TMI Tax Updates - e-Newsletter
November 10, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise

Articles

1. ITD PORTAL observations on recent visit on 5th November, 2021.

   By: DEVKUMAR KOTHARI

2. ECONOMY & GST COLLECTIONS – ON A POSITIVE NOTE

   By: Dr. Sanjiv Agarwal

News

1. India poised to achieve Services Export target of $1 Trillion by 2030- Shri Piyush Goyal

Notifications

GST - States

1. G.O.MS.No. 311 - dated 8-11-2021 - Andhra Pradesh SGST

The Andhra Pradesh Goods and Services Tax Act, 2017 – Amendment to Go.Ms.No.258,Revenue(CT-II)Department, dated 29-06-2017 prescribing certain change in APGST rates of Goods so as to implement recommendations made by GST Council in its 45th meeting held on 17.09.2021.

2. G.O.MS.No.305 - dated 5-11-2021 - Andhra Pradesh SGST

Seeks to amend Notification Go.Ms.No.255, Revenue (CT-II) Department, dated 29.06.2017

3. G.O.MS.No. 304 - dated 3-11-2021 - Andhra Pradesh SGST

Amendment in Notification Go. Ms.No.582, Revenue (CT-II) Department, dated 12.12.2017

4. G.O.MS.No.298 - dated 28-10-2021 - Andhra Pradesh SGST

The Andhra Pradesh Goods and Service Tax Act, 2017 –Amendment to the Orders issued in Go.Ms.No.127, Revenue(CT-II)Department, dated 15.06.2021

5. G.O.MS.No. 299 - dated 28-10-2021 - Andhra Pradesh SGST

The Andhra Pradesh Goods and Services Tax Act, 2017 – Amendment to Go.Ms.No.588, Revenue(CT-II)Department, dated 12-12-2017 so as to implement recommendations made by GST Council in its 45th meeting held on 17.09.2021

6. G.O.MS.No.294 - dated 26-10-2021 - Andhra Pradesh SGST

THE ANDHRA PRADESH GOODS AND SERVICES TAX ACT, 2017 - AMENDMENT TO GO.MS.NO.259 REVENUE(CT-II) DEPARTMENT,DATED: 29.06.2017

Circulars / Instructions / Orders

FEMA

1. 16 - dated 8-11-2021

Investment by Foreign Portfolio Investors (FPIs) in Debt – Review

Highlights / Catch Notes

GST

• Court Overturns Registration Cancellation Due to Defective Show Cause Notice Lacking Required Date and Time u/r 22(1.

  Case-Laws - HC : Cancellation of registration of the petitioner - Defective show cause notice (SCN) - A bare perusal of the show cause notice format prescribed under Rule 22(1) shows that there is a difference in the show cause notice dated 12.5.2021 issued to the petitioner and in the form of the show cause notice quoted aforesaid. The specific date and time is necessarily required to be mentioned in the notice for showing cause which is conspicuous by its absence in the notice to the petitioner. Moreover, the proviso to subsection (2) of Section 29 mandates opportunity of hearing being provided to the person whose registration is proposed to be cancelled before cancelling the registration - Order of cancellation quashed - HC
  Visit to Get Source

  ---

• Societies can't claim Input Tax Credit on repairs for construction work under CGST Act Section 17(5)(c).

  Case-Laws - AAR : Whether the society can claim ITC on repairs both major as well as minor? - The supply of goods and services supplied for construction work of an immovable nature can be done in composite manner also i.e. works contract. The works contract service for supply of above mentioned goods and service is covered under Section 17(5)(c) read with explanation mentioned therein. Therefore, ITC on GST paid on above said works contract service will not be available to the extent of capitalisation as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. - AAR
  Visit to Get Source

  ---

• RWA Monthly Charges for Garages and Shops Not Exempt from 18% GST, Classified Under SAC 9995.

  Case-Laws - AAR : Levy of GST on Resident Welfare Association (RWA) - monthly subscription contribution charged from its members - The intention of the 'housing society' is only for residential purpose, whenever it includes garages and commercial shops then it is beyond the ambit of the RWA, hence the exemption towards the commercial shops and garages is not applicable to the TP. - The amounts collected by the TP towards aforesaid receipt in respect of supply of services to members, covered under SAC 9995 as “Services of Membership Organisations” and are taxable to GST @ 18% - AAR
  Visit to Get Source

  ---

• Locomotive parts for coach factory classified as mixed supply, not under HSN code 8607, rules Advance Ruling Authority.

  Case-Laws - AAR : Classification of supply and services - Locomotive parts - supply of multiple items, some of these items are manufactured by the applicant and some of them are procured for supply to the coach factory - The nature of supply is Mixed supply. - These supplies do not fall under HSN code 8607 - AAR
  Visit to Get Source

  ---

Income Tax

• Pr.CIT's attempt to revise issues u/s 263 denied as CIT(A) had already decided them in appeal.

  Case-Laws - AT : Revision u/s 263 by CIT - As both the issues in question on the basis of which the Pr.CIT had assumed jurisdiction u/s 263 of the Act had been considered and decided in appeal by the CIT(A), therefore, the Pr.CIT was clearly divested of his jurisdiction to have exercised the revisional jurisdiction vested with him u/s 263 of the Act as regards the said issues. - AT
  Visit to Get Source

  ---

• Tax Exemption Denied: Section 54/54F Claim Disallowed for Owning Multiple Residential Units; Revenue Criticized for Oversight.

  Case-Laws - AT : Disallowing the exemption claimed u/s 54/54F - sale of the bungalow as well as the land - assuming the assessee has claimed deduction under section 54F of the Act, then it was the duty of the revenue to provide the rightful claim of the assessee which is available under the provisions of law but the same was not claimed by the assessee under the wrong believe. As such, the Revenue cannot take the benefit of the ignorance of the assessee rather it was duty-bound to extend the benefit available to the assessee under the provisions of law. - assessee is not eligible for exemption under section 54F of the Act on the sale of land, as the assessee was holding more than one residential unit. - AT
  Visit to Get Source

  ---

• CIT's Revision u/s 263 on Share FMV Upheld; Section 56(2)(viib) Not Applicable Despite Technical Breach.

  Case-Laws - AT : Revision u/s 263 by CIT - Determination of Fair market value (FMV) of shares - applicability of section 56(2)(viib) - even where there is a technical breach in terms of obtaining and submitting the valuation report from an associate member of ICAI as against fellow member of ICAI; and even taking into consideration report of the merchant banker, the position will remain the same and the provisions of section 56(2)(viib) continues to remain inapplicable and thus, the order passed by the Assessing officer cannot be held as prejudicial to the interest of Revenue which is an essential condition for invocation of jurisdiction u/s 263 - AT
  Visit to Get Source

  ---

• Court Rules IEX Rates Unreliable for Transfer Pricing; Validates Assessee's Benchmarking u/s 92C (2.

  Case-Laws - AT : TP Adjustment - IEX rates for the purpose of benchmarking the transaction of sale of power - if the prices are so divergent and the difference between the two external cup becomes irreconcilable, the external cup price which is more reliable should be used. Therefore, in our view, IEX rates for these reasons cannot be said to be an external cup available for invoking the provisions of first proviso to Section 92C (2) of the act. - No infirmity in the benchmarking analysis of the assessee wherein the assessee has considered rate of ₹ 6.30 per kilowatt against the rate of power purchase paid by the assessee to Jaipur Vidyiut Vitran Nigam Limited at the rate of ₹ 8.35 per kilowatt, using the external cup for comparability. - AT
  Visit to Get Source

  ---

• PCIT's Section 263 revision deemed mechanical; failed to identify AO errors; CBDT Circular supports assessee's stance.

  Case-Laws - AT : Revision u/s 263 by CIT - Reopening of assessment u/s 147 initiated - PCIT has resorted to the revision proceedings u/s. 263 of the Act in a mechanical manner on the basis of the proposal of the Ld. AO. It has not been pointed out as to what error has been committed by the Ld. AO in accepting the explanation/evidences so furnished by the assessee in the process of verifying the nature of transactions. Even the CBDT's Circular cited by the Ld. PCIT in his order, in fact, comes to the support the assessee. - AT
  Visit to Get Source

  ---

• Section 43B: Customs Duty Expenses Claim Allowed After Special Benefits Not Received, Recognized as Revenue Expenditure.

  Case-Laws - AT : Disallowance u/s 43B - custom duty expenditure not claimed as expenses in the year of actual payment as appellant was entitled to receive special benefits as per Custom & Excise Rules but said special benefits were not received hence expenses were claimed as revenue expenditure in year under consideration - Claim cannot be denied - AT
  Visit to Get Source

  ---

Customs

• Importing Piano for Personal Use Without IEC Legal if Duties Paid; No Absolute Ban on Restricted Items.

  Case-Laws - AT : Legality of import without Importer-Exporter Code (IEC) - import of Piano - import for personal use - restricted or prohibited item - admittedly this goods is a restricted item but there is no absolute restriction or prohibition available for such import of goods except that in case the CIF value of goods is above ₹ 2000/- the same is subjected to customs duty which appellant had paid @ 35% + CVD + SAD, as per submissions of learned Counsel for the appellant. - AT
  Visit to Get Source

  ---

PMLA

• Court Reviews Money Laundering Allegations in Captive Mining Lease Case; Section 3 PMLA Interpretation Critical.

  Case-Laws - HC : Money Laundering - violation of undertaking of captive mining for the grant of Mining Lease - Explanation to section 3 of P.M.L.A Act which has been added later on stated that process or activity connected with proceeds of crime continues till such time a person is directly or indirectly enjoying the proceeds of the crime, accordingly the entire process/activity connected to the proceeds of crime is a continuing offence - In the case in hand, it cannot be said that at this stage, in absence of trial where the facts are hazy when initial action itself was not in consonance with law. - HC
  Visit to Get Source

  ---

Service Tax

• Court Denies Extension of Sabka Vishwas Scheme for Individual Cases; Committee No Longer Operational.

  Case-Laws - HC : Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - The scheme cannot be made operational by this Court going beyond the period for which it was formulated only for one person or to relax any of the conditions enumerated in the scheme. It is also when the committee under the scheme no more exists. The prayer made in the writ petition cannot be granted for consideration of a case of the petitioner for paying the service tax under the scheme. - HC
  Visit to Get Source

  ---

Central Excise

• Interest Payable on Cenvat Pre-Deposits: Adjudicating Authority Must Pay 12% Annually from Deposit to Refund Date.

  Case-Laws - AT : Entitlement to Interest on pre-deposit - the finding of learned Commissioner (Appeals) is erroneous that no interest is payable whether the pre-deposit is made by way of debit in cenvat credit account. - The Adjudicating Authority is directed to disburse the interest @12% per annum on the refund amount from the date of deposit till the date of refund - AT
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (11) TMI 274
  Liability of Interest u/s 50 of CGST Act - Interpretation of statute - Section 73 of CGST Act - whether interest can be determined without initiating any adjudication process either u/s 73 or 74 of the CGST Act in the event of an assesse raising dispute towards liability of interest? - HELD THAT:- Issue notice, returnable in eight weeks.

  ---

• 2021 (11) TMI 273
  Seeking anticipatory bail - Availment of fraudulent ITC upon the strength of fake invoices providing fabricated information on E-way bill portal - It was held by Delhi High Court that petitioner shall cooperate with the investigation and make herself available for interrogation by police officer, as and when required - HELD THAT:- There are no reason to interfere with the impugned order passed by the High Court. The special leave petitions are, accordingly, dismissed.

  ---

• 2021 (11) TMI 272
  Transitional Credit - directions to the respondents to allow one time filing of revised Form GST TRAN 1 and GST TRAN 2 by either reopening the GSTN Portal or accepting the revised physical Form GST TRAN 1 GST TRAN 2 or accepting transitional Input Tax Credit claimed through GSTR 3B return - Section 140 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- Counsel for the petitioner states that the petitioner has already sent a representation dated 19.3.2020 (Annexure P-8) to the concerned Commissioner and that he would be satisfied at this stage if in the first instance a direction is issued to respondent No.5 to decide the same by passing a speaking order there within a reasonable time. This is considered to be a fair request. Resultantly, respondent No.5 is directed to decide the representation dated 19.3.2020 (Annexure P-8) of the petitioner by passing a speaking order within a period of three months from the date of receipt of a certified copy of this order - petition disposed off.

  ---

• 2021 (11) TMI 271
  Permission for withdrawal of petition - Validity of initiation of recovery proceedings - HELD THAT:- Allowed as prayed for. The petition stands dismissed as withdrawn with the aforesaid liberty asked for.

  ---

• 2021 (11) TMI 270
  Principles of natural justice - Validity of assessment orders - reply of petitioner not considered properly - HELD THAT:- Since there has been an appellate remedy provided under Section 107 of the Act, which can very well be availed by the petitioner as the same has been mentioned in the impugned order itself, as there is no plausible reason on the part of the petitioner for not availing such an appeal remedy, but the petitioner has filed the writ petitions by invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. It is the settled proposition that if want of jurisdiction, violation of the statute and denial of principles of natural justice, only in such circumstances, the Writ Petition would be entertained by this Court against order in original ie., the orders passed by the original assessing authority - In every Tax Statute, there is hierarchy of authorities provided for preferring further appeal, revisions etc. Such appeal remedies shall be availed by the assesses/taxpayers without default. Herein the case in hand, though there is an appeal remedy under Section 107 of the Act, the petitioner has chosen to file the Writ Petitions before this Court on the ground that the reason stated in the reply or objection or show cause by the petitioner had not been properly considered or not considered in a proper perspective. Such an issue can very well be decided by the appellate authority as it coupled with facts and therefore, each and every minute details of the facts on tax matters cannot be gone into by the Writ Court. In that view of the matter, this Court feels that while rejecting these Writ Petitions, liberty can be given to the petitioner to file an appeal before the appellate authority as per the provisions of the Act. All these Writ Petitions are rejected with liberty to the petitioner to file an appeal before the appellate authority and if any such appeal is filed, the time taken or consumed by the petitioner in filing these writ petitions can be excluded for calculating the limitation period - Petition dismissed.

  ---

• 2021 (11) TMI 269
  Cancellation of registration of petitioner - opportunity of being heard not provided - principles of natural justice - HELD THAT:- As the sanctity of a personal hearing before cancellation registration has been ingrained in first proviso to Section 29(2)(a), it is only appropriate that the writ petitioner is given a personal hearing. The II impugned order is set aside without expressing any opinion on the merits of the matter. To be noted, when this Court says I impugned order, it necessarily means impugned order wherein the quantum of Rs. 49,98,868/- has been scaled down to Rs. 24,75,183/- - application disposed off.

  ---

• 2021 (11) TMI 268
  Applicability of reduced GST rate vide Notification No.20/2017, dated: 22-08-2017 as well Notification No.1/2018-CT(Rate), dated: 25-01-2018 from 01-07-2017 -works rendered by the constituents of the Joint Venture - to be treated as sub-contract to Joint Venture, which is not having physical existence other than the constituents? - HELD THAT:- As seen from the information provided by the DGGI the investigation proceedings are still pending under Chapter XIV of the CGST Act, 2017 with respect to the questions raised by the applicant. When seen in light of the amendment to Section 83(1), the pending investigation after inspection or search have to be interpreted as pending proceedings in light of rules of interpretation and law declared by the Hon ble Supreme Court of India in Raghubansh Narain Vs Govt. of UP [ 1966 (9) TMI 145 - SUPREME COURT] . Thus as the proceedings are pending under Chapter-XIV of the CGST Act, 2017 regarding the question raised by the applicant, the application filed by M/s. Megha Engineering Infrastructures Limited stands rejected.

  ---

• 2021 (11) TMI 267
  Exemption from GST or not - services provided to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls - requirement of registration under GST - section 97 (b) of CGST Act, 2017 - Requirement of deduction of TDS u/s 51 - refund entitlement, if TDS is deducted - HELD THAT:- The applicant has submitted that the total amount received by her along with Mr. Sagar Borade, co-ownor in the property, per annum is Rs. 31.13 lakhs to be distributed between both of them in the ratio 50:50. Thus, the amount received by the applicant is below the threshold amount above which liability to pay GST accrues. It is seen from the submissions that there is an overlapping of Plot Numbers in respect of five co-owners for example applicant has mentioned that Plot nos. 2 3, belongs to her along with Mr. Sagar Borade. However, it is seen that the said Plot No. 3 belong to other co-owners also. The applicant has not made any detailed submissions stating the actual percentage of the owner/co-owners in the said property. Said submissions made by the applicant is not addressed, in support of being below threshold GST turnover limit due to non-submission of details. Admissibility of entry no. (3) of Notification No. 12/2017-CTR - HELD THAT:- Schedule II of the CGST Act, 2017 sets out the activities which are to be treated as supply of goods or supply of service wherein renting of immovable property is treated as supply of service - in the instant case, the supply of leasing of immovable properties by the applicant is a supply of services - Though the applicant as per her submission is supplying Pure Services, in light of insufficient material on record, it is not possible to find whether the said services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. The renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. Whether TDS provisions will be applicable in case where the supply of services is exempt? - HELD THAT:- The impugned services supplied by the applicant are liable to tax and therefore not exempt. Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case. As the Applicant is not registered under GST and provide services to Social Welfare Department (Samaj Kalyan Department), a Department of State Government, then whether TDS notification issued under section 51 would be applicable for deduction of TDS? - HELD THAT:- TDS notification issued under section 51 would be applicable for deduction of TDS in the subject case. In case TDS is deducted, whether applicant would be entitled for refund of the same? - HELD THAT:- The said question pertains to entitlement of refund and is not covered under Section 97 of the CGST Act, 2017 and therefore this question is not answered.

  ---

• 2021 (11) TMI 266
  Levy of GST on Resident Welfare Association (RWA) - monthly subscription contribution charged from its members - requirement for surrender of GST registration or not - ITC on GST on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services - whether the society can claim ITC on these services either fully or proportionately despite of availing exemption available to residential units? Scope of Advance Ruling application - the applicant is covered under Section 97(2) of the CGST Act, 2017 or not - HELD THAT:- In the instant case, the question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the CGST Act. In other words, Section 97(2), which encompasses the questions, for the ruling by this Authority does not deal with the issue of whether a GST registration should be surrendered. Hence, it is held that this authority does not have jurisdiction to pass any ruling on such matters - the question posed does not pertain to matter in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, the first question is not maintainable. Whether the society can claim ITC on repairs both major as well as minor? - HELD THAT:- Input tax credit generally is not available for construction, reconstruction, renovation, addition, alteration or repair of an immovable property even when such goods or services or both are used in course or furtherance of business. However, the limitation in such a situation is to extent of capitalization. The activity of repair and maintenance which encompasses supply of goods for a construction activity is of immovable nature. The provisions of ITC for the said supply of goods is covered under Section 17(5)(d) read with explanation mentioned therein. Therefore, ITC on GST paid on such goods as mentioned above will not be available to the extent of capitalisation on account of construction service in respect of the concerned immovable property as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. The supply of goods and services supplied for construction work of an immovable nature can be done in composite manner also i.e. works contract. The works contract service for supply of above mentioned goods and service is covered under Section 17(5)(c) read with explanation mentioned therein. Therefore, ITC on GST paid on above said works contract service will not be available to the extent of capitalisation as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. Whether the society can claim ITC on these services either fully or proportionately despite of availing exemption available to residential units? - HELD THAT:- The provisions of Section 17 (2) will be applicable in the present case in as much as when goods or services or both are used by the applicant partly for effecting taxable supplies under the GST Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies.

  ---

• 2021 (11) TMI 265
  Classification of supply and services - Locomotive parts - supply of multiple items, some of these items are manufactured by the applicant and some of them are procured for supply to the coach factory - supply of goods or works contract services - composite supply or mixed supply or normal individual supply? - contract with Krishna Bhagya Jala Nigam Limited for Design, manufacturing, supply, installation, operation and maintenance of Phase-II of SCADA and GIS based automation, for NLBC, SBC, JBC, MBC IBC canal network systems including maintenance of the system for 5 years after commissioning of the scheme on turnkey basis - naturally bundled services or not. HELD THAT:- The Hon ble Supreme court of India in a catena of case law has ruled that illustrations in a statute are part of the statute and help to elucidate the principle of the Section. Therefore a composite supply should be similar to a supply mentioned in the illustration to the definition in Section 2(30), where two or more taxable goods or services are supplied along with each other to constitute a composite supply - the supply made by the applicant against the purchase order of the Integrated Coach Factory is a mixed supply and the rate of tax applicable is the highest rate of tax applicable to the particular goods constituting the mixed supply. Applying principle of Noscitur a sociis it is seen from the purchase order none of the goods supply fall under this entry. They are also not essential component without which the whole cannot function. Therefore the supplies made under the referred purchase order to Integrated Coach Factory, Chennai do not fall under entry 8607. Contract with Krishna Bhagya Jala Nigam Limited, Narayanpur Division, Hunasagi Taluk, Yadgir District in the State of Karnataka - HELD THAT:- The applicant has entered into a contract with Krishna Bhagya Jala Nigam Limited, Narayanpur Division, Hunasagi Taluk, Yadgir District in the State of Karnataka. Whereas the application is dated.28-05-2018 the contract is much later to the application i.e., 12-10-2018. Further the place of supply falls outside the State of Telangana and hence this authority cannot decide the matter. Request for clarification as to whether the scope of work can be treated as supply of goods or works contract services and also request for the applicable rate of tax for the same - HELD THAT:- The clarification can t be issued on supplies made in Karnataka.

  ---

• 2021 (11) TMI 241
  Principles of natural justice - Cancellation of registration of the petitioner - Section 29 of the U.P. GST Act, 2017 - contention of petitioner is that the SCN reveals no details as to whether any survey had actually taken place or not and that what was the date and time fixed for personal hearing - HELD THAT:- Rule 21 of the U.P. GST Rules, 2017 provides that the registration granted to a person is liable to be cancelled, if the said person; (a) does not conduct any business from the declared place of business; or (b) issues invoice or bill without supply of goods or services in violation of the provisions of the Act, or the rules made thereunder; or (c) violates the provisions of section 171 of the Act or the rules made thereunder. A bare perusal of the show cause notice format prescribed under Rule 22(1) shows that there is a difference in the show cause notice dated 12.5.2021 issued to the petitioner and in the form of the show cause notice quoted aforesaid. The specific date and time is necessarily required to be mentioned in the notice for showing cause which is conspicuous by its absence in the notice to the petitioner. Moreover, the proviso to subsection (2) of Section 29 mandates opportunity of hearing being provided to the person whose registration is proposed to be cancelled before cancelling the registration - the denial of opportunity of hearing to the petitioner as is mandated in the first proviso to sub-section (2) of Section 29 of the Act of 2017 vitiates the proceedings as well as the orders cancelling the registration of the petitioner. The provisions of sub-section (1) of Section 29 would come into play where (a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or (b) there is any change in the constitution of the business; or (c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24. The learned Standing Counsel has not been able to demonstrate that the case of the petitioner is liable to be covered under any of the three clauses as aforesaid - Sub- Section (1) of Section 29 would come into play only in the given set of circumstances that are mentioned in sub-section (1) and for no other reasons. The order of cancellation of registration dated 28.5.2021 as well as order passed in the appeal dated 17.7.2021 are quashed - Petition allowed.

  ---

• Income Tax

• 2021 (11) TMI 264
  Penalty u/s 271B - non-furnishing of Tax Audit Report - HELD THAT:- It is the claim of the assessee that it had not only got his accounts audited as per mandate of law u/s 44AB of the Act, but had also duly uploaded the audit report in Form No. 3CB and Form No. 3CD a/w his return of income that was filed on 17.09.2011 - there appears to be some substance in the explanation of the assessee as regards his failure to participate in the course of the proceedings before the lower authorities. Be that as it may, we are of the considered view that in the totality of the facts involved in the present case before us the matter requires to be revisited by the A.O for verifying the aforesaid claim of the assessee i.e he had duly got his accounts audited u/s 44AB of the Act and had uploaded the tax audit reports in Form No. 3CB and Form No. 3CD, dated 05.08.2011 a/w his return of income that was filed on 17.09.2011. In case, if the claim of the assessee is found to be in order, then, the penalty imposed by the A.O u/s 271B would stand vacated. We, thus, in terms of our aforesaid observations set-aside the matter to the file of the A.O for the limited purpose of giving effect to our aforesaid observations. Needless to say, the A.O shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

  ---

• 2021 (11) TMI 263
  Disallowance of deduction u/s 80IC - rule of consistency - Whether CIT(A) was correct in deleting the addition made by the AO on account of disallowance of deduction u/s 80IC of the I.T. Act on the basis of deduction allowed in earlier years as per the directions of the Hon ble ITAT on a single issue ignoring other issues which were also attributable to the said disallowance? - HELD THAT:- As it appears that the claim of deduction has been denied from A.Ys 2007-08 to 2010-11 and pursuant to the directions of the Tribunal, the Assessing Officer allowed the claim of deduction. Since the Assessing Officer had allowed the deduction pursuant to the directions of this Tribunal from A.Ys 2007-08 to 2010-11, the ld. CIT(A) allowed the claim of deduction following the earlier orders. In our considered opinion, if the deduction has been allowed in earlier years on the same set of facts and on similar claim the Assessing Officer cannot take a fresh view. We, therefore, do not find any error or infirmity in the findings of the ld. CIT(A). - Decided against revenue.

  ---

• 2021 (11) TMI 262
  Rejection of books of accounts u/s.145 - Addition on account of low gross profit - HELD THAT:- There is no doubt that assessee Gross Profit was estimated @10.31% in A.Y. 2010-11 to 2012-13. For the year under consideration, the assessee has declared Gross Profit @8.38%. The assessee claimed that in the immediately preceding year the Gross Profit percentage was Nil and the profit of assessee increase substantially and it should be accepted as it is - Gross Profit of the assessee has been consistently adjudged being estimated @10.31% in preceding years. There cannot be any consistent Gross Profit for several years. And on perusal of comparative chart of gross profit, we find that business of assessee in terms of turnover has increased from Rs. 14.64 crore in A.Y. 2012-13 to Rs. 19.87 crore in the year under consideration. The assessee claimed that incidental cost and cost of raw material is increased. We find that the assessee raised the similar plea before the AO - AO has not countered such fact. Considering the fact and circumstances of the case that turnover of the assessee is increased, the estimation of 10% Gross Profit will meet the possibility of Revenue leakage and would meet the end of justice, therefore, we direct the AO to estimate the Gross Profit @10%. Penalty u/s 271(1)(c) - HELD THAT:- There is no dispute that AO while passing the assessment order under section 143(3) on 16.02.2015, made addition by rejecting books of accounts and thereby made addition on estimation basis by estimating Gross Profit @10.31%. The AO levied penalty on the said estimated additions. We find that similar penalty were levied in earlier years i.e. 2009-10, 2010-11 and 2011-12. The same was deleted by the ld.CIT(A) and on further appeal before the Tribunal, the order of ld.CIT(A) was upheld. - Decided against revenue.

  ---

• 2021 (11) TMI 261
  Revision u/s 263 by CIT - Fair market value of the shares and receipts of consideration on issue of shares over and above the fair market value invoking applicability of section 56(2)(viib) - HELD THAT:- The assessee obtained and submitted a report from a merchant banker who is equally qualified to issue such valuation report under Rule 11UA(2) and who has determined the fair market value of the shares at Rs. 219.50 per shares which is still higher the value at which the shares were issued by the assessee company. Thus, even where the report of the merchant banker is considered, the provisions of section 56(2)(viib) continues to remain inapplicable There is no adverse finding recorded by the ld PCIT and no dispute which has been raised regarding the discounted cash flow method of valuation and the methodology adopted in both the valuation reports. Though there is a variation in valuation so determined in two reports on account of certain underlying assumption regarding illiquidity ratio, as highlighted by the ld A/R, there can always be a different of opinion among the technical experts, but the necessary corollary thereof doesn t necessarily mean than the valuation so determined doesn t stand on sound foundation in terms of data and methodology and the fair market value and issue of shares is not supported by the valuation report. We agree with the contention advanced by the ld A/R that even where there is a technical breach in terms of obtaining and submitting the valuation report from an associate member of ICAI as against fellow member of ICAI; and even taking into consideration report of the merchant banker, the position will remain the same and the provisions of section 56(2)(viib) continues to remain inapplicable and thus, the order passed by the Assessing officer cannot be held as prejudicial to the interest of Revenue which is an essential condition for invocation of jurisdiction u/s 263 - Decided in favour of assessee.

  ---

• 2021 (11) TMI 260
  TP Adjustment - adjustment with respect to power transferred by the assessee from eligible unit to non eligible unit - internal CUP v/s external CUP - Claim of the assessee is that price at which assessee has purchased power from SEB is internal cup and therefore these prices are to be preferred over any external cup price i.e. average price of IEX and the price at which it has purchased power in Rajasthan - HELD THAT:- There is no dispute about the applicability of internal cup prices with respect to transaction of sale of power from eligible unit to non eligible unit with respect to UP. This is so for the reason that in UP region assessee sales power to SEBs and therefore it is an internal cup accepted by the learned DRP also. However in Kota, Rajasthan, assessee purchases power but it does not sell the power and in that circumstances it cannot be said to be an internal cup applied by the assessee. Therefore we are in agreement with the learned dispute resolution panel that for the purpose of benchmarking of power transferred from eligible unit to non eligible unit assessee can only claim internal cup when it also sales power to SEB. Here it purchases power from SEB therefore it cannot be used as an internal cup but is rightly held by the learned dispute resolution panel to be an external cup. Whether the learned that TPO has correctly adopted IEX rates for the purpose of benchmarking the transaction of sale of power by Kota eligible unit to non eligible unit? - whether the Indian energy exchange rates are proper external cup or not? - HELD THAT:- Much sanctity is attached to the rates adopted by SEBs. TPO has failed to show the reason of such a wide disparity between the rates of Indian energy exchange which is a spot exchange compared with the rates at which the energy is actually consumed in that geographical region. This does not mean that the quoted price cannot be used for the comparability analysis in cup method. But if the prices are so divergent and the difference between the two external cup becomes irreconcilable, the external cup price which is more reliable should be used. Therefore, in our view, IEX rates for these reasons cannot be said to be an external cup available for invoking the provisions of first proviso to Section 92C (2) of the act. As in case of the assessee for assessment year 2015 16 , external corporate of purchase price of power from SEB is used as a comparable discarding the Indian energy exchange rate by the learned CIT A, and the same order has not been challenged before the higher forum, it becomes final. This shows that in the subsequent year the learned transfer pricing officer/assessing officer has accepted the methodology of benchmarking the transaction of transfer of power in Rajasthan from eligible unit to non eligible unit at the purchase price of power from SEB. No infirmity in the benchmarking analysis of the assessee wherein the assessee has considered rate of Rs. 6.30 per kilowatt against the rate of power purchase paid by the assessee to Jaipur Vidyiut Vitran Nigam Limited at the rate of Rs. 8.35 per kilowatt, using the external cup for comparability. Accordingly, the ground number 2 of the appeal of the assessee is allowed and the transfer pricing adjustment is deleted. Determining the arm s-length price of steam at rupees nil - HELD THAT:- Revenue authorities erred in holding that the steam does not have any cost and therefore steam transferred by assessee s eligible units to non eligible units at cost, which is determined by Cost accountants and Other professional, has the Arms length price of Rs Nil instead of cost of Rs. 103745275/- . Therefore we allow ground number 3 of the appeal and direct the learned transfer-pricing officer to delete the addition of Rs. 1,035,745,275 which was made determining the arm s-length price of transfer of steam from eligible unit to non-eligible unit by considering the cost of production of the steam at Rs. Nil. Disallowance u/s 14 A - HELD THAT:- Assessee has interest free funds available which are 12.82 times higher than the amount of investments. Thus Where assessee had its surplus fund against which investment was made, no question of making any disallowance of expenditure in respect of interest expenses under section 14A arose - See Principal CIT v. Sintex Industries Ltd. [ 2018 (3) TMI 1448 - SC ORDER] . Further for working out the portion of administrative expenditure, assessee has applied the factor of 0.5 % on the amount f investments which has yielded tax-free income during the year. We find that this stand of assessee is also in consonance with the decision of Honourable Delhi High court in ACB India limited [ 2018 (3) TMI 1448 - SC ORDER] . In view of this we direct the ld AO to retain the disallowance offered by assessee as disallowance u/s 14 A of the Act only to the extent of Rs. Rs. 6,399,219/ which is offered by the assessee itself and delete the balance. Accordingly Ground no 4 of the appeal is allowed. Addition made to the income of the assessee Under the head capital gains by invoking the provisions of Section 50 C - HELD THAT:- Provision of section 50C (2) provides that where the assessee claims before the ld AO that stamp duty value exceeds the fair market value, then the Ld AO is duty bound to refer the matter to the DVO for determining fair market value of that property. This fact is also noted by the ld DRP but upheld the action of the ld AO for the reason that assessee objected to adoption of stamp duty value as deemed consideration at a very late stage , so ld AO did not have enough time to refer the matter to DVO. Assessee also disputed that the stamp duty valuation is of the commercial properties where as the assessee has purchased agricultural land only. Therefore even otherwise the stamp duty rates of the property should be determined on the basis of it being agricultural land. Assessee in terms of provision of section 50C (2) of the Act has objected against adoption of stamp duty rates as well as characteristics of the land before the ld AO, we set aside the whole issues back to the file of the ld AO with direction to the ld AO to refer mater to the district valuation officer to determine fair market value of the property and assessee is also direct to raise all the issue before ld AO as well as DVO about the real character of the property whether it is an agricultural land or otherwise. Addition u/s 115JB of the income tax act which was disallowed u/s 14 A - HELD THAT:- We find that this issue is squarely covered in favour of the assessee by the decision of special bench in case of ACIT V Vireet Investments [P] Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] where in it has been held that the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated under section 14A, read with rule 8D of the Income-tax Rules, 1962. Therefore action of ld AO of imputing disallowance u/s 14 A of the act as addition as per clause [f] of explanation [1] to section 115 JB is not proper - Even otherwise the assessee has already made adjustment as the above clause of explanation [1] of section 115 JB of the act of Rs. 66.92 lakhs. Thus it is directed to be deleted. Deduction of Education cess u/s 37 (1) - HELD THAT:- We find that this issue is squarely covered in favour of the assessee by the decision of Honourable Bombay high court in case of Sesa Goa Limited. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] and Honourable Rajasthan High court in case of Chambal fertilizers Limited [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT] . Therefore respectfully following the same, we direct the ld AO to allow assessee the deduction of cess u/s 37 (1) of the act. Accordingly, additional ground of appeal is allowed.

  ---

• 2021 (11) TMI 259
  Revision u/s 263 by CIT - Reopening of assessment u/s 147 initiated - eligibility of reason to believe - unexplained investments transactions-HELD THAT:- As established that during re-assessment proceedings u/s. 147 of the Act, the Ld. AO had done detailed enquiry and the assessee had duly explained that separate portfolios for trading and investments were maintained by the assessee. The transactions were carried out in separate D-mat accounts and shares were received in the separate d-mat account. Therefore, there was no question of any manipulation. After duly verifying the explanations of the assessee, the Ld. AO accepted/assessed the assessee s returned income. However, subsequently on the proposal of the Ld. AO, the Ld. PCIT, without applying his mind to the above factual position, exercised his revision jurisdiction u/s. 263 of the Act. The Ld. PCIT has not pointed out any discrepancy/error in the reply/explanation so submitted by the assessee during the reassessment proceedings, which was part of the assessment records. PCIT has resorted to the revision proceedings u/s. 263 of the Act in a mechanical manner on the basis of the proposal of the Ld. AO. It has not been pointed out as to what error has been committed by the Ld. AO in accepting the explanation/evidences so furnished by the assessee in the process of verifying the nature of transactions. Even the CBDT s Circular cited by the Ld. PCIT in his order, in fact, comes to the support the assessee. As the assessee has duly explained that separate portfolios were maintained and trading and investments transactions were carried out in a separate d-mat accounts from the very beginning and that there was no bar for the assessee to carry out both the trading and investment activities. The impugned order passed u/s.263 of the Act by the Ld. PCIT, in this case, is, therefore, not sustainable and the same is accordingly quashed. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 258
  Revision u/s 263 by CIT - Reopening of assessment u/s 147 initiated by AO - escapement of capital gain arising from sale of an industrial plot - HELD THAT:- AO did not make any addition on the issue for which the assessment was reopened - meaning thereby the reassessment proceedings become final. The learned Commissioner cannot explore any other issue under Section 263 which even cannot be explored by the Assessing Officer in reassessment proceedings; because, on the original point on which assessment was reopened, no addition was made. The jurisdiction of the learned Commissioner is confined to the issues on which an assessment is reopened and examined by the AO. The other issues can only be entertained if addition is being made on the issue for which the assessment was reopened. We can make it very clear that if the Assessing Officer has made any addition on account of Long Term Capital Gain earned by the assessee for transfer of industrial plot, then other points could also be examined. Similarly, learned Commissioner could also be found out a fault of the Assessing Officer qua the issue of transfer of industrial plot. If that aspect was considered by the learned Commissioner as erroneous and prejudicial to the interest of the Revenue; thereafter other aspects on the issue of share transactions would also be examined; but in the absence of any addition on the first point, no other issue can be entertained, even under revisional jurisdiction under Section 263 of the Act. We, therefore, allow this appeal and quash the impugned order passed under Section 263 of the Act. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 257
  Reopening of assessment u/s 147 - addition of unexplained cash deposits in the AXIS Bank - as argued no addition remained on the issue for which assessment was reopened - difference between sale consideration taken by the assessee for computing long term capital gain vis- -vis deemed sale consideration under section 50C of the Act calculated on the basis of amount on which stamp duty was paid - HELD THAT:- Unanimous approach of all the Hon ble High Courts i.e. Hon ble Bombay High Courts, Delhi High Court and jurisdictional High Court in construing the provision of section 147 is that expression assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently has been used in section 147. The words and also employed in the section would contemplate that any such other issues come to the notice of the AO would be examined if an addition on the issue for which assessment has been reopened are made. In case no additions are made, then any other such issue will not be examined. In the present case, the ld. CIT(A) has deleted the addition for which assessment was reopened; meaning thereby, an addition on account of unexplained cash deposits in the AXIS Bank cannot be examined and cannot be added by the AO. Therefore, putting reliance upon the judgment of Hon ble jurisdictional High Court in the case of Mohmed Juned Dadani [ 2013 (2) TMI 292 - GUJARAT HIGH COURT] we delete the addition made by the AO. Penalty u/ 271(1)(c) - We have deleted the impugned addition, and therefore, no addition exists in the hands of the assessee so as to attract vigour of penal provision under section 271(1)(c) - Assessee appeal allowed.

  ---

• 2021 (11) TMI 256
  Ad-hoc disallowance being 25% of certain outstanding creditors - HELD THAT:- It was not supposed to maintain the books of accounts and other details. If it was not having those details, how these sundry creditors appearing in the books of accounts of the assessee become bogus? It is an irregularity, if any, at the end of the manpower supplier. The existence of the party is not in dispute. Where is the necessity to take work in this year? It can be an outstanding sundry creditor from the earlier years out of which partly paid in this year. We failed to appreciate the logic given by the learned First Appellate Authority. One of the observations made by learned CIT(A) is that a credit entry of Rs. 3,00,000/- was shown in the bank statement of M/s. Globe Trade followed by transferring the same amount back to the assessee. But this aspect has not been further elaborated by reproducing the bank statement and why the learned CIT(A) has not issued a notice for enhancement of disallowance. Because, in that case, the whole amount should be considered as bogus and not 25% of that. To our mind, both the authorities have not appreciated the facts in right perspective and, therefore, no disallowance is called for. We, therefore, delete the disallowance and allow the appeal of the assessee.

  ---

• 2021 (11) TMI 255
  Disallowance u/s 43B - custom duty expenditure not claimed as expenses in the year of actual payment as appellant was entitled to receive special benefits as per Custom Excise Rules but said special benefits were not received hence expenses were claimed as revenue expenditure in year under consideration - HELD THAT:- As assessee has paid custom duty which was allowable deduction of the assessee under Section 43B of the Act in the year of payment itself. However, the assessee was expecting certain special benefits as per Custom and Excise Rules; therefore, the assessee did not claim it in that year. Ultimately, those benefits were not given to the assessee and, in this year, he has written off the alleged customs duty receivable in the accounts and claimed it as revenue expenditure in the profit and loss account. We find that the learned First Appellate Authority has rightly adjudicated this issue after putting reliance upon the decision of the ITAT in the case of ACIT Vs. Rangoli Industries Pvt. Limited [ 2013 (1) TMI 968 - ITAT AHMEDABAD] and no interference is called for.

  ---

• 2021 (11) TMI 254
  Exemption u/s 11 - rejecting the registration u/s. 12AA - Denial of principle of natural justice - main grievance of the assessee order passed by the Ld. CIT(E) without granting adequate opportunity of being heard - HELD THAT:- In the instant case it is not clear as to whether the Ld. CIT(E) raised the queries after receiving the reply from the assessee to the earlier queries raised on 19/08/2020. It is well settled that nobody should be condemned, unheard as per the maxim, audi alteram partem . Keeping in view the principles of natural justice deem it appropriate to set aside this case back to the file of Ld. CIT(E) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Appeal of the Assessee is allowed for statistical purposes.

  ---

• 2021 (11) TMI 240
  Revision u/s 263 by CIT - CIT jurisdiction to revise the order passed by the A.O u/s 143(3) r.w.s 153A - AO had short assessed the assessee s income by restricting the addition u/s 68 as regards the bogus transactions of sale of shares only to the extent of the capital gain instead of the alleged sale proceeds credited in his bank account; and short assessed the addition u/s 69C as regards the commission alleged to have been paid by the assessee to accommodation entry providers to facilitate the bogus sale transactions by quantifying the same on the basis of the capital gain and not the amount of sale consideration - HELD THAT:- As both the issues in question on the basis of which the Pr.CIT had assumed jurisdiction u/s 263 of the Act had been considered and decided in appeal by the CIT(A), therefore, the Pr.CIT was clearly divested of his jurisdiction to have exercised the revisional jurisdiction vested with him u/s 263 of the Act as regards the said issues. We, thus, in terms of our aforesaid observations set-aside the order passed by the Pr.CIT u/s 263 and restore the order passed by the A.O u/s 143(3) r.w.s 153A.- Decided in favour of assessee.

  ---

• 2021 (11) TMI 239
  Unexplained cash deposits - No source of cash deposits given during the year in the two bank accounts maintained by the assessee - whether any on-money received by the assessee in cash over and above the declared sale consideration? - HELD THAT:- As per cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded by him and partly by his wife and therefore, availability of cash in hand at the beginning of the year has been sufficiently explained. In the result, we hereby direct the Assessing officer to delete the addition so made in the hands of the assessee towards unexplained cash deposits - Decided in favour of assessee.

  ---

• 2021 (11) TMI 238
  Depreciation on intangible assets - HELD THAT:- As per our orders in the earlier assessment years 2010-11 2014-15 [ 2021 (5) TMI 252 - ITAT PUNE] AND 2012-13.[ 2021 (8) TMI 1243 - ITAT PUNE] in respect of the assessee, the issue of depreciation on intangible assets is allowed for statistical purposes whereas the issue of depreciation on other assets is allowed. Thus, Ground Nos. 1 to 4 raised in appeal by the Revenue are partly allowed for statistical purposes. TP adjustment - method of benchmarking royalty payment merging with transactions of purchase of raw materials - HELD THAT:- CIT(Appeals) has accepted the receipts of services and going through the various evidences placed before us annexed in the paper book, there is no dispute regarding such receipt of services. DR could not place any evidences contrary to these facts on record. That only for determination of arm s length price of the transaction payment of royalty has to be benchmarked separately and cannot be aggregated with the payment for purchase of raw materials. This exercise has to be done by the Assessing Officer/TPO. Ground are restored to the file of Assessing Officer/TPO for adjudication as per law and as per aforesaid observations.

  ---

• 2021 (11) TMI 237
  Disallowance u/s 14A r.w.r. 8D - contention of the Ld. counsel is that since the AO had computed the disallowance in a mechanical manner, the Ld. CIT(A) ought to have deleted the addition made by the AO - HELD THAT:- Send the issue back to the AO to decide the issue afresh affording a reasonable opportunity of being heard to the appellant/assessee. Disallowance of the interest paid on working capital limit on CC Account - company had its own sufficient funds - HELD THAT:- Send the issue back to the AO to decide the issue afresh affording a reasonable opportunity of being heard to the appellant/assessee. Addition on proportionate basis on loan given to its sister concern - HELD THAT:- This issue is covered in favour of the assessee by the decision of the coordinate Bench in assessee s own case [ 2018 (5) TMI 2093 - ITAT CHANDIGARH] we find no reason to take a different view. Hence, respectfully following the decision of the coordinate Bench, we allow this ground of appeal and set aside the findings of the Ld. CIT(A).

  ---

• 2021 (11) TMI 236
  Disallowing the exemption claimed u/s 54/54F - sale of the bungalow as well as the land - Assessee was owner of more than one residential property as on the date of transfer of the Bungalow as well as the land - HELD THAT: - Exemption on sale of bungalow - On perusal of the above statement of income of the assessee, it is nowhere clear whether the assessee has claimed deduction under section 54/54F of the Act. Rather, it shows the deduction claimed under section 54EA of the Act which deals with the capital gain on sale of capital assets invested in specified securities. However, we find that none of the authorities including the principal CIT has disputed that the assessee has claimed the deduction under section 54EA of the Act. Rather the issue revolves for the exemption claimed under section 54 or 54F of the Act. Thus, the statement of income of the assessee does not give any information to decide the issue on hand. The exemption under section 54 and 54F of the Act are computed in a different manner. As such under the provisions of section 54 of the Act the amount of capital gain is considered for the purpose of making the investment in another residential property whereas under the provisions of section 54F of the Act the amount of net consideration is considered for the purpose of making the investment in another residential property. On perusal of the direction of the learned principal CIT we find that it was directed to the AO to make a fresh assessment in accordance with the provisions of law in terms of section 54F of the Act. Thus, it was clear that the AO was authorized to make a fresh assessment as per the provisions of law after the necessary verification in terms of section 54F of the Act. Without prejudice to the above, we also note that, assuming the assessee has claimed deduction under section 54F of the Act, then it was the duty of the revenue to provide the rightful claim of the assessee which is available under the provisions of law but the same was not claimed by the assessee under the wrong believe. As such, the Revenue cannot take the benefit of the ignorance of the assessee rather it was duty-bound to extend the benefit available to the assessee under the provisions of law. Exemption u/s 54F of the Act on the sale of land by the assessee - There is no dispute to the fact that the assessee has claimed the exemption under section 54F of the Act on the sale of land. As such the assessee can claim the deduction under section 54F of the Act on the sale of long-term capital asset being land in the present case. Furthermore, this fact was also admitted by the assessee before the authorities below. However, the authorities below have denied the exemption claimed by the assessee under section 54F of the Act on the sale of land on the reasoning that the assessee on the date of transfer of land was the owner of more than one residential property. The contention of the assessee was that one of the assessee residential property was used as business asset as staff quarters. Therefore, as per the assessee the same cannot be held as residential property owned by the assessee as on the date of transfer. Admittedly, the onus lies upon the assessee to prove that its residential property was used for the business purposes. For this purpose, we have perused the depreciation chart of the assessee to see whether the assessee has claimed depreciation on such alleged building used for the purpose of the business. But we find that there was no depreciation claimed by the assessee on the alleged building rather the depreciation was claimed by the assessee only on the factory building along with other assets. Thus, the assessee failed to provide any documentary evidence in support of his contention. Accordingly, we hold that the assessee is not eligible for exemption under section 54F of the Act on the sale of land, as the assessee was holding more than one residential unit. Hence, the ground of appeal of the assessee is partly allowed.

  ---

• Customs

• 2021 (11) TMI 253
  Legality of import without Importer-Exporter Code (IEC) - import of Piano - restricted or prohibited item - imported goods were not meant for sale in market and imported for personal use - Confiscation - redemption fine - penalty - HELD THAT:- It is an admitted fact that the goods in question is covered under HSN No. 9804900 which is not freely importable but restricted subject to value limit of Rs. 2000/- (C.I.F.) and other conditions as specified in Clouse 3(1) of the Foreign Trade (Exemption from application of Rules in certain cases) order 1993, which appellant had asserted all along before the adjudicating authority and the Commissioner (Appeals) but the goods were directed to be confiscated for violation of Section 7 of the Foreign Trade (Development Regulation) Act, 1992 read with Foreign Trade Policy para 2.12 and 2.8 of 2009-2014. Further, there is no denial of the fact that in the said Foreign Trade (Exemption from application of Rules in certain cases) order 1993 under Order No. 3(I) any person importing goods through the post/courier or otherwise for his personal use except certain item including consumer electronic items is covered under such exemption when the CIF value of such goods shall not exceed of Rs. 2000/-. Therefore, admittedly this goods is a restricted item but there is no absolute restriction or prohibition available for such import of goods except that in case the CIF value of goods is above Rs. 2000/- the same is subjected to customs duty which appellant had paid @ 35% + CVD + SAD, as per submissions of learned Counsel for the appellant. The order of confiscation with option for redemption fine and penalty for importer/appellant not having IEC number is not sustainable in law and facts - Appeal allowed - decided in favor of appellant.

  ---

• Corporate Laws

• 2021 (11) TMI 252
  Approval of Scheme of Arrangement by way of amalgamation - Section 230-32 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013, read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The directions with respect to calling, convening and holding of the meeting of Equity Shareholders, Secured Creditors and Unsecured Creditors or dispensing with the same as well as issue of notices including by way of paper publication are issued. The scheme is approved - application allowed.

  ---

• 2021 (11) TMI 235
  Sanction of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- Since all the requisite statutory compliances have been fulfilled, CP (CAA) 1022/MB-II/2020 is made absolute in terms of the prayer clauses of the said Company Scheme Petition - The Scheme is hereby sanctioned with the Appointed Date of 1 April 2020. Application allowed.

  ---

• Insolvency & Bankruptcy

• 2021 (11) TMI 251
  Seeking approval of Resolution Plan - Section 30(6) r.w. Section 31 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The resolution plan complies with all the requirements of Section 30(2) of IBC, 2016. The Resolution Plan complies with all the applicable provisions. The total outstanding admitted claims of all stakeholders stand at Rs. 617,10,92,265/- and Resolution Applicant has committed payment to them at Rs. 110,88,99,779/- which amounts to 17.13% of total outstanding debt. The resolution plan also contains provisions for its effective implementation and we as Adjudicating Authority are satisfied that the resolution plan so approved can be successfully implemented. The monitoring committee and supervisory committee as mentioned in the resolution plan shall be formed for effective implementation of the resolution plan. The scheme is allowed to be approved - application allowed.

  ---

• 2021 (11) TMI 250
  Liquidation of the Corporate Debtor - no resolution plan has been received by Corporate Debtor - Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On the perusal of the Application and the documents enclosed therein it is found, the RP has complied with the procedure laid down under the Code; Regulations made thereunder. The reasons assigned in the petition with regards to taking the decision of liquidation of Corporate Debtor by COC appears to be convincing. On verification, it is found that this is a fit case to pass liquidation order under sub-section 1 of section 33 of the Code for liquidation in the absence of any resolution plan. Application allowed.

  ---

• 2021 (11) TMI 249
  Maintainability of application - Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - service of demand notice - HELD THAT:- The Invoices pertain to the period 2013-14. Further, the Operational Creditor has issued demand notice u/s. 8 of the Code for the operational debt on 16.10.2019 - The last payment which has been received from the Corporate Debtor is on 04.04.2014. However, no acknowledgment anywhere on record has been issued by the Respondent regarding the payment due to the Petitioner. This Bench also notes that no reply to the demand notice was given by the Respondent. The last date of any part payment/acknowledgment is 04.04.2014 and the Petition has been filed on 16.02.2021 i.e. after more than six years from the date of any part payment/acknowledgment. Therefore, the Petition is heavily time-barred in terms of relevant provisions of the Limitation Act, 1963. Petition dismissed.

  ---

• 2021 (11) TMI 248
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - service of demand notice - Section 8 of IBC, 2016 - HELD THAT:- From perusal of Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, it emerges that the Demand Notice under Section 8 of IBC, 2016 can be issued by the Operational Creditor in two formats i.e. Form 3 and in Form 4. In the present case, the Operational Creditor has preferred to send the Demand Notice to the Corporate Debtor in Form - 4 on 29.10.2019. However it is the contention of the Learned Counsel for the Corporate Debtor that the Demand Notice sent in Form 4 is invalid and incomplete. It is to be noted that whether the invoices sent by the Operational Creditor is able to prove that the operational debt is due and payable by the Corporate Debtor. Based on the documents in the typed set, more particularly, the balance confirmation mail by Corporate Debtor, is more than sufficient to prove the existence of the operational debt and hence the contentions raised by the Learned Counsel for the Corporate Debtor in this regard are not sustainable and valid in the eye of law, there is no such pre-existing dispute and also the Demand Notice issued by the Operational Creditor does not suffer from any legal infirmities. The Petition as filed by the Operational Creditor is required to be admitted under Section 9(5) of the IBC, 2016 - petition admitted - moratorium declared.

  ---

• 2021 (11) TMI 234
  Liquidation of Corporate Debtor - Section 33(1), 33(2) and 34(1) of the Insolvency Bankruptcy Code - HELD THAT:- It is noted that the company is not having assets and funds to meets the liabilities of the Corporate Debtor. The COC in the meeting dated 02.06.2021 passed a resolution to Liquidate the Corporate Debtor by 100% votes. The COC has also assessed the liquidation costs and remuneration of the Liquidator as per Regulation 39B 39C of the CIRP Regulation. The shortfall in Liquidation of Corporate Debtor shall be born by the members of COC. The COC could not explore to sale as a going concern on the ground that no assets of Corporate Debtor exist. The COC has also resolved in the said meeting to appoint the applicant (RP) Liquidator who has also given consent to act as a Liquidator. The order of liquidation of the Corporate Debtor is allowed - application allowed.

  ---

• PMLA

• 2021 (11) TMI 247
  Money Laundering - violation of undertaking of captive mining for the grant of Mining Lease - violation of environmental laws - section 3 read with section 70 which is punishable under section 4 of the Act of 2002 - territorial jurisdiction - petition filed at Patna - jurisdiction of State of Bihar for the said complaint - HELD THAT:- It is an admitted fact that C.B.I case was filed in the year 2016 in which the charge-sheet has not been submitted as yet the authority concerned had filed petition at Patna wherein the Hon ble Patna High Court has held that the State of Bihar has got no jurisdiction for the said complaint and directed to return the complaint copy to the complainant and thereafter the case in hand has been filed at Ranchi. There is no doubt that the petitioner s lease is being governed under the Act of 1957. The provisions placed by Mr. Luthra, the learned counsel appearing on behalf of the petitioner under the said Act are statutory in nature and action under that Act is open to be taken by the authority prescribed under that Act. The application of special law and the Indian Penal Code are well settled as has been argued by the learned counsel appearing on behalf of the petitioner. But, it must be in the facts and circumstances of each case. Section 2(1)(y) of the Act of 2002 defined the scheduled offences under the Act in Part-A and Part-B and in the schedule section 120B and section 420 are provided. Thus, it cannot be said that cheating is not prescribed under the scheduled of section 2(1)(y) of the Act. It is an admitted fact that the C.B.I has registered the case under section 120B and 420 of the IPC - In view of own admission of the officers of the company about the export, at this stage, it cannot be held that the petitioner was not exported the iron ore. Moreover, when undertaking to that effect has been submitted by the petitioner that iron ore will be used for own industry only. Explanation to section 3 of P.M.L.A Act which has been added later on stated that process or activity connected with proceeds of crime continues till such time a person is directly or indirectly enjoying the proceeds of the crime, accordingly the entire process/activity connected to the proceeds of crime is a continuing offence - In the case in hand, it cannot be said that at this stage, in absence of trial where the facts are hazy when initial action itself was not in consonance with law. Moreover, it is crystal clear that the object of exercise of power under Section 482 Cr.P.C. is to prevent abuse of process of Court and to secure ends of justice. The exercise of extraordinary jurisdiction is an exception, but not a rule of law. There is no straitjacket formula nor defined parameters to enable a Court to invoke or exercise its inherent powers. It will always depend upon the facts and circumstances of each case. The Court requires to be very cautious while exercising jurisdiction under Section 482 Cr.P.C. The expression cognizance has not been defined in the Code. Cognizance merely means become aware of and when used with reference to Court or a Judge, it cannot to take notice of judicially . The Court is not required to make a roving enquiry, and discuss the evidences for coming to a conclusion that no prima-facie case is made out, at this stage, which is against the mandate of law - application disposed off.

  ---

• 2021 (11) TMI 233
  Grant of anticipatory bail - Proceeds of crime - cheating the investors - recipient of crime - Sections 3 read with Section 70 of Prevention of Money Laundering Act, 2002 and punishable under Section 4 of Prevention of Money Laundering Act, 2002 - HELD THAT:- Considering the serious allegations against the petitioner and in the absence of any material to suggest that the petitioner is not guilty of the offence and that he is not likely to commit any offence, while on bail, this Court is of the considered view that this is not a fit case, where the privilege of anticipatory bail be given to the petitioner. The prayer for anticipatory bail of the petitioner is rejected - Application dismissed.

  ---

• Service Tax

• 2021 (11) TMI 246
  Commercial training and coaching services or not - Prayer to excuse the appellant from paying the pre-deposit amount for instituting the appeal - HELD THAT:- The Assessment Order calling upon the appellant to pay tax on an erroneous understanding of the status of the appellant cannot be countenanced. In that case, the appellant may not be asked to pursue the remedy of appeal and as a consequence, obliged to deposit the pre-deposit amount. The fact that the appellant is not covered by the category of assessee engaged in commercial training and coaching services, is not disputed by the Department - If that is the position, to do substantial justice in exercise of our plenary powers under Article 142 of the Constitution of India, it is ordered that the demand raised in Order-in-Original be effaced from the record. As such, no demand towards subject tax could be levied and collected against the appellant in the fact situation of the present case. Appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 245
  Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - petitioner was restrained to make the payment by operation of law - payment was made subsequently - HELD THAT:- To take certain benefit of service tax, the respondents came out with a scheme namely Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. One was required to make the payment under Scheme of 2019 within the timeframe but the petitioner did not comply the mandate. It may be on account of the order passed by the N.C.L.T. or operation of law but the question would be as to whether this Court can issue a direction going contrary to the Scheme of 2019. It is also when now the scheme is no more exist so as the committee to consider the case of the petitioner. The scheme cannot be made operational by this Court going beyond the period for which it was formulated only for one person or to relax any of the conditions enumerated in the scheme. It is also when the committee under the scheme no more exists. The prayer made in the writ petition cannot be granted for consideration of a case of the petitioner for paying the service tax under the scheme. Petition dismissed.

  ---

• 2021 (11) TMI 244
  CENVAT Credit - input services or not - items were used by the assessee in fabrication or for support of capital goods - M.S. Angles, G.I. sheet, Bolts, Shelter Cabins, Structures Cabins, Structure of Iron and Steels, M.S. Huts, fabricated and galvanized structures, etc. - HELD THAT:- It is an admitted fact that the respondent/assessee does not own the telecom towers. The respondent are only providing services of providing uninterrupted power for ensuring maximum uptime of the telecom towers, to ensure un-interrupted mobile services. For rendering such output services, the respondent has acquired the items under dispute for providing the output service. It is found that an output service provider under Rule 3 of CCR is entitled to take cenvat credit on all such goods without any distinction as to inputs or capital goods for rendering taxable output service. Further, the show cause notice is mis-conceived for raising the dispute on the inputs being not capital goods. There are no merit in this appeal by the Revenue and the same is dismissed - decided against Revenue.

  ---

• Central Excise

• 2021 (11) TMI 243
  CENVAT Credit - invoices issued prior to dated 01.09.2014 - denial of credit on the ground that it was taken after the lapse a period of six months/one year - applicability of N/N. 21/2014-CE(NT) dated 11.07.2014 - HELD THAT:- An identical issue was examined by Hon ble High court of Delhi in GLOBAL CERAMICS PVT. LTD., M/S. B.R. CERAMICS (P) LTD. VERSUS THE PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, DELHI-1 [ 2019 (5) TMI 1432 - DELHI HIGH COURT] where it was held that the appellant is entitled for the Cenvat Credit since all the invoices on which cenvat credit was claimed were issued prior to 01.09.2014. Appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 242
  Entitlement to Interest on pre-deposit, on being successful in appeal - Section 35FF of Central Excise Act - HELD THAT:- Section 35FF provides for interest on the amount refundable to an assessee, pursuant to being successful in appeal, does not make any distinction between pre-deposit made by way of cash/ LPA or by way of cenvat credit account - the finding of learned Commissioner (Appeals) is erroneous that no interest is payable whether the pre-deposit is made by way of debit in cenvat credit account. The Adjudicating Authority is directed to disburse the interest @12% per annum (on the refund amount of Rs. 49,94,990/-) from the date of deposit till the date of refund - appeal allowed - decided in favor of appellant.

  ---