no. 5 of Reverse charge Mechanism notification - Held that:- The penalty is to be treated as supply of service in terms of Schedule II of the ACt and is liable to GST at 18% under service code 9997 and to be treated as other services - the applicant is required to discharge GST Liability under Reverse charge in terms of sl.no. 5 of N/N. 23/2017. Input Tax Credit - Availability of GST paid by applicant at the time of purchase or repairs including spars w.r.t. Vehicles (Pokland, JCB, Dumper and Tipper) used by it for movement of goods in its place of business as Input Tax Credit - Held that:- Section 17(5) of the Act restrict availment of ITC in respect of GST paid on inputs, capital goods and services - in terms of the provisions of Section 2(76) of the Act the expression 'motor vehicle' shall have the same meaning as assigned to it in clause (28) of section 2 of Motor Vehicle Act, 1988 - Under the provisions of GST law, the GST paid on purchase of 'Pokland, JCB, Dumper and Tipper' used for transportation of goods will be allowed as ITC. Ruling:- "Abhivahan Shulk" is different from toll tax and is covered under Service Code 9997 and to be treated as 'other services' and is liable for GST. The applicant is liable to pay GST @ 18% as on date on the same under Reverse Charge in terms of Sl. No. 5 of N/N. 13/2017. The fee collected by UEPPCB is exempt in terms of SL.NO. 4 of N/N. 12/2017. Thus, there is no GST on the same. Khanji Sampada Shulk is a supply of service. The applicant is liable to pay GST @ 18% as on date on the same under reverse charge in terms of sl.no. 5 of N/N. 13/2017. The service of registration rendered by State transport Office is a exempt service and no GST payable on the same. The penalty imposed by the authority is liable to GST @ 18% as on date under reverse charge in terms of sl. no. 5 of N/N. 13/2017. Input Tax Credit will be admissible on GST paid on purchase of "Pokland, JCB, Dumper and Tipper".
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2018 (10) TMI 345
Maintainability of Advance Ruling application - Section 97(2) of the CGST Act, 2017 and Gujarat Goods and Services Tax Act, 2017 - Supply of services - whether the consideration received from M/s. Pearson VUE, for Tax Invoice No. 001 dated 31st July, 2017 for conducting test on behalf of M/s. Pearson VUE in India is export of services u/s 16(1)(a) of the IGST Act or not? - If the answer of the above question is negative then transaction of supply of services is intra state supply of service or interstate supply of services? Held that:- The issue whether the consideration received by the applicant from M/s. Pearson VUE for Tax Invoice No. 1 dated 31.07.2017 for conducting test on behalf of M/s. Pearson VUE in India is ‘export of service’ under the provisions of the IGST Act, 2017 can be determined in light of various provisions of the IGST Act, 2017, including Section 2(6), which defines ‘export of services’ - Thus, one of the important requirements of supply of any service to be treated as ‘export of service’ is that the place of supply of service is outside India. Thus, the entire issue is intrinsically related to determination of ‘place of supply’ of service by the applicant. This authority has been constituted in exercise of the powers conferred by section 96 of the Gujarat Goods and Services Tax Act, 2017, which Act extends to the whole of the state of Gujarat. This authority is a creature of statute and has to function within the legal boundary mandated by the Act. As the ‘place of supply’ is not covered by Section 97(2) of the Acts, this authority is helpless to answer the question raised in the application, as it is lacking jurisdiction to decide the issues. The jurisdiction of this authority does not extend to the questions on determination of ‘place of supply’. The application for Advance Ruling of Take Off Academy is rejected, under sub-section (2) of section 98 of the CGST Act, 2017 and the GGST Act, 2017.
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2018 (10) TMI 344
Classification of goods - Chicken waste intestine - Whether the goods “Chicken intestine waste” are classifiable under heading 0505 of the GST Tariff? - Held that:- The issue has been examined and found that chicken intestine waste is classifiable under heading 0505 of the Customs Tariff heading as the said heading covers “Skins and other parts of birds, with their feathers or down, feathers and parts of feathers (whether or not with trimmed edges) and down, not further worked than cleaned, disinfected or treated for preservation; powder and waste of feathers or parts of feathers”. As the rules for interpretation of Customs Tariff Act, 1975 was made applicable to GST Tariff, the goods “Chicken intestine waste” are classifiable under heading 0505 of the GST Tariff. The HSN Code applicable for “Chicken intestine waste” is 0505, and the rate of tax is 2.5% CGST + 2.5% SGST.
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2018 (10) TMI 343
Maintainability of Advance ruling application - applicant id recipient of goods - Classification of goods - Sacks and bags of a kind used for the packing of goods of manmade textiles materials. Held that:- It is clear that applications for the advance ruling should be directly related to applicant in respect of supply of goods or services. In the instant case applicant is a recipient of goods and not the supplier or manufacturer of said goods. Since the applicant has sought question which is directly related to supplier of goods, the above said ruling does not appears to be applicable in instant case. The ruling is not applicable as applicant is a recipient of goods and not the supplier or manufacturer of the said goods.
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2018 (10) TMI 342
Classification of goods - Wood Waste and scrap - Debark/bark eucalyptus wood waste - Debark/bark suabool wood waste - Debark/bark poplar wood waste (length about 2 metre and its girth between 15 to 60 centimetre) to be supplied to paper mills for pulping only. Held that:- The Bark/debark which cannot be used in making timber, electricity and poles of telephone, matchsticks, veneer, woodware etc., comes within the classification of Wood waste and scrap - the wood waste and scrap comes within N/N. 1/2017-CT(rate) dated 28-06-2017 and will be taxable at 5%(2.5% CGST and 2.5% SGST).
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2018 (10) TMI 341
Levy of GST - services by way of granting Long Term Lease - upfront charges - Whether GST is applicable on upfront amount (called as premium/salami) payable in respect of services by way of granting of longterm lease of the thirty years or more for plots catering to public health care such as hospital, nursing home, diagnostic centres etc? Held that:- From the plane reading of N/N. 12/2017-Central Tax (Rate), dated 28-6-2017, it can be concluded that contention of applicant is correct i.e. the above such services are exempted from the GST, if fulfil all the above conditions as mentioned in the notification. Ruling:- GST is not applicable i.e. exempted on upfront amount, if the conditions are satisfied as mentioned [at] SI. No. 41 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended by Notification No. 32/2017-Central Tax (Rate), dated 13-10-2017.
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Income Tax
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2018 (10) TMI 383
Capital receipt or revenue receipt - assessee is not entitled for the benefit u/s 115JB that appeal deserves to be allowed - Held that:- Delay condoned. The Special Leave Petition is dismissed.
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2018 (10) TMI 382
Reopening u/s 147 - basis of substantial evidence brought on record - Held that:- Special Leave Petition is dismissed. Pending application stands disposed of.
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2018 (10) TMI 381
Benefit of Section 80-G(5)(vi) - activities carried out would qualify as charitable activities - activities would clearly be included to be covered under the provisions of Section 2 (15) and in view of that the benefit of Section 80-G (5) (vi) would also enure to the assessee - Held that:- The Special Leave Petition is dismissed. However, the question of law is left open. Pending application stands disposed of.
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2018 (10) TMI 380
Initiation of proceedings against the Assessee u/s 153C - cash payments from unaccounted sources - whether document belonged to the Assessee? - Held that:- Special Leave Petition is dismissed. However, the question of law is left open.
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2018 (10) TMI 379
Reopening of assessment - failure of the AO to apply the mind during the regular assessment - allowing deduction u/s 80IC in respect of component of “other income” which was not derived from industrial undertaking - Held that:- Special Leave Petition is dismissed.
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2018 (10) TMI 378
Reopening of assessment - eligibility of reason to believe - change of opinion - new material found for reopening - period of limitation - time period for notice - Held that:- Assessee did not file a fresh return in response to Section 148 notice and only relied on the original return. Providing certain materials during the earlier reopening proceedings, cannot be equated with the disclosure of true and full material facts necessary for the assessment, unless such material was already placed on record at the time of filing the original return itself. Therefore, whatever the materials filed during the reassessment proceedings relatable to a particular issue, cannot be considered as the true and full disclosure, unless such material is having any connection with the issue for which such reopening was done. On the other hand, such material, not relatable to the issue for the earlier reopening proceedings, will only take the shape of a new and tangible material before the Assessing Officer to reopen the assessment once again. Taking note of the fact that end of the assessment year 2009-10 fell on 31.03.2010, the impugned notice under section 148 having been issued on 15.03.2016, I am of the view that the same is well within the period of six years and therefore, find that the impugned reopening of the assessment is not barred by limitation as contended by the petitioner. The petitioner further contended that notice issued under section 148 dated 15.03.2016 did not allege that the assessee has not disclosed fully and truly all the materials necessary for the assessment and therefore, the issuance of mere notice without such material averment is bad. We do not think that the petitioner is justified in making such contention, more particularly, when the proceedings issued with reasons for reopening the assessment is in clear and categorical terms stated that the assessee has not disclosed fully and truly all the material details necessary for the assessment. - Decided against assessee.
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2018 (10) TMI 377
Charitable activity u/s 2(15) - scope of the amendment - Cancellation of registration granted u/s 12A - concealed the actual mode of transaction and transferred the funds to the trustee by violating the provisions of section 13(1)(c) - land proposed to be acquired by the Trust is an agricultural land which was not yet controverted into non agricultural use and huge sum collected from students at the time of their admission - cognizance the latest amendment in the nature of proviso to section 2(15) of the I.T. Act inserted with effect from 01/04/2009 - Held that:- The event of cancellation of registration of a Trust in exercise of powers under sub-section (3) of section 12AA of the Act would arise when the Commissioner is satisfied that the activities of such Trust or institution are not genuine or are not being carried out in accordance with the objects of the Trust or institution. Mere breach of the provisions contained in section 11(1)(d) or 13(1)(c) per se would not fall within the either of the two grounds available to the Commissioner to cancel the registration viz. the activity of the Trust not being genuine or not being carried out in accordance with the objects of the Trust. The Tribunal was thus perfectly justified in coming to such a conclusion. Our view that we expressed gets force from the decision of Uttranchal High Court in case of Welham Boy's School. Society vs. Central Board of Direct Taxes and anr [2005 (10) TMI 66 - UTTARANCHAL HIGH COURT]. Tribunal had correctly examined the materials on record, agreed with the Trust's contentions that desire on part of the Trust was to acquire land which could be used for setting up educational institution. Agreement to purchase agriculture land was executed in name of the Managing trustee since obviously the Trust should not have even entered into an agreement to purchase agriculture land. Equally, merely because donations are received would not per say imply that the Trust was operating along commercial lines. Trust was running several self finance educational institutions. Collecting fees for such purpose would be part of the normal activities. Even for an educational institution, to retain a reasonable surplus out of its activities has never been frowned upon by judicial decisions. If at all this is getting more liberal. Prime requirement is that such surplus should not be diverted for any other purpose. It must be utilized for the objects of the Trust. Provisio to sub-section (15) to section 2 of the Act was added by the Finance Act, 2010 providing that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for cess or fee or any other consideration irrespective of the nature of use or application, or retention of the income from such activity. It applies to activity for the advancement of any other object of general public utility. Such activity would be excluded from the definition of charitable purpose if it involves carrying on any activity in the nature of trade, commerce or business or for cess or fee or any other consideration. Clearly, the legislature did not desire this condition or restriction to be attached to the remaining activities which were defined or categorized as charitable purpose under sub-section (15) which includes the education. - Decided against revenue
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2018 (10) TMI 376
Special audit notice u/s 142 (2A) - Held that:- With all the proceedings, we put it to both counsel, for the Petitioner as also the Respondents as to why the whole gamut of a special audit and thereafter further legal proceedings under the I. T. Act. Instead, during the course of the assessment which will be undertaken pursuant to the resort by Respondent No.1 to Section 148 of the I. T. Act and when the Petitioner is possessed of a copy of the report of PWC, all contentions in relation to the said proceedings can be raised and orders thereafter can be passed on hearing the Petitioner. The Petitioner stated that they would make appropriate submissions on the report of the PWC. They would also raise other contentions. These Writ Petitions can be conveniently disposed off without examining the larger issue. The Petitions can be disposed off with a direction that the special audit in terms of the impugned notice and the approval need not be undertaken for all the materials in relation to the Petitioner's transactions, their share holdings, are already referred to in the PWC report as also the pending proceedings under Section 148 of the I. T. Act. There is a return of income filed under protest by the Petitioners on 26th April, 2017 and that is under assessment. If during the course of assessment and pursuant to this return, the Petitioner desires to raise objections with regard to the contents of the PWC report and to be relied upon by the Assessing Officer, then, the Assessing Officer shall allow the Petitioner to raise the necessary contentions and after dealing with them, he shall pass an order in accordance with law.
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2018 (10) TMI 375
Transfer pricing - Validity of order passed by the TPO without considering the objection raised by the petitioner - Power of the Dispute Resolution Panel (DRP) u/s 144C in giving direction to AO - Manner in which such power has to be exercised - Held that:- Perusal of the procedure contemplated under Sub-Section 6 and Sub-Section 7 of section 144C thus, would clearly indicate that issuance of such directions as contemplated under Sub-Section 5, cannot be made mechanically or as an empty formality and on the other hand, it has to be done only after considering the above stated materials. Consideration of the above materials by the Dispute Resolution Panel must be apparent on the face of the order and such exercise would be evident only when the order contains the discussion of facts and independent findings on those facts, by the Dispute Resolution Panel. Certainly mere extraction of the rival contentions will not satisfy the requirement of consideration. In the absence of any such independent reasoning and finding, it should be construed that the Dispute Resolution Panel has not exercised its power and issued directions by following the mandatory requirements contemplated under Section 144C(6) and (7). This Court is fully convinced that the matter has to go back to the first respondent for consideration of the objections raised by the petitioner in detail and to pass a fresh order on merits and in accordance with law with reasons and independent findings.
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2018 (10) TMI 374
Reversal of TDS having regard to reimbursement of allowance by LIC - Benefit of section 89(1) - distribution of income - TDS claim from the amounts paid by LIC to the extent it was applied to allowances meant to reimbursed - Held that:- This Court is of the opinion that as to whether a particular kind of expenditure is necessary and is exclusively incurred or to be incurred in the function intimately connected with the employment requires to be inquired into especially in the context of commercial organisations like the LIC. The Development Officers are charged with the responsibility of increasing the business of the Corporation in the areas under their supervision. Apparently, this involves a range of duties that also calls for extensive travelling within the city or touring outside the city including in rural areas. The circulars referring to the terms of the employment clearly indicate that LIC expects such Development Officers to routinely travel within the city and also undertake journey outside city periodically. Given these impediments, the analogy which the DCIT appears to have drawn by comparing the chart, which referred to Section 10(14)(ii) of the Act, and granting relief limited to the extent the chart indicated, was not appropriate. In this regard this Court is of the opinion that the decision of the employer to grant the allowance either on actual reimbursement after verifying it or spare itself the added responsibility of verifying it but based upon observing a general pattern give a lump-sum allowance, which either covers it fully or in part leaving the rest to be reimbursed, if a higher amount was incurred, was a business or commercial decision. The stereotypical approach adopted by the DCIT was clearly not warranted. What the Central Government or the State Government might permit their employees or officers under the employment or having authority of law cannot blindly be applied to other organisations – even to the Public Sector Units which are expected to be organised on commercial pattern and have entire different objectives. The petitioners are entitled to succeed. The respondents, DCIT and the concerned Assessing Officers are hereby directed to facilitate the working out of the reversal of the TDS having regard to the circulars of the LIC (especially circular of 18.03.1991) with respect to the reimbursement of three items i.e. fixed conveyance allowance, additional conveyance allowance and expenses under the head “reimbursement of expenses scheme” . The LIC shall also ensure that the amounts withheld from the employee and kept in a fixed deposit are reimbursed having regard to the orders of the Assessing Officer. Towards such reimbursement, the TDS amounts, if any, shall receive the benefit of spread out under Section 89 of the Act.
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2018 (10) TMI 373
Reopening of assessment - Deemed dividend - addition u/s 2(22)(e) - change of opinion - whether information received from the Deputy Commissioner of Income Tax, Company Circle V(1) constituted new information? - Held that:- The correctness of the factual findings recorded by the Assessing Officer and the CIT (A) was tested by the Tribunal. The Tribunal independently examined the matter and held that when there was no information before the Assessing Officer regarding the shareholding pattern of the company or its accumulated profits, it cannot be said that the assessee disclosed all necessary materials for the assessment in this regard. It was further held that the Assessing Officer had no occasion to examine the advances received from the company from the angle of taxability of the sum under Section 2(22)(e) of the Act and that it was not a case of change of opinion. On going through the above factual matrix, we are fully satisfied that the reopening of assessment was not a case of change of opinion, but it was a case where the assessee did not disclose fully and truly the material facts necessary for the assessment. In the light of the above, substantial question of law answered against the assessee and in favour of the Revenue. Deemed dividend addition u/s 2(22)(e) - contention of the assessee is that the amounts were received for the purposes of advances for the purchase of mining land and for supply of material - Held that:- After referring to the decision of the Hon'ble Supreme Court in the case of Smt.Tarulata Shyam Vs. CIT [1977 (4) TMI 3 - SUPREME COURT], the Tribunal held that the amount that was advanced during the year was to be considered as deemed dividend and not the balance outstanding at the end of the accounting year. It was also held that there was no infirmity in the order passed by the CIT (A) for the assessment year 1998-99, as no part of the advance given had been treated as deemed dividend before this assessment year and accordingly, the finding was confirmed. As regards the assessment year 1999-2000, it held that it did not agree with the view taken by the CIT (A) that the deemed dividend for the assessment year 1998-2000 should not be adjusted from the balance of accumulated profit as on the close of the assessment year 1998-99. After referring to the decision in the case of G.Narasimhan [1998 (12) TMI 5 - SUPREME COURT], it was further pointed out that there was no ambiguity in that regard. Hence, for the assessment year 1999-2000, the Assessing Officer was directed to compute the deemed dividend equivalent to the amount advanced during that year to the extent the PGIIPL had accumulated profits after adjustment of the deemed dividend for the assessment year 1998-99. We fully subscribe to the view taken by the Tribunal in affirming the order passed by the Tribunal. Thus, the factual matrix clearly shows that the findings rendered by the Tribunal and the Authorities below on the concept of 'deemed dividend' call for no interference. - decided in favour of revenue
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2018 (10) TMI 372
Validity of demand raised u/s 156 - adjustment of past demand with the refund - no proof in the official records of service of such demand on the Petitioner/Assessee - Held that:- It is conceded before us that a proof of service would be necessary before the impugned action and particularly seeking to adjust the refund due to the Petitioner/Assessee against such demand is taken. It is the Revenue Officials who go on boasting that 30% to 40% of the Revenue collection in this Country is from the city of Mumbai. If that is the position and the status of city of Mumbai styled as a commercial capital of India, then, it is but natural that the judiciary and the public expects highest degree of efficiency and expediency on the part of the officials. If demands are generated electronically as is now stated, then, equally that technology should enable them to generate proof and evidence of service and other procedural requirements being complied with. If these are the state of affairs, we do not think anybody will be able to help the Revenue Officials. Our order passed on the earlier occasion is clear. Though we have extensively heard both sides on that date and even today, Mr. Suresh Kumar would urge that this officer now is posted elsewhere in the Department but at Mumbai itself. He relied on the position as brought to his notice by other officials in the Department. Therefore, if at all there is any lapse or omission on his part, that is not intentional or deliberate. We do not see how the step which was initiated by some other official but taken to its logical end and conclusion by this officer should not be visited with such consequences as the law permits. All the more because on account of his fault, lapse and error, it is the Department or the Respondents who have been severely embarrassed and seriously handicapped in justifying their acts which are challenged in this Petition. We have not been shown anything in law which disables the Petitioner from claiming such refund. If that amount is yet not released but is sought to be adjusted against demands which are also not taken to their logical conclusion, then, the Revenue must suffer the consequences in law. It cannot then say that the Petitioner was not prompt or vigilant in obtaining the refund or the benefits due to it in accordance with law. By allowing the Writ Petition and without visiting the concerned officials with any consequences would send a wrong message. We must as a part of our duty send strong signal and message that we do not tolerate any inefficiency and lapse in the working and functioning of this Department. Hence, while we allow the Writ Petition, we impose costs on the Respondents which are quantified in the sum of ₹ 1.5 Lakhs. The costs to be paid to the Petitioner within a period of four weeks from today. The costs be apportioned between the officer who is present in Court and the officer who was his predecessor. Refund allowed with cost of ₹ 1.5 Lakhs to be paid to the petitioner - Writ Petition allowed.
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2018 (10) TMI 371
Levy of penalty u/s 158BFA(2) - computation of the undisclosed income for the purpose of invoking the Second Proviso to Section 158BFA - Held that:- We find that more than 19 hearings took place before the assessment was drawn. It may not be necessary for this Court to refer to all the statements, which were recorded and the materials, which were called for and placed before the Assessing Officer but, it would suffice to state that there are abundant references in the assessment order to show as to how the undisclosed income was computed. On facts, the Assessing Officer clearly recorded the finding that the undisclosed income has been properly computed based on the seized materials as well as the details furnished by the assessee. The assessee seeks to dispute the fixation by contending that the fixation is based on the letter given by the assessee, which according to the assessee is voluntary. The first appellate authority has considered the issue independently, especially the contention now put forth before us and noted that the undisclosed income has been properly computed. The Tribunal also has examined the factual position and noted the particulars of the undisclosed income and then rendered a finding confirming the orders passed by the first appellate authority and the Assessing Officer. Thus, we find that the three authorities have concurrently appreciated and re-appreciated the factual position and held that the undisclosed income has been determined based on the documents and other materials and information available at the time of search. For the above reasons, the assessee has not made out any case for interfering with the order passed by the Tribunal. - Decided against assessee.
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2018 (10) TMI 370
Capital gain - STCG or LTCG - Sale of property on which depreciation has been claimed - Land sold after demolition of building on such land - whether the sale of land/property was correctly subjected to capital gains taxation in terms of Section 50 as against the computation reported as per Section 45 read with Section 48 - Held that:- AO is not correct in stating that the land sold is a short capital asset, on which, depreciation had been claimed. An identical issue came up for consideration before the Division Bench of this Court in the case of CIT Vs. Union Co. (Motors) Ltd. [2006 (2) TMI 93 - MADRAS HIGH COURT ] as held in the instant case, the fact remains that the purchaser had applied for demolition of the building and also demolished the building, which was taken into consideration by the Commissioner and the Tribunal, while arriving at a conclusion that Section 50 of the Act is not attracted, as, under the facts and circumstances of the case, it is clear that the sale consideration made by the purchaser is only for the land, since the building had no value and therefore, got demolished - Decided in favour of assessee Loss of sale of shares - AO found that the assessee had not filed proper details- Held that:- in the absence of any evidence produced by the assessee to indicate that there were, indeed, transactions of purchase and sales of shares by the assessee, the Assessing Officer rejected the contention of the assessee and held that the purported loss of sale of shares is a speculation loss and cannot be set off against other gains except gains, if any, on any other speculation business as envisaged under Sub-Section (1) of Section 73 of the Act. Thus, we find that the reasons assigned by the Assessing Officer as confirmed by the CIT (A) as well as the Tribunal are perfectly legal, valid and do not call for any interference. Accordingly, substantial question of law No.2 is answered in favour of the Revenue and against the assessee.
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2018 (10) TMI 369
Additional finance charges as eligible to interest tax - whether additional finance charges are not in the nature of interest on loans and advances as defined under Section 2(7) of the Interest Tax Act? - Held that:- The above referred substantial questions of law have been answered in favour of the assessee by the Supreme Count in the judgment reported in M/S. STATE BANK OF PATIALA VERSUS COMMISSIONER OF INCOME TAX, PATIALA [2015 (11) TMI 869 - SUPREME COURT] wherein held Section 2(7) itself makes a distinction between loans and advances made in India and discount on bills of exchange drawn or made in India. It is obvious that if discounted bills of exchange were also to be treated as loans and advances made in India there would be no need to extend the definition of “interest” to include discount on bills of exchange. Indeed, this matter is no longer res integra. - Decided in favour of the assessee and against the Revenue
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2018 (10) TMI 368
Allowing deduction u/s 80HHC on the basis of book profits u/s 115JA even though the eligible profits u/s 80HHC was Nil as per normal computation - Held that:- A Division Bench of this Court in the case of Commissioner of Income Tax, Chennai Vs. M/s.Three Bags India P.Ltd. [2016 (10) TMI 400 - MADRAS HIGH COURT] after taking note of the decision in Ajanta Pharma Ltd. [2010 (9) TMI 8 - SUPREME COURT] decided the above question in favour of the assessee and against the Revenue. Set-off of MAT credit - set off from the tax payable before setting off the Tax Deducted at Source and Advance Tax paid - Held that:- Above referred to substantial questions of law have been answered against the Revenue by the Hon'ble Supreme Court in the case of CIT V. Tulsyan NEC Ltd [2010 (12) TMI 23 - SUPREME COURT OF INDIA] the right to set off arises as a result of the payment of tax under Section 115JA(1) although quantification of that right depends upon the ultimate determination of total income for the first assessment year. It is immaterial that the relevant form prescribed under Income Tax Rules, at the relevant time (i.e. before 1.4.2007), provided for set off of MAT credit balance against the amount of tax plus interest i.e. after the computation of interest under Section 234B. This was directly contrary to a plain reading of Section 115JAA(4). Further, a form prescribed under the rules can never have any effect on the interpretation or operation of the parent statute. Mat credit allowed to be set off from advance tax before calculating interest - Decided against the Revenue and in favour of the Assessee.
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2018 (10) TMI 367
Revision u/s 263 - allowing benefit of netting of interest to the assessee - AO's order treated as erroneous and prejudicial to the revenue - Held that:- The Court need not probe into the fact as to whether the Assessing Officer has faulted or not, since the decision taken by the Assessing Officer has now been upheld by the Hon'ble Supreme Court in ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax [2012 (2) TMI 101 - SUPREME COURT OF INDIA] as held the processing charges received by the assessee were part of the business turnover and accordingly the income arising therefrom should have been included in the profits and gains of business of the assessee and ninety per cent of this income also would have to be deducted under Expln. (baa) to s. 80HHHC of the Act. In this case, this Court was not deciding the issue whether ninety per cent deduction is to be made from the gross or net income of any of the receipts mentioned in cl. (1) of the Expln. (baa). - Decided in favour of the assessee
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2018 (10) TMI 366
Reopening of assessment - scope of reasons recorded for reopening of assessment - allegation of non filing of return to disclose income from house property but actual the return was filed - reference to section 50C for valuation of property was not mentioned in the notice - Held that:- AO may be correct in pointing out that when the sale consideration as per the sale deed is ₹ 50 lakhs but the registering authority has valued the property on the date of sale at ₹ 1,18,95,000/for stamp duty calculation, section 50C of the Act would apply, of course, subject to the riders contained therein. However, this is not the cited reason for reopening the assessment. The reasons cited are that the assessee filed no return and that 1/3rd share of the assessee from the actual sale consideration of ₹ 1,18,95,000/ therefore, was not brought to tax. These reasons are interconnected and interwoven. In fact, even if these reasons are seen as separate and severable grounds, both being factually incorrect, Revenue simply cannot hope to salvage the impugned notice. Through the affidavit-in-reply a faint attempt has been made to entirely shift the center of the reasons to a completely new theory viz. the possible applicability of section 50C of the Act. The reasons recorded nowhere mentioned this possibility. Reasons recorded, in fact, ignored the fact that the sale consideration as per the sale deed was ₹ 50 lakhs and that the assessee had by filing the return offered his share of such proceeds by way of capital gain. - Decided against revenue
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2018 (10) TMI 365
Addition u/s 50C - capital gain computation - ascertaining fair market value - Held that:- Section 50C provides that full consideration mentioned in section 48 is to be replaced by the consideration on which value of the property was adopted for the purpose of payment of stamp duty. No doubt the assessee had purchased an area of 2468 sq.meters, 1936 sq.meters, 1979 sq.meters and 893.sq.meters consisting of four survey numbers. Out of that cancellation qua area 1979 sq.metes and 893 sq.meters (143/1 and 143/2) stand accepted by the ld.CIT(A). If an industrialist wants a particular piece of land and that fallen short of expectation of its potential user, then it would make a distress sale qua the remaining area. None of the authorities have examined, whether the remaining area has access from the road or not. Hence, in order to ascertain fair market value as contemplated in section 50C(2), a reference ought to be made to DVO. Restore these issues to the file of AO and direct him to make a reference under section 50C(2) to the DVO for determining fair market value of the plot as on the date of sale i.e. 31.1.2012. On the basis of that report, he would work out capital gain assessable in the hands of the assessee. Hence, in order to ascertain fair market value as contemplated in section 50C(2), a reference ought to be made to DVO. We set aside both orders of the Revenue authority below. Restore these issues to the file of AO and direct him to make a reference under section 50C(2) of the Act to the DVO for determining fair market value of the plot as on the date of sale i.e. 31.1.2012. On the basis of that report, he would work out capital gain assessable in the hands of the assessee - Appeal of the assessee is partly allowed for statistical purpose.
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2018 (10) TMI 364
Entitled to deduction u/s 80P - Assessee’s area of operation is not confined to a taluk - Held that:- In the instant case, the Assessing Officer has held that the assessee’s operations during the relevant assessment year have extended to two taluks, viz., Aluva and Paravoor. This finding of the Assessing Officer has been objected to by the assessee by stating that the bye-laws have been amended during the relevant assessment year and the assessee’s operations were confined to only Aluva taluk. We find that this issue was not adjudicated by the CIT(A), and therefore, in the interest of justice and equity, we deem it appropriate to restore the matter to the CIT(A) for de novo consideration. We also noticed that the CIT(A) has directed the A.O. to grant deduction u/s 80P(2)(c) of the I.T.Act. There is no discussion by the CIT(A) for granting benefit of deduction u/s 80P(2)(c) of the I.T.Act. For this reason also, we vacate the finding of the CIT(A) and direct him to consider the entire case afresh. The CIT(A) shall also take into consideration that a co-operative society having an area of operation in more than one taluk is not entitled to deduction u/s 80P of the I.T.Act. The assessee shall produce necessary material to prove its case of eligibility u/s 80P(2)(a)(i) and 80P(2)(c) of the I.T.Act. It is ordered accordingly.
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2018 (10) TMI 363
Penalty u/s 271(1)(c) - defective notice - struck off the portion which is not applicable while initiating the penalty proceedings - Held that:- It is not clear whether penalty is initiated for concealment of income or furnished inaccurate of particulars of such income. Under the similar facts and circumstances of the case, the coordinate bench of the tribunal in the case of Konchada Sreeram Vs. ITO [2017 (11) TMI 1164 - ITAT VISAKHAPATNAM]. As per the notice, the assessing officer was not sure of which limb of the offence he sought the explanation from the assessee, whether it was for the concealment of income or for furnishing of inaccurate particulars. - Decided in favour of assessee.
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2018 (10) TMI 362
Accrual of income - Addition towards interest accrued on the amounts due - Held that:- Assessee has advanced an amount and is following mercantile system of accounting. During the course of survey, the Assessing Officer has found that assessee is charging interest on the advances. The case of the assessee is that he is not charging any interest. When the Assessing Officer has established the fact that assessee is charging interest and following mercantile system of accounting, simply submitted that no interest is charged. The assessee has not filed any material to show that he is not charging any interest from the customers. Under these facts and circumstances of the case, we are of the opinion that the Assessing Officer has rightly made the addition - Decided against assessee Addition towards interest accrued on the amounts advanced to the customers - Held that:- The assessee has advanced various amounts to the customers which is attached with Annexure-A of the assessment order. The case of the assessee is that he has not charged any interest, however, the Assessing Officer has pointed out from the material collected during the course of survey, the assessee has charged interest from two persons, namely Sri G. Yathiraj Kumar and Smt. K.Seshavataram. This fact has not been disputed by the assessee. It is also a fact that the assessee is following mercantile system of accounting. The assessee simply submitted that due to heavy competition in the business, funds advanced to the customers and no interest is charged from them, but he has not filed any supportive evidence to substantiate his argument. It is also a fact that assessee is charging interest. It is also a fact that same submission is made even in the earlier years. CIT(A) correctly confirmed the order of the Assessing Officer - Decided against assessee
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2018 (10) TMI 361
Reopening of assessment - non service of notice - Held that:- We hold that the assumption of jurisdiction u/s. 147 by the AO is without proper service of notice and notice u/s. 148 of the Act is bad in law and reassessment proceedings are consequently liable to be quashed. We accordingly, quash the same and confirm the finding of the Ld. CIT(A). Since we have quashed the reassessment proceedings on the legal ground, we are not adjudicating the issues on the merits of the case. - decided in favour of assessee.
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2018 (10) TMI 360
Penalty proceedings u/s 271(1)(c) - preoperative expenses addition - Held that:- A perusal of the orders shows that the contention of the Assessing Officer is incorrect that the business of the assessee had not commenced. It was only submitted before the Assessing Officer that it was the first year of incorporation of the company and the company had also sold samples of wooden flooring to one of the parties towards which an income of ₹ 82,932/- had been declared by the assessee. It is also seen that the AO has not doubted the genuineness of the expenses and the only ground for disallowing the expenditure was that in view of the Assessing Officer the expenses were in the nature of preoperative expenses. Further, it is seen that the Assessing Officer has imposed penalty for furnishing inaccurate particulars of income whereas on facts of the case, it is our considered opinion that all the information relevant to the impugned disallowances was before the Assessing Officer at the time of assessment proceedings and no case could have been made out by the AO for furnishing inaccurate particulars of income. - Decided against revenue.
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2018 (10) TMI 359
Addition of claim of deduction u/s 36(1)(viia) to the extent of the provisions for bad and doubtful debts made in the books of accounts - Held that:- As decided in assessee's own case ASSISTANT COMMISSIONER OF INCOME-TAX VERSUS PRATHMA BANK [2017 (9) TMI 106 - ITAT DELHI] the assessee in its computation of revised total income/loss clearly mentioned that deduction under section 36(1)(viia) of the Act was claimed at 10 per cent of average agricultural advances of ₹ 801.56 crores. Thereafter, the Assessing Officer after examining the aforesaid details came to the conclusion that the claim of the assessee was allowable and he accordingly allowed the claim of the assessee under section 36(1)(viia) of the Act. The said claim was in accordance with law and as provided in the provisions of section 36(1)(viia) of the Act - decided against revenue
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2018 (10) TMI 358
Assessment u/s 153A - Addition on account of unaccounted income from scrap sales - Held that:- When we examine document A-2/B-3 scrap sale pertaining to AY 2003-04 is of ₹ 15,58,435/-. When it is not in dispute that incriminating material A-2/B-3 containing detail of scrap sale was seized during search and seizure operation, the AO was not permitted to resort to estimating to make addition on account of sale of scrap @ 1% of the total raw material consumed, particularly when the assessment is being made u/s 153A of the Act. So, we are of the considered view that in AY 2003-04, ld. CIT (A) has rightly deleted the addition by confirming the remaining addition of ₹ 15,58,435/-. So, ground no.1 in AY 2003-04 is determined against the Revenue. Addition on payment on account of speed money - Held that:- When it is not in dispute that the assessee has been making payment on account of speed money varying from 0.8% to 2.58% of the project value/contract value, the AO has rightly assessed the amount of ₹ 30,85,500/- @ 0.75% of ₹ 41.14 crores for AY 2003-04 and ₹ 43,37,000/- @ 0.75% of ₹ 61.83 crores for AY 2004-05 by treating the same to have been paid out of unaccounted income generated from scrap of sale. Since the assessee has failed to explain the availability of funds with him to explain the entries made in the seized material pertaining to the speed money so as to work out as to which of the amount pertains to a particular assessee in group cases on account of speed money, the benefit of telescoping cannot be given to it. So, in these circumstances, ld. CIT (A) has erred in reversing the order of the AO in assessing the speed money at ₹ 30,85,500/- & ₹ 43,37,000/- for AYs 2003-04 & 2004-05 respectively. So, the findings returned by the ld. CIT (A) on this ground are hereby reversed and findings of AO are restored. - Decided in favour of the Revenue. Transformer oil as returned by the customers not taken in the figure of sales in FY 2002-03 as per audit report - Held that:- Assessee has not produced stock register showing returned quantity of transformer oil and the said sale made because of the fact that due to search and seizure operation their record was scattered. Merely because of the fact that assessment for the year under consideration as completed u/s 153A / 143 (3), particularly when incriminating material was seized on the basis of which different additions were made and the fact that the assessee has itself admitted the sale and then alleged return of the transformer oil in question, the ld. CIT (A) could not have arrived at the decision to delete the addition made by the AO. This issue is required to be remanded back to the AO to decide afresh. Addition on account of business expenses - Held that:- CIT (A) has restricted the addition to ₹ 1,00,000/- by taking into account the facts highlighted by AO during framing of assessment of the assessee u/s 143 (3) on 29.12.2006, the addition of ₹ 3,00,000/- was made on the admission of the assessee, and confirmed the remaining addition of ₹ 1,00,000/-. Keeping in view the fact that when, as per findings returned by the AO, addition of ₹ 3,00,000/- made in the assessment u/s 143 (3) was confirmed vide impugned order only remaining addition of ₹ 1,00,000/- was to be explained by the assessee who has not preferred to produce the account books supported with bills and vouchers to explain the genuineness of the expenses. So, we are of the considered view that this issue also requires to be sent back to the AO to decide afresh - decided in favour of the Revenue for statistical purposes.
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2018 (10) TMI 357
Income from other sources - sum of money or any property received in contemplation of death of payer or donor - as per assessee since the assessee has received the amount in question as a nominee of Shri Tek Chand Bhardwaj after his death being a childhood friend, the same is not liable to be taxed - Held that:- Assessee has based his entire case on the undated nomination letter otherwise required to be executed in prescribed proforma in all probability and apparently appears to be a colouring device to extract the undue benefit in collusion with Milton Keynes Council. Assessee has also not produced any correspondence by way of text messages or letters between him and Shri Tek Chand Bhardwaj to prove his childhood friendship rather based his entire case on alleged nomination letter. CIT (A) has rightly observed that Milton Keynes Council has recorded in the letter issued to the assessee that they being next kin of Shri Tek Chand Bhardwaj have been nominated to receive his movable assets and to prove the fact that the assessee’s next kin has not brought on record any evidence if he has close relative by way of blood or marriage of Shri Tek Chand Bhardwaj. Entire exercise as to transfer of the amount in question by Milton Keynes Council to the assessee is based upon bald document which has not been supported with any evidence either by the Milton Keynes Council or by the assessee to prove his close relations with Shri Tek Chand Bhardwaj. So, in the given circumstances, we are of the considered view that AO as well as ld. CIT (A) have rightly treated the amount in question as income of the assessee without consideration. Hence, question framed is determined against the assessee Penalty u/s 271(1)(c) - Held that:- additions made against the assessee during quantum proceedings have already been confirmed. It is settled principle of law that the penalty cannot be imposed merely on the ground that additions made in the income of the assessee has been confirmed rather to proceed with imposition of penalty u/s 271(1)(c), the AO has to prove that there was concealment of particulars of income or assessee has furnished inaccurate particulars of such income. Bare perusal of the notice issued to the assessee u/s 271(1)(c) goes to prove that assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income rather a tick has been marked against both the charges mentioned in the printed proforma. Operative part of the penalty order shows that even at the time of levying the penalty, the AO was not categoric enough if the assessee has furnished inaccurate particulars of income or has concealed particulars of income. Even ld. CIT (A) in the impugned order has not preferred to clarify while confirming the penalty order (if the assessee has furnished inaccurate particulars or has concealed particulars of such income) rather upheld the penalty order passed by the AO in mechanical manner. levying/confirming the penalty which is not sustainable in the eyes of law - Decided in favour of assessee
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2018 (10) TMI 356
Reopening of assessment - eligibility of claiming revenue expenditure - denial of claim as assessee has not commenced the commercial activities - proof of commencement - Held that:- Assessee is into real estate business. Various courts have held that commercial activities and setting up of the business depends upon the industry to industry. In the case of real estate business, as soon as the assessee commences the activities of buying the land for development, it amounts to set up of the business. In the given case, we notice that assessee has procured huge land for the purpose of development. Therefore, as soon as the assessee procured the land for development, setting up of the business has commenced. Therefore, in our view, assessee has commenced the commercial activity and setting up of business and, hence, the assessee is eligible for claiming revenue expenditure and he can treat the expenditure incurred during the year subsequent to setting up of business, as revenue expenditure relevant for that AY. In the given case, assessee has incurred interest and financial expenditure relating to the business after setting up of the business. CIT(A) has rightly allowed the interest expenditure relating to the current AY and, therefore, upholding the order of CIT(A), we dismiss the grounds raised by the revenue in this regard. - decided in favour of assessee.
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2018 (10) TMI 355
Late filing fee under Section 234E - delay in furnishing the TDS statement to the Department - Held that:- There cannot be levy of late fee u/s. 234E for the period prior to 01/06/2015, we are inclined to delete the levy of late fee u/s. 234E of the Act in all the cases. See Fatheraj Singhvi & Ors. Vs. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] - Decided in favour of assessee
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2018 (10) TMI 354
Addition on account of disallowance of expenses - Held that:- AO noted that assessee has only income from FDR which is taxed under the head “Income from Other Sources”. Therefore, expenses were not allowed. The Ld. CIT (A) on the same reason dismissed the appeal of the assessee. During the course of arguments, the assessee did not point out any infirmity in the orders of the authorities below. Since, income is earned under the head “Income from Other Sources”. Therefore, assessee shall have to prove that expenses have been incurred on account of earning of interest on FDR. However, no evidences have been produced by the assessee before the authorities below. Even no arguments are made before us. Ground of appeal of the assessee is dismissed. Undisclosed sources u/s 68 - Held that:- Initial burden upon the assessee to prove identity of the investors, their creditworthiness and genuineness of the transaction have been discharged by the assessee. AO thereafter, did nothing in the matter, therefore, no addition could be made against the assessee. Therefore, it is not a fit case to remand matter to the CIT(A). We are, therefore, of the view that assessee proved identity of the investors, their creditworthiness and genuineness of the transaction in the matter. Therefore, no addition could be made against the assessee. We, accordingly, set aside the orders of the authorities below and delete the addition.
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2018 (10) TMI 353
Activities in the nature of technical services - DTAA provision - nature of the business of the assessee - Held that:- During the course of scrutiny assessment proceedings, the A.O observed that in the preceding assessment year i.e. 2001-02, the nature of the business of the assessee was the same and the contracts entered into by the assessee during the preceding years continued during this year as well. Following the findings of his predecessor for assessment year 2001-02 and for the same arguments and facts and also following the order of the AAR, New Delhi in the case of the assessee itself, remuneration received by the assessee was taken as fees for technical services within the meaning of DTAA with Sweden. As decided in assessee's own case it is seen that the authorities below have decided the issue of taxability of the amount of fees received by the assessee from technical services earned from Indian concerns simply on the basis of the Ruling given by the AAR. In such circumstances, the prescription of section 245S(2) gets attracted, which requires consideration of the arguments of the assessee in the light of the substituted DTAA along with its Protocol to the facts of the instant case. Such new DTAA and the Protocol have not been considered by the Assessing Officer, who has simply gone by the Ruling rendered by the AAR. As such, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this score is set aside and the matter is remitted to the file of Assessing Officer. TPA - comparable selection criteria - benchmarking - margin calculation of the appellant company - Held that:- There is no dispute that the assessee sold its major business activity in the middle of FY. It is equally true that the assessee was incurring unutilised capacity in the form of fixed costs which were no longer recoverable through normal business activity. Meaning thereby, that there was no level playing field with the 51 comparables, in as much as, the comparables were not on the same platform with that of the assessee. In our considered opinion, the first appellate authority has given a very reasonable and justifiable finding in coming to the conclusion that the appellant has earned OP/TC of 14%. The allegation of the ld. DR that the findings of the ld. CIT(A) is not based on any sound reason in, is ill founded as the same is justified - decided against revenue
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2018 (10) TMI 352
Disallowance u/s.14A - Held that:- It was brought to our notice that the Hon’ble ITAT Kolkata in the case of REI Agro Ltd. Vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA] has held that it is only the investments which yields dividend during the previous year that has to be considered while adopting the average value of investments for the purpose of Rule 8D(2)(ii) & (iii). Also in the case of ACIT v. Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI] held that only those investments which yielded dividend income are to be considered for computing average value of investments for the purpose of Rule 8D(2) of the Rules. - Decided against revenue Allowable revenue expenditure - stamp duty payable on issue of Bonds as a part of the expenditure incurred for mobilization of funds through issue on bonds - Held that:- The facts with regard to expenses on issue of bonds are identical in the present AY also. Following the order of the Tribunal for AY 2010-11, we uphold the order of the CIT(A) in allowing the claim - Decided in favour of assessee.
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2018 (10) TMI 351
Taxability of interest received under Land Acquisition Act - whether it is enhanced compensation and thereby exempt u/s.10(37) or income from other sources - Held that:- The plea of the assessee is that interest received on enhanced compensation is not taxable as the said interest was received under section 28 of the Land Acquisition Act the said aspect is not clear from the perusal of the record and it is deemed fit to restore the issue back to the file of Assessing Officer for the limited purpose of verifying the claim of the assessee. In case the interest is received under section 28 of the Land Acquisition Act, then same is not taxable in the hands of the assessee and in case, the interest is received under section 34 of the Land Acquisition Act, the same is taxable in the hands of the assessee. The assessee is directed to furnish complete details before the Assessing Officer and the Assessing Officer shall decide the issue after affording reasonable opportunity of hearing to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purposes.
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2018 (10) TMI 350
Assessment u/s 153C - assessment barred by the limitation - Held that:- Examining the facts of the instant case, we observe that it was F.Y. 2011-12 during which the Assessing officer of the assessee was handed over the seized documents by the Assessing Officer of Mr. I.C. Dubey (husband of the assessee Geeta Dubey) and as the relevant date of handing over these seized documents falls after 1st April 2010 the second proviso to section 153B sub section (1) of the Act will have no application and the time limit for framing the assessment would be two years from the end of the financial year in which the documents were handed over and in the instant appeal these two years will end on 31st March 2014 i.e. two years from the end of A.Y. 2011-12 and the impugned assessment have been completed on 22.03.2013 which are well within the time limit provided in the Act. Therefore impugned assessment framed u/s 153C r.w.s. 143(3) of the Act are not barred by limitation and are thus valid. - Decided against assessee. Addition treating gifts from relative as unexplained - sum received without consideration by an individual as Hindu Undivided family - Held that:- Sub-sections 56(2)(v), 56(2)(vi) & 56(2)(vii) shall not be applicable if any sum is received from any relative ( as defined in explanation (e) to section 56). There is no mention about the occasion to be a necessary condition for receiving any sum from any relative. In the instant case, the alleged gifts of ₹ 50,000/-, ₹ 1,00,000/- and ₹ 50,000/- for A.Ys. 2004-05, 2005-06 & 2006-07 have been received from relatives of the assessee i.e. father and sister-in-law through account payee cheques/demand draft. Therefore, the same cannot be included in the income of the assessee by any cannon of law. We, therefore, set aside the finding of the lower authorities and delete the addition made on account of unexplained gifts - Decided in favour of assessee Disallowance of expenses of vehicle expenses and vehicle insurance - CIT(A) partly deleted the disallowance and sustained to the extent of ₹ 10% of the alleged expenditure - Held that:- We find that the expenditure in the nature of vehicle expenses and vehicle insurance have been incurred by the assessee in the course of business of earning commission. There is no suo motto disallowance on the part of any assessee nor has any amount been shown specifically under the household drawing. We, therefore, in the given facts and circumstances of the case, find no inconsistency in the finding of the ld. CIT(A) sustaining the disallowance of 10% of vehicle expenses and vehicle insurance. We, therefore, dismiss the relevant ground for all seven assessment years. Addition on account of alleged loan repayment out of undisclosed sources - Held that:- From perusal of records as well as balance sheet and capital account placed in the paper book we find that in the balance sheet under the head loan taken from ICICI, Bank, assessee has reduced the portion of principal loan amount of ₹ 35,593/- whereas the interest on loan of ₹ 1,07,759/- have been reflected in the capital account placed at page 15 of the paper book and this interest amount is shown as a part of the withdrawal of ₹ 1,34,760/-. We, therefore, find merit in the contention of the Ld. counsel for the assessee and are of the view that the assessee has duly disclosed the interest expenditure of ₹ 1,07,759/-. Both the lower authorities erred in sustaining the addition for unexplained expenditure. We, accordingly delete the addition - decided in favour of assessee Disallowance of assessee’s claim of interest on loan claimed as on deduction under the head income from house property - Held that:- we find that the assesses’s source of income is from commission. The assessee is not into the business of purchase and sale of land. The alleged annual property for which the loan has been taken is shown under the fixed asset. We fail to understood that how the interest paid on purchase of the land can be allowed as a business expenditure when the land is not used for business purpose nor the assessee has succeeded at any point of time to prove the use of land for business purpose. Even if it is for a project for future, the alleged interest amounts needs to be capitalized along with cost of land. In our view there is no room available to claim the alleged interest amount as business expenditure. The contentions of the Ld. Counsel for the assessee are brushed aside and no interference is called for in the finding of Ld. CIT(A) upholding the addition. - decided against assessee Addition on account of alleged difference in cost of land - Held that:- The assessee received an advance of ₹ 2,31,000/- for sale of this agricultural land. For some reason this deal could not be completed. The assessee forfeited 10% of the advance amount and paid back the remaining amount of ₹ 2,07,900/- to the proposed buyer. Sum of ₹ 23,100/- being 10% of the advance amount was reduced from the total cost of land of ₹ 3,51,240/- and the remaining amount of ₹ 3,28,140/- has been shown in the balance sheet as on 31st March 2008. Both the lower authorities has considered the amount of ₹ 23,100/- as income of the assessee. In our view, as the assessee has reduced the forfeited amount from the cost of land as the deal could not materialized, the cost of land has been reduced by ₹ 23,100/- and the lower authorities erred in confirming the addition of ₹ 23,100/-. We accordingly delete the same. - decided in favour of assessee. Disallowance of deduction u/s 80C for the repayment of house loan - investment eligible for section 80C was ₹ 1,10,191/- which included the repayment of housing loan of ₹ 12,346/- - Held that:- We find force in the contention for the Ld. counsel for the assessee and are of the view that out of eligible deduction claimed by the assessee at ₹ 1,10,191/-, the Ld. AO should have first reduced this amount by ₹ 12,346/- which results into a figure of ₹ 97,845/-. This sum of ₹ 97,845/- is eligible for deduction u/s 80C of the Act and the same should have been allowed to the assessee and therefore, the disallowance should have only been to the extent of ₹ 2,155/- and not ₹ 12346/-. The assessee gets partial relief and disallowance for deduction u/s 80C is restricted to ₹ 2,155/- only - Decided partly in favour of assessee
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Customs
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2018 (10) TMI 337
Jurisdiction - Power of DGFT to amend the Foreign Trade policy - import of Newsprint - Validity of N/N. 09/2015-20 dated June 3, 2016 issued by Director General of Foreign Trade - The impugned notification requires small business persons to comply with such requisitions which are onerous. Held that:- Section 5 of the Act of 1992 allows the Central Government to formulate the foreign trade policy and to amend it. Section 3 of the Act of 1992 allows the Central Government to make provisions for prohibiting, restricting or otherwise regulating import or export of goods or services or technology. In the present case, by the impugned notification, a foreign trade policy has been sought to be amended - The Central Government could have done so in exercise of powers under Section 5 of the Act of 1992. It has however chosen to involve the provisions of Section 3 of the Act of 1992, as appearing in the impugned notification. In the present case, by the impugned notification, the Director General of Foreign Trade has sought to amend the existing policy. On the strength of Atul Commodities Private Limited [2009 (2) TMI 18 - SUPREME COURT], it can be said that, Director General of Foreign Trade has no jurisdiction to amend the Export and Import Policy. The impugned notification herein, has not been suggested to be clarificatory in nature. The impugned notification no. 09/2015-20 dated June 3, 2016 issued by the Director General of Foreign Trade is quashed.
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2018 (10) TMI 336
Advance Authorizations - Relaxation in export obligation - supplies to SEZ - Minutes of a meeting / orders dated 29th August, 2016 and 6th July, 2017 of the Policy Relaxation Committee in the office of the Director General of Foreign Trade – respondent no.3 - Held that:- In the facts of this case, both the minutes of the meeting / orders dated 29th August, 2016 and the review order thereon dated 6th July, 2017 rejected the petitioner's application for relaxation only on account of failure to produce copy of bill of export of their supplies to SEZ. However, in the present facts, as in the earlier two cases party has been able to establish that supplies have been made to SEZ units i.e. M/s. Pipavav Shipyard Ltd. Ramapura, Gujarat and M/s. Hansen Drives Ltd. Coimbatore, Tamil Nadu. The impugned minutes of meeting / orders dated 29th August, 2016 and 6th July, 2017 are set aside - Petition disposed off.
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2018 (10) TMI 335
Levy of IGST - import of goods - petitioner Unit was situated in a SEZ - Held that:- Considering the issues arising, let there be Notice, returnable on 25.10.2018. By way of adinterim relief, the respondents are directed to permit reexport of the goods in question on condition that the Director of the petitioner Company files an Undertaking before this Court latest by 09.10.2018 that eventually, if the Court does not accept the petitioner’s contention noted above, then the petitioner shall furnish the remaining Bank Guarantee. Direct service for respondent nos.2 & 3 is permitted.
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2018 (10) TMI 334
Refund of SAD - Time limitation - N/N. 102 of 2007 as amended by N/N. 93 of 2008 - Whether the decision of the Delhi High Court in the case of Sony India Pvt. Ltd., v/s. Commissioner of Customs, New Delhi [2014 (4) TMI 870 - DELHI HIGH COURT] can be said to be binding precedent in the light of the judgment and other order in M/s. CMS Info Systems Limited v/s. Union of India and Others [2017 (1) TMI 786 - BOMBAY HIGH COURT]? Whether the impugned Judgments of the Appellate Tribunal are perverse as the Appellate Tribunal ignored that the demands subject matter of the Appeals were from the year 2010 onwards? Held that:- This Court, by an order dated 4th October, 2017, set aside the order of the Tribunal in the case of DSM Sinochem Pharmaceuticals (I) Pvt. Ltd. in the facts situation which are identical. It held that the Delhi High Court decision in case of Sony India Pvt. Ltd., will not apply as it concerned itself with import of goods prior to the amendment of Notification No.102 of 2007 as amended by Notification No.93 of 2008. Besides, the issue also stands covered in favor of the Revenue by the decision of this Court in CMS Info Systems Ltd. The first question answered in negative i.e. in favor of the Revenue and against the Respondent-Assessee - the second question answered in affirmative i.e. in favor the Revenue and against the Respondent-Asseessee.
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2018 (10) TMI 333
Maintainability of petition - remedy by way of appeal/revision present - dismissal order passed by the trial court in the discharge petition - petitioner has submitted that the petitioner need not file revision against the dismissal of the discharge petition and he can straight away file petition u/s.482 of Cr.P.C., to quash the criminal proceedings - Smuggling - restricted item - Muriate of Potash (MOP) - export of MOP smuggled out of India under the guise of 'Industrial Salt' - Offences punishable under Sections 132 and 135 of the Customs Act, 1962. Held that:- It is no doubt that the dismissal order passed by the trial court in the discharge petition filed by the petitioner is not an interlocutory order and as such, it is a revisable order but, the petitioner has not filed any revision - reliance placed in the decision in the case of MOHIT ALIAS SONU AND ANOTHER VERSUS STATE OF U.P. AND ANOTHER [2013 (7) TMI 1005 - SUPREME COURT], where it was held that The intention of the Legislature enacting the Code of Criminal Procedure and the Code of Civil Procedure vis-a-vis the law laid down by this Court it can safely be concluded that when there is a specific remedy provided by way of appeal or revision the inherent power under Section 482 Code of Criminal Procedure or Section 151 Code of Civil Procedure cannot and should not be resorted to. This petition is not maintainable and hence, the same is liable to be dismissed - petition dismissed.
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2018 (10) TMI 332
Valuation of import consignments - cooling pads - rejection of declared value - enhancement of assessable value on the basis of contemporaneous import price of similar / identical goods - Rule 5 of the Customs Valuation Rules - Held that:- The price of the consignment of cooling pads when imported by the appellant importer has been compared with the contemporaneous price of similar/ identical imports, it is also a matter of fact that during contemporary period, as it appears from the record of appeal that the importer has been confronted with contemporary import prices which were much higher than what has been declared by them on the Bill of Entry. Since the department had valid reasons for rejection of declared assessable value as per section 14 of the Customs Act, 1962 as same were found much lower than the contemporary prices of similar / identical goods, the importer was confronted with these facts and the importer has agreed for enhancement of the import price of their import consignment from ₹ 118/- to ₹ 220/- per kg. (which was average price of range of import price varying between ₹ 180 to ₹ 240/- per kg at the relevant time). Since the importer appellant at the time of import has agreed themselves for enhancement of the value of their consignment on the basis of contemporaneous import price, we hold that the price for enhancement ought to have been taken ₹ 180/- per kg. which was lowest range of contemporary price and not the average price of ₹ 220/- per kg. Matter remitted back to the original adjudicating authority for redetermination of the Customs duty taking the value of the import consignment at ₹ 180/- per kg. instead of ₹ 220/- kg. - appeal allowed by way of remand.
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2018 (10) TMI 331
Redemption Fine and Penalty - import of used Clinical equipments - case of appellant is that they applied to the Government of India for ad hoc exemption with respect to the import of the goods in question which was pending with the Government of India and redemption fine and penalty was imposed without appreciating the facts and the law - Held that:- When the Commissioner(Appeals) passed the impugned order at that time, the appellant could not produce ad hoc exemption which was pending with the Government of India and subsequently the said exemption was granted vide letter dt. 24/02/2011 which is on record. In view of the exemption granted by Government of India, the imposition of redemption fine and penalty is not warranted - redemption fine and penalty set aside - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (10) TMI 340
Oppression and mismanagement - Invoking jurisdiction prescribed under Section 241(2) of the Companies Act, 2013 - Held that:- This Bench is of the considered view that it is judicious to invoke the jurisdiction prescribed under Section 241(2) of the Companies Act, 2013 and the Tribunal is of the opinion that as per Section 242 (1) of the Companies Act, 2013, the affairs of the IL&FS were being conducted in a manner prejudicial to public interest. The interim prayer of suspending the present Board of Directors and reconstitution of the new Board of Directors is hereby allowed. At present, by an additional affidavit only 6 names (supra) of the Board members have been proposed by the Union of India. As Further directed that the present Board of Directors be suspended with immediate effect. The six Directors as reproduced supra shall take over the R1 company immediately. Newly constituted Board shall hold a meeting on or before 8th October, 2018 and conduct business as per the Memorandum and Articles of Association of the company and the provisions of the Companies Act, 2013. Liberty is granted to the Board of Directors to select a Chairman among themselves. Thereafter, report the roadmap to NCLT, Mumbai Bench at the earliest possible not later than the next date of hearing. The suspended directors henceforth shall not represent the R1 company as a Director and shall also not exercise any powers as a Director in any manner before any authority as well. As a consequence of “Admission” of the Petition, issue notice to intimate next date of hearing. The Petitioner is to serve copy of this order along with Petition to all the Respondents. The Respondents in turn may file their reply by 15th October, 2018, only after serving copy to the Petitioner. The Petitioner can file rejoinder, if deem fit, by 30th October, 2018.
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2018 (10) TMI 339
Direction on Central Government for appointment of an inspector for comprehensive enquiry of the affairs of the respondent company in order to protect the interest of creditors of respondent company - Held that:- In the present case applicant has shown that the respondent company had given interest free loans and advances in crores to its group companies, whereas it was paying interest to the banks for the moneys borrowed and outstanding. There is no material on record to suggest that respondent had taken steps to recover the advances in order to revive the cash flows and stability of the company. Balance sheets of the company itself depict that there had been diversion of funds. On this count alone, prima facie adverse opinion can be formed that the affairs of the company are being conducted with a view to defraud the creditors. Applicant bank has also shown that there has been diversion of funds from short term sources to long term uses. That apart considerable reduction in stocks suggest that the recoveries from the stocks/receivables have been diverted. The petitioner also has pointed out that false sale and purchase transactions of goods have been made to defraud the creditors. As further revealed that though there was realisation of the stock receivables but there has not been any corresponding reduction in the working capital limits, which suggests mismanagement in the affairs of the company. In addition, applicant bank has placed on record the details of adverse comments made in the audited balance sheets of the company to show the following violations: The company is in default u/s. 252 and Sec. 383 of the Companies Act, 1956, regarding non-complying with the minimum directors and appointments of the company secretary.The company is not regular in paying statutory dues like PF, ESI, Income Tax, Custom duty etc. The Company has not internal audit system; its audit committee is not functioning. The company has not filed audited balance sheet for 2013 whereas, the same was signed and accepted by the AGM on 20.07.2013. Not only the company has collected huge amount from the creditors but also has failed to repay the debts and the aforementioned facts prima facie show that the business of the company was being conducted to deceive its creditors. Admittedly the petitioner bank deals with public money and has come to the Tribunal bona-fide. There should not be slightest indication of a likelihood of prejudice to the public interest. Mismanagement of the affairs of the company including syphoning of funds have caused prejudice to the creditors. There are allegations of manipulation of accounts which raises inference of misappropriation and diversion of funds with intent to defraud its creditors as described in sub-clause (i) of sub-section (b) of Section 213 of the Companies Act, 2013. Material on record suggests that deeper probe in the affairs of respondent company is necessary. In view of above the company petition is allowed by holding that it is a fit case to direct Central Government to take steps to investigate in to the affairs of respondent company M/s. Surya Pharmaceutical Limited.
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2018 (10) TMI 338
Rectification of Register of members - when there is transfer of shares it has to be seen whether such transfers have been made in accordance with the Articles of Association or not? - Held that:- In the case on hand the Investment Agreement which is incorporated in the Articles of Association gives a right of election to ask for conversion of CCDs into equity shares when an event of default occurred as per the terms of Investment Agreement dated 25.06.2015. Such election has been made by the Petitioner. Therefore, the conversion of CCDs into equity shares is not in derogation of Articles of Association or the terms of Investment Agreement. In that view of the matter only it is concluded that there is a sufficient cause for mentioning the names of the Petitioners as shareholders of Respondent No. 2 Company on account of conversion. Here in case on hand the manner in which the Petitioner kept quite till 20.03.2018 in respect of election for conversion of CCDs into equity shares and several issues that crop up in this petition and the fact that the Petitioner filed the Petition u/s.7 of the IB Code against Respondent No.4 herein would go to show that this Petition is not a mere petition seeking rectification of entries in the register of members but it has got other collateral purposes namely, triggering Corporate Insolvency Resolution Process in respect of Respondent No.4. Therefore, this Tribunal is of the considered view that such contentious issues cannot be decided while exercising jurisdiction u/s.59 of the Companies Act.
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Insolvency & Bankruptcy
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2018 (10) TMI 312
Ineligibility of resolution applicants to submit resolution plans after the introduction of Section 29A into the Insolvency and Bankruptcy Code, 2016 with effect from 23.11.2017 - Persons not eligible to be resolution applicant - Held that:- Both sets of resolution plans that were submitted to the Resolution Professional, even on 2.4.2018, are hit by Section 29A(c), and since the proviso to Section 29A(c) will not apply as the corporate debtors related to AMIPL and Numetal have not paid off their respective NPAs, ordinarily, these appeals would have been disposed of by merely declaring both resolution applicants to be ineligible under Section 29A(c). Shri Subramanium, on behalf of the Committee of Creditors, requested us to give one more opportunity to the parties before us to pay off their corporate debtors respective debts in accordance with Section 29A, as the best resolution plan can then be selected by the requisite majority of the Committee of Creditors, so that all dues could be cleared as soon as possible. Acceding to this request, in order to do complete justice under Article 142 of the Constitution of India, and also for the reason that the law on Section 29A has been laid down for the first time by this judgment, we give one more opportunity to both resolution applicants to pay off the NPAs of their related corporate debtors within a period of two weeks from the date of receipt of this judgment, in accordance with the proviso to Section 29A(c). If such payments are made within the aforesaid period, both resolution applicants can resubmit their resolution plans dated 2.4.2018 to the Committee of Creditors, who are then given a period of 8 weeks from this date, to accept, by the requisite majority, the best amongst the plans submitted, including the resolution plan submitted by Vedanta. We make it clear that in the event that no plan is found worthy of acceptance by the requisite majority of the Committee of Creditors, the corporate debtor, i.e. ESIL, shall go into liquidation. The appeals are disposed of, accordingly.
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PMLA
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2018 (10) TMI 330
Offence under PMLA - provisional attachment orders - Held that:- In view of the fact that the complex facts and circumstances raised in these writ petitions, cannot be adjudicated by this Court at this stage, since the writ petitioners have challenged the very show cause notice and the attachment order passed. The writ petitioners are bound to submit their statements, documents to the respondents to establish their innocence at the first instance, so as to avoid further proceedings under the provisions of the Prevention of Money Laundering Act, 2002. Equally, the respondents are also bound to follow the procedures contemplated under the Act, by providing a reasonable opportunity to the writ petitioners to submit their defence and establish their case before the Competent Authorities. The judgments cited by the learned counsel for the writ petitioners with reference to the merits of the case deserves no consideration in view of the fact that this Court has considered the ground of maintainability of the writ petitions with reference to the PMLA Act and with reference to the stage in which the present writ petitions are filed. Thus, all those judgments referred by the learned counsel for the writ petitioners have no relevance with reference to the grounds considered in the present writ petitions. This Court has no hesitation in coming to the conclusion that the present writ petitions are not only premature and the complex facts and circumstances now raised by the writ petitioners, cannot be adjudicated in view of the fact that the writ petitioners have not exhausted the appeal remedies provided under the Statutes and not participated in the administrative procedures contemplated under the provisions of the Prevention of Money Laundering Act, 2002, establishing their innocence or otherwise before the Competent Authorities. Such administrative procedures contemplated cannot be construed as akin to that of the criminal proceedings initiated under the Indian Penal Code. Writ petitioners, being failed to establish any legally acceptable ground, so as to interfere with the impugned orders passed by the respondents under the provisions of the Prevention of Money Laundering Act, 2002. Thus, both the writ petitions stand dismissed.
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2018 (10) TMI 329
Offence under PMLA - attachment orders - Held that:- From the language of the second proviso, it appears that only in particular types of cases, such power can be exercised as stated in the proviso itself otherwise in remaining/routine matters, the power should be exercised under first proviso. The second proviso should be invoked very carefully only in those cases where it shows that (if not invoked), the attachment proceedings would likely to frustrate the proceedings under this act. Thus, the due compliance has to be made by ED who only can attach the property once full satisfaction of circumstances of second proviso are available. The said proviso can be invoked in case of urgent matters and immediately. Otherwise, in normal cases, the ED should wait till the report under Section 173 of Cr. P.C. is filed before the Magistrate. The question of urgency did not arise on the date of passing the provisional attachment order as the property in question is under construction where the stakes of hundreds flat owners are involved and after taking the possession, they would reside there and it is a mortgaged property. The financial institutions are secured creditors. The 2nd proviso mandates that in case the property is not attached immediately, the non-attachment of the property is likely to frustrate any proceeding under this Act. Prima facie, such situation is not available as per material placed on record nor it is mentioned in the impugned order. At the time of hearing of appeal, this tribunal will re-examine as to whether the mandatory compliance has been made in the present case or not and if the compliance of second proviso has been made on the date of passing the provisional attachment order (which the relevant date), then the objection may be over-ruled.If not, then the provisional attachment ordercould not have been passed as per law. Even the confirmation order ipso facto would also be set aside. As enquired from the learned counsel for respondent no. 1 to produce the copy of the reasons to believe which is mandatory under 2nd proviso of Section 5(1) of the Act. He submits that the copy of reasons to believe is not available with him. It must have been sent to the Adjudicating Authority. He is also not aware the language of the reasons to believe if passed under the 2nd proviso of the Act. Appellate Authority is directed to produce the trial record along with the copy of the reasons to believe in the sealed cover on the next date of hearing. In the interest of justice, the equity in favour of the appellant who are offering the alternative property which is approx. ₹ 119 crores as per the prevailing circle rate of area. The respondent no. 1 is always at liberty to point out if the said alternative is not free from any incumbrances. The prayer made is allowed. As direct respondent no. 1 to accept the alternative land at Sekkadu Village, Avadi Taluk, Tiruvallur District ad-measuring 10.21 acres in place of the property attached. Direction is passed to release the property forthwith which was attached under the provisional attachment order admeasuring about 10.46 acres in Guindy Village, Chennai at VGN Fairmont, Thiru Vi Ka Industrial Estate, Guindy, Chennai-32, while exercising my discretion available under Section 35(1) of the Act as prima facie it is found that the property was not purchased from the money of proceed of crime.
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Service Tax
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2018 (10) TMI 328
Classification of service - composite services consisting of a combination of different services - services of loading, unloading, together with shifting/transportation of household articles to various customers - Held that:- The appeal, being devoid of any merit, is liable to be dismissed and, is dismissed accordingly.
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2018 (10) TMI 327
Rejection of VCES Declaration - pending issue under in any forum of litigation - rejection on the ground that if the issue with regard to ‘any period’ ‘on any issue’ is pending in litigation at any Forum from the side of the assessee, no Declaration can be made by the assessee under VCES, 2013 and the same cannot be accepted by the Respondent-Authority and therefore, the present rejection of the Declaration by the concerned authority was justified - applicability of provisions of Section 73 of Chapter V of the Finance Act, 1994 as inserted by Finance Act, 2006 w.e.f. 18.04.2006 for the impugned period. Held that:- This Court is satisfied that the Second Proviso to Section 106 of the VCES-2013 does not make any distinction about the payment of service tax by the assessee under the VCES as to Section 73 or Section 73A of the Act. There is no watertight compartment between the payment of due service tax by the assessee under the said VCES whether it is under Section 73 of the Act or 73A of the Act. Section 73 of the Act envisages recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded to the assessee whereas Section 73A of the Act which was later on inserted by Finance Act, 2006 envisages the service tax wrongly collected by any person to be deposited with Central Government. Section 73A of the Act was obviously to prevent any situation of unjust enrichment to the assessee by retaining the amount even wrongly collected from the customers in the name of service tax and therefore that amount so collected as service tax in any case was liable to be deposited with the Central Government. The short payment of service tax under Section 73 of the Act whether or not levied earlier or short levied earlier does not stand on a different footing so far as VCES, 2013 is concerned. The Second Proviso clearly begins with a negative stipulation that “Where a notice or an order of determination has been issued to a person in respect of ‘any period’ ‘on any issue’, no Declaration shall be made of his tax dues on the same issue for any subsequent period”. Therefore, the Second Proviso to Section 106 of the Act is a clear bar in the present case for the assessee. The appeal filed by Assessee admittedly pending before the CESTAT regarding its liability to pay service tax on the service provided by it for the previous period. Merely because the period in the appeal before the Tribunal and the period covered in the Declaration are different, the Second Proviso cannot be rendered otiose or inapplicable to the case. The VCES and the determination of issues by competent adjudication Forums cannot be separated in any water-tight compartments and segregated in silos, so to say. The combined purpose of Sections 73 and 73A of the Act is obvious and clear and that is not to allow the Assessee to retain any component of service tax in any manner whether already assessed but not paid, deposited short levied or short paid or erroneously refunded or even wrongly collected but not so far deposited and paid to the Central Government. The loophole left in Section 73 of the Act was sought to be plugged by the Legislature by bringing on the statute book Section 73A of the Act and therefore, both these provisions cannot be read in isolation for the purpose of VCES. The assessee’s Declaration was rightly rejected by the Respondent-authority - petition dismissed.
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2018 (10) TMI 326
Power to Audit under Service Tax - Declaration sought that sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 as substituted by notification No. 23/2014-S.T., dated December 25, 2014 is arbitrary and in conflict with provisions of Section 72A of the Finance Act, 1994. Held that:- Since sub-rule 2 of Rule 5A of the Service Tax Rules, 1994, as substituted by notification dated December 25, 2014 was declared ultra vires by Mega Cabs Pvt. Ltd. (supra), it would be appropriate to grant interim stay of the proceedings. Such stay will continue till November 30, 2018 or until further orders whichever is earlier. List the writ petition under the heading “for Hearing” in the monthly list of November 2018.
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2018 (10) TMI 325
CENVAT Credit - certain common input services that were used / utilized in or in relation to their trading activity also - non-maintenance of separate records - extended period of limitation. Held that:- The Department was very well aware of the trading activity carried out by the appellant because the details of trading was available in the balance sheet of the appellant during the relevant period, on the basis of which, the demand has been raised. Therefore there is no suppression of facts on the part of the appellant with intent to evade payment of tax. Further it is found that the period involved in all the appeals is prior to the amendment effected in Rule 2(e) of the CCRS, 2004. The demand for the longer period is set aside and the appellants are liable to reverse the CENVAT along with interest only for the normal period - penalty also set aside - appeal disposed off.
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2018 (10) TMI 324
Utilization of CENVAT Credit for payment of Service Tax under reverse charge basis - appellant receiving service of commission agents for export of their goods - services received from outside India - POT Rules - Rule 3(4) of the CENVAT Credit Rules, 2004 - it was alleged that the payment of service tax was to be made in cash only and not from credit account was done by the appellant on 30/05/2012 and 31/08/2012 - demand alongwith Interest and penalty - extended period of limitation. Held that:- There is no bar for utilization of CENVAT credit for deemed service provider to pay the service tax liability caused upon him in terms of Section 66A. In terms of Rule 2(r), the appellant is a deemed service provider. Rule 5 of Taxation of Services (Provided from outside India and received in India) Rules only refer to availing of CENVAT credit and not utilization of CENVAT credit. Before 20/06/2012 there was no restriction upon the deemed service provider to pay the service tax liability from CENVAT credit. The Tribunal in the case of Kansara Modler Ltd. Vs. CCE, Jaipur-II [2014 (1) TMI 1095 - CESTAT NEW DELHI] has allowed the utilization of credit. Extended period od limitation - Held that:- The period involved is 30/09/2011 to 30/07/2012 and the show-cause notice was issued on 22/05/2004 which is beyond the normal period prescribed under Section 73. Therefore, the entire demand is time barred. Appeal allowed on merits as well as on limitation - decided in favor of appellant.
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2018 (10) TMI 323
Business Auxiliary Service - business of booking space and collection of freight for M/s. British Airways World Cargo and providing visa services to the applicants - ground handling agency services - Circular No.137/06/2011-ST dated 20.4.2001 issued by CBEC - export of services or not - penalty. Held that:- The services rendered by the appellants insofar as visa services are concerned are squarely covered by the clarification issued by CBEC vide the Circular No.137/06/2011-ST dated 20.4.2001 issued by CBEC vide File No.332/2011/2010-TRU wherein it was clarified that similar activities undertaken with reference to visa service are not liable to service tax - the demand as far as visa services rendered by the appellants are concerned does not sustain. Ground handling agency services - BAS services - Case of appellant is that the services are in the nature of export and therefore, in terms of Rule 3(3) of Export of Service Rules, 2005, the services are exempt - Held that:- On being questioned, the learned counsel could not specifically reply as to whether such services are rendered only with reference to the export cargo or otherwise. He submitted that necessary details are contained in the agreements and he was not in a position to submit the agreements readily - for determination of the liability of service tax of the appellant vis-à-vis the contracts and the actual nature of the work undertaken by the appellants so as to evaluate whether they can be termed as export of services, the matter is remanded. Increase in quantum of Penalty u/s 76 by subsequent issuance of SCN - Held that:- The learned Commissioner has clearly erred in taking a step which amounts to review of his own order. The Department was well within its rights to file an appeal before the appropriate form if it was felt that there was an error in the order - the subsequent order being issued without authority of law is liable to be set aside. Appeal allowed in part and part matter on remand.
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2018 (10) TMI 322
Classification of services - Works contract service - Erection, Commissioning and Installation Service or otherwise? - Sub-contract - service provided to the Delhi Jal Board - Services provided to HUDA Haryana and Urban Development Authority. Whether the services provided by the sub-contractor is falling within the services as mentioned in the show cause notice or elsewhere? Held that:- It is the contention of the Ld. Advocate that the services provided were pertaining to the construction of road which is also evident from the work order submitted before us. However, there is a difference in opinion by the Appellant and primary adjudication authority and calculation of gross value for services render as to what are the services actually provided. From the perusal of the appeal record we also find that the appellant has not provided the actual information which was asked by the Department to arrive at the revaluation of Service Tax leviable. In view of the non-cooperation in providing the data as required by the Department for the payment of Service Tax the same was confirmed by the primary adjudicating authority as well as the Ld. Commissioner (Appeal) in the impugned order by applying best judgement. The issue need to be decided by the lower adjudicating authority for considering the entire evidence regarding the nature of the services provided by the appellant - appeal allowed by way of remand.
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2018 (10) TMI 319
CENVAT Credit - output service not provided - Whether the service tax paid on inputs such as electricity transmission structure etc., could be utilized to pay service tax on output service, when the Assessee had not provided any output service? Held that:- It is an undisputed fact that the Respondent herein, was granted registration by the Appellant to pay service tax on the broadcasting services being provided by it. Respondent had admittedly discharged the tax on the output services through their office in India - If the contention of the Appellant-Revenue is to be accepted, then the payment made on output service is not payment of service tax, then in such a case, the credit taken stands reversed by payment made on output service. The question of law, as proposed, does not give rise in the present facts to any substantial question of law. Thus, not entertained. Appeal dismissed.
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Central Excise
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2018 (10) TMI 321
Pre-deposit - failure to comply with the time limit of pre-deposit - Section 35F of the Central Excise Act, 1944 - extension of time sought - Held that:- The motion is allowed in terms of prayer clause (a) and the time to make the pre-deposit is extended till 2nd June, 2018 - Motion disposed off.
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2018 (10) TMI 320
Penalty exceeding ₹ 50 lakhs - section 35D(3) of Central Excise Act, 1944 - Held that:- The jurisdiction of a single member to decide any appeal before the Tribunal would be limited to the cases where the amount of fine and penalty involved does not exceed ₹ 50 lakhs - In the present case therefore the single member had no jurisdiction to decide the appeal. Impugned order is therefore set aside only on this ground. Appeal is revived before the Tribunal and shall be heard by the Division Bench of the Tribunal.
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2018 (10) TMI 318
Clandestine removal - shortage found in stock taking - Appellant's contention is that the demand is unsustainable as no physical stocktaking was done - proviso to Section 11A of the Act, 1944 - penalty - Held that:- The above defence was taken by the Appellant long after the date of the stocktaking i.e. only in response to the show cause notice. Moreover, it is to be noted that at the time when the objection was taken, it would not be possible to reverse the clock and direct physical stocktaking to determine the shortage on the date when the 200.278 MT of raw material, was found short - The view taken by the Tribunal on facts, is a possible view and no interference would be warranted. CENVAT Credit - Held that:- The question of law as proposed completely ignores the fact that proceedings for recovery of Cenvat Credit and imposition of penalty have been taken in terms of Rule 14 and 15 of Cenvat Credit Rules 2004 read with Sections 11A and 11AC of the Act. Thus, taking of Cenvat Credit on inputs which was found to have not been received would justify the present proceedings. Appeal dismissed - decided against appellant.
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2018 (10) TMI 317
Maintainability of appeal - statutory appellate remedy before the Commissioner of Customs and Central Excise, Appeals-1, Coimbatore - classification of capacitor box/control panel under chapter heading 8537 of the Schedule to the Central Excise Tariff Act, 1985, read with Section-174 of the Central Goods and Services Tax Act, 2017 - Held that:- This Court is not inclined to entertain the present writ petition on the sole reason that the petitioner has to avail the alternative remedy of appeal - this writ petition is disposed of, without expressing any view on the merits of the matter, with liberty to the petitioner to file such appeal, by complying with other statutory requirements, within a period of two weeks from the date of receipt of a copy of this order.
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2018 (10) TMI 316
Clandestine removal - demand based on electricity consumption - Whether the demand based on estimated production per unit of electricity consumption is tenable? - Held that:- The finding of the learned Commissioner is contrary to the findings in Appellants’ own case SATGURU CEMENT PVT. LTD., MR. JAGDISH AGARWAL AND OTHERS VERSUS CCE, INDORE AND OTHERS [2015 (7) TMI 460 - CESTAT NEW DELHI], where it was held that Merely on the basis of power consumption norm and that too when there are serious doubts about its correctness, duty demand cannot be confirmed against an assessee, when there is no other corroborative evidence of unaccounted purchase of raw-material and clearance of unaccounted production. Appeal allowed - decided in favor of appellant.
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2018 (10) TMI 315
Reversal of excess Credit availed u/r 14 of CCR - Penalty - Department entertained a view that the assessee has wrongly transferred the CENVAT credit to their new registration number - Held that:- The appellant had duly intimated to the Range Superintendent vide letter dated 16.7.2012 regarding shifting of their premises to the new premises and requested for cancellation of registration number as they have applied for new registration for the new premises - the department did not raise any objection and did not have any doubt regarding the shifting of the inputs and the capital goods to the new premises and during the audit, which was conducted on 15/16.11.2014, no objection was raised and further, the original authority after considering the factum of shifting to the new premises as well as the audit report found the transfer of credit valid. The appellant has availed the CENVAT credit in the returns of the new premises and there is no question of any diversion done by the appellant - there is no infirmity in the transfer of CENVAT credit to the new premises and the original authority after proper verification has allowed the claim of the appellant. Appeal allowed - decided in favor of appellant.
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2018 (10) TMI 314
Clandestine removal - demand based on the basis of unexplained loose sheets - whether in the facts and circumstances of the case, charge of clandestine removal is sustainable against the appellants or not? Held that:- In this case during the course of investigation, in the factory premises of the appellant, nothing incriminating was found. Moreover, the stocks of raw material as well as finished goods has also found tallied with the statutory records. There are certain loose sheets recovered from the residence of the Director of the appellant company and on the basis of this, the case has been made out against the appellant. On going through the said loose sheet, it is found that some name i.e. M. Vijayvada is written thereon but to ascertain the truthness of said clearance, no effort has been made by the Revenue to investigate or to find out who is M. Vijayvada. If that effort could have been done, then truth could have been revealed. Simply, on the basis of these loose sheets and without any corroborative evidence, i.e. from where the raw material has been procured, how the goods were transported and how much electricity was consumed it cannot be alleged that the appellant is engaged in the activity of clandestine removal of goods. Merely, the corroborative statement of the Director of the appellant company cannot be the basis in the clandestine removal of the goods. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (10) TMI 347
Revision of assessment - rejection of claim of exemption for interstate purchase of building materials - Section 3B(2)(b) of the TNGST Act, 1959 - Held that:- A careful perusal of notice of proposal dated 11.06.2008, would indicate that the same does not reveal any material details or particulars as to how the Assessing Officer proposed to disallow the exemption already granted in respect of purchases made through interstate sale to the tune of ₹ 1,80,16,025/-. Except stating that on examination of assessement on records, it is seen that turnover of ₹ 1,80,16,025/-, being the interest purchase of building materials, were wrongly allowed exemption, the said notice does not disclose as to what materials found in the assessment records had driven the Assessing Officer to make such proposal for disallowing the exemption. The reasons given for disallowing exemption, would show that such reasonings were not referred in the form of proposal, when notice was issued on 11.06.2008 - the assessee cannot be put to surprise with certain reasons in the assessment order, when crux of such reasons, in the form of grounds, is not stated in the notice of proposal. At the same time, at this stage, this Court is not expressing any view on the correctness or otherwise of the reasons assigned by the Assessing Officer in the impugned order, as this Court is inclined to interfere with the same only on the reason that the same was passed strictly not by following the principles of natural justice. This Court is of the view that the matter has to go back to the Assessing Officer once again for redoing the revision of assessment on merits and in accordance with law - petition allowed by way of remand.
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2018 (10) TMI 313
Dispense with the requirement of depositing the tax into Government Treasury in accordance with Section 26(6B) of the Maharashtra Value Added Tax Act, 2002 - Held that:- The mandate of Section 26(6B) of the MVAT Act is very clear. It does not provide for any exception in complying with the requirement of pre-deposit for the purpose of filing an appeal. The difficulty of the petitioner in depositing the amounts while filing the appeal will not exempt them from the requirement of Section 26(6B) of the Act. Therefore, no fault can be found with the impugned order dated 28th February, 2018 of the Tribunal so as to warrant any interference by us under Article 226 of the Constitution of India. However, it may be pointed out that when the petitioner is able to satisfy with the requirement of Section 26(6B) of the MVAT Act, it could file an appeal along with an application for condonation of delay to the Tribunal. In terms of Section 81 of the MVAT Act, it would be open to the Tribunal to consider the petitioner's application for condonation of delay on its own merits after the petitioner filed an appeal along with evidence of the requisite deposit in terms of Section 26(6B) of the MVAT Act. Petition dismissed.
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Wealth tax
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2018 (10) TMI 311
Correct fair market value of the property as on the relevant valuation date - value declared by assessee - Held that:- The Special Leave Petition is dismissed. However, the question of law is left open. Pending application stands disposed of.
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