TMI Tax Updates - e-Newsletter
November 29, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Law of Competition Service Tax Central Excise Indian Laws

News

1. CCI approves acquisition by Mitsubishi-Hitachi Metals Machinery, Inc. in Primetals Technologies

2. CCI approves acquisition of 37.40% of the paid up share capital and joint control of Adani Gas Limited by Total Holdings SAS

3. CCI approves acquisition by Amazon.com in Future Coupons

4. ADB, India sign $451 Million Loan to strengthen Power Connectivity in Tamil Nadu

5. Microfinance as the next wave of Financial Inclusion (Shri. M. K. Jain, Deputy Governor, Reserve Bank of India - November 26, 2019 - at the SIDBI National Microfinance Congress 2019 at Mumbai)

6. Growth of Medium and Small Entrepreneurs

Notifications

Companies Law

1. S.O. 4279(E). - dated 27-11-2019 - Co. Law

Central Government appoints Judicial and Technical Members in the National Company Law Appellate Tribunal

GST - States

2. S.O.116/P.A.5/2017/S.172/2019 - dated 29-10-2019 - Punjab SGST

Punjab Goods and Services Tax (Removal of Difficulties) Order, 2019

3. S.O.115/P.A.5/2017/S.11/2019 - dated 24-10-2019 - Punjab SGST

Amendment under section 11 to exempt supply of goods for specified project under FAO under the PGST Act, 2017

4. S.O.114/P.A.5/2017/Ss. 9, 11 and 16/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O.32/ P.A.5/2017/Ss. 9, 11 and 16/2019, dated the 08th April, 2019

5. S.O.113/P.A.5/2017/S.11/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O. 20/P.A.5/ 2017/S.11/2019, dated the 28th February, 2019

6. S.O.112/P.A.5/2017/S.11/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O.27/P.A.5/ 2017/S.11/2017, dated the 30th June, 2017

7. S.O.111/P.A.5/2017/S.11/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O.18/P.A.5/ 2017/S.11/2017, dated the 30th June, 2017

8. S.O.110/P.A.5/2017/Ss. 9 and 15/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O.16/P.A.5/2017/S.9/2017, dated the 30th June, 2017

9. S.O. 109/P.A.5/2017/S.10/Amd./2019 - dated 24-10-2019 - Punjab SGST

Amendment in Notification No. S.O.39/P.A.5/2017/S.10/2019, dated the 08th April, 2019

IBC

10. S.O. 4280 (E) - dated 27-11-2019 - IBC

Corrigendum - Notification No. G.S.R. 852 (E)., dated the 15th November, 2019

Income Tax

11. 99/2019 - dated 27-11-2019 - IT

U/s 35(1) (ii) of IT Act 1961 Central Government approved M/s International Centre for Research in Agroforestry, South Asia Regional Programme, NASC Complex, Delhi

Money Laundering

12. G.S.R. 882(E) - dated 28-11-2019 - PMLA

Central Government notifies jurisdictions

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/DDHS/CIR/P/2019/142 - dated 27-11-2019

Guidelines for preferential issue of units and institutional placement of units by a listed Real Estate Investment Trust (REIT)

2. SEBI/HO/DDHS/DDHS/CIR/P/2019/143 - dated 27-11-2019

Guidelines for preferential issue of units and institutional placement of units by a listed Infrastructure Investment Trust (InvIT)

Customs

3. 39/2019 - dated 28-11-2019

Appointment of Common Adjudicating Authority

Companies Law

4. 16/2019 - dated 28-11-2019

Extension of last date of filing of Form PAS-6

5. 15/2019 - dated 28-11-2019

Relaxation of additional fees and extension of last date in filing of forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act, 2013- UT of J&K and UT of Ladakh

Highlights / Catch Notes

GST

• Silver Sand Supply Classified as Goods Transfer, Not Composite Supply in Construction Under GST Rules.

  Case-Laws - AAAR : Classification of supply - supply of goods or supply of services - supply of Silver Sand - it is not case of composite supply where principal supply constitutes of sand as argued by the Appellant but a case of transfer of property in goods in course of site preparation construction.
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• Flavoured Milk Classified as Beverage with 12% GST Under Tariff Item 2202 9930, Customs Tariff Act, 1975.

  Case-Laws - AAR : Rate of GST - outward supply of “Flavoured Milk” - the 'flavoured milk' is classifiable under tariff item 2202 9930 of the First Schedule to the Customs Tariff Act,1975 as a “beverage containing milk” under HS code 2202. - Taxable @12% of GST.
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• GST Rates for Tobacco Trading and Processing: 5% and/or 28% for Purchase, Threshing, and Re-drying Activities.

  Case-Laws - AAR : Rate of GST - the applicant purchases the dried leaves on auction platform and trades the same to other dealers or exporters and further engaged in threshing and re-drying of tobacco leaves on job work basis for other traders or manufacturers. - Taxable @5% and/or 28% of GST
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• Court Dismisses PIL on Premature Tax Refund Claims, Imposes Rs. 5,000 Cost for Possible Influence by Aggrieved Parties.

  Case-Laws - HC : PIL - allegation that officers has granted refund claims of excess tax (compensation cess) prior to the Notification dated 30.9.2019 - an individual dispute should not be allowed to be converted into a PIL. It cannot be ruled that this writ petition may be sponsored by some interested persons who are having any grudge against the private respondents. - Public Interest Litigation petition is dismissed with ₹ 5,000/- cost
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• Deadline Set for Petitioner to Submit Form TRAN-1 for Transitional Input Tax Credit by December 31, 2019.

  Case-Laws - HC : Unable to upload Form TRANS-I - transitional input tax credit - The respondents are directed to permit the petitioner to file TRAN-1 either electronically or manually statutory form(s) TRAN-1 on or before 31.12.2019
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Income Tax

• TDS Obligation Confirmed for Payments to Hospitals u/s 194J for Health Insurance Medical Services.

  Case-Laws - AT : TDS U/S 194J - TDS on payment to hospitals for rendering medical services to policy holders under various health insurance policies issued by several insurers - TDS liability confirmed.
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• Interest Levied on 10% TDS Shortfall for Hospitals; Section 201A Applies Until Deductees File Returns.

  Case-Laws - AT : Levy of interest U/s. 201A for non deduction of TDS - 90% of the advanced tax must have been paid by those hospitals and therefore we direct the Assessing Officer to levy the interest on the shortfall of 10% of TDS amount up to the date of filing of returns by the deductees U/s.201(1A).
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• Unexplained Bank Deposits Lead to Sections 68 & 69A Additions, Contradicting Simplified Presumptive Taxation u/s 44AD.

  Case-Laws - AT : Addition u/s 68/69A - unexplained deposits in the Bank account - assessee offered income u/s. 44AD - Asking the assessee to prove to the satisfaction of the AO, the expenditure to the extent of 92% of gross receipts, would also defeat the purpose of presumptive taxation as provided under section 44AD or other such provision.
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• Interest Accrual on Last Day of Previous Year for Tax Purposes Under Mercantile Accounting System Explained.

  Case-Laws - AT : Accrual of interest - Non recognising interest against the advance - assessee is a company and following mercantile assessment of accounting - the interest accrues and arises as on the last day of the previous year in which the assessee’s accounts are closed. Once the interest is accrued, it has to be charged to tax.
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• Income Tax Act Section 56(2)(vii)(b)(ii): Road Proximity Doesn't Justify Higher Property Valuation for Tax Purposes.

  Case-Laws - AT : Addition invoking the provisions of section 56(2)(vii)(b)(ii) - just because the said colony or flat is adjacent to a road, which has a higher guideline value, the higher value cannot be adopted for the purpose of making an addition by invoking the provisions of section 56(2)(vii)(b)(ii).
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• Income Tax Case Error: One Cannot Pursue Two Exclusive Paths; Order Remanded for Reconsideration by Commissioner.

  Case-Laws - AT : Rectification of mistake - One person can not travel on two boats at a same time - Even we have failed to understand as to what prejudice has been caused to the assessee, when no order survives and order has been remanded back to CIT(A)
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• Assessment Quashed for Not Following Section 144 Procedure u/s 153C and 143 of Income Tax Act.

  Case-Laws - AT : Assessment framed u/s 153C r.w. Sec.143 - in the absence of return, assessment is required to be framed u/s 144 of the Act only, which in the instant case has not been framed and therefore entailed quashing.
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• Appeal Delay Excused After Double Addition Error u/s 69 Causes Hardship to Small Assessees.

  Case-Laws - AT : Condonation of delay in filing of an appeal - delay of 1895 days - Addition u/s 69 - small assesses. - the addition made by the AO amounts double addition of same income in the block period as well as in the regular returns of income. Therefore, it causes unnecessary hardship and financial injury to the assessee. - Delay condoned - Additions deleted.
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• Section 200A Didn't Allow Fees u/s 234E Before June 1, 2015; Demands Were Unenforceable.

  Case-Laws - AT : Levy u/s 234E - intimation u/s 200A - as the law stood, prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. - in the absence of the enabling provision under section 200A, no such levy could be effected
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• Burden of Proof Shifts to AO When Assessee Proves Source and Source of Source u/s 68.

  Case-Laws - AT : Addition u/s.68 - If the assessee has proved the source as well as the source of the source of the fund then onus shifts upon the AO to carry some prima facie inquiry to rebut the explanation given by the assessee.
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Customs

• Revenue Authority Can't Reopen Finalized Assessments Without Appeal; Extended Limitation Period Not Applicable in Fabric Import Case.

  Case-Laws - AT : Import of fabric - undervaluation of imported goods - evasion of customs duty - once the assessments finally done have not been challenged by way of filing an appeal there again, it was not open to the revenue to initiate the proceedings by invoking the longer period of limitation.
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Indian Laws

• MMT-Go and OYO Face Investigation for Alleged Price Discrimination Violating Section 3(4) of Indian Act.

  Case-Laws - Commission : Abusive/Anti-competitive practices - price discrimination -there exists a prima facie case for investigation against MMT-Go and OYO for alleged violation of the provisions of Section 3(4) of the Act.
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SEBI

• SEBI Sets Guidelines for Preferential Issue and Institutional Placement by InvITs to Enhance Transparency and Protect Investors.

  Circulars : Guidelines for preferential issue of units and institutional placement of units by a listed Infrastructure Investment Trust (InvIT)
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• SEBI Guidelines for REITs on Preferential and Institutional Placement of Units: Ensuring Transparency, Fairness, and Market Integrity.

  Circulars : Guidelines for preferential issue of units and institutional placement of units by a listed Real Estate Investment Trust (REIT)
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Service Tax

• Sale of Agricultural Plot for Resale Classifies as Real Estate Agent Service, Subject to Service Tax Regulations.

  Case-Laws - HC : Classification of services - real estate agent service or not - sale of agricultural plot - When a person from the first day enters into an agreement to purchase some property with an intention to sell it to some other person, it cannot be said that the transaction was of a transaction of simple sale and purchase of immovable property, in fact, the said act attracts the definition of “Real Estate Agent” and the participation of appellant in view of aforesaid transaction comes within the purview of “Service Provider”.
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• Non-Registration Leads to Extended Limitation Period: Service Tax Demand Confirmed Due to Suppression of Facts by Appellant.

  Case-Laws - HC : Extended period of limitation - failure to take registration - non-registration of the Appellant, in the given circumstances, definitely will amount to suppression of the relevant facts, which came to the notice of the Department, only later, on the basis of some intelligence gathered by the Preventive Officers of the Central Excise. - Demand confirmed.
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• Appellant Can't Contest Jurisdiction After Accepting Authority's Decision Without Protest.

  Case-Laws - HC : Territorial Jurisdiction - After having submitted to the jurisdiction of the Commissioner / Adjudicating Authority without any protest, it is not correct or proper for the Appellant to take a 'U-turn', when the decision has gone against him.
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• Tribunal Not Obligated to Inquire Based Solely on Committee Concerns Over Refund Claims and Unjust Enrichment Principles.

  Case-Laws - AT : Refund claim - principles of unjust enrichment - The Tribunal is not to be expected to either undertake an enquiry, or direct any of the lower authorities to proceed in that direction merely on the basis of apprehensions entertained by the Committee of Commissioners.
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• Extended Limitation u/s 73 of Finance Act 1994 Unjustified; No Information Suppression Found in ST-3 Forms.

  Case-Laws - AT : Extended period of limitation - The appellant had filed ST-3 also and the whole transaction was reflected in the balance sheet. Therefore, there is no element of suppression - the invocation of proviso to sub-Section (1) of Section 73 of Finance Act, 1994 was not justified in the present case.
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Case Laws:

• GST

• 2019 (11) TMI 1256
  Classification of supply - supply of goods or supply of services - Supply of Silver Sand - composite supply - challenge to AAR decision - HELD THAT:- As per the work orders issued by MBL, the Appellant is required to fill in the foundation or plinth by silver sand in layers and consolidate the same. Further the job also involves filling in the compound tank and other lying areas with sand and good earth and consolidating the same by ramming and dressing. The activities undertaken by the Appellant amount to improvement and modification of land future construction. In the circumstances, it is not case of composite supply where principal supply constitutes of sand as argued by the Appellant but a case of transfer of property in goods in course of site preparation construction of Central Correctional Home Baruipur. There are no infirmity in the ruling pronounced by the West Bengal Authority Advance Ruling in the matter and hence there is no reason to interfere with it - appeal dismissed.

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• 2019 (11) TMI 1255
  Rate of GST - outward supply of Flavoured Milk - HELD THAT:- The applicable rate of GST is 18% (9% CGST and 9% SGST) on all goods except the goods specified in the schedules I, II, IV, V, VI of the said Notification - Further, for interpretation of the said notification, the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as FS to CTA, 1975 ) are to be applied. The applicant opines that flavoured milk is covered in Chapter 4 of FS to CTA, 1974. We examine this aspect. The Section I of FS to CTA, 1975 deals with Live Animals; Animal Products. The Chapter 4, deals goods of DAIRY PRODUCE; BIRDS EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED . Therefore, any items/goods are specified or included elsewhere in the Schedule; those items/goods do not fall under Chapter 4. The applicant stated that flavoured milk is a preparation. Section IV deals with goods of Prepared food stuffs; beverages , spirits and vinegar; tobacco and manufactured tobacco substitutes and the Chapter 22 deals with items/goods of Beverages, Spirits and Vinegar . The tariff item no. 2202 99 30 covers Beverages containing milk . Thus, the flavoured milk is classifiable under tariff item 2202 9930 of the First Schedule to the Customs Tariff Act,1975 as a beverage containing milk under HS code 2202. The rate of tax applicable for the said tariff item is 12% GST (6% CGST + 6% SGST) under entry no. 50 of Schedule II of Notification No.1/2017 - Central (Rate) dated 28.06.2017 as amended.

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• 2019 (11) TMI 1254
  Rate of GST - tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves - applicant purchases tobacco leaves form other dealers who have purchased them from farmers, for the purpose of trading - applicant segregates the tobacco into grades depending upon their size (width), colour /shade, length, texture of the leaf etc., and sells such graded tobacco leaf - tobacco leaves are butted and sold to other dealers - tobacco leaves re-dried without getting them threshed - tobacco leaves threshed and re-dried - tobacco threshed and re-dried on job work basis at others premises and then sells such threshed and re-dried tobacco leaves to others - service of bundling of tobacco leaves by the service providers and then the bundled leaves are sold to others - service of stripping of tobacco leaves by the service providers without getting them threshed and sold such stripped tobacco leaves to others. HELD THAT:- It is felt that the transactions of tobacco from auction platform to the supply made to the exporter are to be interpreted in the light of the relevant notifications and to decide the rate of tax accordingly. As seen from the different stages of commodity i.e., from the leaves stage to the final product (manufactured tobacco), the green leaf plucked from the plant undergoes different types of curing to reduce the level of moisture to the maximum extent for sustainability and to continue as leaf for further process. The tobacco leaf will be entitled as a commercial commodity only after drying (Curing) and normally put to trade in form of bundles. The same will be traded between the farmer and the trader and trader to trader/manufacturer and so on - The commodity tobacco leaves shall be interpreted in the light of the entry 109, Schedule- I of Notification No. 1/2017-Central Tax (Rate) and the entry no 3 inserted under the notification 4/2017 CGST (Rate) issued for liability under reverse charge mechanism and the relevant HSN code mentioned against the description of the commodity i.e., 2401. As observed from the facts, i.e process of tobacco, from the field to final product, the green leaves undergo curing process, and become eligible commercial commodity, for which the transaction takes place in between the farmer and the trader on the auction platform. Further, as per the clarification issued by The Department TRU (Tax Research Unit) vide circular F.No.322/2/2017/Dec.2017, Tobacco Leaves means leaves of tobacco as such or broken leaves Tobacco Leaves stems . It clearly expresses that the leaves as long as they do not loose their basic character as leaves , shall be considered as tobacco leaves only. if the leaves are bundled and the same are sold to others, they attract the same rate as well, as the leaves remain the same without loosing their form or shape. But if the leaves are stripped and sold to others, they attract higher Rate of Tax i.e., 28 %, as stripping is nothing but removal of mid rib from the leaves, which is threshing activity conducted manually. In the present case the applicant purchases the dried leaves on auction platform and trades the same to other dealers or exporters and further engaged in threshing and re-drying of tobacco leaves on job work basis for other traders or manufacturers. What is the rate of GST applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves? - HELD THAT:- The GST Rate of tax for the tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves is 5% as per the notification 4/2017-Central Tax (Rate), under Reverse charge . What will be the applicable rate of tax if the applicant purchases tobacco leaves from other dealers who have purchased them from farmers, for the purpose of trading? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant segregates the tobacco into grades depending upon their size (width), colour /shade, length, texture of the leaf etc., and sells such graded tobacco leaf? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the tobacco leaves are butted and sold to other dealers? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What is the applicable rate of tax if the applicant gets the tobacco leaves re-dried without getting them threshed? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant gets the tobacco leaves threshed and re-dried? - HELD THAT:- 28% (14% SGST +14% CGST) as per Sl.No. 13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant gets the tobacco threshed and re-dried on job work basis at others premises and then sells such threshed and re-dried tobacco leaves to others? - HELD THAT:- 28% (14% SGST +14% CGST) as per Sl.No. 13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What is the applicable rate of tax if the applicant gets the service of bundling of tobacco leaves by the service providers and then the bundled leaves are sold to others? - Whether bundled or sold separately tobacco leaves attract 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification Central Tax (Rate) dated 28.06.2017? - What is the applicable rate of tax if the applicant gets the service of stripping of tobacco leaves by the service providers without getting them threshed and sold such stripped tobacco leaves to others? - HELD THAT:- 28% (14% SGST +14% CGST) as per Sl.No. 13 of Schedule IV Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

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• 2019 (11) TMI 1253
  Rate of GST - tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves - applicant purchases tobacco leaves form other dealers who have purchased them from farmers, for the purpose of trading - applicant segregates the tobacco into grades depending upon their size (width), colour /shade, length, texture of the leaf etc., and sells such graded tobacco leaf - tobacco leaves are butted and sold to other dealers - tobacco leaves re-dried without getting them threshed - tobacco leaves threshed and re-dried - tobacco threshed and re-dried on job work basis at others premises and then sells such threshed and re-dried tobacco leaves to others. HELD THAT:- It is felt that the transactions of tobacco from auction platform to the supply made to the exporter are to be interpreted in the light of the relevant notifications and to decide the rate of tax accordingly. The commodity tobacco leaves shall be interpreted in the light of the entry 109, Schedule- I of Notification No.1/2017-Central Tax (Rate) and the entry no 3 inserted under the notification 4/2017 CGST (Rate) issued for liability under reverse charge mechanism and the relevant HSN code mentioned against the description of the commodity i.e., 2401 - It is to note that though there are different entries with respect to tobacco there is a specific entry in Schedule I of Notification 1/2017 (CGST Rate) as Tobacco leaves, and for the same the liability was brought under reverse charge mechanism. Hence it is clear that the commodity tobacco leaves is distinct from the other entries in this aspect. As observed from the facts, i.e process of tobacco, from the field to final product, the green leaves undergo curing process, and become eligible commercial commodity, for which the transaction takes place in between the farmer and the trader on the auction platform. Further, as per the clarification issued by The Department TRU (Tax Research Unit) vide circular F.No.322/2/2017/Dec.2017, Tobacco Leaves means leaves of tobacco as such or broken leaves Tobacco Leaves stems . It clearly expresses that the leaves as long as they do not loose their basic character as leaves , shall be considered as tobacco leaves only. In the present case the applicant purchases the dried leaves on auction platform and trades the same to other dealers or exporters and further engaged in threshing and re-drying of tobacco leaves on job work basis for other traders or manufacturers. What is the rate of GST applicable on tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves? - HELD THAT:- The GST Rate of tax for the tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves is 5% as per the notification 4/2017-Central Tax (Rate), under Reverse charge . What will be the applicable rate of tax if the applicant purchases tobacco leaves from other dealers who have purchased them from farmers, for the purpose of trading? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule I Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant segregates the tobacco into grades depending upon their size (width), colour /shade, length, texture of the leaf etc., and sells such graded tobacco leaf? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the tobacco leaves are butted and sold to other dealers? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What is the applicable rate of tax if the applicant gets the tobacco leaves re-dried without getting them threshed? - HELD THAT:- 5% (2.5% SGST + 2.5%CGST) as per Sl.No.109 of schedule 1 Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant gets the tobacco leaves threshed and re-dried? - HELD THAT:- 28% (14% SGST +14% CGST) as per Sl.No. 13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. What will be the applicable rate of tax if the applicant gets the tobacco threshed and re-dried on job work basis at others premises and then sells such threshed and re-dried tobacco leaves to others? - HELD THAT:- 28% (14% SGST +14% CGST) as per Sl.No. 13 of Schedule IV Notification No.1/2017-Central Tax (Rate) dated 28.06.2017.

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• 2019 (11) TMI 1252
  Unable to upload Form GST TRANS-I - transitional input tax credit - transition to GST regime - benefit of the Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein are fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified Form TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 09.12.2019. Respondents are directed to process the petitioner s claim in accordance with law once the Form GST TRAN 1 is filed - petition allowed.

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• 2019 (11) TMI 1251
  Filing of Form GST Tran-1 - carry forward credit of eligible duties on stock - vires of rule 117 in Central Goods and Services Tax Rules, 2017 - HELD THAT:- On facts, case of petitioner is that it could not attempt to file GST TRAN 1 form on GST portal because his own system was down. On 9th January, 2018, deadline having expired on 27th December, 2017, petitioner said so to Revenue. Petitioner then has obtained a report, upon forensic examination of his system, having provided password, which report confirms petitioner s contention. Less said about the instructions, in context of such facts, as being removed from them, the better. Concerned respondents in Revenue will allow petitioner to file GST TRAN 1 form to enable him to obtain credit accrued in his favour prior to the transition, on his stock as on 30th June, 2017 - Petition allowed.

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• 2019 (11) TMI 1250
  Unable to upload Form GST TRANS-I - transitional input tax credit - transition to GST regime - benefit of the Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein are fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified Form TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 09.12.2019. Respondents are directed to process the petitioner s claim in accordance with law once the Form GST TRAN 1 is filed - petition allowed.

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• 2019 (11) TMI 1249
  Unable to upload Form GST TRANS-I - transitional input tax credit - transition to GST regime - Benefit of the Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein are fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified Form TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 09.12.2019. Respondents are directed to process the petitioner s claim in accordance with law once the Form GST TRAN 1 is filed - petition allowed.

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• 2019 (11) TMI 1248
  Unable to upload Form GST TRANS-I - transitional input tax credit - transition to GST regime - benefit of the Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein are fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified Form TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 09.12.2019. Respondents are directed to process the petitioner s claim in accordance with law once the Form GST TRAN 1 is filed - petition allowed.

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• 2019 (11) TMI 1247
  Unable to upload Form GST TRANS-I - transitional input tax credit - transition to GST regime - benefit of the Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein are fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified Form TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 09.12.2019. Respondents are directed to process the petitioner s claim in accordance with law once the Form GST TRAN 1 is filed - petition allowed.

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• 2019 (11) TMI 1246
  PIL against the GST officers - Doctrine of legitimate expectation - principle against retrospectivity - conduct of an independent, free and fair enquiry against the concerned officers in respect of all refund claims of excess tax (compensation cess) paid prior to the Notification dated 30.9.2019 - inverted tax structure in relation to Tobacco and manufactured tobacco substitutes - vires of Rule 117 of CGST Rules HELD THAT:- In view of the doctrine of legitimate expectation, and the principle against retrospectivity, the Notification dated 30.9.2019, shall necessarily apply prospectivity in respect of the goods notified on 30.09.2019 to restrict only those refund claims which are in respect of accumulated credit of excess tax paid on such notified input supplies after 30.9.2019 - Both the impugned orders dated 04.10.2019 are not in respect of any such accumulated credit of excess tax paid after 30.9.2019 on such notified input supplies - Therefore, there is no infirmity in these orders granting refund, warranting any interference. Pn individual dispute should not be allowed to be converted into a PIL. It cannot be ruled that this writ petition may be sponsored by some interested persons who are having any grudge against the private respondents. Accordingly, the Public Interest Litigation petition is dismissed with Rs. 5,000/- cost.

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• 2019 (11) TMI 1245
  Unable to upload Form TRANS-I - transitional input tax credit - transition to GST regime - time limitation as provided under Rule 117 of the CGST Rules 2017 for availing such credit - HELD THAT:- It is not in dispute that there were glitches in the system which led to filing of petitions before various High Courts of the Country and these Courts have granted the relief to the taxpayers by directing the authorities to open the portal and/or receive the manually filed Forms and/or approach the Nodal Officers appointed by the Government in this regard. In various judgements, it has been held that GST is a new progressive levy. One of the progressive ideal of GST is to avoid cascading taxes. GST Laws contemplate seamless flow of tax credits on all eligible inputs. The input tax credits in TRAN-1 are the credits legitimately accrued in the GST transition. The due date contemplated under the laws to claim the transitional credit is procedural in nature. Therefore, in view of the GST regime and the IT platform being new, it may not be justifiable to expect the users to back up digital evidences - reliance can be placed in various cases of Madras and Delhi High Courts of M/S. AADINATH INDUSTRIES ANR. VERSUS UNION OF INDIA ORS. [ 2019 (10) TMI 91 - DELHI HIGH COURT] , M/S. ARORA CO. VERSUS UNION OF INDIA ORS. [ 2019 (11) TMI 471 - DELHI HIGH COURT] and TARA EXPORTS VERSUS THE UNION OF INDIA, GOODS AND SERVICE TAX COUNCIL, THE PRINCIPAL COMMISSIONER OF CGST AND CENTRAL EXCISE, THE PRINCIPAL SECRETARY/COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE CENTRAL GST OFFICER AND THE ASSISTANT COMMISSIONER, CGST AND CENTRAL EXCISE [ 2018 (9) TMI 1474 - MADRAS HIGH COURT] . We have no reason to doubt the claim of the petitioner that it had made genuine efforts for filing the returns online, but such attempts failed because of technical glitch. We, however, make it clear that does this Court is not dealing with an issue whether the petitioner is entitled to input credit as claimed by it because that is a matter to be examined by the authorities. The respondents are directed to permit the petitioner to file TRAN-1 either electronically or manually statutory form(s) TRAN-1 on or before 31.12.2019 - petition allowed.

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• Income Tax

• 2019 (11) TMI 1244
  Assessment u/s 153A - incriminating materials were found / seized under aforesaid search and seizure action u/s 132 - HELD THAT:- No assessment proceedings were pending in the case of the assessee on 05.12.2007, the date of search and seizure action u/s 132. It is also a fact that time limit for service of notice under Section 143(2) in respect of return filed on 22.07.2006. Assessment Order dated 30.12.2009 u/s 153A has not been passed after abatement of any pending assessment proceedings under second Proviso to Section 153A(1). There is also no dispute between the two sides that no incriminating materials were found / seized under aforesaid search and seizure action under Section 132 of I.T. Act. In these facts and circumstances, the issue, whether, the AO had the jurisdiction to make the aforesaid addition is squarely covered in favour of the assessee by Kabul Chawla vs. CIT [ 2015 (9) TMI 80 - DELHI HIGH COURT] .

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• 2019 (11) TMI 1243
  Assessment u/s 153A - whether the assessment orders are barred by limitation - whether the CIT(A) erred in confirming the addition of 50% of agricultural income returned by the assessee as income from other sources ? - - HELD THAT:- In the instant case, it is clear from the assessment order that no transfer of document is required since the Assessing Officer in the case of searched person and the assessee is same. The search was conducted on 31.10.2011 and hence the last date for completion of assessment was 21 months from 31.03.2012, being the end of the financial year in which the search was carried out. Therefore, the assessment orders ought to have been passed on or before 31.12.2013. However, in these cases, the assessment orders were passed only 31.03.2014. Hence, these assessment orders are prima facie barred by limitation. On merits we find that the assessee is the owner of more than 75 acres of land in Madikeri. In Madikeri, the assessee s land is cultivated with coffee, cardamom, pepper etc. The assessee is also having land in Kozhikode, where coconut trees are planted. Copies of the record rights, crop information, sale invoices etc. are placed on record to prove that the land in Kudagu was owned by the assessee as well as agricultural operations were carried out regularly. The cost of asset remains fixed and the inflation index only reckons the indexed cost for the same asset based on the index which is notified by the Central Government. The concept of reverse indexation is not prescribed in the Income-tax Act. This method is wholly unsuitable when the yield for a particular year for each type of crop cultivated and its unit price varies from season to season in a year based on many uncertain and unpredictable variables like weather, market demand and supply etc. Therefore, we are of the view that the CIT(A) was not justified in directing that the agricultural income for all assessment years has to be determined on the basis of reverse indexation of income estimated for the calendar year 2018. Moreover, the Assessing Officer to assume jurisdiction u/s 153C he has to be satisfied that the documents or material found during the course of search belong to a person other than the searched person. In this case, there is no mention in the assessment order as to what document or valuable were found in the premises of the searched person that belonged to the assessee. There is no material belonging to the assessee which were unearthed during the search. This is clear from the fact that additions were made to the income returned in the respective assessment orders u/s 153C of the I.T.Act, by disbelieving 50% of agricultural income returned by the assessee and treating it as income from other sources (which was done on estimate basis) and the addition u/s 2(22)(e) of the I.T.Act. It is now well settled position of law that proceedings u/s 153C of the I.T.Act against the person who is not searched cannot be initiated unless incriminating documents or valuables belonging to such person were detected during the search In the instant case, the assessments were completed u/s 153A r.w.s. 153C of the I.T.Act. Therefore, in the absence of any incriminating evidence regarding details or documents, showing introduction of unaccounted income in the guise of agricultural income, the addition of a portion of agricultural income as income from other sources cannot be justified. Such an assessment is clearly unsustainable as the assessing authority has wrongly assumed jurisdiction u/s 153C of the I.T.Act as it was held in the case of Sinhgad Technical Education Society v. CIT [ 2017 (8) TMI 1298 - SUPREME COURT] . Additions made as income from other sources by disbelieving 50% of agricultural income returned by the assessee in the respective assessment years is uncalled for and we delete the same - Decided in favour of assessee

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• 2019 (11) TMI 1242
  Condonation of delay - delay of 133 days beyond time prescribed u/s 253(3) - Change of officer who was looking after taxation matter and due to this change over of relevant officer incharge , it could not file its appeal in time with tribunal as there was not proper handover by outgoing officer looking after taxation matter to a new officer incharge of taxation matter - HELD THAT:- it is now a well settled position of law that if technicalities are pitted against substantial justice, the Court will lean towards substantial justice and in our considered view the assessee has shown sufficient cause in explaining delay of 133 days in filing of this appeal with tribunal beyond time prescribed u/s 253(3) of the 1961 Act and hence keeping in view, interest of substantial justice, we are inclined to condone this delay of 133 days in filing of this appeal late by assessee beyond time prescribed u/s 253(3) of the 1961 Act, by invoking our powers u/s 253(5) of the 1961 Act and admit this appeal to be adjudicated on merits in accordance with law. It is pertinent to mention that no averments are made by Revenue nor there is any material on record to show that there is an malafide on part of assessee in filing this appeal late with tribunal Disallowance u/s 14A - no exempt income is earned by taxpayer - HELD THAT:- In the case of Chettinad Logistics Private Limited [ 2017 (4) TMI 298 - MADRAS HIGH COURT] has held that no disallowance of expenditure u/s 14A can be made when no exempt income is earned by taxpayer. The SLP filed by Revenue against decision of Hon ble Madras High Court decision in case of Chettinad Logsitics Private Limited(supra) has been dismissed by Hon ble Supreme Court [ 2018 (7) TMI 567 - SC ORDER] When no exempt income is earned by taxpayer, no disallowances of expenditure u/s 14A are warranted. Thus no disallowance of expenditure by invoking provisions of Section 14A of the 1961 Act is warranted as assessee has not earned any exempt income during the year under consideration and hence we hereby order deletion of disallowances of expenditure made by AO by invoking provisions of Section 14A of the 1961 Act read with Rule 8D of the 1962 Rules, which additions were later confirmed by Ld.CIT(A). MAT Computation - Our above decisions shall also apply mutatis mutandis while making disallowance of expenditure incurred for earning of exempt income while computing book profits u/s 115JB of the 1961 Act. The decision in the case of ACIT v. Vireet Investment Private Limited [ 2017 (6) TMI 1124 - ITAT DELHI] is relevant wherein it is held that computation under clause (f) of Explanation 1 to Section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D of the 1962 Rules.

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• 2019 (11) TMI 1241
  Order u/s 201(1) and 201 (1A) - period of limitation - Time limit for completion of assessment, reassessment and recomputation - HELD THAT:- AO has passed the orders for the assessment years 2005-06 to 2009-10 beyond the period of limitation, as canvassed by the assessee, supra, and therefore these orders cannot stand in the eye of law. In view of the above, the orders of both the authorities below are set aside and the tax and interest demand for the assessment years 2005-06 to 2009-10 are deleted. TDS U/S 194J - TDS on payment to hospitals for rendering medical services to policy holders under various health insurance policies issued by several insurers - levy of interest u/s. 201 (1A) - HELD THAT:- Third party administrator, who is responsible for making payment to hospitals for rendering medical services to policy holders under various health insurance policies issued by several insurers, he is obliged to deduct tax at source U/s.194J from the payments made to hospitals. Therefore, we do not find any merit in the submission of the assessee and hence, the corresponding grounds of the assessee are dismissed. With regard to the levy of interest U/s.201A, we find that this assessee s case is almost on similar facts and circumstances and hence in line with the decision canvassed by the assessee, supra. Therefore following that case, we hold that 90% of the advanced tax must have been paid by those hospitals and therefore we direct the Assessing Officer to levy the interest on the shortfall of 10% of TDS amount up to the date of filing of returns by the deductees U/s.201(1A). To this extent the assessee s appeal is allowed for assessment year 2010-11.

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• 2019 (11) TMI 1240
  Addition u/s 68/69A - unexplained deposits in the Bank account - assessee offered income u/s. 44AD - HELD THAT:- If the income component is estimated, how the expenditure component on the basis of said income can be considered to have been actually incurred and it is only presumption that an amount of 92% of gross receipts was incurred by the assessee as expenditure. We must also observe here that this is not a case, where the AO has doubted the gross receipts or gross turnover of the assessee. In fact, accepting the same, estimating income @ 8% on the same at presumptive rate, he preferred to make further addition under section 68/69A. The argument of the learned D.R. that the turnover of ihe assessee has been doubted by the AO is totally ill-found, in view of the same. It is a fact on record that the assessee had not maintained books of account that is why he opted for 8% income as per section 44AD. The section also does not put obligation on the assessee to maintain books of account, more so, in view of the fact that his income has been assessed as per section 44AD of the Act, he cannot be punished for not maintaining the same. From an analysis of section 44A we have already held that the assessee had not incurred the expenses to the extent of 92% of the gross receipts. Therefore, in the present case, the provisions of section 69A cannot be applied. Asking the assessee to prove to the satisfaction of the AO, the expenditure to the extent of 92% of gross receipts, would also defeat the purpose of presumptive taxation as provided under section 44AD or other such provision. Since the scheme of presumptive taxation has been formed in order to avoid the long drawn process of assessment in cases of small traders or in cases of those businesses where the incomes are almost of static quantum of all the businesses, the AO could have made the addition under section 69A of the Act, once he had carved out the case out of the glitches of the provisions of section 44AD of the Act. No such exercise has been done by the Assessing Officer in this case. Applying the propositions of law laid down in the above case law lo the facts of the case on hand, we delete the addition in question. AO nor the CIT(A) have given any reason as to why the provisions of Section 44AD of the Act are not applicable to this case. This ground of appeal of the assessee is allowed

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• 2019 (11) TMI 1239
  Validity of re-reassessment proceedings u/s 147 - non-issuance of notice u/s 143(2) - scope of section 292BB - HELD THAT:- Special leave petition is dismissed on the ground of low tax effect.

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• 2019 (11) TMI 1238
  Income received by way of rent - ITAT treated as business income - nature of income - Rental income and the service charges thus were received by the Assessee Company as business income during the course of business carried out by them of operating and running a Mall as a commercial activity - HELD THAT:- The appeal and pending applications are dismissed as withdrawn, leaving question of law open.

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• 2019 (11) TMI 1237
  Bogus LTCG - exemption claimed u/s 10 (38) denied - No evidence of actual sale - HELD THAT:- SLP dismissed.

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• 2019 (11) TMI 1236
  Revision u/s 263 - Addition u/s 40A(3) - Cash payment against purchases - HELD THAT:- As seen from the assessment order, the assessee also filed affidavit from land owners insisting the payments in cash. AO did not believe the contention of the assessee and brushed aside the submissions merely because of the endorsements on the reverse side of the agreement acknowledging the receipt of cash payment. There is no dispute that the land owners have given endorsement to the effect that they had received the cash on various dates. As per the affidavit, land owners have insisted for cash payments and Shri G.V.K.Chowdary has acted as an agent and the firm has given the cash to Shri G.V.K.Chowdary who in turn made the disbursements to the land owners. Merely because of endorsement made on agreement it does not conclusively prove that the assessee made cash payment directly to the land owners. Though Shri G.V.K.Chowdary has given the affidavit, the AO has simply brushed aside the agreement without making any enquiry. AO without examining either Shri G.V.K.Chowdary or the land owners has come to a conclusion that the documents were created to strengthen the assessee s case which is based on surmises without having any evidence. Any conclusion has to be drawn only after verification of the facts. AO ought to have examined Shri G.V.K.Chowdary and the land owners to ascertain the fact regarding the payments, made directly or through the agent. The fact that the land owners were agriculturists and small farmers, insisted the cash payment was supported by the affidavits given by the land owners as seen from the assessment order. There is no reason to disbelieve the submission of the assessee that the payment was made through the agent to the farmers, hence, there is no case for application of section 40A(3). Apart from the above, all the recipients are identifiable and the payments were genuine. The department also did not dispute the genuineness of payment. Since the assessee has furnished the evidences supporting it s contentions, we hold that the case law relied upon by the assessee in the case of Sri K.Phani Kumar cited supra squarely applicable to assessee s case. There is no reason to make the disallowance u/s 40A(3) and accordingly, we set aside the order of the CIT(A) and allow the appeal of the assessee.

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• 2019 (11) TMI 1235
  Deduction u/s 80IB(10) - addition as income from business and profession - HELD THAT:- We are aware that partnership firm has done meagre hardly business the partnership business during these 5 years since the partnership firm was constituted. The land cost of the Thane project has been appreciated and only appreciated value as per the shares in the partnership firm assessee received Rs. 14,35,00,000/- and assessee has also paid long-term capital gain tax to the revenue. In our considered opinion, we do not find any reason into interfere in the order passed by the Ld. CIT(A) and we are reluctant to accept pleas of the revenue. Therefore, we dismiss this ground of appeal of the Revenue. Now, we come to next ground with regard to allowing deduction u/s. 80IB(10) - In this case assessee has claimed deduction under section 80IB(10) of Rs. 38,75,140/- for the year under consideration. It has been noticed that in earlier years on the same issue of deduction under 80IB(10) for A.Y. 2007-08, A.Y. 2010-11, A.Y. 2011-12 and A.Y. 2012-13 claim of the assessee was allowed by the Ld. CIT(A). Thus, at the principle of consistency we dismiss this ground of appeal of the Revenue.

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• 2019 (11) TMI 1234
  Addition on account of unexplained cash credit u/s. 68 - identity, creditworthiness etc. of the shareholders or the genuineness payment - HELD THAT:- The documents filed were stated to be the audited balance sheet; Memorandum of Association of the company; names of the shareholders; bank details of the year under consideration of Bank of India, Bahadur Shah Zafar Marg, New Delhi showing three transactions during the year under reference; ledger account of audit fee payable, audit fees, bank charges, payment to Image Dresses Private Limited etc. The documents filed by the assessee do not satisfy the requirement of law as per section 68 of the Act as no evidence has been submitted regarding the identity, creditworthiness etc. of the shareholders or the genuineness payment to Image Dresses Private Limited. The assessee has not produced any evidence except computer generated ledger account in support of it s contention. No bank details, documents evidencing the identity and the creditworthiness of the share holders, identity of Image Dresses Private Limited etc have been submitted either during the course of appellate or assessment proceedings. Therefore as rightly held by the Ld. CIT(A) that the assessee has not been able to submit any evidence in support of his contention that the addition made by the AO was incorrect. In view of the same the contention of the assessee was not accepted. - Decided against assessee.

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• 2019 (11) TMI 1233
  Accrual of interest - Non recognising interest against the advance - accrual method of accounting - HELD THAT:- The undisputed facts are that the assessee is a company and following mercantile assessment of accounting. The assessee primarily relied on the copy of the letter issued by M/s. Seahorse Hospitals Limited dated 01.12.2004, wherein M/s. Seahorse Hospitals Ltd., confirmed the receipt of Rs. 1,10,00,000/- from the assessee company and also confirmed the terms of repayment of loan. Loan carried interest at the rate of 10.5% per annum. Therefore, the interest accrues and arises as on the last day of the previous year in which the assessee s accounts are closed. Once the interest is accrued, it has to be charged to tax in accordance with the method of accounting, i.e., mercantile system, employed by the assessee. The treatment between the parties or the subsequent settlement between the assessee and the other party is not affecting the chargeability of tax. Therefore, the interest accrued at the rate of 10.5% on the impugned loan for the period 01.12.2004 to 31.03.2005 is assessable during the period relevant to this assessment year and accordingly the amount levied by the AO and sustained by the appellate authority is held as in order. The assessee s corresponding plea are dismissed.

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• 2019 (11) TMI 1232
  Charitable activities u/s 2(15) - exemption u/s 11 - assessee is engaged in providing education and promoting research, training and education for peoples participation in developmental processes nationally and internationally - HELD THAT:- Invocation of proviso to section 2(15) of the Act to deny the claim of exemption u/s.11 and 12 was not justified and same has been rightly allowed by the ld.CIT(A). Further, the AO himself accepted the charitable character in subsequent assessment proceedings. In view of these facts, we do not find any infirmity in the order of the ld.CIT(A), therefore same is upheld, consequently the appeal of the Revenue is dismissed.

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• 2019 (11) TMI 1231
  Addition invoking the provisions of section 56(2)(vii)(b)(ii) - assessee had purchased a flat in housing board colony - HELD THAT:- Admittedly, the property has been purchased by the assessee vide sale deed dated 07.01.2016. The Purchase Deed placed at pages 20 to 30 of paper book, clearly shows that the property is in block 156, Jayanth colony, 20th Main road, Anna Nagar scheme, Chennai. The sale deed is not a subject matter of re-valuation of the Sub-Registrar, nor is there any allegation of low stamp duty in respect of the said property by the Sub-Registrar. Guideline value listed shows that in respect of Jayanth colony specific guideline value has been fixed by the Government. The purchase deed shows the specific prescribe value. In respect of 20th Main Road also, there is a guideline value fixed by the Government. There is a specific guideline value fixed by the Government in respect of specific colony or flat, just because the said colony or flat is adjacent to a road, which has a higher guideline value, the higher value cannot be adopted for the purpose of making an addition by invoking the provisions of section 56(2)(vii)(b)(ii). Addition made by the AO is unsustainable in so far as the sale deed has been executed at the value as prescribed by the Government in respect of Jayanth colony itself. This being so, the addition made by the Assessing Officer and confirmed by the ld.CIT(A) stands deleted. Appeal of the assessee is allowed.

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• 2019 (11) TMI 1230
  Bogus LTCG - Addition u/s 68 - AO selected the case based on the computerized selection of cases due to suspicious transaction identified through data analysis - HELD THAT:- Assessee has not been given a fair opportunity to prove the genuineness but the assessment has been made primarily, based on the evidences collected by the Revenue in the course of the investigation conducted by them on the brokers / share broking entities etc. This is not permissible. This being so, in the interests of natural justice, the issue of the genuineness of the transactions require re-adjudication. Since, the right to exemption must be established by those who seek it, the onus therefore lies on the assessee. In order to claim the exemption from payment of income tax, the assessee had to put before the Income Tax authorities proper materials which would enable them to come to a conclusion. As relying on SHRI HEERACHAND KANUNGA VERSUS THE INCOME TAX OFFICER, CHENNAI [ 2018 (6) TMI 1329 - ITAT CHENNAI] remit the issue of exemption in this appeal back to the file of the Assessing Officer for re-adjudication on the lines indicated above. Therefore, the Assessing Officer shall require the assessee to establish who, with whom, how and in what circumstances the impugned transactions were carried out etc., to prove that the impugned transactions are actual, genuine etc. Assessee s appeal is treated as partly allowed for statistical purposes.

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• 2019 (11) TMI 1229
  Rectification of mistake - no addition can be made u/s 68 of the Act unless there is a credit in the books of accounts of the assessee - HELD THAT:- One person can not travel on two boats at a same time, however in the instant case the Asseeee tried to take two inconsistent stands therefore the tribunal on the basis of material available on record realised that since the assessee has taken the clear-cut stands in his wife s assessment proceedings that the amount deposited in his wife s account belongs to the assessee, which the assessee has received as advance against his property from the buyer and in reply in response to notice u/s 142(1) of the Act in his assessee s wife case, specifically admitted that the deposit of Rs. 36 lacs in the Asst. Year: 2011-12 does not belongs to assessee s wife but belongs to the assessee only therefore, the co-ordinate bench was constrained to deal with the contrary contention raised and new stand taken by the assessee which was inconsistent to record and admission made in his wife assessment proceedings and held the same as devoid of merit and unsustainable. While considering the peculiar facts and circumstances to the effect that the assessee though filed its reply but did not appear regularly before the Ld. CIT(A), therefore, on the basis of reply the Ld. CIT(A) decided the appeal of the assessee as ex-parte, hence, in that eventuality and in peculiar facts and circumstances of the case and for the ends of justice without going into further controversy and deciding the case on merit and other grounds/issues raised by the assessee, the Co-ordinate Bench remanded the case to the file of the Ld. CIT(A) for decision afresh and in the order it was specifically mentioned by the Co-ordinate Bench in the last Para No.6.2 of the order that as the Ld. CIT(A) has passed the order exparte therefore, we are not adverting to the other grounds/ issues raised in the appeal and the Ld. CIT(A) shall decide the appeal without being influenced by any of the observations made above. Claim of the assessee is that the Co-ordinate Bench did not consider the judgment of Supreme Court - We have already mentioned the facts and given thoughtful consideration to issue raised by the assessee. In our considered view, the courts including tribunal are bound to follow the judgments of the higher courts in case the it decides the case on merits. As in this case considering the peculiar facts, impugned order has been quashed and case is remanded back to the Ld. CIT(A) for decision afresh with specific direction that Ld. CIT(A) shall decide the appeal without being influenced by any of the observations made above, therefore as per our considered view, no error seems to be apparent on record which requires any rectification as sought for by the Assessee. Even we have failed to understand as to what prejudice has been caused to the assessee and what error is apparent from the record which requires rectification because at the time of passing order under rectification, no order survives against the assessee and the tribunal in view of contrary material available on record and which is not denied by the assessee but in fact admitted by the assessee, has dealt with inconsistent stand only but not otherwise and left it open to the Ld. CIT(A) to decide afresh without being influenced by any observation made in its order. Even liberty was given to the Asseeee to agitate the original ground of appeal as raised before the Ld. CIT(A). The inference can be drawn that in this case, no mistake is apparent from record which could warrant rectification. Miscellaneous Applications filed by the assessee stands dismissed.

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• 2019 (11) TMI 1228
  Assessment framed u/s 153C r.w. Sec.143 - absence of return filled - HELD THAT:- Once, it is clear that neither any return of income has ever been filed in response to notice u/s 153C of the Act nor the assessee has claimed that his earlier return may be treated in response to notice u/s 153C of the Act and therefore, the assessment order passed u/s 153C r.w.s 143(3) of the Acct is unsustainable and against the spirit of law. We are also in agreement with the observation of the CIT(A) to the effect that in the absence of valid return in response to notice u/s 153C of the Act, the assessment was to be framed u/s 144 of the Act but not otherwise, as also held in the case of Eastern Engineering Venture vs. Income Tax Officer [ 2019 (7) TMI 697 - ITAT CUTTACK] . As per our considered view, it is not res-integra that in the absence of return, assessment is required to be framed u/s 144 of the Act only, which in the instant case has not been framed and therefore entailed quashing. On the basis of aforesaid analyzation, in our consider view the order under challenge does not suffer from any perversity, illegality or impropriety, hence, does not require any interference and liable to be affirmed. Consequently the appeal filed by the Revenue Department is liable to be dismissed. In the result, the appeal of the Revenue Department stands dismissed.

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• 2019 (11) TMI 1227
  Disallowance of interest representing 1/3rd interest on loans obtained from Indian Overseas Bank - housing loan availed - loan was taken by 3 person, property was constructed for 2 persons - HELD THAT:- The CIT (A) however, observed that the loan was a housing loan availed by three persons. Therefore, he directed the AO to allow only 1/3rd of the interest paid as being the assessee s share of interest. The learned Counsel for the assessee submitted that though the loan was taken by three persons, the entire loan was utilized in construction of the house property by two people only, i.e.the assessee and his wife at Plot No.301, GR Elite, Road No.14, Banjara Hills, Hyderabad, and since he was offering the income from house property in his hands, the entire interest amount were also to be allowed in his hands. These facts need verification by the AO i.e. whether that the entire rental income is offered in the hands of the assessee alone. Only if the assessee is offering the entire income in his hands, then the entire interest paid on the housing loan shall be allowed in the hands of the assessee. Therefore, the assessee s ground in all the AYs on this issue are treated as allowed for statistical purposes. Addition u/s 68 - credit allegedly received from his father-in-law - HELD THAT:- We agree with the relationship of the assessee and creditor, we find that unless the details of the Bank A/c are furnished and it is proven that the amounts have been received through banking channels, the identity and creditworthiness of the said persons cannot be accepted. Therefore, we direct the AO to verify the Bank A/c of the assessee and to verify if the amount has been received through Banking channels and if it is found to have been credited to his Bank A/c, then this addition cannot be sustained. As regards the amount of Rs. 45,20,000/- received from Sri G.Madhusudan Reddy, the assessee submitted that he has received the sum through cheque No.707006 on 17.01.2007 and it was deposited in the Bank A/c with M/s. Sai Sudheer Constructions and credited to the capital a/c of the assessee. This fact also needs verification by the AO, hence we direct the AO to verify the same and if it is found to have been credited to the assessee s Bank a/c, the disallowance cannot be sustained. Therefore, assessee s appeal for the A.Y 2007-08 is also partly allowed for statistical purposes. Disallowance of interest paid on loan obtained from the Indian Overseas Bank - HELD THAT:- We find that the assessee has not given the details of the Bank A/c and the date on which M/s. Sai Sudhir Infra Co. has received the amount and in in turn, transferred the same to the assessee s company. If the assessee is able to produce the details, then the addition may be deleted. The issue is therefore, remanded to the file of the AO afresh to enable the assessee to produce the relevant details and on verification of the same, if the AO found that the amount is received from Obulapuram Mining Co. (P) Ltd, into the books of Sai Sudhir Infra Co and from such A/c to the A/c of the assessee, then no addition can be made in the hands of the individual. Addition of the fresh loans received by the assessee during the relevant financial year - HELD THAT:- Assessee reiterated the submissions made before the authorities below and the learned DR supported the orders of the lower authorities, we find that it is not disputed that the amount was received through banking channels, thus identity of the remitter is confirmed. But, it does not prove the nature of the remittance, nor does it prove the creditworthiness of the creditor. The assessee has not filed any evidence to prove these two conditions even before us. Therefore, the addition of Rs. 20,00,000/- is confirmed. Addition u/s 56(2) - shares received as gift - HELD THAT:- If the contentions of the assessee were true, then as rightly pointed out by the CIT (A), the assessee could have taken this stand before investigation team. In fact, he offered to admit it as his undisclosed income. He never mentioned that the shares were HUF property, but it was stated so only during the assessment proceedings. Therefore, we agree with the findings of the CIT (A) that the contentions of the persons who have given affidavits to the above effect are not verifiable or acceptable. We also agree with his findings that unless contrary is proved, the investment belonged to the person in whose name it stands. Therefore, the shares standing in the names of E. Yella Reddy and E. Sailaja Reddy belong to them only and though they are the cousins of the assessee, they do not fall within the meaning of a relative u/s 56(2) Agricultural income after deducting expenses incurred on agriculture - HELD THAT:- We find that the AO in the remand report has confirmed that the assessee is the owner of the land to the extent of nearly 30 acres. However, the possibility of the assessee getting the agricultural income is doubted by the CIT (A). When there are two bore wells and one well along with electricity connection, we doubt whether any person would keep the land idle. However, without any evidence as to records, the nature of the agricultural crops grown and the expenditure claimed by the assessee, the claim of the assessee cannot be accepted in toto. Therefore, the agricultural income can only be estimated at this stage. We therefore, deem it fit and proper to remand the issue to the file of the AO to consider and estimate the agricultural income which could be derived from the land of 30 acres owned by the assessee for both the A.Ys 2010-11 and 2011-12

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• 2019 (11) TMI 1226
  Condonation of delay - delay of 1895 days - Addition u/s 69 - Double additions - HELD THAT:- Having filed the cash receipt in the regular returns, the addition made by the AO amounts double addition of same income in the block period as well as in the regular returns of income. Therefore, it causes unnecessary hardship and financial injury to the assessee. The assessee is a small employee in the educational institution and the problem is more so in the case of small assesses. Hence, technical default in not filing the appeal within the time limit should not be a reason for non-condonation of delay and we are of the considered opinion that in the interest of the justice, the delay required to be condoned. Accordingly, we condone the delay. Addition of un-disclosed income - HELD THAT:- We have heard both the parties. In the instant case, the assessee has admitted the said income in the regular returns filed for the AYs.2003-04 2004-05 and also filed the acknowledgement copy before us during the course of hearing. This fact was not controverted by the Ld.DR - delete the addition made by the AO.

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• 2019 (11) TMI 1225
  Levy u/s 234E - intimation u/s 200A - HELD THAT:- Post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the fee, if any, shall be computed in accordance with the provisions of section 234E . There is no dispute that what is impugned in the appeal before us is the intimation under section 200A as stated in so many words in the impugned intimation itself, and, as the law stood, prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. While examining the correctness of the intimation u/s 200A, we have to be guided by the limited mandate of Section 200A, which, at the relevant point of time, permitted computation of amount recoverable from, or payable to, the tax deductor after making the following adjustments: (a). after making adjustment on account of arithmetical errors and incorrect claims apparent from any information in the statement - Section 200A(1)(a) (b). after making adjustment for interest, if any, computed on the basis of sums deductible as computed in the statement . - Section 200A(1)(b) No other adjustments in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existed at that point of time. Adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. This intimation is an appealable order u/s 246A (a), and, therefore, the Ld. CIT (A) ought to have examined the legality of the adjustment made under this intimation in the light of the scope of the section 200A. The Learned CIT (A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is, thus, an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected - we delete the fee levied u/s 234E in the present appeal.

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• 2019 (11) TMI 1224
  Addition u/s.68 - non genuine share application money received by the assessee company - HELD THAT:- Here the genuineness of the transaction is proven from the fact that M/s. Aviskar Marketing Pvt. Ltd. has subscribed the shares on premium out of loan taken from NBFCs and has given the immediate source; and not only that, it has also given the documents and confirmations from the NBFC companies confirming the loan given to the subscribing company who in turn has subscribed the share of the assessee company. Wthout there any material that any unaccounted money has been routed through various channels, then simply based on presumption and hypothesis deeming fiction cannot be invoked. If the assessee has proved the source as well as the source of the source of the fund then onus shifts upon the AO to carry some prima facie inquiry to rebut the explanation given by the assessee. In absence of any such exercise, addition cannot be sustained simply based on certain hypothesis. Another reasoning given by the AO for rejecting all the evidences was that assessee has not produced the directors. Now when the party subscribing the shares and paying the money has confirmed the transaction and has proved the source from where it has got the funds directly before the AO by giving all the evidences as discussed above, then mere non-appearance will not make the transaction doubtful or colourable. It is only when there are inconsistencies in the explanation and the evidences filed then the Assessing Officer may ask the assessee to produce. One has to see in such cases, firstly, whether primary onus of proving the nature and source of credit has been discharged, that is, identity, creditworthiness and genuineness of the transaction; and secondly, post such onus, Assessing Officer has made any inquiry or has some material to rebut the explanation and the evidences filed by the assessee. If there are any inconsistencies, then AO may ask the assessee to produce the person and if assessee is unable to do so for certain reasons, then AO has the power to issue summons u/s 131 to ensure the presence. Otherwise AO cannot simply doubt the entire the entire credit which is share application money and shares have been allotted. DR are not applicable on the facts of the case as discussed above, as the entire share application money and premium received by the assessee company stands proved by the assessee company and also by the subscribing company, which has even proved the source of money given to the assessee company. Here it is not case of any accommodation entry provider nor there is any report of investigation wing nor has any inquiry been conducted by the AO to allay or rebut the evidences filed by the assessee company or by the subscribing company. Thus, ratio of all these judgments will not apply in the present case. We hold that share application money received by the assessee company from M/s. Aviskar Marketing Pvt. Ltd cannot be held to be non-genuine. Accordingly, the addition made u/s.68 is directed to be deleted. In the result, the appeal of the assessee is allowed.

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• 2019 (11) TMI 1223
  Rejection of books of accounts u/s 145(3) - AO estimated the income of the assessee by applying NP rate at 4% of turnover as against NP declared by the assessee at 2.51% - HELD THAT:- The past history of the assessee which is accepted by the department is a proper guidance and reasonable basis for estimation of income of the assessee for the year under consideration. AO has applied 4% net profit without citing any basis or comparable instance. Therefore, ignoring the past history of the assessee and estimating the income based on NP at 4% without giving any basis as to how NP rate of 4% is reasonable and proper, the action of AO is contrary to the settled proposition of law. The power of estimation does not mean an arbitrary power with the AO but the estimation has to be on some reasonable and proper basis. CIT (A) though restricted the addition by applying 3.5% NP, however, there was no basis explained by the ld. CIT (A) for applying the NP at 3.5%. Thus it is clear that the assessee has declared a better result for the year under consideration in comparison to the result of the preceding years which were accepted by the department. Accordingly, in view of the above facts and circumstances of the case as discussed above, the addition sustained by the ld. CIT (A) is not justified and the same is deleted. - Appeal of the assessee is partly allowed.

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• 2019 (11) TMI 1222
  Depreciation to assessee trust - accumulation of income - carry forward deficit @ 15% - whether, for the purposes of section 11(l)(a) of the Income-tax Act, 1961, the amount for the grant of exemption of twenty-five per cent, should be the income of the trust or it should be its total income as determined for the purposes of assessment to income-tax? - HELD THAT:- depreciation claimed on the assets acquired from income of trust did not amount to double deduction. Accumulation of income - carry forward deficit @ 15% - Held that:- Following the decision of Apex Court in the case of CIT vs. Programme For Comminity Organisation [ 2000 (11) TMI 4 - SUPREME COURT] , decided in favor of assessee.

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• 2019 (11) TMI 1221
  Income from House Property - addition on account of notional rent of unsold area - taxation of notional rental income relating to the unsold area of the Mall built by the assessee - HELD THAT:- It is evident that the real rental income earned by the assessee out of letting of the unsold flats is taxable under the head income from house property and the same is the ratio laid down by the Jurisdictional High Court in the case of CIT vs. Sane Doshi Enterprises [ 2015 (4) TMI 882 - BOMBAY HIGH COURT] and others. Therefore, considering the above settled legal proposition on this issue, we are of the opinion that the ground no.1 raised by the assessee is should be allowed in favour of the assessee. Thus, the ground no.1 raised by the assessee is allowed. Disallowance of expenses relating to the material purchase and labour charges - AO disallowed the same in view of the bona-fide belief that the expenses are not allowable for the reason of claim of deduction allowed u/s 24 in respect of flats rented out which earned the rental income - HELD THAT:- AO and the CIT(A) did not appreciate the fact that the impugned repair and maintenance expenses relate to the unsold flats which were never rented out. Therefore, these repair and maintenance expenses are not disallowable. Further, AR on the above referred facts and arguments, submitted that the said issue may be remanded to the file of the Assessing Officer for fresh adjudication. The said prayer of the assessee appears to be fair and reasonable. Disallowance u/s 14A needs to be restricted to the total exempt income which is earned during the year and formed part of the total income of the assessee. In this regard, ld. Counsel relied on the various judicial decisions in support of the claim. Denying of deduction claimed u/s 80IB(10) - HELD THAT:- Allowability of the pro-rata deduction u/s 80IB(10) is a decided issue in the own case of the assessee in earlier years. Considering the above settled legal nature of this issue, we find the order of the CIT(A) is fair and reasonable and it does not call for any interference. Thus, the ground is allowed.

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• Customs

• 2019 (11) TMI 1220
  Early disposal of the applications - abandonment of five containers of imported goods in terms of provisions of section 23(2) of the Act - HELD THAT:- The impugned communication dated 4 April 2019 does not reflect / indicate the basis for exercise of powers under Section 28(9A)(a) of the Act. Therefore, unable to fathom the reasons for keeping the present proceedings in abeyance - the impugned communication dated 4 April 2019 is set aside. So far as the Petitioner s applications dated 9 January 2019 and 16 April 2019 are concerned, the Respondent No.3 will dispose of the same as expeditiously as possible within a period of three weeks from today. We are of the view that the Commissioner of Customs would make an endeavour to dispose of the application as quickly as possible. Petition disposed off.

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• 2019 (11) TMI 1219
  Provisional release of seized vehicle - smuggling - petitioner submits that the alleged smuggled goods were not seized from the vehicle but were seized from two persons who had travelled in the said vehicle - applicability of Section 115(e) of the Customs Act, 1962 - HELD THAT:- Without going into the merits of the seizure, this writ petition can be disposed of with a direction upon the Principal Commissioner of Customs (P), CC (P), Kolkata, West Bengal to provisionally release the aforesaid seized vehicle upon submission of Bond and Security equal to 40% of the value of the vehicle - It is made clear that the authority shall be at liberty to proceed with the investigation and issuance of show-cause in accordance with law. Petition disposed off.

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• 2019 (11) TMI 1218
  Maintainability of appeal - non-compliance with the pre-deposit - HELD THAT:- The respondent has filed affidavit dated 22nd October, 2019 wherein she has stated that the entire amount of pre-deposit payable by her in terms of stay orders of the Tribunal, have been deposited. In support, evidence of payment of deposits has also been annexed. In view of the affidavit, Mr. Shetty submits that the appeal itself is now listed on the board of the Tribunal for final hearing. The grievance of the petitioner that the deposit as directed by the Tribunal has not been done by the petitioner, is not correct - Petition disposed off.

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• 2019 (11) TMI 1217
  Levy of Anti-Dumping Duty - import of fabric - undervaluation of imported goods - evasion of customs duty - it is alleged that the difference between the actual price and price indicated in invoice, was received by M/s Tessuti (HK) Co. Ltd., Hong Kong through hawala channel and such payments were made to M/s Tessuti (HK) Co. Ltd., by M/s Chunghwa, Malaysia, from whom M/s J.R International imported CPT by overvaluing to avoid imposition of anti-dumping duty - request for cross-examination rejected - extended period of limitation. HELD THAT:- Tribunal in the case of M/s PG Electroplast Ltd. [ 2019 (6) TMI 1229 - CESTAT ALLAHABAD ] has dealt with the appeal arising out of the same set of facts and circumstances and the same investigations made by the revenue. While dealing with the appellant s pleas, it was held that once the assessments finally done have not been challenged by way of filing an appeal there again, it was not open to the revenue to initiate the proceedings by invoking the longer period of limitation. The impugned order set aside - appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 1216
  Mis-declaration of imported goods - import of 10500 kgs. of cloves of Sri Lankan origin - It was noticed that the goods do not conform to FSSAI Regulations - direction for re-export of goods - redemption fine - penalty. Levy of redemption fine - HELD THAT:- The appellant is willing to re-export the goods and is not contesting the order passed directing the appellant to re-export the goods - The Hon ble Apex Court in the case relied upon by the ld. counsel for appellant in UNION OF INDIA VERSUS SANKAR PANDI [ 2010 (3) TMI 1247 - SC ORDER ] has affirmed the decision of the Hon ble High Court in SANKAR PANDI VERSUS UNION OF INDIA [ 2001 (12) TMI 83 - MADRAS HIGH COURT ] wherein it was held that redemption fine cannot be imposed when the goods have to be redeemed only for the purpose of export - the redemption fine imposed is unjustified and requires to be set aside Imposition of penalty - HELD THAT:- The appellant ought to have made all efforts to import only goods which conforms to FSSAI Regulations. There being violation of said Regulations, the facts attract imposition of penalty under Section 112(a) of the Customs Act, 1962. However, the penalty of Rs. 2 lakhs imposed is on the higher side. In the interest of justice, the penalty is reduced to Rs. 50,000/-. Appeal allowed in part.

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• 2019 (11) TMI 1215
  Maintainability of appeal under Section 129(A) of the Act - Smuggling - Gold - only objection raised by the respondent in their Cross-objections is that the appeal is not maintainable under Section 129(A) of the Act because the confiscated goods have been recovered from the baggage of passenger - absolute confiscation - penalty - HELD THAT:- The appellant was wearing two numbers of small chain and 2 bangles of gold and one big chain totally weighing 583.18o grams valued at Rs. 15,74,586/- of 24 carat purity gold which she did not declare on arrival at Mangalore Airport. On suspicion, she was searched and then it was found that she was wearing these gold chains and bangles concealed under the burka which she was wearing. In her statement, she has confessed that she was not aware that she was supposed to declare the gold and the ornaments. The original authority has discussed in detail the facts of the case and has arrived at a finding that the appellant has indulged in smuggling and has confiscated the unfinished gold, totally weighing 583.18 grams seized from the possession of the appellant under 111(d), 111(i), 111(l) and 111(m) of the Act and also imposed penalty of Rs. 4,50,000/- on the appellant under Section 112(a) of the Act for her omission and acts rendering the goods liable for confiscation under Section 111 of the Act and also imposed penalty of Rs. 2 lakhs in terms of Section 114AA for having made false declaration under Section 77 of the Act. Penalty under Section 112 and Section 114AA of the Act - HELD THAT:- The imposition of penalty under Section 77 is not sustainable in law because Section 77 is applicable only when passenger fails to declare in his baggage any goods which is liable to confiscation whereas in the present case, it is on record that nothing objectionable was found in her baggage and it is only on a person gold ornaments were secreted - penalty imposed under Section 114AA set aside. Penalty under Section 112(a) of the Act - HELD THAT:- The penalty is upheld but the same is reduced to Rs. 2,25,000/-. Absolute confiscation upheld. Appeal allowed in part.

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• 2019 (11) TMI 1214
  Liability of duty being the duty foregone on parts of CD Deck mechanism imported - period February 2008 and February 2009 - non-compliance with the conditions in N/N. 25/99-Cus dated 28th February 1999 - benefit of concessional rate of duty - HELD THAT:- It would appear that the adjudicating authority has proceeded with his own line of thinking on the scope of the exemption notification. There is no doubt that an exemption notification will need to be construed strictly but an exemption notification that permits import of parts which, according to the adjudicating authority, cannot find use in the intended finished goods is also an indictment of the Central Government for indulging in superfluity. In the absence of such consideration by the adjudicating authority and casual discarding of the expert opinion of Department of Electronics, we are constrained to hold that the findings in the impugned order are not sustainable and must be set aside - matter remanded back to the original authority for consideration of the facts and evidences of proper utilisation of the imported goods in the manufacture of assemblies that conform to the description of the finished goods in the exemption notification - appeal allowed by way of remand.

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• 2019 (11) TMI 1198
  Review petition/rectification of mistake - typographical error or not - it is submitted by Respondent No.1 that final adjudication order has already been passed upon the show cause notice issued to the petitioner - HELD THAT:- In view of the submission made by learned senior Standing Counsel for Respondent No.1 that show cause notice issued to the petitioner has already been finally adjudicated upon, this review petition does not survive. Review petition disposed off.

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• Insolvency & Bankruptcy

• 2019 (11) TMI 1213
  Maintainability of application - initiation of CIRP - Corporate Debtor has defaulted in its repayments - debt due and payable or not - section 7 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is abundantly clear that the present petition under section 7 of the 1B Code has been filed solely and exclusively in the background and in pursuance of RBI Circular dated Even the last date for filing of petition under 1B Code has been discussed and mentioned in Minutes dated 30.11.2018 making it clear that compliance of RBI Circular dated 12.02.2018 was very much in the mind of Financial Creditor. Accordingly, the present petition under section 7 of the Code has been filed on 06.12.2018 i.e. just five days before the date of 11.12.2018. The present petition filed by financial creditor under section 7 of the Code is solely filed in pursuance of RBI Circular dated 12.02.2018 - the present petition filed under section 7 of the 1B Code deserves to be dismissed - Petition dismissed.

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• 2019 (11) TMI 1212
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - debt due and payable or not - HELD THAT:- the Corporate Debtors are Corporate Guarantor , and also shown as Co-Borrowers . In Annexure-II therein, the statement showing details of the loan and security documents have been mentioned which includes guarantee agreements given by the aforesaid Corporate Debtors . As the project will be developed on the land of five Corporate Debtors , as referred to above as per the township plan, they have rightly taken plea that simultaneous Corporate Insolvency Resolution Processes should continue against them under the guidance of same Resolution Professional . Group Corporate Insolvency Resolution Process proceeding is required to be initiated against five Corporate Debtors namely- Sachet Infrastructure Pvt. Ltd. ; Magad Realtors Pvt. Ltd. ; Mehak Realtech Pvt. Ltd. ; Sameeksha Estate Pvt. Ltd. and Jamvant Estates Pvt. Ltd. apart from the Corporate Insolvency Resolution Process which has already been initiated against Adel Landmarks Limited - ( Principal Borrower ). As the Adjudicating Authority has failed to appreciate the relevant fact that in the facts and circumstances, a group insolvency is to be initiated and in absence of simultaneous Corporate Insolvency Resolution Process against five Corporate Debtors namely- Sachet Infrastructure Pvt. Ltd. ; Magad Realtors Pvt. Ltd. ; Mehak Realtech Pvt. Ltd. ; Sameeksha Estate Pvt. Ltd. and Jamvant Estates Pvt. Ltd. , the township project of Town and Country Planning, Haryana, will not be complete, we set aside the impugned order dated 7th March, 2019 and remit the case to the Adjudicating Authority - Adjudicating Authority will admit the applications under Section 7 filed by Edelweiss Asset Reconstruction Company Limited against Sachet Infrastructure Pvt. Ltd. ; Magad Realtors Pvt. Ltd. ; Mehak Realtech Pvt. Ltd. ; Sameeksha Estate Pvt. Ltd. and Jamvant Estates Pvt. Ltd. .

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• 2019 (11) TMI 1211
  Maintainability of application - initiation of CIRP - default in repayment of loan amount by the Corporate Debtor to the Applicant - debt due and payable or not - HELD THAT:- Upon a detailed consideration of the application and documents filed by the Applicant, it is apparent that the payment of claim amount has been defaulted by the Corporate Debtor. The Registered Office of the Corporate Debtor is situated in Ajmer and therefore this Tribunal has jurisdiction to entertain and try this Application. The matter is within the purview of Law of Limitation - this Tribunal is inclined to initiate the Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor as envisaged under the provisions of IBC, 2016. Petition admitted - moratorium declared.

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• 2019 (11) TMI 1210
  Maintainability of application - initiation of CIRP - Respondent failed to make repayment of outstanding amount - Debt due and payable or not -Section 8 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The applicant has attached the copy of Bank certificated issued by UCO Bank dated 27.07.2018 and also the copy of bank statement for relevant period in compliance with the requirement of Section 9(3)(c) of the IBC 2016 - The registered office of respondent is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is filed on 21.08.2018 which is within the period of limitation. The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code - Application admitted.

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• Service Tax

• 2019 (11) TMI 1209
  Permission for withdrawal of appeal - compliance with the pre-deposit - Manpower, Recruitment/Supply Agency Service - non payment of the stated tax liability for the assessment years commencing from the year 2009-2010 till 2013-2014 - HELD THAT:- Petitioner prays for permission to withdraw t6he present writ petition to avail the benefit of amnesty scheme floated on 01.09.2019. Appeal dismissed as withdrawn.

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• 2019 (11) TMI 1208
  Maintainability of appeal - monetary amount involved in the appeal - business auxiliary service - HELD THAT:- The Central Board of Indirect Taxes and Customs has issued instruction dated 22.8.2019 revising the monetary limits for filing appeals before this Court to Rs.One Crore and these instructions are also applicable on pending appeals. It is further averred that personal penalty involved in this appeal is Rs. 70,47,000/- which is below the said threshhold limit of Rs. One crore. In this view of the matter it is averred in the application that Commissioner of Central Goods and Service Tax,Ludhiana has sent instructions to withdraw the present appeal. Appeal dismissed as withdrawn.

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• 2019 (11) TMI 1207
  Classification of services - real estate agent service or not - sale of agricultural plot - in the books of accounts the amount was shown as OTHER INCOME - period 2005-06 and 2006-07 - suppression of facts or not - penalty. HELD THAT:- The appellant entered into an agreement to purchase of land from the original owner, but did not execute the sale deed in its favour. The appellant got sale deed executed in favour of third party directly from the original owner of land. The appellant first entered into an agreement with the registered owner of land and paid a nominal amount as advance. It was mentioned in the agreement that he is having rights to sell the land to some other person from the date of execution of sale agreement - it cannot be accepted that transaction of sale and purchase of land is a simple sale and purchase of immovable property. When a person from the first day enters into an agreement to purchase some property with an intention to sell it to some other person, it cannot be said that the transaction was of a transaction of simple sale and purchase of immovable property, in fact, the said act attracts the definition of Real Estate Agent and the participation of appellant in view of aforesaid transaction comes within the purview of Service Provider . Extended period of limitation - HELD THAT:- The act of appellant clearly shows that he suppressed the facts, therefore, the period of limitation is to be counted from the date of knowledge of the Departmental Authority as provided under sub-section 3(ii) of Section 11A of the Act of 1944 - the appellant has not shown specific source from which the income was received though income was showed in books of account which is a clear act of suppressing correct facts. For the aforementioned reason, the limitation will be counted from the date of knowledge. Imposition of penalty - HELD THAT:- The finding recorded by the Assessing Officer for imposition of penalty under Sections 77 and 78 of the Act of 1994 has been affirmed by the Appellate Authority as well as the CESTAT - there is no error or infirmity in the said findings recorded by the Assessing Officer and affirmed by the Appellate Authority and the CESTAT - Penalty upheld. Appeal dismissed - decided against appellant.

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• 2019 (11) TMI 1206
  Nature of activity - manufacture or service - services of erection, commissioning and installation to the service recipient M/s. Larsen and Toubro Limited - territorial jurisdiction - manufacture taking place or not? - Service tax already paid - recovery sought - double taxation - time limitation - demand of interest and penalty. Territorial Jurisdiction - Whether, in facts and circumstances of the present case the learned Tribunal vide impugned order is correct in not considering submissions / documents for wrong invocation of jurisdiction? - HELD THAT:- With reference to the materials on record, the Tribunal held that admittedly, the Head Office of the Appellant was situated at Raipur; that the Appellant/Proprietor of the establishment was residing at Raipur; that the Appellant had neither registered centrally nor regionally so as to confine to the jurisdiction to a particular place as sought to be effected by the Appellant and further that, all the work orders were executed by the Appellant at his Raipur address, as admitted by him in this regard - After having submitted to the jurisdiction of the Commissioner / Adjudicating Authority without any protest, it is not correct or proper for the Appellant to take a U-turn , when the decision has gone against him. It is settled law that the power conferred upon the competent authority with reference to territorial jurisdiction is not an instance of total lack of jurisdiction, so as to make the order null and void. Manufacture taking place or not - HELD THAT:- Obviously, it is an inclusive definition and not exclusive one. Admittedly, the activity being pursued by the Appellant in the premises of M/s. L T involving fabrication, commissioning and erection is by making use of the raw materials supplied by the service recipient / M/s. L T. There is no case for the Appellant that the Appellant was owner of the raw materials, which were put into the alleged manufacturing activity, to give rise the products. There is no instance of any sale and the products cannot be called as goods, having no independent marketability, as tailor-made, subject to the specifications given by the M/s. L T / service recipient - It is nothing but a service , the Appellant admittedly having no ownership over the materials supplied by the M/s. L T or on the products. Service tax already paid - recovery sought - double taxation - HELD THAT:- The explanation offered by the Appellant that they had not taken registration and were not satisfying the service tax, despite the liability to satisfy the same, merely on the basis of instructions / advice stated as given by the service recipient / M/s. L T can never be accepted as any explanation, much less, anything reasonable or satisfactory. Ignorance of law is no excuse. This being the position, the said ground also does not hold any water at all. Extended period of limitation - Whether, in facts and circumstances of the present case the Appellate Tribunal vide impugned order is correct in confirming demand of service tax invoking extended period of limitation under proviso to section 73 of the Act? - HELD THAT:- The contention of the Appellant is that the extended period of five years is not applicable to the instant case, as it does not come within the purview of specific Clauses at a, b, c, d and e . This aspect has been considered by the Tribunal and it has been clearly held in paragraph 17 that non-registration of the Appellant, in the given circumstances, definitely will amount to suppression of the relevant facts, which came to the notice of the Department, only later, on the basis of some intelligence gathered by the Preventive Officers of the Central Excise. This being the position, it squarely comes within the purview of sub-Clause (d) under the proviso to Section 73 (1) of the Finance Act, 1994 and hence it was open for the Department to have invoked the extended period of five years for issuing the show-cause notice - the finding rendered by the Tribunal is well supported by the reasoning and hence it warrants no interference. Penalty - Whether, in facts and circumstances of the present case the Appellate Tribunal vide impugned order is correct in confirming imposition of penalties U/S 76, 77 78 of the Act? - HELD THAT:- The course pursued by the Appellant might be considered as a reasonable cause for the failure as envisaged under Section 80 of the Finance Act, 1994, so as to exclude the Appellant from satisfying penalty (which otherwise is payable under Sections 76 or 78 of the Finance Act, 1994). The learned counsel submits that the above penalty provisions are not attracted and the Appellant might be considered for the benefit of Section 80 of the Finance Act, 1994. Though the said provision came to be deleted with effect from 14.05.2015, insofar as the Appellant is concerned, the said provision was governing the field for the period from 01.10.2006 to 15.12.2011 involved herein. The course and conduct pursued by the Appellant is not liable to be branded as innocent or bona fide, insofar as the necessity to have taken registration was well known to the Appellant, who, in fact, had taken registration in respect of the sister concern belonging to the very same Appellant as Proprietor, which was being run under the name and style as M/s. M.R. Engineering Works, providing necessary services to the very same service recipient / M/s. L T. There is no substantial question of law - appeal dismissed.

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• 2019 (11) TMI 1205
  Refund claim - retrospective exemption accorded to the activity rendered in a works contract awarded by Jawaharlal Nehru Port Trust - principles of unjust enrichment - HELD THAT:- The issue of whether any claim for refund has been preferred by the two sub-contractors who included the tax in the invoice raised on the respondent herein or had availed benefits is, in our opinion, too vague on allegation to be raised at this juncture. There is no essaying of any facts, or even speculation, on the nature, and extent, of benefits that could be availed. The Tribunal is not to be expected to either undertake an enquiry, or direct any of the lower authorities to proceed in that direction merely on the basis of apprehensions entertained by the Committee of Commissioners. Appropriately, a responsible approach on the part of the Committee would have been to enunciate some facts that could reasonably lead to such conclusion. In the absence thereof, this ground is not tenable. In fact, the apprehension that appears to have led by the Committee on that path is apparent from reference to the amount involved in the refund, superfluous though it be. The withdrawal of the exemption for a limited period was considered to be crucial enough for reconsideration and it is with full authority of Parliament that the exemption was not only restored but refund of amount already paid legislated upon Appeal dismissed.

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• 2019 (11) TMI 1204
  Service of order - mode of service - imposition of penalty - HELD THAT:- The learned Commissioner (Appeals) has nowhere established that the acknowledgement received from the appellant on having received the said Show Cause Notice is available with Revenue - the provisions of Section 37 C of Central Excise Act, 1944 require that the notice is to be sent through registered post with acknowledgement due and if the same is sent through speed post then Department should be in a position to establish that the same has been served on the person for whom it is intended. Thus, the appellants were not put on notice to defend themselves against the proposal of imposition of penalty. Therefore, penalties imposed are not sustainable. Invocation of proviso to sub-Section (1) of Section 73 of Finance Act, 1994 - HELD THAT:- The appellant had filed ST-3 also and the whole transaction was reflected in the balance sheet. Therefore, there is no element of suppression - the invocation of proviso to sub-Section (1) of Section 73 of Finance Act, 1994 was not justified in the present case. Therefore, the finding of the learned Commissioner (Appeal) that provisions of sub-Section (3) of Section 73 of Finance Act, 1994 were not applicable in the present case is not sustainable. The penalty imposed is set aside and without interfering with the voluntary deposit of service tax along with interest - appeal allowed.

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• Central Excise

• 2019 (11) TMI 1203
  Maintainability of appeal - monetary amount involved in the appeal - sale or not - electricity so generated and cleared to the grid outside the factory - HELD THAT:- Vide instructions dated 22.8.2019, the Central Board of Indirect Taxes and Customs (CBIC) has prescribed the monetary limits for filing and prosecuting appeals in this Court at Rs. 1 crore and above - It is further stated therein that vide email dated 23.10.2019,counsel for the appellant has received instructions for withdrawal of the present appeal since the duty amount involved in this matter is Rs. 53,09,892/- and thus below the monetary limit prescribed by CBIC. In the end prayer has been made to grant permission to appellant to withdraw the appeal. Appeal dismissed as withdrawn.

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• 2019 (11) TMI 1202
  Demand of Court fee - Rebate claim - It is contended by the learned counsel for the petitioner that in fact under Section 35EE (3) of the Central Excise Act, 1944, no court fee is to be paid by the petitioner - HELD THAT:- Looking to the provisions of Section 35EE (3) of the Central Excise Act, 1944, the petitioner was not liable to make the payment of any court fee before the Revisional Authority - in view of the fact that the petitioner is claiming a rebate of Rs. 67,73,865/- (for total of 13 + 8 rebate claims), no question whatsoever arises of making payment of court fee before the Revisional Authority. Nonetheless, the petitioner has already paid Rs. 1,000/- demanded by the respondents towards court fee. The revision application filed by the petitioner before the Revisional Authority is revived with the same number and matter is remanded to the Revisional Authority for fresh decision on merits in accordance with law, rules and regulations and evidence on record as expeditiously as possible and practicable - petition allowed.

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• 2019 (11) TMI 1201
  Maintainability of appeal - Demand u/s 11D - Recovery of Central Excise duty - money was collected by the respondent from its customers but in the relevant documents like invoice bills etc. raised by them, it was not stated that any particular sum was collected on account of central excise - HELD THAT:- We are of the opinion that on these submissions, it is difficult to throw out the appeal at the admission stage. We admit the appeal to be heard on questions which are based on the arguments of Mr. Chatterjee and Mr. Maity - Since the respondent is represented by learned counsel, issuance and service of the notice of appeal are dispensed with. List the appeal for hearing on 11th December, 2019.

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• 2019 (11) TMI 1197
  Interest on delayed refund - time limitation for calculation of refund amount - appellant claims interest on delayed refund i.e. from the date of deposit till payment thereof - Section 35FF of the Central Excise Act, 1944 - section 243 Income Tax Act, 1961 - HELD THAT:- On-going through the provisions of both Income Tax Act, 1961 and Central Excise Act, 1944, the interest on delayed refund is payable after expiry of 3 months from the date of granting refund or from the date of communication of order of the appellate authority, which are pari-materia. The decision of Hon ble Apex Court in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] is law of land, in terms of Article 14 of the Constitution of India which is to be followed, wherein the Hon ble Apex Court has answered the issue holding that the assessee is entitled to claim interest from the date of payment of initial amount till the date its refund. Thus, the appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization - the appellants are entitled to claim interest from the date of payment of initial amount till the date its refund @ 12% per annum - appeal allowed - decided in favor of appellant.

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• Indian Laws

• 2019 (11) TMI 1200
  Dishonor of Cheque - insufficiency of funds - Accursed seeking permission to lead additional evidence - accused had filed complaint against him (the complainant) and his father for cheating - section 391 and 394 of the Code of Criminal Procedure, 1973 - HELD THAT:- Onus lay upon the accused to dislodge the presumptions that the cheque was drawn for consideration and in discharge of a legally enforceable debt or liability. - Whether the accused succeeded in rebutting the presumptions of law warrants adjudication. However, mere failure to place on record the copy of the reply could not have been construed as a failure to dislodge to the presumption especially when it was the claim of the complainant that the accused had replied the statutory demand notice raising false contentions - The situation which, thus, obtains is that so far as the endeavour of the accused to lead evidence in the nature of the documents to demonstrate that the cheque was drawn by way of security only and to contest the quantum of liability for which the cheque was allegedly drawn, the omission to place on record the said documents before the trial court, is clearly in the realm of lacuna for reasons more than one. In the facts of the case, no justifiable ground is made out for such a course, which would have been permissible had there been a resultant failure of justice. Thus, to the extent of those documents, excluding the reply to the demand notice, the learned Sessions Judge was within his rights in rejecting the application. As the factum of reply to the demand notice was indisputable, in my considered opinion, to prevent failure of justice, the accused can be permitted to place the said reply on the record of the Court. However, this would not be construed as an opportunity for the accused to lead evidence aliende in proof of the correctness of the contents of the said reply. Thus, to restrict the powers of the appellate court to receive only oral evidence and exclude documentary evidence from its purview, would be in complete derogation of the letter and spirit of the provisions contained in section 391 of the Code - Application allowed in part.

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• Law of Competition

• 2019 (11) TMI 1199
  Directions for investigation under Section 26(1) of the Competition Act, 2002 - To discontinue Abusive/Anti-competitive practices - price discrimination - fixation of commission rate for all partner hotels - elimination of Performance Linked Bonus (PLB) or other additional promotional incentives which indirectly add to fixed commission - prohibition of discrimination and offering of heavy discounting on hotel room tariffs over above fixed commission - remittance of advance payments etc. - contravention of the provisions of Sections 3 and 4 of the Competition Act, 2002. HELD THAT:- The Commission is of the view that there exists a prima facie case for investigation against MMT-Go and OYO for alleged violation of the provisions of Section 3(4) of the Act. Further, a prima facie case for investigation under Section 4 of the Act is made out against MMT-Go, as elucidated in the earlier parts of this order. The DG is, thus, directed to carry out a detailed investigation into the matter, in terms of Section 26(1) of the Act, and submit a report to the Commission, within 150 days. During the course of investigation, if involvement of any other party/entity is found, the DG shall investigate the conduct of such other party/entity(s) who may have indulged in the said contravention. It is, however, made clear that nothing stated herein shall tantamount to an expression of final opinion on the merits of the case and the DG shall conduct the investigation without being influenced by any observations made herein.

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