Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 28, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
News
Notifications
GST - States
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S.O. 396 - dated
22-11-2019
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Bihar SGST
Seeks to insert explanation In Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017
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38/1/2017-Fin(R&C)(26/2019-Rate) - dated
25-11-2019
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Goa SGST
Insert Explanation in Notification No. 38/1/2017-Fin (R&C)(11/2017-Rate) dated 30th June, 2017
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38/1/2017-Fin(R&C)(25A/2019-Rate) - dated
20-11-2019
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Goa SGST
Seeks to amend Notification No. 38/1/2017-Fin(R&C)(2/2017-Rate), dated the 30th June, 2017
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103/GST-2 - dated
27-11-2019
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Haryana SGST
Insert explanation regarding Bus Body Building in Notification No. 46/ST-2, dated 30-06-2017 under the HGST Act, 2017
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102/GST-2 - dated
26-11-2019
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Haryana SGST
Removal of Difficulty Order under section 172 to extend the last date for furnishing of annual return/reconciliation statement in FORM GSTR-9/ FORM GSTR-9C for FY 2017-18 till 31st December, 2019 and for FY 2018-19 till 31st March, 2020 under the HGST Act, 2017
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Availment of credit pertaining to SAD - filing of revised declaration in FORM G.S.T. T.R.A.N-1 - transition to GST regime - unlimited or indefinite period of time after submitting a declaration electronically in FORM G.S.T. T.R.A.N-1 under Rule 117 cannot be granted.
Income Tax
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Reopening of assessment u/s 147 - Income escaping assessment - the census figures for the year 2011 were made available only a few years later. The assessee could not have peeped into the future while submitting its return of income. - Proceedings quashed.
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Special audit u/s 142 sub-section (2A) - merely because the terms of reference contain some irrelevant directions, the same would not vitiate the entire process as is sought to be contended on behalf of the petitioner. Needless to state that the Special Auditors would confine the inquiry only to the relevant directions.
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Employees contribution towards PF and ESI deducted by assessee from salaries of employees which is deposited by assessee beyond the due date prescribed under relevant statutes governing PF and ESI, but deposited prior to due date of filing of return of income u/s.139(1) of the 1961 Act shall be allowed as deduction
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The loss could not be qualified as Speculative, because it was incurred by the assessee in the trading conducted in derivatives and since the derivative trading was carried out through authorized members of the recognized Stock Exchanges, as per clause (d) of the Explanation to section 43(5) it did not constitute “Speculative transaction”
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Claim of loss due to rejection of goods - the observations of the A.O, that now when the goods exported were rejected, then as to why the same were not included in the inventory of the assessee, we are afraid is an absolute fallacious and misconceived view.
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CBDT directed to initiate a discreet enquiry in this case to find out, as to how and under what circumstances on the basis of false, frivolous and baseless allegations, that too with malafide intentions, proceedings u/s 263 of the Act have been initiated apparently to victimize the appellant, to proceed against the guilty officials under Rules and to further frame the guidelines to deal with such abuse of powers by the senior officers, so that such incident should not reoccur.
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Disallowance of expenditure against the business income received from the partnership firms - the assessee on becoming a partner in the firm does not mean that he is carrying out any business activity - the question of claiming the expenses against the income received from the firm does not arise.
DGFT
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Amendment in Chapter 6 of the handbook of Procedures 2015-20 and Appendix 6E of Appendices & ANFs
State GST
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Clarification on the effective date of explanation inserted in notification No. 11/2017- STR dated 30.06.2017, Sr. No. 3(vi) - regarding:- transactions under taken by Government and Local Authority are excluded from the term 'business'.
Indian Laws
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Dishonor of Cheque - petitioner have argued that the petitioner has resigned from directorship of the accused-company w.e.f. 21.01.2016 and the cheques were issued subsequently - Petitioner failed to prove its case - Petition dismissed.
IBC
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CIBIL rating - Removal of name of the petitioner from the list of defaulters maintained by Credit Information Bureau (India) Limited - liability of a guarantor towards a creditor - Section 14 of the Code of 2016 does not apply to a personal guarantor. The Code of 2016 does not allow personal guarantors to escape their liability
Service Tax
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Clearing and forwarding agent services or GTA service - The appellant by arrangement with their principal has decided to have monthly settlement of transport bill consignment wise which is also evident from the ledger produced by the appellant - there is no force in the arguments raised by the Revenue regarding inappropriate consignment note.
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GTA Services - benefit of N/N. 31/2012-ST - the land customs station having been introduced in the notification w.e.f. 14 February, 2015, it cannot be held that the exemption was effective from the original date of issuance of the notification even in respect of exports from land customs station.
VAT
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Scope and validity of SCN - Levy of penalty - The Tribunal has committed a blunder in as much as instead of the word “retailer” used the word “dealer”. This is a mistake of fact committed by the Tribunal and its findings on the incorrect provision of law which is not applicable in the case of the petitioner.
Case Laws:
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GST
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2019 (11) TMI 1196
Availment of credit pertaining to SAD - filing of revised declaration in FORM G.S.T. T.R.A.N-1 - transition to GST regime - HELD THAT:- It is the admitted position that the writ petitioner has already submitted FORM G.S.T. T.R.A.N-1 on 10th October, 2017, to carry forward the credits available to it as on 30th June, 2017. By a letter dated 28th March, 2019, addressed to the Hon'ble Chairman, Goods and Services Tax Council, Government of India, the writ petitioner requested the Council to consider its case and to allow the writ petitioner to re-submit FORM G.S.T. T.R.A.N-1 within the extended period in order to enable the writ petitioner - company to carry forward the credit of SAD amount of ₹ 22,51,380.21/- in relation to stock of goods lying as on 30th June, 2017, under the transitional provisions of section 140(3) of the Uttar Pradesh Goods Services Tax Rules, 2017. Every registered person who has submitted a declaration electronically in FORM G.S.T. T.R.A.N-1 within the period specified in Rule 117 or Rule 118 or Rule 119 or Rule 120 is allowed to revise such declaration once and submit the revised declaration in FORM G.S.T. T.R.A.N-1 electronically on the common portal, within the period specified in the said rules or such further period as may be extended by the Commissioner in this behalf. This further period as may be extended by the Commissioner which is provided under Rule 120-A, therefore, cannot go beyond the time-frame provided under Rule 117 of the Uttar Pradesh Goods Services Tax Rules, 2017 - The period of extension has been statutorily circumscribed at 90 days and that too is possible only on the recommendation of the Council. Petition disposed off.
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Income Tax
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2019 (11) TMI 1195
Revision u/s 263 - Period of limitation - Correct principles of law - deduction claimed by the assessee on account of premium paid for the accountant risked policy premium allowed by Tribunal - HELD THAT:- The action u/s 263 of the Act in so far as the premium paid was barred by limitation as laid down u/s 263(2) of the Act. We therefore quash the order u/s 263 of the Act on the ground of limitation. We may also add that even on merits we are of the view that the premium paid in question cannot be considered as one falling within the ambit of Explanation 1 to section 37 of the Act. Since we have decided the issue on the point of limitation we do not wish to elaborate on this aspect further. For the reasons given above we quash the order u/s 263 of the Act and allow the appeal of the assessee.
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2019 (11) TMI 1194
Disallowance u/s. 14A r/w. Rule 8D(2)(ii) - Tribunal found that only an amount of ₹ 23 lakhs of interest paid is attributable to earning exempt income - HELD THAT:- The Revenue is not able to point out, why the impugned order of the Tribunal should be interfered with by this Court. More particularly in view of the fact that this Court s in M/s. Nirved Traders Pvt. Ltd. v/s. Deputy Commissioner of Income Tax [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT] has held that disallowance under Section 14A of the Act cannot be more than exempt income. Tri bunal restricting the disallowance u/s 14A r/w. Rule 8D(2)(iii) by reducing the value of strategic investment and investment not yielding dividend income - HELD THAT:- Appeal is admitted on the substantial question of law as (B) above. Prima-facie, this issue seems to be concluded against the Respondent assessee and in favour of the Revenue by the decision of the Apex Court in Maxopp Investment Ltd. v/s. Commissioner of Income tax, New Delhi [ 2018 (3) TMI 805 - SUPREME COURT] . Therefore, we fix the final hearing of this Appeal on 3 February 2020 at the bottom of the Admission Board. Registry is directed to communicate copy of this order to the Tribunal.
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2019 (11) TMI 1193
Condonation of delay - Delay in filing of the appeal is of 1744 days - Delay in filing of appeal is in reference to the Manager, who said to be ill - HELD THAT:- It is a fact that Income Tax Appellate Tribunal passed the impugned order on 28.02.2014. The period for filing the appeal was expired on 08.07.2014. The appeal has been preferred on 17.04.2019. The main excuse of delay in filing of appeal is in reference to the Manager, who said to be suffering from many ailments. There is nothing on record to show that Late Padam Prakash Singh was suffering from ailments and was such an ailment which did not permit him to take initiative for filing of appeal. It was otherwise duty of the assessee to watch the affairs of its firm and in any case, Late Padam Prakash Singh died on 22.11.2017. At least thereupon, the assessee was expected to file appeal immediately but it was filed almost after one and half years. The delay in filing the appeal is not of few days or months but is of more than four and half years. Taking note of the aforesaid, we do not find any ground to condone the delay - application for condonation of delay is dismissed.
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2019 (11) TMI 1192
Reopening of assessment u/s 147 - Income escaping assessment - disallowance made u/s 14A - HELD THAT:- In this case, there is no failure on the part of the assessee. On the other hand, there appears to be a failure on the part of the assessing officer to make an appropriate determination of the amount of expenditure in terms of Section 14A. In such a case, the remedy for the Revenue is elsewhere and not in assuming jurisdiction under Section 147 of the Act. That would amount to exercising the power of review which the statute has not conferred on the authority. This is particularly because the attempt to reopen is made after the expiry of 4 years from the end of the assessment year and the original assessment was made under Section 143(3). The authority cannot take advantage of their own wrong. If they failed to perform their statutory duty, the consequence of default cannot fall on the assessee. The other reason cited by the authority is also not sufficient. It is beyond dispute that the census figures for the year 2011 were made available only a few years later. The assessee could not have peeped into the future while submitting its return of income. One can have the benefit of hindsight but nature has not endowed the assessees with prophetic abilities. Lex non cogit ad impossibilia (Law does not compel a man to do that which he cannot possibly perform) is a well known legal maxim. There is also no substance in the contention that writ remedy under Article 226 of the Constitution of India is not available for the petitioner. The petitioner has demonstrated that the conditions precedent to the exercise of jurisdiction u/s 147 did not exist and the first respondent had therefore no jurisdiction to issue the impugned notice in respect of the assessment year 2011-12 after the expiry of 4 years. When the issue touches on the jurisdiction of the authority, the existence of alternative remedy is no ground to deny relief to the petitioner. The divergent stand of the parties revolves around Section 14 A of the Act. The true object, scope and meaning of Section 14 A of the Income Tax Act has been authoritatively laid down by the Hon'ble Supreme Court in the decision in Maxopp Investment Limited vs. Commissioner of Income Tax [ 2018 (3) TMI 805 - SUPREME COURT] This judgment also deals with the decision reported in Principal Commissioner of Income Tax Vs. State Bank of Patiala [ 2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] . For the foregoing reasons, the impugned proceedings are liable to be quashed. They are accordingly quashed. This writ petition is allowed
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2019 (11) TMI 1191
Special audit u/s 142 sub-section (2A) - infirmity in the process - Whether irrelevant directions are issued without application of mind ? - HELD THAT:- Insofar as the procedure for invoking sub-section (2A) of section 142 of the Act is concerned, there is no infirmity in the process as the petitioner has been given opportunity of hearing by the AO as well as the PCIT. AO has duly considered the objections raised by the petitioner before passing the order disposing of the objection. PCIT has duly given an opportunity of hearing to the petitioner and after applying his mind to the material on record and satisfying himself as regards the necessity of directing the petitioner to get his accounts audited by an accountant as envisaged under section 142(2A) of the Act has granted approval for the proposal for special audit. One of the contentions raised of the petitioner is that in the terms of reference, various irrelevant directions are issued without application of mind and therefore, the reference to special audit under section 142(2A) of the Act stands vitiated. While it is true that some of the directions contained in the terms of reference to the Special Auditors are not germane, it appears that such directions are issued in some standard format. In the opinion of this court, merely because the terms of reference contain some irrelevant directions, the same would not vitiate the entire process as is sought to be contended on behalf of the petitioner. Needless to state that the Special Auditors would confine the inquiry only to the relevant directions. Insofar as the contention regarding separate assessment year wise show cause notices not having been issued for different assessment years is concerned, the same is beyond the scope of the present petition, wherein the subject matter of challenge is the direction to get the accounts audited by an accountant as envisaged under sub-section (2A) of section 142 of the Act and further proceedings pursuant thereto. Upon verification of it bank statement, the Assessing Officer found that the money credited in the bank has either been withdrawn in cash immediately or transferred to other bank accounts and then withdrawn and was of the view that this proves that the donations received in the bank account were not used for the purpose of the Trust but were diverted for personal usages or some other activities. He has accordingly held that the total deposits in the account are not eligible for exemption under section 11 and 12 of the Act and are to be treated as income in the hands of the recipient, that is, the Trust for the assessment years 2011-12 to 2017-18. This court does not find any infirmity in the procedure for initiation of proceedings under section 142(2A) of the Act as well as directions issued by the Assessing Officer for special audit under section 142(2A) of the Act so as to warrant interference.
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2019 (11) TMI 1190
TP Adjustment - Validity of order passed in the case of the assessee by the Additional CIT - HELD THAT:- On harmoniously reading Explanation below 92CA(7) along with sections 116 on one hand and section 2(28C) on the other, the sequitur is that both the authorities, namely, JCIT and Addtl. CIT can act as TPO and there is no statutory proscription in the Addtl. CIT acting as TPO in the facts and circumstances of the case. As the impugned order has been passed by the Addtl. CIT on 28-01-2014, which obviously is after the insertion of the definition of Joint Commissioner given in section 2(28C), we hold that no infirmity can be found in his passing the order u/s.92CA(3). Ergo, the additional ground raised on behalf of the assessee is jettisoned. Whether the foreign/Associated Enterprise(s) can be considered as tested party or only the Indian entity, which has recorded the transaction in its books of account, can be so considered? - international transaction - HELD THAT:- It is axiomatic and again accentuated that the requirement under the Indian law is to compute the income from an international transaction between two AEs having regard to its ALP and the same is required to be strictly adhered to in the manner as prescribed. Obligation under the Indian law is to compute the income from an international transaction between two AEs having regard to its ALP and the same is required to be strictly determined as stipulated. The contention, that the foreign/AEs be considered as a tested parties for determining the ALP of the international transaction, having no statutory sanction, is sans merit and hence jettisoned. Similar view of not accepting foreign/AE as a tested party has recently been taken in Bekaert Industries Private Limited Vs DCIT [ 2019 (4) TMI 1786 - ITAT PUNE] . Thus, we are of the considered opinion that no infirmity can be found in the view canvassed by the authorities below in rejecting foreign/Associated Enterprises as tested parties. Once we come to the conclusion that the international transaction of import raw material was not correctly benchmarked by the assessee and the TPO was justified in rejecting such ALP determination, we hold that the view adopted by the TPO in clubbing the international transactions of Import of raw material and Export of finished goods, in the absence of the assessee putting up any alternate way of computation of the ALP of the international transactions separately, is unassailable. Since the sales made to non-AEs in India are at an altogether different geographical location vis- -vis the exports made to AEs in the USA and Brazil, the internal comparable, being, sales made in India cannot be considered as a comparable transaction unless the effect of difference in the geographical locations on the profitability is ironed out. The assessee has not put forth any data eliminating the effect of difference due to varied geographical locations in sales made in India vis- -vis Brazil and the USA. The Hon ble Bombay High Court in the case of Pr. CIT Vs. Amphenol Interconnect India (P) Ltd. [ 2018 (3) TMI 536 - BOMBAY HIGH COURT] has upheld the exclusion of certain comparables by the Tribunal, inter alia, on the basis of geographical differences and timing differences etc. In the hue of the foregoing discussion, it is held that the argument of the assessee for adopting profit on sales made in India to non-AEs as a comparable instance for determining the ALP of international transactions including exports made to the AEs in Brazil and the USA, cannot be countenanced for lack of the provision by the assessee of any data offloading the effect of such geographical differences in the profit margins. TPO accepted the contention of the assessee for granting capacity utilization adjustment - TPO ought to have considered the gross margins of the assessee as well as the three comparables chosen by him because of under-utilization of the installed capacity by the assessee as well as the comparables - HELD THAT:- Adjustment on account of differences, if any, between the assessee and comparables, is to be carried out only in the computation of the margin of comparables and not that of the assessee. It is ergo held that the ld. AR was correct in not pressing the first limb of his argument, when the legal position in this regard was put across to him. The second fold of the argument in this regard was that the TPO should have taken gross margin of the assessee and comparables, that is, before the effect of depreciation etc. We do not find any force in the contention of the ld. AR urging the adoption of gross margins for determining the ALP under the TNMM as numerator as against the operating profit margin taken by the TPO. We have set out Rule 10B(1)(e) supra . It can be seen that sub-clause (i) provides for the computation of net operating profit margin realized by the assessee from an international transaction. D etermining the operating profit under the TNMM - Depreciation has to be necessarily considered as part of operating costs in the process of determining the operating profit under the TNMM. As such, there can be no question of excluding depreciation from the ambit of operating costs for the purposes of determining operating profit. At this stage, it is pertinent to note that as against Rule 10B(1)(e) specifically providing for adoption of operating margin under the TNMM, rule 10B(1)(b) and 10B(1)(c) containing mechanism for determining the ALP under the Resale Price method and Cost Plus method specifically provide for adopting the gross margin. The contention, therefore, raised by the assessee that the numerator in the formula as per rule 10B(1)(e) should have been Gross margin rather than the operating margin as applied by the TPO, is bereft of any force and hence repelled. Computing the transfer pricing adjustment with reference to transactions with AEs as well as non-AEs - Transfer pricing adjustment cannot be made with reference to the non-AE transactions, but, the same has to be confined only to the international transactions. Since the TPO/AO has proposed/made the addition on the basis of transactions even with non-AEs, we set aside the impugned order and send the matter back to the file of the AO/TPO for deciding the issue afresh as per law after allowing a reasonable opportunity of hearing to the assessee. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings. Transfer pricing addition with respect to the international transaction of Import of fixed assets - Assessee has placed on record certain documents evidencing the purchase of fixed assets, which is albeit not complete, we consider it expedient to set-aside the impugned order on this count and remit the matter to the file of AO/TPO for examining such evidence and ascertaining if such evidence really documents the purchase of fixed assets. To the extent, the evidence, namely, invoices etc. for the purchase of the fixed assets are available, there will not be any question of making transfer pricing addition. However, to the extent of non-availability of invoices and other accompanying documents supporting the purchase of fixed assets, the transfer pricing addition would be called for, but not to the value of purchase of such fixed assets but only to the extent of depreciation on such fixed assets claimed in the computation of total income. At the same time, no further claim of depreciation on such assets will be entertained in next years as well. With the above remarks, we direct the AO/TPO to decide this issue afresh after allowing reasonable opportunity of hearing to the assessee. Disallowance u/s.37(1) - Current liabilities were reported in the Balance sheet - AR contended that some of the provisions were voluntarily written back by the assessee in the computation of income - HELD THAT:- The claim of the assessee which now stands is about the deductibility or otherwise of the provisions amounting to ₹ 1.13 crore. The ld. AR contended that some of the provisions were voluntarily written back by the assessee in the computation of income. The AO is directed to verify the correctness of this contention. In case the same is found to be correct, then no addition should be made to that extent. With reference to certain other provisions, the ld. AR submitted that it represented certain purchase of goods made during the year for which bills were actually received in the subsequent year. It was stated on receipt of such bills, the amount of provision was reversed. AO is directed to verify this contention as well. In case, the same is found to be correct to the effect that the purchases were made during the year and debited to the provision, then of course no addition should be made provided such provision has been reversed in the subsequent year on the receipt of bills. Qua the remaining provision for which there is no evidence, the same is liable to be disallowed in the absence of the assessee furnishing any justifiable reasons.
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2019 (11) TMI 1189
TP Adjustment - export sales made to AE - HELD THAT:- The assessee s submissions that the expenditure was incurred in India for advertisement of a particular product and the same pertained only to Indian market and had a target audience in India, remained uncontroverted. The documents placed in the paper book, in the shape of media service agreements, invoices etc. support the said submissions. Another relevant fact is that assessee s AE were incurring similar expenditure in the respective markets and the assessee was not incurring any expenditure in respect of products being exported. Lastly, the assessee had benchmarked these transactions using TNMM method, external as well as internal and had demonstrated that the stated transactions were at Arm s Length. The same has also remain uncontroverted and no fallacy has been found in the same. The Ld. DRP dismissed this ground treating the same as redundant, which could not be held to be correct approach. Therefore, keeping in mind all these factors, the impugned adjustment made in final assessment order, in this regard, could not be sustained. By deleting the same, we allow Ground Nos. 1 2. Payment of trademark royalty @5% R D Royalty @1.4% - HELD THAT:- In line with view taken by Tribunal in assessee s own case for AY 2007-08, we deem it fit to restore the matter of trademark royalty as well as R D royalty back to the file of Ld. AO / TPO with similar directions as given in para-12 of the order for AY 2007- 08. Ground Nos. 3 4 stands allowed for statistical purposes. Allowability of brand development expenses - HELD THAT:- As per the terms of the agreement, the AE was, inter-alia, to make available and give assessee access to achievement in its product conception / development and marketing activities relating to Global brands. The assessee was also granted a non-exclusive, non-transferable and indivisible license under all existing and future intangible property rights for the products marketed and sold by the assessee under the Global Brands. In turn, the assessee was to pay to its AE a compensation in proportion to assessee s share in costs of such services computed on the basis of Net Sales Value in certain segment. The perusal of these documents would demonstrate that the impugned payments were made by the assessee pursuant to well defined contractual terms under an agreement. The nature of services being availed by the assessee were clearly spelt out in the agreement and the fact that the allocations were on cost basis, remain uncontroverted. It is also noteworthy that Ld. TPO, without determining the ALP of these transactions by adopting any of the prescribed method, disallowed the entire payment. The same, in our opinion, could not be said to be correct approach. Another fact is that similar payments have been made by the assessee in preceding years which emanates from the same agreement but no such adjustment has bene made in earlier years. Therefore, the given factual matrix does not inspire us to confirm the impugned additions. Hence, by deleting the same, we allow Ground of assessee.
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2019 (11) TMI 1188
Disallowance on account of commission paid to its two directors - HELD THAT:- In this year also both the Directors admitted the payment of commission received and offered the same in their income tax returns and had paid at a maximum marginal rate. This clearly establishes the fact that there has been no tax avoidance motive behind the payment of commission to the directors by the assessee company. The CIT(A) has taken proper cognizance of these fact. There is no need to interfere with the finding of the CIT(A). Thus Ground No.1 of the Revenue s appeal is dismissed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Fixed maturity plans offered by mutual funds definitely require much less professional expertise as compared for making investments in equity related schemes and therefore, less expenditure is involved in managing such schemes. Moreover before upholding partial disallowance u/s 14A, Ld. CIT(A) should have considered the submissions of assessee that a part of investments were not for earning dividends but were strategic investments. In view of the above, we are of the opinion that the issue of disallowance be readjudicated by the AO and the AO should decide the disallowance on the basis of his objective findings after giving a reasonable opportunity to the assessee of being heard. In view of the above, the appeal of the assessee allowed for statistical purposes TDS u/s 195 - Disallowance u/s 40(a)(ia) for non-deduction of TDS - HELD THAT:- From the perusal of the order of the CIT(A), it can be seen that the companies did not have any PE in India and it is not the case of the Assessing Officer that these companies have PE in India. Further, such services are not in the nature of Management, technical and consultancy, therefore, the same cannot be treated as FTS. Thus, there was no obligation on the assessee to deduct TDS thereon u/s 195. CIT(A) rightly held that no disallowance u/s 40(a)(i) can be made. CIT(A) has given a detailed finding and this issue is also decided in favour of the assessee in previous years, therefore, Ground No.3 is dismissed.
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2019 (11) TMI 1187
Addition u/s 68 being share application money received by the assessee - HELD THAT:- Assessee was not provided with any adverse material which has been used by the Assessing Officer while framing the assessment a statement made by the ld. counsel for the assessee and not controverted by the ld. DR. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and credit worthiness of the share applicants and the genuineness of the transactions. The Assessing Officer, if feels necessary, may summon the directors of the investor companies or ask the assessee to produce the directors of the investor companies. Addition to be interest income for this year - HELD THAT:- CIT(A) upheld the action of the Assessing Officer on the ground that the assessee could not substantiate by producing necessary evidence that the balance interest has been offered to tax in the subsequent year after the same was credited in the bank account of the assessee. It is the submission of assessee that the interest income has been shown on receipt basis and since the assessee has offered the same to tax in the subsequent year, no addition is called for during this year. We find some force in the argument of the ld. counsel that an income cannot be taxed twice. However, it is a mater of record that the assessee has not substantiated by producing necessary evidence either before the AO or before the CIT(A) that the balance interest has been offered to tax in the subsequent year. Penalty levied u/s 271(1)(c) - HELD THAT:- We find the quantum appeal has been restored to the file of the Assessing Officer for fresh adjudication. Therefore, the penalty so levied by the Assessing Officer and upheld by the CIT(A) has no legs to stand - Penalty levied by the AO and sustained by the CIT(A) is cancelled. However, the Assessing Officer is at liberty to initiate fresh penalty proceedings and levy penalty u/s 271(1)(c) if so required, after completion of the assessment. The grounds raised by the assessee are accordingly allowed.
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2019 (11) TMI 1186
Deduction of P.F. and E.S.I. contribution of Employees - Delay in deposits - HELD THAT:- Assessee is in the business of wholesale and retail trading of gold covering jewellery. As observed that assessee had deducted PF ESI share of employees contribution from salaries of employees to the tune of ₹33,32,061/- in aggregate during the year under consideration, which admittedly was deposited late by assessee beyond due date prescribed for deposit of PF/ESI under relevant statutes governing PF ESI, but admittedly said amounts of employees contribution towards PF/ESI deducted by assessee from employees salaries were deposited by assessee before due date prescribed for filing of return of income u/s.139(1). We have observed in the case of CIT v. M/s.Industrial Security and Intelligence India Pvt. Ltd [ 2015 (7) TMI 1063 - MADRAS HIGH COURT] for ay: 2003-04 and 2004-05 has held that if employees contribution of PF and ESI deducted from employees salary is deposited before due date prescribed u/s.139(1) of 1961 Act, the deduction for same shall be allowed. As in the case of Carat Lane Trading Pvt. Ltd. [ 2017 (12) TMI 1669 - ITAT CHENNAI] we decide this issue in favour of the assessee and hold that employees contribution towards PF and ESI deducted by assessee from salaries of employees which is deposited by assessee beyond the due date prescribed under relevant statutes governing PF and ESI, but deposited prior to due date of filing of return of income u/s.139(1) of the 1961 Act shall be allowed as deduction and we direct deletion of the additions made to the income of the assessee. The assessee succeeds in its appeal filed with tribunal. - Decided in favour of assessee.
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2019 (11) TMI 1185
Business promotion expenses disallowances - HELD THAT:- It emerges that neither the assessee has proved any nexus between the impugned expenses in the nature of loading and unloading charges and printing and stationery sales promotion by placing all supportive details in entirety nor the lower authorities have found any specific defect in the expenses in issue. Faced with this position, we deem it appropriate in larger interest of justice that a lumpsum disallowance of ₹ 1,00,000/- out of ₹ 4,19,204/- would be just and proper with the rider that the same shall not be treated as precedent in other assessment year. The assessee s instant first substantive ground is partly accepted in above terms Disallowance u/s 80P(2)(a)(i) deduction claim in the nature of interest income - HELD THAT:- Issue of section 80P(2)(a)(i) deduction on interest income derived from parking of surplus funds in term deposits schemes of nationalized banks. The fact also remains that impugned disallowance has to be computed on netting basis and both the lower authorities have not taken into consideration the same in their respective orders. We therefore direct the AO to compute the impugned disallowance on netting basis as per law within three effective opportunities of hearing.
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2019 (11) TMI 1184
Reopening of assessment - approval to the reopening of assessment in a mechanical manner - HELD THAT:- In the present case the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind by mentioning only Yes, I am satisfied that it is a fit case for issue of Notice u/s. 148 in Column No. 12 of the Format for Recording the Reasons for Initiating Proceedings u/s. 147 and For obtaining the Approval of the Addl./JCIT Commissioner of Income Tax and therefore, the legal issue in dispute is squarely covered by the aforesaid finding of the Tribunal, hence, respectfully following case of Krishna Print Pack, Meerut vs. ITO, Ward 1(3), Meerut [ 2019 (10) TMI 843 - ITAT DELHI] relevant to assessment year 2009-10, the reassessment is hereby quashed and accordingly the legal ground of assessee is allowed.
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2019 (11) TMI 1183
TP Adjustment - comparable selection - authorities below rejecting CUP as the most appropriate method for determining ALP of the international transactions entered into by the assessee with its group concerns under software development services - contention of assessee is that the TPO had secretly received information from Syntel India and said information was not available in public domain and hence the same cannot be applied against the assessee - HELD THAT:- Since, the information from Syntel India was not available in public domain, the assessee was deprived of information being used against it. We are of considered view that fair opportunity should have been granted by the authorities below in line with the principles of natural justice Inclusion/exclusion of comparables for determining ALP of the transactions under ALM segment HELD THAT:- As during the course of submissions the ld. AR of assessee has not specified the comparables that need to be included/excluded in the final list of comparables. Accordingly, ground Nos. 6 and 7 of the appeal are dismissed. Method of computation of operating profit margin - HELD THAT:- Assessee deserves the benefit of adjustment in operating margins on account of substantial salary and travel cost in initial year of operation. The ground Nos. 8 and 9 of the appeal are restored back to the file of Assessing Officer/TPO for recomputation of operating margin after allowing adjustments as mentioned above. The assessee is directed to produce all relevant documents before the Assessing Officer/TPO in support of its claim. Non considering multiple year data - HELD THAT:- It is a well settled legal position that only data relevant to the corresponding single year has to be considered. We do not find any merit in ground No. 10 of the appeal. Comparable selection - Lanco Global Systems Limited and Gebbs Infotech Limited - HELD THAT:- We do not find any infirmity in the order of CIT(A) in including the said companies in the list of comparables. The objection raised by the assessee i.e. information in respect of Gebbs Infotech Limited is not available in public domain is without any merit. The assessee has furnished information regarding the services of Gebbs Infotech Limited. Inclusion of Asian CERC Information Technology Limited is concerned the said company has been included in the list of comparables by TPO itself. The same has been accepted by the CIT(A). We do not see any prejudice caused to the Revenue in CIT(A) accepting the comparable selected by the TPO. In our considered view the ground No. 4 of the appeal is misconceived and hence, needs to be rejected.
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2019 (11) TMI 1182
Disallowance of expenses u/s.14A - HELD THAT:- As decided in own case AY 2011-12 [ 2018 (9) TMI 1691 - ITAT PUNE] formula adopted by the assessee of allocating the cost to earning of exempt income has been adopted for working out disallowance - Disallowance under section 14A of the Act is to be restricted. Hence, the ground of appeal partly allowed - same parity of reasoning to be applied and we remit the issue back to the file of the Assessing Officer to adjudicate the issue in lines of the order of the Tribunal in assessee‟s own case for assessment year 2011-12 Claim of deduction u/s.35(2AB) - HELD THAT:- As relying on assessee;s own case we direct the Assessing Officer to allow weighted deduction under section 35(2AB) Disallowance of additional depreciation - HELD THAT:- in the case of Commissioner of Income Tax and another Vs. Rittal India Pvt. Ltd. [ 2016 (1) TMI 81 - KARNATAKA HIGH COURT] and Commissioner of Income Tax Vs. Shri T.P. Textiles Pvt. Ltd. [ 2017 (3) TMI 739 - MADRAS HIGH COURT] and in both these cases, it has been unanimously observed and held that the assessee can claim balance depreciation in the subsequent assessment year. - Decided in favour of assessee
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2019 (11) TMI 1181
Condonation of delay - delay of 194 days in filing this appeal - HELD THAT:- AR of the assessee who represented before the Ld. Pr. CIT was not aware that the impugned order of Ld. Pr. CIT passed u/s 263 is appealable before this Tribunal. Later when the assessee consulted a senior Counsel, he advised him to file the appeal and then only the assessee realized that the assessee could have preferred an appeal before this Tribunal, thus, the delay happened and thereafter once the brief had been handed over to the Counsel he filed the appeal within 10 days. Due to the said reason delay of 194 days happened when assessee filed this appeal, which according to him is not intentional and pleads that delay be condoned. Since there is no quarrel in-respect of the facts which led to the delay we are of the opinion that the assessee should not be penalized for the ignorance of the AR as discussed. Revision u/s 263 - Bogus purchases u/s 69C - AO adding the 2.25% GP in respect of the alleged bogus purchase - HELD THAT:- AO has made enquiries and the assessee has given details and furnished answers/replies which has been discussed CIT ought not to have taken a view that the AO s order is erroneous for lack of enquiry. It has to be kept in mind that since enquiry was conducted by AO even if inadequate that would not by itself gives an occasion to the Pr. CIT to interdict and interfere by exercising his revisional jurisdiction merely because he is of the opinion that some more enquiries should have been conducted in the matter. In a case where the PrCIT finds that the enquiry conducted by the AO is not in accordance with his subjective standards, then it is incumbent upon the ld. Pr CIT to himself conduct the investigation and thereafter record a clear finding in his order u/s. 263 that the view followed or acted upon by the AO in his assessment order was unsustainable in law and therefore the order of the AO was erroneous. We note that the Ld. Pr. CIT has not taken any such exercise as discussed. Thus, in the light of the enquiry conducted by the AO on the issue on which the Ld. Pr. CIT has found fault with, the Ld. Pr. CIT s finding of fault cannot be sustained and, therefore, there was no basis to find fault with. Pr. CIT erred in usurping the jurisdiction without satisfying the jurisdictional condition precedent as stipulated in sec. 263 and, therefore, we are inclined to quash the impugned order of the Ld. Pr. CIT. Appeals of the assessee are allowed.
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2019 (11) TMI 1180
Unexplained cash deposits - assessee failed to furnish material in support of source of income - CIT-A deleted the addition - HELD THAT:- CIT(A) has recorded a finding of fact on examination of the cash flow statement for the year under consideration, as also for the earlier two years and cross verifying it with the entries in the bank statements, find that the entries are recorded in the disclosed bank accounts of the assessee which showed that sufficient cash withdrawals were made by the assessee from his bank account to cover the cash deposit. This finding of fact made by the AO after examination of the cash flow statement for the year under consideration as also for the earlier two years after cross verifying it with the entries in the bank statement could not be dislodged by the departmental representative before us. In such a scenario, we are inclined to uphold the action of the CIT(A) and dismiss the ground of appeal of the revenue. Disallowance u/s. 17(3)(ii) - loan taken from two companies - HELD THAT:- CIT(A) has made a clear finding of fact that assessee is not an employee of the two companies namely, M/s. Rolls Print Co. Pvt. Ltd. and M/s. Rolls Print Graphics Pvt. Ltd. which finding of fact has not been challenged by the department before us and since the amounts taken has been admitted by the assessee as given by these companies as loan, the question of this amount falling in the ken of section 17(3)(ii) does not arise Assessee in subsequent year has repaid the said loan to both these companies. Therefore, the amount which the assessee had taken as loan from these two companies does not attract section 17(3)(ii) of the Act and the CIT(A) s action on this score is upheld. Loan taken from the M/s. XPRT Engineered Packaging Solutions Pvt. Ltd., we note that assessee was a whole time director of the said company and has drawn salary from it. Therefore, once the assessee had drawn interest free loan from the said company where he was employed, what is chargeable to tax is only the perquisite value computed in the manner prescribed in Rule 3(7)(i) of the Rules, which is assessable under the head salary . We note that in the aforesaid scenario, the CIT(A) has directed the AO to assess/compute the perquisite value in respect of interest free loan granted by the M/s. XPRT Engineered Packaging solutions Pvt. Ltd. to the assessee in the manner prescribed under Rule 3(7)(i) of the Rules. We find that the action of the Ld. CIT(A) is as per law and need not be interfered with. Business loss derived from non-speculation transactions - HELD THAT:- CIT(A) has recorded a finding that since tax audit was conducted in the assessee s case, the date of filing of return of income was 30th September and since the assessee had filed the return of income on 28th September the return of income was not belatedly filed; and he also found that the loss could not be qualified as Speculative, because it was incurred by the assessee in the trading conducted in derivatives and since the derivative trading was carried out through authorized members of the recognized Stock Exchanges, as per clause (d) of the Explanation to section 43(5) it did not constitute Speculative transaction which findings of the CIT(A) is valid and, therefore, the action of Ld CIT(A) in the facts is upheld. Revenue appeal dismissed.
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2019 (11) TMI 1179
Revision u/s 263 - AO had simply accepted the version of assessee and allowed deduction of provision which is an un-ascertained liability, as well as the same [un-ascertained liability] could not have been allowed by the AO while computing book-profit u/s 115JB - HELD THAT:- CIT has simply made an averment that the assessment order is not in accordance to Explanation 2(c) below Section 263 of the Act, without spelling out which order, direction of CBDT has not been followed by the AO. So we do not countenance such a bald finding of the Ld. Pr. CIT to bring in the deeming provision to hold that the assessment order is erroneous as well as prejudicial to the interest of the revenue. We note that the fault which the Ld. Pr. CIT noted was that the provision of ₹5.75 crores is based on estimation and whether there is any liability for the assessee to complete the flats and whether the liability is ascertained liability or not and since according to the Ld. Pr. CIT it is unascertained liability, ₹5.75 crores should have been added u/s 115JB of the Act. AO had taken note of the issue of provision of ₹5.75 crores claimed by the assessee as deduction and has raised queries and the assessee has duly replied and the AO has accepted the claim of the assessee. Since the provision the assessee claimed is an ascertained liability, there was no question that AO could have disallowed the same neither in the normal computation nor while computing book profit u/s 115JB of the Act. So the AO has discharged his duty as an investigator as well as an adjudicator and allowed the claim which is a plausible view, which cannot at any rate be called as an unsustainable view. So the Ld. Pr. CIT failed to make out a case that the order of AO is erroneous as well as prejudicial to the interest of the revenue, which was a condition precedent for invoking jurisdiction u/s 263 of the Act. Therefore the impugned order of Ld. Pr. CIT is without jurisdiction and null in eyes of law. - Decided in favour of assessee.
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2019 (11) TMI 1178
Bad Debts written off disallowed - HELD THAT:- AR has stated at the Bar that at no point of time the assessee was engaged in industrial activity or the objects of the assessee were amended to include carrying on of industrial activity as its business. Hence, there is no question of purchasing land to set up any industrial activity. We find merit in the contentions of the assessee. The inevitable conclusion that can be drawn from examining the documents on record and facts of the case is that the industrial plot was held by the assessee as stock in trade. Since, the assessee failed to recover the advance paid which was forfeited by the Vendor of the plot in line with the terms and conditions of agreement dated 07-12-2005, the assessee had no other option but to write off the same. As per terms and conditions of the agreement of sale, the assessee had paid ₹ 10 lakhs at the time of execution of agreement, whereas, the assessee has written off ₹ 25 lakhs. The authorities below have not examined the amount which the assessee has paid as advance for the purchase of industrial plot. Therefore, we deem it appropriate to restore this issue back to the file of Assessing Officer for limited purpose to verify the amount paid by the assessee as advance for purchase of industrial plot. In principle, we are of the view that advance paid by the assessee towards purchase of plot had become irrecoverable and hence, the claim of assessee deserves to be allowed.
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2019 (11) TMI 1177
Claim of loss due to rejection of goods - loss claimed by the assessee was not to be accepted, for the reason, that the correspondence and the joint declaration filed by them did not inspire much confidence - HELD THAT:- It is not a case that the revenue had placed on record any irrefutable documentary evidence which would dislodge the authenticity of the aforesaid claim of the assessee. As regards the observations of the A.O, that now when the goods exported to M/s Ammetal FZCO, UAE were rejected, then as to why the same were not included in the inventory of the assessee, we are afraid is an absolute fallacious and misconceived view. It is not a case where the goods after having been rejected were received back by the assessee. In fact, it is a case where the goods exported on being rejected were sold at an amount below the sale price. We have given a thoughtful consideration to the observations of the lower authorities and find no justifiable reason as to why the duly substantiated claim of loss suffered by the assessee in the normal course of its business of export was not to be allowed while computing its income for the year under consideration. We thus not being able to persuade ourselves to subscribe to the view taken by the lower authorities, therein set aside the order of the CIT(A) and delete the additions/disallowance made by the A.O. - Decided in favour of assessee.
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2019 (11) TMI 1176
Reopening of assessment u/s 147 - Addition towards unexplained money - HELD THAT:- As during the course of assessment proceedings the appellant was granted sufficient opportunity. He had the benefit of intervention by the Joint Commissioner of Income Tax, Non Corporate Range-2, Madurai u/s 144A. Further, as requested by the appellant, the cross examination of the seller was also granted by the Assessing Officer on 21.11.2016 wherein the appellant could not disproved the fact that he had not paid ₹ 32 lakhs. The various case laws quoted by the authorised representative have been considered. Under the facts and circumstances of the case, the appellant does not get any support from the cited case laws. CIT(A) decided the issue based on facts and circumstances, which remain undisputed. Since the assessee has not laid any material for the alleged duress, the original statement made by the assessee with the corroborating evidences from the seller side clinches the issue in favor of the Revenue. Therefore, we find no reason to interfere with the order of the ld.CIT(A) and hence, the assessee s appeal is dismissed.
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2019 (11) TMI 1175
Revision u/s 263 - assessee had incurred expenditure on foreign travels along with his family that was in excess of ₹ 3 crores - PCIT is of the firm belief that the Assessing Officer failed to conduct proper enquiry and failed to apply proper law leading to the said assessment order being erroneous as well as prejudicial to the interest of the revenue - HELD THAT:- Evidences, examined and analysed by the Assessing Officer during the course of assessment proceedings, further supported by thorough investigations/enquiries made by the Assessing Officer during the assessment proceedings, we are of the considered view that there remains nothing for the PCIT to assume jurisdiction u/s 263 to say that the assessment order is not only erroneous but prejudicial to the interest of the revenue. We are of the considered view that the PCIT has wrongly assumed jurisdiction u/s 263 of the Act, hence his combined order for all the A.Ys deserves to be set aside. We, accordingly, set aside the order of the PCIT and restore that of the Assessing Officer. We order accordingly. We are constrained to bring on record, to be looked into by the Central Board of Direct Taxes (CBDT) that proceedings u/s 263 of the Act have been initiated in this case apparently on the basis of false, frivolous and baseless allegations with malafide intention of the quarter concerned which were also examined and found not sustainable by the Vigilance Directorate of Income-tax Department. Senior Officer of the Revenue Department had not only got the proceedings u/s 263 initiated against Appellant on false, frivolous and baseless allegations rather continued to litigate against the appellant as well as against the Revenue Department by filing frivolous applications one after the other before the Hon ble High Court of Delhi as well as the Tribunal. We direct the CBDT to initiate a discreet enquiry in this case to find out, as to how and under what circumstances on the basis of false, frivolous and baseless allegations, that too with malafide intentions, proceedings u/s 263 of the Act have been initiated apparently to victimize the appellant, to proceed against the guilty officials under Rules and to further frame the guidelines to deal with such abuse of powers by the senior officers, so that such incident should not reoccur.
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2019 (11) TMI 1174
Disallowance of expenditure against the business income received from the partnership firms - whether there emerges any business activity merely on becoming a partner in the partnership firm - HELD THAT:- A business can earn a profit for the products and services it offers and it works on regular basis. We also note that a partnership firm is a form of business in which a group of people, also known as partners, come together. They set up their firm and provide services and products through it. However, a partnership firm is not considered to be a separate legal entity. Partners share all the profit and losses amongst each other. Thus the business has been carried out by the partnership firm and the profit of the same has been determined in its hands for the purpose of the tax. Accordingly, we hold that the assessee on becoming a partner in the firm does not mean that he is carrying out any business activity. We are of the opinion that the assessee as such is not carrying out any business activity and therefore the question of claiming the expenses against the income received from the firm does not arise. As relying on N. KHADERVALI SAHEB AND ANOTHER [ 2003 (2) TMI 63 - SUPREME COURT] it is clear that the partners are not separate from the partnership firms. Therefore the income of the partner from the firm is treated as business income. Income received by the assessee from the partnership firm i.e. remuneration from the firm, in this regard we note that such income is taxable in the hands of the partner. Now the question arises, whether the assessee has incurred an expense against the earning of such income. The assessee as partner in the firm is acting in the representative capacity meaning thereby whatever expenses are incurred by the partner in connection with the business of the firm, then the firm is entitled for the deduction of such expenses subject to the provisions of the Act. If the assessee has incurred any expense on behalf of the partnership firm then the right course of action is to claim the reimbursement from the partnership firm and such firm will claim the deduction under the relevant provisions of the Act on account of such reimbursement of expenses. As such the assessee cannot claim any expense against the income from the firm, save as provided above. As we have noted that, there is no dispute regarding the interest income viz a viz interest expenses. From the above, it is transpired that the assessee has claimed an expense against the remuneration and share of profit as discussed above. However the assessee has claimed that expenses against the remuneration income. As such the assessee has not allocated any expense which has been incurred against the share of profit. Thus, the action of the assessee is not acceptable. Principles of consistency can be applied where the facts remain the same. Thus it is transpired that the principles of consistency are based on the facts. For example if the salary has been paid to the staff for a particular amount in a year then in our considered view the same cannot be disturbed in the subsequent year until and unless the facts warrant otherwise. Thus in our considered view in such a situation, the principles of consistency will be applied. In a case where there is a violation of the law in 1 year then the question arises whether, the same can be allowed to be applied in the subsequent year. For example, the assessee is entitled to claim the depreciation at a particular rate say 10% but the assessee has claimed depreciation at the rate of 25%. Thus the question arises whether the assessee can claim depreciation at the rate of 25% in the subsequent year keeping the principle of consistency. To our mind, the answers stands negative. Now, coming to the present facts of the case, we are of the view that the issue involved is legal in nature whether the assessee by becoming a partner in the firm can be said that the partner has started any business and commercial activity. It is undisputed fact that there was no scrutiny assessment under section 143(3) of the Act in the earlier years. But in our considered opinion the principles of consistency cannot be applied in the given facts of the case. - Decided against assessee.
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Customs
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2019 (11) TMI 1173
Maintainability of appeal - monetary amount involved in the appeal - liability of compensation due to demurrage - HELD THAT:- In view of low tax effect, the instant appeal is disposed of.
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2019 (11) TMI 1172
Writ petition - Validity of Tribunal's order - Tenability of claim for interest under Section 28AA - Period of limitation in relation to amount receivable upon forfeiture of the bond - HELD THAT:- We decline to interfere in this special leave petition.
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2019 (11) TMI 1171
Condonation of delay of 486 days in filing appeal - sufficient reason for condonation of delay or not - HELD THAT:- The effect of the orders passed by this Court in earlier appeals, setting aside similar impugned orders is that rather than the Adjudicating Authority, it is the CESTAT itself that would now undertake the required exercise. Pertinently, it were the appeals of the assessees/Respondents on which the impugned order had been passed. The effect of the impugned order is to await the decision of the Supreme Court in UNION OF INDIA VERSUS MANGALI IMPEX LTD. [ 2016 (8) TMI 1181 - SC ORDER] and then the case is to be decided on merits. This would delay the proceedings, and the same would neither be in the interest of the Revenue, nor in the interest of the assessee. The objection of the Respondents to the condonation of delay is rejected - application allowed.
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Corporate Laws
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2019 (11) TMI 1170
Maintainability of petition - Oppression and mismanagement - whether the 1st Respondent/ Petitioner is not a shareholder? - eligibility in terms of Section 244 of the Companies Act, 2013 - HELD THAT:- The right arising out of an instrument does not vest with nominee automatically on the death of the original holder of the instrument. Nominee does not mean that the amount or the share belongs to the nominee. On the death of the holder of the instrument, the amount/ share vests with the legal heirs, the nominee merely holds the amount/ share herein till the matter of vesting is decided in favour of the legal heirs. In view of the decision of the Hon ble Supreme Court in WORLD WIDE AGENCIES PVT. LTD. AND VERSUS MRS. MARGARAT T. DESOR AND ORS [1989 (12) TMI 245 - SUPREME COURT] whereby the Hon ble Supreme Court affirmed the decision of the Hon ble Delhi High Court, we hold that the application under Sections 241, 242 244 of the Companies Act, 2013 was maintainable at the instance of Mr. Pankaj Oswal (1st Respondent) otherwise also, in view of the matter that his claim relating to the shares of Late Mr. Abhey Kumar Oswal which is pending in a suit before the Court of Competent Jurisdiction, we hold that this is a fit case for waiver under sub-section (4) of Section 244 of the Companies Act, 2013 and for that the application under Sections 241, 242 should be heard on merit. Appeal dismissed.
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Insolvency & Bankruptcy
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2019 (11) TMI 1169
CIBIL rating - Removal of name of the petitioner from the list of defaulters maintained by Credit Information Bureau (India) Limited - liability of a guarantor towards a creditor in respect of a guarantee given by such guarantor to secure the claim of a creditor for the credit facilities advanced by such creditor to the company - Whether the liability of a guarantor of a debt of a corporate-debtor stands reduced/extinguished upon an Insolvency Resolution Plan in respect of the corporate debtor, being approved under the Insolvency and Bankruptcy Code, 2016? HELD THAT:- Section 14 of the Code of 2016 does not apply to a personal guarantor. The Code of 2016 does not allow personal guarantors to escape their liability. When an application under Section 7 of the Code of 2016 is admitted by the Adjudicating Authority, the steps taken subsequent thereto flows out of the statute. The two termination points of an application under Section 7 of the Code of 2016, after the admission of such application, do not result in any variance, made without the surety s consent, in the terms of the contract between the principal debtor and the creditor to constitute a discharge of a surety under Section 133 of the Act of 1872. The ratio of Canonnore Spinning and Weaving Mills Ltd [ 2002 (4) TMI 943 - SUPREME COURT ] being binding precedents and the factual scenarios obtaining therein being same as that obtaining in the present case, the ratio laid down therein are applied in the facts of the present case, wherein it was being held that a definite volition on the part of the creditor is required to take place for the guarantor to stand discharged in terms of section 141 of the Act of 1872. It has held that, the liability of the guarantor cannot but be stated to be a strict liability and even if the principal debtor is discharged from his liability unless such discharge is through the act of the creditor without consent of the surety/guarantor, the creditor s right of action against the surety is preserved. The issue is answered in the negative and against the writ petitioner - no relief can be granted to the writ petitioner - petition dismissed.
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2019 (11) TMI 1168
CIRP - non-cooperation by the suspended Board of Directors during Corporate Insolvency Resolution Process (CIRP) - exclusion of 105 days time period in the CIRP lost in the appointment of Resolution Professional - HELD THAT:- This Tribunal holds that the RP is not at fault in causing the delay of the CIRP Process and the time lines stated by him must be excluded in computing the period of 270 days (with extended period of 90 days). The period of 268 days is excluded from the CIRP - Application disposed off.
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Service Tax
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2019 (11) TMI 1167
Maintainability of petition - efficacious statutory remedy of appeal - Section 86 of the Finance Act, 1994 - demand of service tax - HELD THAT:- True, it is that despite existence of an alternative remedy, it is within the discretion of the High Court to entertain an application under Article 226 of the Constitution of India. However, when the statutory remedy is created under the Act for the redressal of grievances, it would not be proper to entertain the writ petition ignoring the statutory dispensation. In view of the availability of an equally efficacious statutory remedy of appeal to the petitioner under the Act, we are not inclined to entertain the present application in extra writ jurisdiction under Article 226 of the Constitution of India - the application is dismissed with liberty to the petitioner to avail of the statutory remedy provided under the Act.
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2019 (11) TMI 1166
Clearing and forwarding agent services - GTA service - It is the contention of the Revenue that the Second Agreement has been entered into by the appellant with Akzo during the validity of First Agreement in order to avoid payment of service tax on C F service, hence it appeared that the Second Agreement was with sole intention to pay service tax on 25% of the value under Goods Transport Agency Service‟ and to avoid the service tax on 75% on the gross value. Whether the territory freight agreement, which has been entered upon by the Appellant with its principal (Akzo) on 01.01.2013 is required to be considered as a part of First Agreement dated 01.10.2011, and therefore, the value of the transportation service is required to be added for computation of service tax under the Clearing and forwarding services being undertaken by the Appellant? HELD THAT:- On reading of the terms and conditions of the two agreements, it is evident that the second agreement is offer for GTA service for the first time after execution of the second agreement which is specific to the transportation of the goods of the principal as per their direction. Therefore, the first agreement cannot be treated as a part of the second agreement as contended by the Revenue. In this regard, we also find that both the agreement has to be read in whole which is complete in itself. The CBEC trade notice No. 87/97 dated 14/07/1997 makes it clear that the C F agent‟s responsibility is restricted to arranging dispatch of goods as per the direction of the principal by engaging transport of his own or through third party transporter as authorised by the principal. Thus, the activity of C F agent is primarily responsible for delivery and forwarding and not the transport activities as such. As per the agreement in case of exigency the appellant was to arrange for the transportation of consignments on behalf of the principal from the approved transporters. It is a clear admission on part of the appellant that no such transportation has ever been arranged by them on behalf of their principal till the second agreement was executed between them, which was specifically for transportation of the goods. Validity of Consignment note - HELD THAT:- The appellant has disclosed the levy of service tax on the basis of weight of consignment except distance covered in kilometres mentioned therein. The consignment note issued by the appellant appears to contain all the relevant information including the payment of service tax by consigner but for the actual amount which is written as TBB (to be billed). The appellant by arrangement with their principal has decided to have monthly settlement of transport bill consignment wise which is also evident from the ledger produced by the appellant - there is no force in the arguments raised by the Revenue regarding inappropriate consignment note. The impugned order is not sustainable, accordingly, there is no question of imposition of any interest and penalty also - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 1165
Supply of tangible goods service - contract for transportation of goods - issue of consignment note - HELD THAT:- The learned Adjudicating Authority has observed that the party is creating confusion and their both versions are far away from the truth. Further, The party has not contradicted the allegation in respect Supply of Tangible Goods instead they have tried to establish that they are not liable to pay Service Tax under GTA service which is not a matter of dispute in the case. The matter needs to be remanded to Original Authority with directions to Original Authority to give appellant an opportunity to present their case along with all admissible documents - Appeal allowed by way of remand.
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2019 (11) TMI 1164
Short payment of service tax - Works Contract Services - Department alleges that the appellant has done certain construction activities after execution of the sale deed and therefore such construction activities ought to be subject to levy of service tax - period April 2014 to March 2015 - demand alongwith interest and penalty - HELD THAT:- As explained by the Learned Consultant appearing for the appellant, an amount of ₹ 42,29,075/- which is the amount shown as sale value in the sale deed is included for ascertaining the short payment of tax. It is also seen that the said sale deed was executed after occupation certificate was obtained by the appellant. Thus, the transaction would indeed be sale of immovable property and the value of ₹ 42,29,075/- shown in the sale deed cannot be subject to levy of service tax. However, certain construction works have been carried out by appellant for an amount of ₹ 11,985/-. The appellant has conceded that they are liable to pay service tax on this amount. The demand of service tax to the tune of ₹ 1,92,667/- cannot sustain. The demand of service tax on ₹ 42,29,075/- is set aside. The demand is confined to the service tax liable to be paid on ₹ 11,985 only - penalties set aside - appeal allowed in part.
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2019 (11) TMI 1163
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- The amount involved in the present cases is below the monetary limit of ₹ 20 lakhs which has been notified vide Board s Instruction being F. No. 390/Misc./116/2017-JC dated 11/07/2018. The appeal is dismissed under litigation policy.
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2019 (11) TMI 1162
CENVAT credit - input - tower and shelters - input services - services used for erection of towers for providing telecommunication services - HELD THAT:- The issue decided in the case of M/S. BHARATI INFRATEL LIMITED VERSUS COMMISSIONER OF SERVICE TAX, DELHI-IV [ 2019 (5) TMI 1698 - CESTAT CHANDIGARH] where it was held that the assessee-appellant are entitled to avail cenvat credit on items, towers, shelter parts thereof being input used for providing output service - credit on inputs allowed. Input services - services used for erection and installation telcom towers - HELD THAT:- In the case of Bharat Sanchar Nigam Limited vs. CCE, Chandigarh [2016 (8) TMI 1284 - CESTAT, CHANDIGARH] , this Tribunal has allowed the credit for the services used for erection and installation telcom towers wherein this Tribunal has observed that Since the disputed services have been used by the appellant for erection of the telecom towers, which is used for providing the taxable output service, in my opinion, it will not be appropriate to deny the Cenvat benefit - credit of input services used for erection of towers to the appellants allowed. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 1161
GTA Services - benefit of N/N. 31/2012-ST dated 20 June, 2012 - appellant used the services of GTA for movement of the goods for the export purposes - Inasmuch as the export in their case was being undertaken from Land Custom Station and not from the port or air port, the Revenue proposed to deny the benefit of the said Notification on the ground that the same exempts only movement of the goods for export purposes from port or air port and not from land customs - HELD THAT:- The original Notification granted exemption to the GTA services availed for transportation of the goods for export purpose up to port or air port. There was no exemption for the said services if the export took place from land custom agent. The land custom station was specifically introduced in the Notification w.e.f. 01 April, 2015 by way of Amending Notification No.04/2015-ST. It is well settled law that the Notification have to be interpreted in the light of the expression used therein. The Notification No.31/2012 clearly mentions only port or air port and there is no ambiguity in the use of the said expression. If an unambiguous language stands used by the Government, legislative intent is not required to be examined. Tribunal being only an interpreter of the notification cannot rewrite the notification by introducing any extraneous words to the same - the land customs station having been introduced in the notification w.e.f. 14 February, 2015, it cannot be held that the exemption was effective from the original date of issuance of the notification even in respect of exports from land customs station. Extended period of limitation - HELD THAT:- The Original Notification prescribes a procedure to be followed by the assessee, which is in the nature of filing of consignment note and EXP1 returns etc. The appellant had followed the said procedure and Revenue was aware of the fact that the exports have taken place from the land customs station. In such a scenario no mala fide can be attributed to the appellant so as to justifiably invoke the longer period of limitation. Penalty - HELD THAT:- As we have held absence of any mala fide on the part of the assessee, the penalty imposition upon them is not called for. Accordingly, the entire penalty is set aside. The demand having been raised and confirmed by invoking the longer period has to be held as barred by limitation. However, a part of the demand falls within the limitation period, which shall be re-quantified by Original Adjudicating Authority - appeal allowed by way of remand.
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Central Excise
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2019 (11) TMI 1160
Refund of Education/Higher Education Cess - Area Based Exemption availed - Revenue held a view that the assessee-Appellants are not eligible for such refund as exemption is available only to excise duty - HELD THAT:- Appeal admitted.
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2019 (11) TMI 1159
Demand of Central Excise duty - waste arising during the course of manufacturing of the wire and cables - CBEC Circular No. 904/24/2009/CX dt. 28.10.2009 - whether waste scrap arising out during the manufacture of wire cables is excisable or not? - HELD THAT:- The appellant is manufacturing enameled wires and cables and during the course of manufacturing, such waste scrap arise - the waste scrap of wire cables is not a manufactured product, accordingly, waste and scrap are not goods and are not dutiable. In the decision of Hon ble Bombay High Court in the case of Hindalco Industries Ltd [ 2014 (12) TMI 657 - BOMBAY HIGH COURT ], it was held that the waste and scrap, arising during the course of manufacture of final product, is not dutiable. Thus, the waste scrap, arising during the course of manufacture of enameled wires and cables, the appellant is not liable to pay the duty - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (11) TMI 1158
Stock transfer sales - duplicate C-Forms - petitioner submitted that even in the absence of original C-forms, the Assessee is entitled to file the duplicate forms before the Assessing Officer, who inturn, can consider the same after verifying its genuineness - HELD THAT:- Considering the fact that the Assessing Officer has chosen to decide the issue viz., Sales against form C, against the petitioner only on the reason that the petitioner has not filed the proof of acknowledgement for filing original C-forms before the then Assessing Officer and further considering the fact that the Assessing Officer is not disputing the fact that the duplicate C-forms were filed before him, this Court is of the view that the Assessing Officer shall consider the duplicate C-forms filed by the petitioner and pass fresh orders on merits and in accordance with law, after giving due opportunity of hearing to the petitioner as well. The impugned order is set aside only in respect of the issue regarding sales against form C and corresponding penalty - the matter is remitted back to the Assessing Officer for reconsidering the said issue after considering the duplicate copies of C form already filed by the petitioner and pass fresh orders on merits and in accordance with law - Petition allowed by way of remand.
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2019 (11) TMI 1157
Levy of Entry Tax - section 8(2) of the Bihar Tax on Entry of Goods in to Local Areas for Consumption, use or sale Therein Act, 1993 - Principles of natural justice - ex parte order of assessment - HELD THAT:- While the assessment order for the period 2014-15 (ET) has been passed on 22.06.2019, an order under section 39 (2) of the BVAT Act for the period 2015-16 has been passed on 12.01.2019 (Annexure-6) itself taking into consideration the amount of entry tax accepted by the petitioner in their returns and the amount of entry tax actually paid by the petitioner for the relevant period. As per order under section 39(2) of the BVAT Act, 2005 for the period 2015-16, while the petitioner has been found liable to pay further a sum of ₹ 13.32 crores (approx), in the assessment order dated 22.06.2019 for the period 2014-15. It has been found that a sum of ₹ 15.33 crores (approx) is refundable to the petitioner and it has further ordered that the same would be refunded by way of adjustment against the tax for the next year i.e. 2015-16. Thus, if the respondent authorities has passed the assessment order for the period 2014-15 prior to passing of order under section 39(2) for the period 2015-16, there would not have been any tax liability of the petitioner for the period 2015-16 which was calculated to the tune of ₹ 13.32 crores (approx) and which comes to ₹ 20.11 crores (approx) after adding of interest. From the facts stated and the documents referred to hereinabove the respondent no. 2 cannot be permitted to blow hot and cold at the same time. On one hand he states that the refund of ₹ 15,04,59,365/- for the financial year 2014-15 was credited to the account of the petitioner vide challan no. 297 dated 31.03.2015 and also in the assessment order for the period 2014-15 a sum of ₹ 15,33,20,981/- is found refundable to the petitioner and it has been stated that the same would be refunded by adjustment for the period 2015-16 but in the order impugned dated 12.01.2019 for the period 2015- 16, a further sum of ₹ 13,32,32,322/- is found payable and together with interest of ₹ 6,79,48,484, a total sum of ₹ 20,11,80,806/- has been found payable by the petitioner - Either the respondent authorities should have proceeded to accept the Form ET-05 submitted by the petitioner for the period 2015-16 according to which a sum of ₹ 1.72 crores in excess by way of tax had already been paid or in the alternate they should have passed orders for the period 2014-15 prior to passing of the impugned order for the period 2015-16, on which, no tax would have been found payable by the petitioner. The order of assessment dated 12.01. 2019 passed by the respondent Assistant Commissioner, State Tax Special Circle, Patna contained in Annexure-6 to the application is not sustainable in law - appeal allowed.
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2019 (11) TMI 1156
Scope and validity of SCN - Levy of penalty under Section 40(2) of the JVAT Act and under Section 70(5)(b) - case of petitioner is that from bare perusal of the show cause notice, it is evident that no gist of accusations in regards to penalty under Section 70 (5) (b) of the Act has been given in terms of Rule 58(1) of the JVAT Rule 2006 - HELD THAT:- Rule 38(2) (i) deals with retailers and not with manufacturers which the petitioner in this case is and though the said rule deals with daily takings. Rule 38(2)(r) deals with stock records, but no period is mentioned therein particularly daily maintenance of accounts. Rule 38(6) deals with manufacturers which speak of maintaining month wise accounts - The Tribunal dealt with the fact that on 24.05.2010, the monthly abstract purchases April-2010 has been mentioned and also recorded the petitioner s contention that legislature has not used any explanation like daily entry of transaction. The Tribunal has committed a blunder in as much as instead of the word retailer used the word dealer . This is a mistake of fact committed by the Tribunal and its findings on the incorrect provision of law which is not applicable in the case of the petitioner. There are no discrepancies in accounts maintained by the petitioner and accounts were accepted by the authorities and this aspect would be an important factor in holding that earlier proceedings under Section 70 (5) (b) were bad in law - It would be evident from the facts and documents available on records that the allegation is not that the original documents were not and are unaccounted goods, rather the allegation is that the entries on daily basis was not made in the books of accounts. In the instant case, notice was issued to the Writ petitioner, but no reason, whatsoever, in relation to penalty under Section 70 (5) (b), worth name was given so as to enable the petitioner to file its show cause. In other words, the notice was not in terms of Rule 58 and contention of the State that gist of allegation was provided in the inspection report cannot be taken into consideration and as such on the first point itself that is non issuance of proper show cause notice in terms of Rule 58 of the JVAT Rules 2006 would render the entire proceedings under Section 70 (5) (b) void ab initio. Scope of SCN - imposition of penalty - HELD THAT:- It is apparent that the Tribunal has also gone way beyond the penalty order under Section 70 (5) (b) of the JVAT Act, wherein the only allegation was that entries have not been made into books of accounts but it was never alleged in the penalty order or show cause notice that originals of the documents of purchase were to be produced, the allegation also was not that these are unaccounted goods, rather the only allegation was that entries on daily basis was not made in the books of accounts but the Tribunal in the Impugned Order has repeatedly observed that original documents were not produced - From perusal of the returns, it is evident that all the details of sales and purchases both within the State as well as Inter State transactions have been provided. The authorities below as well as the Tribunal failed to consider the return which was filed by the Petitioner to find out if at all there was any evasion of tax. The impugned orders are liable to be set-aside in as much as the Show Cause Notice itself is not in accordance with the JVAT Act - petition allowed.
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Wealth tax
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2019 (11) TMI 1155
Net wealth assessment - value of the land as on the date of valuation - whether the same is includable as net wealth in the hands of the assessee in the absence of permission received for construction from the competent authority or any construction being carried out, as on the valuation date ? - HELD THAT:- As decided in own case for AY 2014-15 we direct the Assessing Officer to include the value of the aforesaid lands in the hands of the assessee in the respective years. However, for the purpose of determining the value as on the valuation date, the assessee shall file the valuation report from the Registered Valuer or the Assessing Officer may obtain the necessary valuation report from the DVO in this regard and compute the net wealth and Assessing Officer is also directed to allow the value of debts as on the dates of purchase of plot in the hands of the assessee, if still outstanding. Fair Market Value (FMV) of the land owned by the assessee, as on the date of valuation, was to be included in the hands of the assessee - assessee is also aggrieved by the order of CWT(A) in not allowing the deduction of debts accrued - HELD THAT:- The said issue also stands squarely covered by our decision in own case which was an appeal filed by the Revenue as the CWT(A) in those cases had allowed the claim. Value of the lands to be adopted and the costs of the debts to be allowed - HELD THAT:- In line with our directions above in the case of Rajendra M. Developers and Builders Pvt. Ltd., Assessing Officer shall compute the value of the said land as on the date of valuation of the lands in line with our directions in paras above and also allow the claim of the debts against the value of the property after due verification and if still outstanding. Thus, all these appeals filed by the assessee are allowed for statistical purposes. Escapement of wealth - notice u/s 17 of WT Act - reasons recorded for re-opening - HELD THAT:- We have in the paras above held that the lands owned by the assessee are taxable wealth and to be included in the hands of the assessee, then the claim of the assessee that the aforesaid agricultural lands were exempt from wealth tax do not stand. In any case, no such plea was raised before us. Time and again the assessee pleaded that the lands in question were not urban-land . We have already decided the issue that the value of the said lands were includable in the hands of the assessee as on the valuation date. In such circumstances, we uphold the initiation of assessment proceedings in the hands of the assessee and dismiss the grounds raised by the assessee
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Indian Laws
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2019 (11) TMI 1154
Appointment of arbitrators - appointment of Design Consultants for the comprehensive planning and designing, including preparation and development of concepts, master plan for the campus, preparation of all preliminary and working drawings for various buildings/structures, including preparation of specifications and schedule of quantities for the proposed All India Institute of Medical Sciences at Guntur, Andhra Pradesh - whether the arbitration in the present case would be an International Commercial Arbitration or not? - Section 11(6) read with Section 11(12)(a) of the Act - whether a case is made out for exercise of power by the Court to make an appointment of an arbitrator? HELD THAT:- It is not disputed by the respondent that it was a requisite condition to declare a lead member of the Consortium and that by aforesaid declaration the applicant No.1 was shown to be the lead member of the Consortium - It is clear that the declaration shows that the Applicant No.1 was accepted to be the lead member of the Consortium. Even if the liability of both the Applicants was stated in Clause 9 to be joint and several, that by itself would not change the status of the Applicant No.1 to be the lead member. We shall, therefore, proceed on the premise that Applicant No.1 is the lead member of the Consortium. In M/S LARSEN AND TOUBRO LIMITED, SCOMI ENGINEERING BHD VERSUS MUMBAI METROPOLITIAN REGION DEVELOPMENT AUTHORITY [2018 (12) TMI 178 - SUPREME COURT] more or less similar fact situation came up for consideration and it was held that Association and Body of individuals referred to in Section 2(1)(f) of the Act would be separate categories. However, the lead member of the Association in that case being an Indian entity, the Central Management and Control of the Association was held to be in a country other than India. Relying on said decision we conclude that the lead member of the Consortium company i.e. Applicant No.1 being an Architectural Firm having its registered office in New York, requirements of Section 2(1)(f) of the Act are satisfied and the arbitration in the present case would be an International Commercial Arbitration . Whether the power can be exercised by this Court under Section 11 of the Act when the appointment of an arbitrator has already been made by the respondent and whether the appellant should be left to raise challenge at an appropriate stage in terms of remedies available in law? - HELD THAT:- In TRF LTD. VERSUS ENERGO ENGINEERING PROJECTS LTD. [ 2017 (7) TMI 1288 - SUPREME COURT] , the Managing Director of the respondent had nominated a former Judge of this Court as sole arbitrator in terms of aforesaid Clause 33(d), after which the appellant had preferred an application under Section 11(5) read with Section 11(6) of the Act. The plea was rejected by the High Court and the appeal therefrom on the issue whether the Managing Director could nominate an arbitrator was decided in favour of the appellant as stated hereinabove. As regards the issue about fresh appointment, this Court remanded the matter to the High Court for fresh consideration - In the light of these authorities there is no hindrance in entertaining the instant application preferred by the Applicants. Application allowed.
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2019 (11) TMI 1153
Dishonor of Cheque - Funds Insufficient and exceeds Arrangement - offence punishable under Section 138 of the Negotiable Instruments Act - petitioner have argued that the petitioner has resigned from directorship of the accused-company w.e.f. 21.01.2016 and the cheques were issued subsequently and therefore, the petitioner is not liable to be prosecuted - it is also argued that the petitioner is not authorized signatory of the cheques and therefore, the petitioner cannot be prosecuted. HELD THAT:- There is no dispute with regard to judgments of the Hon'ble Supreme Court, relied upon by learned counsels for the petitioner, that a non-executive director or a director, who has resigned prior to issuance of the cheque(s), cannot be prosecuted and there should be a specific averment in the complaint that the director was incharge and responsible for the conduct of business of the accused-company. It is also not disputed that Form No.32 issued by the Registrar of Companies is a proof of resignation of the director. However, it is found that petitioner has, intentionally, not attached Form No.32 to show the date, when his resignation was accepted by Registrar of Companies. As per Rule 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014, a director of the company, upon resignation, will forward his resignation in Form No.DIR-11 along with fees - A perusal of Form No.DIR-12, relied upon by the petitioner, shows that the declaration was signed by Aparna Puri, existing Director on 23.05.2016 and it was also digitally signed by the Company Secretary Anjum Goyal. Therefore, it is a disputed fact, as on which date, resignation of the petitioner was accepted and therefore, there is no illegality in the findings recorded by the trial Court that it could be an ante-dated information given by the petitioner to escape his liability. The petitioner neither in the application(s) for discharge moved before the trial Court nor in the grounds of petitions taken here, has relied upon any certificate from the office of Registrar of Companies, as to when his resignation was accepted and this information is withheld by the petitioner - There is a specific averment in para No.2 of the complaint that the petitioner was travelling abroad on behalf of accused No.1-company for export of the rice and was attending the offices of accused-company for carrying out its business and thus, he was responsible for day to day conduct and affairs of the company. The petitioner neither in the application(s) for discharge nor in the present petitions has denied the fact that as per statements of account of the accused-company pertaining to the relevant period, the liability towards the complainant(s) is not disputed and at that time, the petitioner was a partner, therefore, the argument, that the petitioner was having 0% share, is not acceptable, as even other partners are shown to be having 0% share and for the internal adjustment of directors, no fault can be found with the complaint(s) filed by the respondent(s). Considering the disputed questions of facts, which need to be proved by leading the defence evidence and also in view of the vague pleadings of the petitioner regarding non-denial/explanation of the various facts in the complaint(s) and the discrepancies in Form No.DIR-12, the Court find no ground to quash the criminal complaint(s) and all other proceedings arising therefrom - Petition dismissed.
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2019 (11) TMI 1152
Review of an award - contention of the learned Counsel for the appellants is that after the Award had been passed on 01.10.2003 under Section 11 of the Act, the same had become final as per Section 12 of the Act, and the same could not have been reviewed under any provision of the Act - whether under the Land Acquisition Act, 1894, after the passing of the Award under Section 11 of the Act, the Signature Not Verified Award could be reviewed under any of the provisions of the Act? HELD THAT:- There is no provision under the Land Acquisition Act, 1894 for review of the Award once passed under Section 11 of the Act and had attained finality. The only provision is for correction of clerical errors in the Award which is provided for under Section 13A of the Act, which was inserted with effect from 24.09.1984 - A bare reading of the said Section 13A would make it clear that the same is not a provision for Review of the Award but only for correction of clerical or arithmetical mistakes in the Award. It is further provided in the sub-Section (1) of Section 13A that the said correction can be made at any time, but not later than six months from the date of award. In the present case, the Land Acquisition Collector has actually not made any correction of clerical or arithmetical mistake, but has in fact reviewed the Award dated 01.10.2003 by its Review Award no.16/03 04 dated 14.07.2004, which was also clearly passed beyond such period of six months - the Review Award could not have been passed under Section 13A of the Act, which is meant only for correction of any clerical or arithmetical mistake. There is no other provision in the Act under which the said order dated 14.07.2004 could have been passed. The question whether the structure on the land of the appellants was legal or illegal could only be decided after the parties were given opportunity to adduce evidence, which correction cannot be termed as correction of any clerical or arithmetical mistake. There being no provision under the Land Acquisition Act, 1894 for review of the Award, the passing of the order in Review Award cannot be justified in law. It is settled law that the power of Review can be exercised only when the statute provides for the same. In the absence of any such provision in the concerned statute, such power of Review cannot be exercised by the authority concerned. The Award dated 01.10.2003 could not have been reviewed by the Collector - Appeal allowed.
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