Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 13, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Contempt Petition - allegation is that the case of the petitioner for amendment of TRAN-1 form was not considered and no orders were passed in the case of petitioner - Department has processed the case and found that there was no logs of error evidencing any technical glitch faced by taxpayer - Since department has considered and processed the case, it cannot be said the respondents have flouted the judgment passed by this Court. - HC
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Release of goods alongwith the vehicle - the 1st petitioner had admitted his liability to IGST by declaring the same in the invoice - It cannot be said that there was any intention to evade payment of tax because the tax liability, in either event, would be the same. That apart, there is no specific averment in the notice served on the petitioners, as regards any act or omission, that was suggestive of an intention to evade payment of tax - The proceedings initiated against the petitioners under Section 130 of the GST Act, cannot be legally sustained. - HC
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Detention of goods and vehicle - detention was for the reason that the vehicle was apprehended at a place that was not on the normal route between Kanyakumari and Maharashtra - the respondents have not been able to establish an intention to evade tax which is a necessary pre-condition for invoking the provisions of Section 130 of the GST Act. - While it may be true that the invocation of Section 130 of the GST Act in these cases was not justified, the irregularity in the documents that accompanied the transportation surely make it out to be a case that justified a detention of the goods u/s 129 - HC
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Detention of goods alongwith the vehicle - was the consignment moved without generating the prescribed e-way bills? - If the CTO intended to rely upon data maintained by a third party and shared by such third party pursuant to the communication made by him, the fair play makes it incumbent on the CTO to provide an opportunity to the petitioner to meet the data lest the petitioner is fastened with the liability to pay either the tax or interest or penalty on the basis of the data that, allegedly – and as is now alleged by the petitioner, is obtained behind its back to its detriment. - HC
Income Tax
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Royalty - Taxability of receipts on hire of vessel on time charter basis - as the assessee had received charges on account of time charter services rendered by its vessel ‘Smit Borneo’ along with the crew to Leighton India Contractor Pvt. Ltd., and not for allowing the latter the ‘use’ or ‘right to use’ of industrial, commercial, or scientific equipment, the same therein cannot be treated as ‘royalty’ within the meaning of Article 12(3)(b) of the India-Singapore tax treaty. - AT
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Depreciation on Car - Assessee has not earned any revenue from hotel business - The assessee company is in existence under the Companies Act and it has to fulfill various statutory compliances and it is not disputed that the assessee is earning income from F & O business and other sources. The same was offered for tax. Unless and until the assessee is ceased to exist, the assessee is entitled for depreciation on assets which was included block of assets. For granting depreciation, it is not mandatory for assessee to have revenue from Hotel Business - AT
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TDS u/s 194C - Addition u/s 40(a)(ia) - assessee has violated the provisions of Section 40(a)(ia) of the Act for not deducting & depositing the TDS - The amendment is applicable for the assessment year 2005-06, i.e. it is prospective in nature and not retrospective - Additions confirmed - AT
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Allowable exempenditure u/s 37(1) - Distribution of profit - The amount which is the subject-matter is paid to members who supply milk and in some case also to non-members. The payment is for the quantity of milk supplied and in terms of the quality supplied. The commercial expediency for payment of this price are the market conditions, and the need to procure more milk from the members and non-members to the assessee. - he amount paid by no stretch of imagination can be said to be dividend to the members or shareholders or payment in the form of bonus as bonus also has to be paid from the accrued profits - Deduction allowed - AT
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Reopening of assessment u/s 147 - AO has proceeded to reopen the assessment on the basis of wrong appreciation of facts by mentioning that the assessment is proposed to be made for the first time whereas the facts stood otherwise - Approval has been given in a mechanical manner without appreciating the facts properly and there is complete non-application of mind by the superior authorities. - reassessment proceedings have to be quashed - AT
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TDS u/s 194C - expenditure incurred towards advertisement charges - selling and utilizing the advertisement space on a principal to principal basis in publication of Times of India (kannada edition) owned by BCCL - No TDS liability - Additions deleted - AT
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Tribunal dismissing the Appeal instead of disposing the matter on merits - It appears that on account of inadvertence, the senior chartered accountant engaged by the assessee could not comply with the directions of the Tribunal to file the documents. The tribunal, infact, should have adjudicated the matter on merits instead of summarily dismissing the same. - HC
Customs
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Refund of Customs Duty - Duty paid under protest or not - section 27 of the Customs Act, 1962 - The Tribunal held that it is the second proviso to section 27 (1) of the Customs Act that would be applicable and not the fourth proviso and so all that the Commissioner (Appeals) was required to decide was whether duty had been paid under protest or not since an appeal against the assessment order had been filed. The Commissioner (Appeals) clearly misunderstood the direction issued by the Tribunal - the application filed by the Appellant under section 27 (1) of the Custom Act is allowed with all consequential benefits - AT
Service Tax
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Intellectual Property Rights Service - Reverse Charge Mechanism - payment made to Fosters Australia towards permanent transfer of Fosters trademark and brand under the Deed of Assignment - transfer of right to use - The assignment of trademark and the IPR amounts to permanent transfer and no service tax is applicable on permanent transfer of IP Rights by Foster’s to the appellant. - AT
VAT
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TDS under TNVAT - While issues on tax deduction would form part of an order of assessment and the computation thereof, as applicable to assessees/dealers under Sections 22 to 27 and amenable to appeal under Section 51 and 52, issues of non-deduction in the case of a non-dealer/non-assessee under the provisions of the Act would form part of an order under Section 13(4) amenable to revision under Section 54 - This issue is answered in favour of the petitioner. - HC
Case Laws:
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GST
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2020 (11) TMI 424
Contempt Petition - allegation is that the case of the petitioner for amendment of TRAN-1 form was not considered and no orders were passed in the case of petitioner - Department has processed the case and found that there was no logs of error evidencing any technical glitch faced by taxpayer - HELD THAT:- The direction issued to the respondents in the writ petition was to consider the case of the petitioner and to decide it in light of the judgment and communication referred to above. Pursuant to the directions, the respondents considered and decided the case of the petitioner. The decision has been taken, therefore, it cannot be said the respondents have flouted the judgment passed by this Court. Consequently, no contempt is made out and the same is dismissed. Notice discharged.
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2020 (11) TMI 423
Permission to utilise transitional credit - rectification of GSTR-3B from July 2017 to till date - HELD THAT:- Keeping in view the fact that petitioner s letter dated 18th June, 2020 has not been disposed of till date, the present writ petition is disposed of with a direction to Commissioner, GST Delhi (South), to decide the petitioner s letter dated 18th June, 2020 within eight weeks in accordance with law. All rights and contentions of the parties are left open. Issue Notice.
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2020 (11) TMI 422
Release of goods alongwith the vehicle - detention on the ground that the documents that accompanied the transportation of the goods were found to be defective - Section 130 of the CGST Act - HELD THAT:- While the respondents were justified in detaining the goods and the vehicle, based on the material that was available with them which clearly showed that the transportation undertaken by the petitioners, of the goods in question, was not necessarily from Coimbatore as was declared in the invoice and the e-way bill that were produced by the petitioners, the said material does not point to any intention to evade tax, more so when, there is nothing to doubt the genuineness of the declaration of the petitioners that the goods were consigned to Gujarat from Coimbatore, or any material to suggest that the ultimate destination of the goods was any place other than Gujarat. It has to be noticed that the 1st petitioner had admitted his liability to IGST by declaring the same in the invoice, and if the goods, even assuming that they were loaded from Palakkad, were destined to Gujarat, it is the IGST that had to be paid by the 1st petitioner/consigner of the goods. It cannot be said that there was any intention to evade payment of tax because the tax liability, in either event, would be the same. That apart, there is no specific averment in the notice served on the petitioners, as regards any act or omission, that was suggestive of an intention to evade payment of tax - The proceedings initiated against the petitioners under Section 130 of the GST Act, cannot be legally sustained. The respondents shall permit the petitioners to clear the goods and the vehicle on furnishing a bank guarantee for the tax and penalty amounts determined, consequent to the detention of the goods and the vehicle - Petition disposed off.
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2020 (11) TMI 421
Detention of goods and vehicle - detention was for the reason that the vehicle was apprehended at a place that was not on the normal route between Kanyakumari and Maharashtra - HELD THAT:- It is now settled through a catena of decisions of this Court as well as the other High Courts that Sections 129 and 130 are independent provisions, and that, while a detention of goods and vehicle under Section 129 could entail proceedings under Section 130, in situations where the detained goods/vehicle are not cleared by the owners thereof within a period of 14 days from the date of passing of the order under Section 129, it does not follow that in all cases where Section 130 of the GST Act is invoked, they have to be preceded by a detention of the goods/vehicle while in transit. As already noted, the proceedings under Section 130 can be invoked independent of any detention, and under the circumstances enumerated in the said Section, with the only rider that a precondition for the invocation of the provision is that there has to be material to suggest that the actions/omissions of the person were with an intention to evade payment of tax. In the instant case, while the material collected by the respondents, no doubt justify the detention of the goods and the vehicle, inasmuch as there was evidence to suggest that the transportation did not originate from Tamil Nadu, as was declared in the invoice/e-way bill that accompanied the transportation of the goods, and therefore, the said documents could be seen as invalid documents for the purposes of transportation of the goods, the respondents have not been able to establish an intention to evade tax which is a necessary pre- condition for invoking the provisions of Section 130 of the GST Act. In other words, while in the instant cases, the detention under Section 129 can be said to be justified, the further invocation of Section 130, in the absence of any material to suggest that there was an evasion of tax by the petitioners, cannot be said to be justified. While it may be true that the invocation of Section 130 of the GST Act in these cases was not justified, the irregularity in the documents that accompanied the transportation surely make it out to be a case that justified a detention of the goods under Section 129 of the GST Act. In proceedings under Section 129 of the GST Act, there is no requirement for establishing mens rea, and hence, merely on detecting an irregularity in the documents that are to accompany the transportation of goods, the respondents would be justified in detaining the goods and passing the necessary order under Section 129(3) of the GST Act - The proceedings under Section 130 having been found to be misconceived, the respondents must now be permitted to pass formal orders under Section 129(3), in respect of the detention that I have found to be justified on the facts and circumstances of these cases. The respondents are directed to pass orders based on the material available with them, and the statements taken from the petitioners under Section 129(3) of the GST Act - petition allowed.
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2020 (11) TMI 420
Detention of goods alongwith the vehicle - was the consignment moved without generating the prescribed e-way bills? - HELD THAT:- It is observed that there is no serious dispute about the petitioner s assertion that consignment was being transported to the transporter s godown situate within the prescribed distance from the airport premises, and the e-way bills are generated between 3:06 p.m. and 3:12 p.m. The petitioner asserts that the CTO intercepted the vehicle and directed the driver of the vehicle to the CTO Enforcement Office, Devanahalli because Form-Part B of the e-way bills were not populated, and the endorsements in the prescribed form were served at 4:15 p.m. when the vehicles reached the CTO Enforcement Office premises. The provisions of section 129(4) of the KGST Act mandates that no tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. This stipulation that no tax or interest or penalty shall be determined unless the person concerned is given an opportunity of being heard incorporates the seminal principle of fair play which is inherent in the established principle that no person is to be condemned unheard. If the CTO intended to rely upon data maintained by a third party and shared by such third party pursuant to the communication made by him, the fair play makes it incumbent on the CTO to provide an opportunity to the petitioner to meet the data lest the petitioner is fastened with the liability to pay either the tax or interest or penalty on the basis of the data that, allegedly and as is now alleged by the petitioner, is obtained behind its back to its detriment. Petition allowed in part.
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Income Tax
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2020 (11) TMI 419
Block assessment - surcharge at 10% with interest thereon could not have been levied for the tax payable by the Petitioner for that period in view of the relevant statutory provisions, as it then stood - whether surcharge cannot be levied by the Assessing Officer for the block assessment pertaining to the period prior to 01.06.2002? - HELD THAT:- The impugned order insofar as it levies surcharge with consequential interest thereon, cannot be sustained and that portion of the assessment shall stand deleted. The assessment of the Petitioner in the impugned order in other respects is confirmed. The Petitioner is entitled to work out his remedies in that regard before the proper forum in the manner recognized by law. Writ Petition is ordered on the aforesaid terms.
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2020 (11) TMI 418
Valuation of assets - Reducing the amount of subsidy from the value of assets for the purpose of granting depreciation - HELD THAT:- With the above amendments, subsidy falls within the definition of `income u/s 2(24) and resultantly chargeable to tax in the year of receipt as per section 145B(3) in all cases except where Explanation 10 to section 43(1) gets magnetized, in which eventuality, it will go to reduce the cost of assets. The contention of the ld. DR about either the reduction of the amount of subsidy from the cost of assets in terms of the Explanation 10 or treating it as chargeable to tax will gain relevance in the periods covered by the afore discussed amendments. Since such amendments are not applicable to the year under consideration, the case will be governed by the ratio decidendi in the judicial precedents discussed supra. We are satisfied that the ld. CIT(A) was not justified in directing to exclude the amount of subsidy allowed to the assessee by the States of Jharkhand and Maharashtra from the cost of assets for the purposes of allowing depreciation. - Decided in favour of assessee.
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2020 (11) TMI 417
Violation of the provisions of Rule 46A of Income Tax Rule - assessee has made a fresh claim before CIT-(A) which was not made either in the Income tax Return or before the AO during the assessment proceedings - HELD THAT:- Income of the assessee has to be determined under the provisions of Act. In case the assessee unknowingly omitted to claim the deduction either in the Income Tax Return or during the assessment proceedings it is entitled claim the benefit of such deduction before the higher authorities In holding so we place our reliance on the judgment in case of CIT vs. Mitesh Impex Ors [ 2014 (4) TMI 484 - GUJARAT HIGH COURT] The assessee, indeed made a fresh claim before the Learned CIT-(A) but did not file any fresh documents. Moreover, the Learned CIT-(A) after admitting the fresh claim directed the AO to allow the deduction of the same after verification and quantification of the expenses - AO is still empowered to reject the claim of the assessee if such expenses represents the capital expenditure within the provisions of law. As such, we find that there was no fresh evidences as alleged by the revenue, which were entertained by the Learned CIT-(A) in violation of the provisions of Rule 46A of Income Tax Rule. Accordingly, we hold that there was no violation of the provisions of Rule 46-A of Income Tax rules. Product Development Expenses - Nature of expenses - Expenses are recurring in nature - We also note that the ld. DR has not brought anything on record suggesting that there was any benefit of enduring nature or any new assets coming into existence out of such expenses. Accordingly, we hold that such expenses are of revenue in nature but subject to verification of the AO as held by the CIT-(A). Hence, we uphold the finding of the Learned CIT-(A). Thus, the ground of appeal of the Revenue is dismissed.
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2020 (11) TMI 416
Rectification u/s 154 - bogus purchases - Estimation of income - HELD THAT:- Assessee seeks a review of the order of the Tribunal in the grab of rectification of mistake apparent from record. It is a settled law that review of order in the grab of rectification of mistake apparent from record is not permissible in law. Moreover, it is also noted that the MA has been filed on 15.06.2020 and the Tribunal order was passed on [ 2017 (9) TMI 1903 - ITAT MUMBAI] - MA dismissed.
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2020 (11) TMI 415
Taxability of receipts on hire of vessel on time charter basis - receipts from the time charter of the vessel Smit Borneo brought to tax in its hands as royalty - charges received on account of time charter services rendered by the Appellant for the vessel 'Smit Borneo' to Leighton India Contractors Private Limited in India were rendered for the 'use' of industrial, commercial or scientific equipment, thereby treating the same as Royalty under section 9(1)(vi) - Whether time charter services shall be covered within the definition of the term Royalty under Article 12(4) of the India - Singapore Double Tax Avoidance Agreement ('DTAA') - HELD THAT:- As can be gathered from a perusal of the relevant extracts of the agreement it can safely be concluded that as the assessee had received charges on account of time charter services rendered by its vessel Smit Borneo along with the crew to Leighton India Contractor Pvt. Ltd., and not for allowing the latter the use or right to use of industrial, commercial, or scientific equipment, the same therein cannot be treated as royalty within the meaning of Article 12(3)(b) of the India-Singapore tax treaty. We herein not being able to subscribe to the view taken by the lower authorities, to the extent they had concluded that the amounts received by the assessee for time charter of its vessel viz. Smit Borneo was to be treated as royalty under Article 12(3)(b) of the India-Singapore tax treaty, therein vacate the same. As we have vacated the view taken by the A.O/DRP that the consideration received by the assessee from time charter of its vessel viz. Smit Borneo was to be treated as royalty as per Article 12 of the India-Singapore Tax Treaty, therefore, we refrain from adverting to the other contentions advanced by the ld. A.R to support its claim, which thus are left open. Grounds of appeal No. 2 to 4 are allowed in terms of our aforesaid observations. Mobilisation fees received by the assessee from Leighton India Contractor Pvt. Ltd. - Whether wrongly been treated as royalty, both under Sec. 9(1)(iv) of the Act, and Article 12(3)(b) India-Singapore tax treaty? - HELD THAT:- As observed by the A.O/DRP that as the mobilisation of the vessel viz. Smit Borneo formed an inextricable part of the time charter services rendered by the assessee, thus the fees therein received were also to be assessed as royalty. As we have concluded that the consideration received by the assessee from time charter of the vessel viz. Smit Borneo would not fall within the realm of the definition of the term royalty as contemplated in Article 12 of the India-Singapore tax treaty, therefore, the mobilisation fees, which as observed by the A.O/DRP formed an inextricable part of such time charter services has to be similarly construed. As such, we vacate the treatment of the mobilisation fees received by the assessee as royalty by the lower authorities. The Grounds of appeal No. 5-7 are allowed in terms of our aforesaid observations. Amount received by the assessee towards reimbursement of expenses which were incurred by it for and on behalf of Leighton India Contractor Pvt. Ltd . - Whether to be assessed as royalty within the meaning of Sec. 9(1)(vi) of the Act, and Article 12(3)(b) of the India-Singapore tax treaty? - HELD THAT:- As neither the details of the expenses, which as claimed by the assessee were incurred for and on behalf Leighton India Contractor Pvt. Ltd., nor the basis of allocation of the common expenses to the share of the assessee are discernible from the records, therefore, it would be premature to adjudicate the said issue in the absence of the relevant facts. Accordingly, in all fairness we restore the issue to the file of the A.O, who is herein directed to verify the nature of the amounts which as claimed by the assessee were received by way of reimbursements from Leighton India Contractor Pvt. Ltd., and also, the basis of allocation of the common expenses to the share of the said charterer. Short credit of the tax deducted at source (TDS) - As against the credit for TDS that was raised in its return of income, the A.O had allowed credit of only ₹ 95,64,832/-, which had thus resulted to a short grant of credit of TDS of ₹ 24,64,351/-(principal amount) - HELD THAT:- As the aforesaid issue would require verification of the facts borne from the records, we therefore restore the same to the file of the A.O who is directed to look into the said grievance of the assessee. In case, the assessee is able to substantiate the fact as regards short allowing of credit of TDS in the course of the set aside proceedings, the A.O is directed to issue the balance refund to the assessee, as per law. Ground of appeal No. 11 is allowed for statistical purposes.
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2020 (11) TMI 414
Penalty u/s 271(1)(c) - disallowance of FBT as made in its hands while framing the assessment - HELD THAT:- Admittedly, the A.O is vested with the powers to levy penalty u/s 271(1)(c) if, in the course of the proceedings he is satisfied that the assessee had either concealed his income or furnished inaccurate particulars of his income . As penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed on it. The non-specifying of the charge in the SCN notice not only reflects the non-application of mind by the A.O, but, in fact, defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1) - fine distinction between the said two defaults contemplated in Sec. 271(1)(c) viz. concealment of income and furnishing of inaccurate particulars of income had been appreciated at length in the case of Dilip Shroff [ 2007 (5) TMI 198 - SUPREME COURT] and T. Ashok Pai [ 2007 (5) TMI 199 - SUPREME COURT] . As the two defaults viz. concealment of income and furnishing of inaccurate particulars of income as contemplated in Sec.271(1)(c) are separate and distinct defaults which operate in their exclusive and independent fields, we, therefore, are unable to subscribe to the view taken by the CIT(A) that the A.O had validly imposed penalty for furnishing of inaccurate particulars which led to concealment of income by the assessee in respect of the aforesaid solitary addition/disallowance made in the hands of the assessee. A.O in his SCN had failed to put the assessee to notice as regards the default for which it was called upon to explain as to why penalty u/s 271(1)(c) may not be imposed on it, in our considered view, would suffice to divest the A.O from valid assumption of jurisdiction for imposing penalty under the said statutory provision. As the two defaults viz. concealment of income and furnishing of inaccurate particulars of income as contemplated in Sec.271(1)(c) are separate and distinct defaults which operate in their exclusive and independent fields, we, therefore, are unable to subscribe to the view taken by the CIT(A) that the A.O had validly imposed penalty for furnishing of inaccurate particulars which led to concealment of income by the assessee in respect of the solitary addition/disallowance made in the hands of the assessee. We thus in the backdrop of our aforesaid observations not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set aside the order of the CIT(A) who had upheld the same. The penalty u/s 271(1)(c) is quashed in terms of our aforesaid observations. - Decided in favour of assessee.
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2020 (11) TMI 413
Depreciation on Car - Claim not allowed on the reason that the assessee's hotel business is not in operation and not earned any revenue from hotel business - HELD THAT:- As in the case of CIT Vs. Kriti Resorts (P) Ltd. [ 2011 (7) TMI 39 - HIMACHAL PRADESH HIGH COURT] when the business is not in operational, the assessee can also claim depreciation. The assessee company is in existence under the Companies Act and it has to fulfill various statutory compliances and it is not disputed that the assessee is earning income from F O business and other sources. The same was offered for tax. Unless and until the assessee is ceased to exist, the assessee is entitled for depreciation on assets which was included block of assets. For granting depreciation, it is not mandatory for assessee to have revenue from Hotel Business. In the present case, the Assessing Officer himself has allowed maintenance of Car expenditure however disallowed depreciation on the same which is not correct. In our opinion, the assessee is entitled for depreciation as per Income Tax Act which has to be granted. We allow the appeal of the assessee.
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2020 (11) TMI 412
Unexplained deposit in ICICI Bank account - presumption of the AO that the assessee did not have enough cash to deposit ₹ 4,00,000/- - HELD THAT:- Cash receipts of ₹ 3,43,200/- has been reflected in the ledger account and in cash book, there was opening balance of ₹ 1,97,550/-. If these opening balance and cash receipts are taken into consideration, then, the assessee has sufficient funds in its hand to deposit cash of ₹ 4,00,000/- in two bank accounts. AO has disbelieved the cash book as daily balancing was not done without considering the cash book and ledger account .Since the assessee has shown cash receipts and opening balance in hand, assessee has duly proved the cash deposit of ₹ 4,00,000/- and, accordingly delete the same. Ground No.2 of the assessee is allowed. Draft from undisclosed bank accounts - AO made the addition on the ground that the assessee could not even show that the assessee has sufficient cash to make the drafts, which was confirmed by ld CIT(A) - HELD THAT:- The mere fact that the bank accounts from where the DDs are purchases are not reflected in the balance sheet of the assessee is not a ground to disbelieve the drafts made by the assessee. On perusal of the cash book and ledger accounts of the assessee, observe that the assessee has sufficient balance in its accounts to purchase the drafts in favour of Orissa State Beverages Corporation Ltd. Hence, set aside the orders of lower authorities and delete the addition made u/s.69 - Decided in favour of assessee. Disallowance of expenses - on the ground that the assessee could not submit supporting bills and vouchers in support of the expenses, which was confirmed by ld CIT(A) - HELD THAT:- The assessee could not furnish any satisfactory explanation and evidence as to why the supporting evidences were not filed before the lower authorities. Even before the Tribunal, no evidences were filed. Hence, the lower authorities have taken a justified decision to estimate the disallowance. Ground Nos.4 to 11 are dismissed.
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2020 (11) TMI 411
Transfer pricing adjustment - Provision of software development services only - Comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list. We direct the AO/TPO to compute the ALP of the international transaction in accordance with the directions given above, after affording adequate opportunity of being heard to the assessee. We hold that the assessee cannot be precluded from challenging the inclusion of comparable companies, which had been accepted earlier by the assessee. Deduction u/s 10A - whether the expenses incurred in foreign currency are required to be reduced from export turnover while computing deduction u/s 10A? - HELD THAT:- In the case of Tata Elxsi Ltd, [ 2020 (3) TMI 1082 - KARNATAKA HIGH COURT] exclusion of expenses incurred in foreign currency from both export turnover and total turnover while computing deduction u/s 10A - Also see HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT] . Gain/loss arising on account of fluctuation in foreign exchange is operating income/expenses - HELD THAT:- DRP has directed the AO to consider the foreign exchange fluctuation gain/loss on revenue account in respect of assessee company and also in respect of comparable companies while determining the margin in the case of the assessee company, if in the earlier years, the foreign exchange fluctuation was treated as operating in nature for the purpose of consistency. Since the ld DRP has followed the decision rendered by the Tribunal in this regard, we do not find any infirmity in its decision rendered on this issue.
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2020 (11) TMI 410
Reopening of assessment u/s 147 - HELD THAT:- Re-opening is bad in law as the AO has not independently applied his mind to the material and has recorded reasons which are vague and based on borrowed satisfaction. Hence this ground of the assessee for both the AY are allowed.- See PROFICIENT COMMODITIES PVT. LTD. VERSUS D.C.I.T., CIRCLE-5 (1) , KOLKATA [ 2019 (2) TMI 1408 - ITAT KOLKATA] - Applying the propositions of law to the facts of this case we have no other alternative but to hold that the re-opening of assessment is bad in law. Addition made of bogus purchases - The assessee has provided all evidences in the form of invoices, bank statements, bills etc. and whereas the AO has not brought on record any evidence to controvert the same, except for relying on some information furnished by the Investigation Wing, Kolkata. CIT(A) accepts that they were genuine purchases. He directed that a percentage of these purchases may be added by way of gross profit percentage. When the purchases are held as not bogus by the ld. CIT(A), the question of part addition does not arise. Hence these additions as sustained by the ld. CIT(A) to the extent of ₹69,527/- is hereby deleted. Addition u/s 68 - when an addition made based on the reasons recorded for re-opening of assessment does not survive the question of making another addition on some other ground does not arise, as held in Jet Airways India Ltd. [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] and Ranbaxi Laboratories[ 2011 (6) TMI 4 - DELHI HIGH COURT] Addition under Section 68 of the Act cannot survive, when the addition based on reasons recorded for re-opening does not survive - Borrowing in question was from a sister concern. The partners of the assessee firm and the director of the sister concern which is a company. The bank statement wherein the alleged bogus purchases were recorded, was the same bank statement in which the loans taken from the sister concern were credited. The auditor has mentioned the details of this loan in the Tax audit report. The balance sheet of the creditor company shows that it had the capacity to lend. The creditor company confirmed the loan. The directors of the creditor company, who were also the partners of the assessee firm, have appeared before the AO during the assessment proceedings. Assessee has proved the genuineness of the transaction, the identity and the capacity of the creditor company. Hence the addition made under Section 68 of the Act cannot be sustained on merits. Thus we delete the same. - Decided in favour of assessee.
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2020 (11) TMI 409
Exemption u/s 11 - assessee has filed Form No. 10 setting apart accumulation of income beyond stipulated date - HELD THAT:- An identical issue has been considered by the Tribunal for the assessment years 2006-07 to 2010-11. [ 2019 (3) TMI 1828 - ITAT CHENNAI] where after considering the relevant facts of the case, the Tribunal has restored the matter to the file of the A.O. to reconsider the issue raised by the assessee regarding claim of exemption u/s.11 of the Act. We further noted that facts of the impugned assessment years are identical to the case considered by the Tribunal for the earlier assessment years and further assessment of earlier assessment years will have bearing on the assessments framed by the A.O for these assessment years. Therefore, considering the facts and circumstances and also the fact that assessee s claim of exemption u/s.11 needs to be examined from the assessment year 2006-07 onwards, the appeals filed by the assessee for both the assessment years are restored to the file of the A.O. to reconsider the issue of exemption claimed u/s.11 in the light of Form No.10B filed by the assessee for both the assessment years. Also take note of the Writ Petition filed by the assessee before the Hon ble Madras High Court challenging cancellation of registration withdrawn by the CCIT u/s.10(23C)(vi) of the Act and the outcome of the Writ Petition before the Hon ble High Court. Protective addition - addition made to the income of the assessee for the assessment year 2011-12 on the ground that once substantive assessment has been made for the assessment year 2006-07, protective addition made for the impugned assessment year cannot survive - HELD THAT:- Since the assessment for the assessment year 2006-07 has been set aside to the file of the A.O, the Assessing Officer will examine the issue of taxability of particular addition in appropriate assessment years in accordance with law. Accordingly, appeal of the revenue is also set aside to the file of the AO.
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2020 (11) TMI 408
Rectification u/s 254 - disallowance of assessee s claim of deduction under Section 54(1) - whether there is mistake apparent on the face of record - decision of the Tribunal is not to the liking of the assessee - HELD THAT:- From the submissions of the ld. AR as well as the contents of the Miscellaneous Application, prima facie, it appears that the assessee is not satisfied with the reasoning of the Tribunal. Assessee wanted the order to be passed in a particular manner. Since, the order was not passed according to his expectation, therefore, he has come up with the plea that the appeal order suffers from mistake apparent on the face of record. If the assessee is not agreeable to the reasoning of the Tribunal while deciding the appeal, he has a proper remedy of appeal before the Hon'ble High Court under Section 260A of the Act. However, that cannot be a reason to seek redressal under Section 254(2) of the Act, which is clearly envisaged for rectifying mistake apparent on the face of record. The so-called mistake pointed out by the assessee certainly cannot be said to be mistake apparent on face of record as envisaged under Section 254(2). By filing the present application, the assessee, in our view, is trying to challenge the reasoning of Tribunal in the appeal order in the guise of rectification. It is not acceptable. Only because the decision of the Tribunal is not to the liking of the assessee, he cannot seek review of the appeal order by taking recourse to Section 254(2) of the Act. - Decided against assessee.
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2020 (11) TMI 407
Nature of expenses - expenditure incurred on stamp duty and mortgage charge for obtaining loan - revenue or capital expenditure - HELD THAT:- We find that the issue is squarely covered in favour of the assessee by the decision of India Cements Ltd. [ 1965 (12) TMI 22 - SUPREME COURT ] wherein assessee obtained certain loan which was secured by a charge on the fixed assets of the company. It incurred expenditure like legal fees, registration fees, stamps etc. and claimed that it was a business expenditure - as held that the loan obtained was not an asset or advantage of an enduring nature; that the expenditure was made for securing the use of money for a certain period and that it was irrelevant to consider the object with which the loan was obtained. Consequently, in the circumstances of the case, the expenditure was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee s business Thus we are of the view that the action of the authorities below in holding the expenditure as capital in nature is not sustainable. - Decided in favour of the assessee.
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2020 (11) TMI 406
TDS u/s 194C - Addition u/s 40(a)(ia) - assessee has violated the provisions of Section 40(a)(ia) of the Act for not deducting depositing the TDS - Scope of amendment - HELD THAT:- The amendment has been made in the second proviso of Section 40(a)(ia) of the Act w.e.f. 01.04.2013 and, therefore, it is applicable for the A.Y.2013-2014 onwards. We would like to rely on the decision of Shree Choudhary Transport Company [ 2020 (8) TMI 23 - SUPREME COURT] . Receipts from the bank in his total income and it paid income tax thereon as per the provisions of Income Tax Act, we find that the assessee tried to prove that there is no loss to the Revenue and requested for sending back the matter to the file of AO for verification. On perusal of the order of the CIT(A), we noticed that this proviso i.e. furnishing of Form 26A has been inserted w.e.f.01.04.2013 and, therefore, applicable form the assessment year 2013-2014. This contention is squarely supported by the above decision of the Hon ble Supreme Court as noted supra. In this case, the assessee had not deducted TDS on the transportation payments, which were required to be deducted as per the provisions of Section 194C of the Act for the financial year 2005-06 and the section 40(a)(ia) of the Act was inserted w.e.f.01.04.2005 by the Finance Act No.2. In this case the Hon ble Apex Court decided the case against the assessee and in favour of revenue by holding this provisions is applicable for the assessment year 2005-06. Before us, the impugned case is for the assessment year 2012-2013 and the provisions has been inserted w.e.f.01.04.2013 will not apply in the ratio decidendi above. In the written submissions, the assessee has relied many judgments which have been reproduced above are not applicable considering to the latest judgment of the Hon ble Supreme Court in the case of Shree Choudhary Transport Company (supra). In the peculiar facts and circumstances of the case and the latest decision of the Hon ble Apex Court as stated supra, the case laws relied on by the ld. AR of the assessee is not applicable in the present case in hand. - Ground of appeal of the assessee is dismissed. Disallowance u/s.43B - assessee could not produce the challan copy - HELD THAT:- As these payments relates to the arrears from 2007-2008 but here it is not yearwise breakup that how much amount is relating to which year along with proof of payments. Therefore, this matter is sent back to the file of AO for determination of the yearwise breakup along with the payments and decide the issue as per the provisions of Section 43B of the Act. This ground of appeal of the assessee is allowed for statistical purposes. Disallowance for gratuity to staff - Disallowance u/s 36(1)(v) of the Act and confirmed by the CIT(A) - HELD THAT:- As assessee has submitted that it has been paid as per the direction of the Reserve Bank of India but before us the ld. AR of the assessee has not produce any documentary evidences, therefore, this matter is also sent back to the file of AO for verification as to whether it has been paid within the due date to the approved gratuity fund or any other fund as prescribed by the Income Tax Act. Thus, this ground of appeal of the assessee is allowed for statistical purposes.
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2020 (11) TMI 405
Revision u/s 263 by CIT - AO has allowed the claim of expenditure pertaining to foreign exchange premium without making any proper and due inquiries - HELD THAT:- Assessee has furnished copies of the relevant documents explaining that the A has duly considered the claim of expenditure and explained that assessee has availed the credit facility with respect to the foreign current loan on which the premium was charged. In this facility, the bank has granted a limit of ₹ 15 crore which was subsequently enhanced to ₹ 18 crores and from this facility, the assessee has availed credit facility for purchase of U.S. $ at predetermined rate to cover the risk of foreign exchange fluctuation, the premium was charged by the bank so that the USA dollar was at the predetermined rate. The assessee has also filed the relevant detail to demonstrate that such facility was also obtained in the previous year relevant to the assessment year 2012-13 and also filed the relevant copies of sanction letter of the bank. CIT has failed to controvert the above referred facts and material cited by the assessee to demonstrate that its claim of foreign exchange premium was allowed by the AO after verification of the relevant materials/details as elaborated above - we consider that in the present case it is very clear that the order passed by the Assessing Officer was neither erroneous or prejudicial. - Decided in favour of assessee.
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2020 (11) TMI 404
Estimation of income - Bogus purchases - HELD THAT:- Simply because the parties were not produced the entire purchases cannot be added as held by the Bombay High Court in the case of CIT v. Nikunj Eximp [ 2013 (1) TMI 88 - BOMBAY HIGH COURT] - We agree with the view of the lower authorities that there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. T Keeping in view the nature of business of the assessee i.e. trader in iron and steel, it would be justified if the profit element embedded in those purchases are estimated at 4%. Accordingly, we direct the Assessing Officer to estimate the profit element from the non-genuine purchases at 4% and restrict the disallowance of purchases to 4% and compute the income accordingly.
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2020 (11) TMI 403
Allowable exempenditure u/s 37(1) - Distribution of profit - payment of rate difference after the closure of the accounting year - commercial expediency - Whether amount to be paid was not out of the profits ascertained at the Annual General Meeting ? - HELD THAT:- The issue is covered in its own decision by the Hon ble Bombay High [ 2009 (4) TMI 19 - BOMBAY HIGH COURT] while making the addition, the A. O. has only followed the assessment order of the earlier year without bringing any new facts on record. - Addition made on account of milk rate difference is deleted. The amount which is the subject-matter is paid to members who supply milk and in some case also to non-members. The payment is for the quantity of milk supplied and in terms of the quality supplied. The commercial expediency for payment of this price are the market conditions, and the need to procure more milk from the members and non-members to the assessee. To our mind, therefore, the amount paid by no stretch of imagination can be said to be dividend to the members or shareholders or payment in the form of bonus as bonus also has to be paid from the accrued profits. - Decided in favour of assessee. Depreciation on fixed assets on project without deducting subsidy received from National Dairy Development Board (NDDB) - HELD THAT:- The issue is decided in its favour by the ITAT, Pune Bench . [ 2018 (8) TMI 1996 - ITAT PUNE] - Also the Hon ble Bombay High Court in assessee s own case [ 2009 (4) TMI 19 - BOMBAY HIGH COURT] has dismissed the Revenue s appeal on the above issue.
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2020 (11) TMI 402
Reopening of assessment u/s 147 - nature of deemed escapement of income and also there is contradictions in the proforma for obtaining sanction u/s 151 - unsecured loan creditors - HELD THAT:- Original assessment was framed u/s 143(3) on 10th March, 2014 determining the income at ₹ 20,06,714/- as against the returned loss of ₹ 20,53,019/- and wherein the issue of unsecured loan creditors was duly considered and accepted on the basis of various supporting documents filed at the time of original assessment and since there is no allegation in the reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, therefore, the notice issued u/s 148 after a period of four years from the end of the relevant assessment year in the instant case is illegal and invalid being without jurisdiction. AO has proceeded to reopen the assessment on the basis of wrong appreciation of facts by mentioning that the assessment is proposed to be made for the first time whereas the facts stood otherwise, i.e., the assessment was, in fact, completed u/s 143(3) therefore, there is complete non-application of mind by the AO as well as by both the superior authorities. Approval has been given in a mechanical manner without appreciating the facts properly and there is complete non-application of mind by the superior authorities. On this score also, the reassessment proceedings have to be quashed and the decision relied on by the ld. DR in the case of Sonia Gandhi [ 2018 (9) TMI 720 - DELHI HIGH COURT] is not at all applicable to the facts of the present case in view of the glaring mistake and omission that has been committed by the AO which was not looked into by the superior authorities - we quash the reassessment proceedings initiated u/s 147/148. The various other legal grounds raised by the ld. Counsel challenging the validity of the reassessment proceedings become academic in nature in view of the above discussion. Since the assessee succeeds on this legal ground, the grounds challenging the addition on merit also become academic in nature and, therefore, are not being adjudicated. - Decided in favour of assessee.
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2020 (11) TMI 401
TDS u/s 194C - expenditure incurred towards advertisement charges - selling and utilizing the advertisement space on a principal to principal basis in publication of Times of India (kannada edition) owned by BCCL - HELD THAT:- AO is not justified in holding that the provisions of Section 194C and Section 40(a)(ia) of the Act are attracted in this case. Since, we have held that the provisions of Sec 194C are not attracted, the alternative contention of the assessee on Form no 26A does not require adjudication. We set aside the order of the CIT(A) and direct the assessing officer to delete the impugned addition and allow the grounds of appeal of the assessee.
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2020 (11) TMI 400
Reopening of assessment u/s 147 - Exemption u/s 11 and 12 - receipts of the trust as allowable under section 11 and 12 - HELD THAT:- Since there is no change in the activities carried on by the assessee and also the assessing officer has accepted the activities carried on by the assessee that it is only improving the quality of the breeds of cow for yielding the milk and assessee is not selling or dealing in milk and revisited the assessment records without any new material to reopen the assessment as well as he reopened the assessment after 4 years without bringing on record any mistake on the part of the assessee to disclose fully and truly, all the information to complete the assessment. AO and Ld CIT(A) has applied certain case laws which are distinguishable on facts to the present case. Revenue has accepted the activities of the assessee are not hit by the amended proviso to section 2 (15) of the Act in the subsequent assessment years and we presume that the then assessing officer in the original assessment passed under section 143 (3) must have verified and formed an opinion on application of amended proviso to section 2(15) - reopening of the assessment was made with the wrong understanding of the facts by assessing officer and reviewing the concluded assessment is bad in law. Reassessment proceedings and reassessment order passed by the assessing officer in the assessee s case is quashed. Accordingly, the grounds arise by the assessee on the reopening of the assessment is accordingly allowed.
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2020 (11) TMI 396
Tribunal dismissing the Appeal instead of disposing the matter on merits - ITAT dismissed the appeal inter alia on the ground that in the absence of documentary evidence in support of assessee's claim that the property sold in question was not depreciable asset, no ground is made out to interfere with the order passed by the CIT(Appeals) - HELD THAT:- It is trite law that for the fault committed by a counsel, a party should not be penalized. It appears that on account of inadvertence, the senior chartered accountant engaged by the assessee could not comply with the directions of the Tribunal to file the documents. The tribunal, infact, should have adjudicated the matter on merits instead of summarily dismissing the same. Substantial question of law framed by this Court is answered in favour of the assessee and against the revenue - Order passed by the tribunal is quashed. The matter is remitted to the tribunal.
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Customs
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2020 (11) TMI 397
Maintainability of petition - alternative remedy of appeal - stand of the respondents is that the petitioner is having a remedy under section 129A of the Customs Act, 1962 to prefer an appeal - section 110A of the Customs Act, 1962 - Seizure of goods - HELD THAT:- As there is a remedy of appeal, without averting to the merits of the case, the present petition is disposed of with a liberty to the petitioner to prefer an appeal in accordance with law. The respondents shall make all possible endeavour to decide the appeal at an early date in accordance with law.
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2020 (11) TMI 392
Bail Application - case of the prosecution is that, petitioner has been organizing Indian Operations based in Kerala and has been involved in illegal smuggling of gold in the form of compound gold pieces - HELD THAT:- As the investigating agency is required to unearth the ramifications of the offences, release of the petitioner at this stage is likely to hamper the investigation and hence, petition cannot be allowed. Direction is issued to the State/Union territory to constitute a High Powered Committee comprising of (i) Chairman of the State Legal Services Committee, (ii) the Principal Secretary (Home/Prison) by whatever designation is known as, (iii) Director General of Prison(s), to determine which class of prisoners can be released on parole or an interim bail for such period as may be thought appropriate. For instance, the State/Union territory could consider the release of prisoners who have been convicted or are undertrial for offences for which prescribed punishment is up to 7 years or less, with or without fine and the prisoner has been convicted for a lesser number of years than the maximum. The said order does not furnish a ground for the petitioner to seek his release on bail. Petition dismissed.
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2020 (11) TMI 389
Refund of Customs Duty - Duty paid under protest or not - section 27 of the Customs Act, 1962 - period April 2004 to June 2008 - rejection of refund on the ground that Appellant had not submitted the re-assessed copy of the Bills of Entry, in the absence of which the claim for refund was not maintainable - Time Limitation - whether filing of an appeal against an assessment order would itself mean that duty has been paid under protest? - HELD THAT:- Fourth proviso to section 27(1) of the Customs Act was inserted with effect from May 11, 2007 by section 96 of the Finance Act, 2007 - Also, second proviso to section 11B of the Central Excise Act is identical to the second proviso to section 27 (1) of the Customs Act. Thus, it has to be held that if an appeal is filed against an assessment order, then duty that is paid has to be treated as duty paid under protest and in that case the limitation of six months for filing a refund claim from the date of payment of duty, would not apply. The issue that was required to be decided by the Commissioner (Appeals) was whether in terms of the second proviso to section 27 (1) of the Customs Act, the limitation of filing the refund application within six months from the date of payment of duty would be applicable if an appeal had been filed against the order of assessment as that may amount to payment of duty under protest. The Commissioner (Appeals) was not required to examine whether the fourth proviso to section 27 (1) of the Customs Act would apply or not. The fourth proviso to section 27 (1) of the Act deals with an entirely different situation where the duty becomes refundable as a consequence of a judgment, decree, order or direction of the appellate authority, the appellate tribunal or any court. In such a situation, the limitation of six months shall be computed from the date of such judgment, decree or direction - It needs to be noted that application filed by the Appellant for refund of duty was not as a consequence of any judgment, decree, order or direction of the appellate authority, appellate tribunal or any court. The Tribunal in the present case, while remanding the matter to the Commissioner (Appeals) had examined the second proviso as also the fourth proviso to section 27(1) of the Customs Act and had distinguished the two. The Tribunal held that it is the second proviso to section 27 (1) of the Customs Act that would be applicable and not the fourth proviso and so all that the Commissioner (Appeals) was required to decide was whether duty had been paid under protest or not since an appeal against the assessment order had been filed. The Commissioner (Appeals) clearly misunderstood the direction issued by the Tribunal and based his order on the fourth proviso to section 27 (1) of the Act - it is not possible to sustain the order passed by the Assistant Commissioner (Appeals). Application allowed.
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Corporate Laws
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2020 (11) TMI 390
Approval of Amalgamation scheme - Section 230 to 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules,2016 and National Company Law Tribunal Rules 2016 - dispensation with the convening, holding and conducting of various meetings - issuance of notices as per the provisions of Section 230(5) of the Companies Act 2013 and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - whether the Tribunal has power to dispense with the meetings of the shareholders/secured/unsecured creditors of both the Companies? - HELD THAT:- In the present applications, it is stated that the Transferor Company is a direct wholly-owned subsidiary of the Transferee Company and in the proposed Scheme of Amalgamation, the entire assets and liabilities of the Transferor Company will be taken over by the Transferee Company. The Net worth of the Transferor Company and the Transferee Company are ₹ 13,14,33,968 and ₹ 4,08,86,87,025 respectively and the creditors of the demerged Company will become the creditors of the Transferee Company. The Transferee Company have 69,649 unsecured creditors with total unsecured debt amounting to ₹ 211,07,67,223.03 and does not have any Secured Creditors as on 31.12.2019. The proposed Scheme of Amalgamation will not restructure or vary the debt obligations of the Transferor and Transferee Companies towards their respective Creditors. The prayers of the Applicant Companies deserve to be allowed and that the meetings of the members of the Transferor Company and Transferee Company as envisaged under Section 230(1) of the Companies Act, 2013 is not necessary and will not serve any purpose, if called, be dispensed with subject to strict compliance of the conditions imposed.
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Service Tax
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2020 (11) TMI 398
Legal services to foreign parties - export of services - Vires of Section 94(2)(f) of the Finance Act, 1994 and Rule 6A of the Service Tax Rules, 1994 regarding Export of services as well as Rule 9 of the Place of Provision of Services Rules, 2012 - petitioner prays for a declaration that officers of the respondents No.2 to 3 appointed under the Goods and Services Tax Act, 2017 read with notification dated 01st July, 2017 are not empowered under the law to proceed under the provisions of the Finance Act, 1994 on the basis of Section 174 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is directed that till further orders, no coercive steps shall be taken against the petitioner pursuant to the notice dated 30th September, 2020. List the matter on 27th January, 2021.
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2020 (11) TMI 391
Intellectual Property Rights Service - Reverse Charge Mechanism - payment made to Fosters Australia towards permanent transfer of Fosters trademark and brand under the Deed of Assignment - transfer of right to use - demand of service tax - extended period of limitation - HELD THAT:- After going through the contents of Deed of Assignment, it is found that the intention of the parties while executing the Deed of Assignment is the permanent exclusive and irrevocable transfer of trademark as well as Intellectual Property Rights in favour of the appellant. After seeing the clauses of the Deed of Assignment, it is found that the impugned order has wrongly interpreted the terms of the Deed to mean that there is only grant of right to use the trademark and no permanent transfer of trademark to the appellant in India. The learned Commissioner has ignored the substance of the clauses and has picked a part of the clause to suit his purpose and used the same to hold that there is no assignment of the trademark and the brand IP, but there is only a transfer of right to use. It is found that besides the Deed of Assignment clearly showing that there is an exclusive perpetual and irrevocable transfer of trademark and Intellectual Property Rights in favour of the appellant from the other corroborative evidence produced by the appellant which has not been considered by the Commissioner at all. The appellant has also produced on record the Income Tax Assessment Order for the financial year 2006-2007 wherein the Commissioner has recorded the purchase of trademark by the appellant - further, the appellants have got registered in his favour Foster s trademark as a proprietor under the Trademark Act, 1999. The assignment of trademark and the IPR amounts to permanent transfer and no service tax is applicable on permanent transfer of IP Rights by Foster s to the appellant. Extended period of Limitation - HELD THAT:- The Department was fully aware of the Assignment Deed executed by the appellant with Foster s Australia - Further, the transfer of Deed of Assignment was disclosed by the appellant in the Books of Accounts and with the Income Tax Authorities and was also registered in their name as proprietor under the Trademark Act, 1999. All these facts clearly show that the appellant has not suppressed any material facts from the Department and the Department was very much aware of the said transaction, hence alleging suppression on the part of the appellant is not sustainable and we hold that the entire demand is also barred by limitation. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (11) TMI 394
Permission for withdrawal of petition - alternative remedy of appeal - TNVAT Act - HELD THAT:- When it is pointed out that the Petitioner has got an effective alternative remedy to prefer appeal against that order under Section 51 of TNVAT Act, within a period of 30 days from the date of its receipt before the jurisdictional Appellate Authority as mentioned in the note in the impugned order itself, Learned Counsel for the Petitioner seeks permission of this Court to withdraw the Writ Petition with liberty to resort to the aforesaid procedure. He has sent a confirmatory e-mail dated 06.10.2020 to that effect, which is placed on record. The Writ Petition is dismissed as withdrawn granting such liberty.
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2020 (11) TMI 393
Rectification of mistake - error apparent on the face of record - application was dismissed on the short ground that the petitioner ought to have filed an appeal as permitted by this Court in the earlier round of litigation, and the application filed under Section 84, according to the Assessing Officer, was not maintainable - Whether the filing of Section 84 application by the petitioner despite being permitted to file an appeal in the earlier round of litigation is correct and permissible? - Principles of Natural Justice. Whether the filing of Section 84 application by the petitioner despite being permitted to file an appeal in the earlier round of litigation is correct and permissible? - HELD THAT:- There is no serious contest to the position that once a challenge under Article 226 of the Constitution of India is rejected and the petitioner/assessee relegated to statutory remedy, it is at liberty to avail of any statutory remedy under the Act, be it appeal, revision or any other. Thus, resort to Section 84 by the petitioner is not misconceived and rejection of Section 84 application by the Assessing Officer solely on the ground that only an appeal should have been filed is erroneous. This issue is answered in favour of the petitioner. Whether the impugned order is vitiated by violation of the principles of natural justice? - HELD THAT:- There are no disputes in the facts and all facts as are necessary for the adjudication of the issues on merits are available on record having been filed both by the petitioner as well as by the Department before me. Thus, while accepting the argument that the impugned order is contrary to the principles of natural justice, I refrain from setting aside the order and granting the limited relief of remand and proceed to adjudicate the legal issues raised, on merits. What is the proper scheme of tax deduction under the provisions of the TNVAT Act and whether the scheme has been followed/applied properly in the present case? - HELD THAT:- The impugned assessment and demand made upon the petitioner relates to the period 2016-17, wherein the Assessing Officer proceeds on the basis that no Form S has been received by the petitioner and hence all remittances made ought to have been subject to tax deduction at source - the Officer has entirely lost sight of the scheme of tax deduction under Section 13 as the three certificates issued by R2 would show that Simplex has the benefit of Form S certificates for the entirety of the contract value. The impugned order cannot, be holistically appreciated without noticing the totality of facts involved, which also includes the order of assessment dated 28.05.2019. In the light of the three certificates in Form S dated 28.08.2014, 06.05.2015 and 24.06.2016, there is no justification whatsoever for R1 to have passed order of assessment dated 28.05.2019 for the period 2016-17 or the impugned order dated 23.01.2020 - Answered in favor of petitioner. Whether the order dated 28.05.2019 has been passed under Section 13 or under Section 27 of the TNVAT Act? - HELD THAT:- While hearing the appeal, the Appellate Authority dismissed the same on the sole ground that the issue involved therein related to tax deduction at source under Section 13 of the Act, which could not be the subject matter of assessment under Section 27 of the Act amenable to appeal under Section 51 of the Act. The appeal was dismissed as not maintainable. While issues on tax deduction would form part of an order of assessment and the computation thereof, as applicable to assessees/dealers under Sections 22 to 27 and amenable to appeal under Section 51 and 52, issues of non-deduction in the case of a non-dealer/non-assessee under the provisions of the Act would form part of an order under Section 13(4) amenable to revision under Section 54 - This issue is answered in favour of the petitioner. Petition allowed.
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Indian Laws
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2020 (11) TMI 399
Dishonor of Cheque - discharge of any debt or liability - It is thus contended that as the cheque was given only towards the security and not towards discharge of any debt or liability, no offence under Section 138 of the Negotiable Instruments Act, 1881 was committed by the petitioner - HELD THAT:- In so far as issuance of blank cheque is concerned, in BIR SINGH VERSUS MUKESH KUMAR [ 2019 (2) TMI 547 - SUPREME COURT] the Supreme Court held that if a signed blank cheque is voluntarily presented to a payee towards some payment, the filling up of an amount and other particulars by the payee would not invalidate the cheque. The onus to prove that the cheque was not in discharge of any debt or liability would still remain on the accused which is to be discharged by adducing evidence. There are no merit in the contentions raised by the learned counsel for the petitioner. It is for the petitioner to establish in the trial that the cheque in question was not given towards discharge of any debt or liability - petition dismissed.
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2020 (11) TMI 395
Dishonor of Cheque - enforceable debt or not - applicant argued that the impugned cheque was not against any liability - HELD THAT:- In the present case, there is a cheque issued by applicant Shalu Mehrotra for payment of Rs. Three lacs, it was presented for its payment, but was dishonoured by a Bank memo, then after a notice of demand by way of registered post was issued and the same was returned with endorsement of refusal. After receipt back of the same, within the stipulated period this complaint was filed. The Magistrate took cognizance over it by registering it as a complaint case. Then after an enquiry was made, wherein statement of complainant u/s 200 Cr.P.C. was in reiteration of contention of complaint and u/s 202 Cr.P.C. there was an affidavit annexing all those documentary evidence and on the basis of these evidence collected by the Magistrate in its enquiry a prima-facie case for offence punishable u/s 138 N.I. Act was made out. Accordingly, the applicant Shalu Mehrotra was summoned for above offence punishable u/s 138 of N.I. Act. Saving of inherent power of High Court, as given under Section 482 Cr.P.C, provides that nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. Meaning thereby this inherent power is with High Court (I) to make such order as may be necessary to give effect to any other order under this Code (II) to prevent abuse of the process of any Court (III) or otherwise to secure the ends of justice. An application for setting aside summoning order was moved before the same court, which had passed impugned summoning order, and the same was rejected on the ground that no additional evidence was there. This was challenged in revision, wherein the revisional court has rightly dismissed the revision. The law cited and argued by learned counsel for applicant is also of this fact that source of income is to be explained by complainant when asked by accused i.e. it is to be asked by the accused at an appropriate stage while examining on oath is being done and the same is to be explained by complainant. At this juncture of seeing veracity of the summoning order, the above stage has not come - thus, there is no abuse of process of law in passing the impugned orders either by Magistrate Court or by revisional court. The prayer for quashing summoning order as well as proceeding of the aforesaid complaint case is refused - application dismissed.
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