Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 8, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
GST - States
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18/2019–State Tax (Rate) - dated
1-11-2019
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Jharkhand SGST
Amendment in Notification No. 02/2019-State Tax (Rate), dated the 26th April, 2019
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17/2019 – State Tax (Rate) - dated
1-11-2019
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Jharkhand SGST
Seeks to amend Notification No. 26/2018-State Tax (Rate), dated the 24th January, 2019
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16/2019 – State Tax (Rate) - dated
1-11-2019
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Jharkhand SGST
Seeks to amend Notification No. 3/2017-State Tax (Rate), dated the 29th June, 2017
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15/2019 – State Tax (Rate) - dated
1-11-2019
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Jharkhand SGST
Seeks to amend Notification No. 2/2017-State Tax (Rate), dated the 29th June, 2017
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14/2019 – State Tax (Rate) - dated
1-11-2019
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Jharkhand SGST
Seeks to amend Notification No. 14/2019 – State Tax (Rate)
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VaKar//GST/19/2017 - S.O. 81 - dated
31-10-2019
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Jharkhand SGST
Screening committee on anti profiteering
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18/2019 - No. KGST.CR.01/2017-18 - dated
11-10-2019
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Karnataka SGST
Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020
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17/2019 - No. KGST.CR.01/2017-18 - dated
11-10-2019
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Karnataka SGST
Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020
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G.O. (Ms) No. 167 - dated
22-10-2019
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Tamil Nadu SGST
Amendment in Notification No. II(2)/CTR/301(f-2)/2019, dated the 23rd April, 2019
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G.O. (Ms) No. 163 - dated
11-10-2019
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Tamil Nadu SGST
Tamil Nadu Goods and Services Tax (Sixth Amendment) Rules, 2019.
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G.O. (Ms) No. 162 - dated
11-10-2019
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Tamil Nadu SGST
Filing of annual return for the Financial Years 2017-2018 and 2018-2019 optional for small taxpayers with aggregate turnover less than ₹ 2 crores
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G.O. (Ms) No. 161 - dated
11-10-2019
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Tamil Nadu SGST
Return filing procedure for registered persons having aggregate turnover of upto 1.5 crore rupees
Income Tax
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95/2019 - dated
6-11-2019
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IT
Income-tax (12th Amendment) Rules, 2019
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Detention Order - invalid E-way bill - vehicle was plying in the wrong direction - prima facie there appears to be a justification for the detention of the vehicle - however, there was no opportunity granted to the petitioner to rebut the inferences drawn by the authorities - Matter placed before the adjudicating authority.
Income Tax
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Power to withhold refund in certain cases u/s 241A - merely because a notice has been issued under section 143(2), it is not a sufficient ground to withhold refund under section 241A and the order denying refund on this ground alone would be laconic.
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TDS u/s 194J - whether modeling can be treated as 'acting' - While 'modeling' is aimed at display of merchandise, the 'acting' is defined as ‘to act in play or film’ www.freedictionaty.com) i.e. to portray a role authored by a story-writer with different purposes and objects and certainly not to displace the merchandize to boost the sales of a manufacturer or a trader of the product or services. - No TDS liability u/s 194J
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LTCG - Deduction u/s. 54 - purchase of residential property - making an application for allotment of a house with West Bengal Housing Board or any other Housing Board is not sufficient to claim exemption u/s.54
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Capital gain computation - transferred or property right - assessee has not incurred any expense as Cost of acquisition - the assessee has not earned any profit because the cost of acquisition as on 30.04.2005 should be the market value of the entitlement as on 30.04.2005 because the same is the value in the books of accounts as on 30.04.2005 as the date of retirement - Additions deleted.
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Revision u/s 263 - deduction u/s 80IB(10) - Though, it may be a fact that in course of assessment proceedings, the assessee might have furnish certain information/details in support of its claim however, the Assessing Officer is required to enquire into and actually verify assessee’s claim to reach a logical conclusion. - Revision upheld.
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LTCG - Deduction u/s 54 - purchase of residential house - once the assessee has brought on record the evidence to show that the house was in existence and the plot of land was purchased vide registered sale deed, then in the absence of contrary material to disprove the said fact, the claim of the assessee cannot be denied merely on suspicion and conjectures.
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Registration u/s 12AA - no relevant document was produced before the Commissioner (Exemption) to prove that the assessee is involved in charitable activities in consonance to the object for which it was established. - Tribunal has failed to exercise its jurisdiction, as is vested
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Addition u/s 68 - unexplained cash credit - The stand of the Appellant that since the alleged transaction is made through normal banking channels, it is sufficient to prove the genuineness of the transaction and the credit worthiness of the creditor, cannot be accepted.
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Reopening of assessment u/s 147 - The appellant has himself replied and participated in the impugned proceedings. The reasons were also communicated to the appellant to which the appellant has also replied. - Therefore, it is not open for the appellant to question the same to scuttle the proceedings initiated under the Act.
Customs
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Levy of Anti-Dumping duty - import by SEZ unit to DTA, after manufacturing activity - import of various types of Narrow Woven Fastening Tape Hook and Loop - Revenue has not advanced any arguments to show that the resultant product i.e. Velcro is not known differently in the market than the running length tapes imported by the respondents. - Demand set aside.
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Confiscation - illegal removal of goods from in factory bonded private warehouse - if they have been removed from the customs bonded warehouse clandestinely without filing ex-bond bill of entry and without paying the customs duty. In such a case, if the goods are available outside the bonded warehouse, they are liable for confiscation.
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STPI units - Unauthorised procurement of inputs - The procurement of the goods free of duty, were on the basis of the said certificates issued by the authorities and does not reflect upon mala fide or the assessee so as to invoke any penal action against them - Penalties set aside.
Corporate Law
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Disqualification of Directors - defaulting directors - Section 164(2) of the Act operates prospectively i.e. w.e.f 7.5.2018. - However, such prospective operation would entail taking into account failure to file the financial statements pertaining to the financial year ending 31.03.2014 on or before 30.10.2014. This Court is of the view that the taking into account such default does not amount to a retrospective application of Section 164 of the Act and the contentions advanced by the petitioners in this regard, are unmerited.
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Disqualification of Directors - defaulting directors - The amendment so introduced also does not empower the Central Government to cancel or deactivate the DIN of disqualified directors - the respondents are directed to reactivate the DIN and DSC of the petitioners.
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Oppression and mismanagement - the Company has not undertaken any substantial business from the date of its incorporation and there is a need to put it in motion, the reason for which the Company was envisaged. The dispute between the parties has paralysed the Administration and ordinary business of the Company.
Indian Laws
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Disqualification of Directors - harmoniously read, the interplay between Section 164 and 167 is that the office of a director of a company will not automatically fall vacant if a director of a company incurs any of the disqualifications enumerated in Section 164(2) of the Act of 2013.
IBC
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Attachment of personal assets - it is alleged that respondents are responsible for defrauding the creditors - The findings given in Forensic Audit Report only prima established the fraudulent transactions, in question. Therefore, it is necessary to conduct further investigation by SFIO in the affairs of Company
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Jurisdiction - power of Adjudicating Authority as well as of NCLT - Merely because additional power of Adjudicating Authority has been vested, the power of the National Company Law Tribunal under the Companies Act, 2013 does not stand extinguished.
Service Tax
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The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded. As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits - Demand set aside.
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Club and Association Service for the purpose of treatment of effluent - it is clear that the project was financially assisted by the State Government of Gujarat - The Service is clearly exempted.
Central Excise
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Refund of Central Excise Duty - SEZ units - There is no mechanism under SEZ Rules for claiming rebate/refund on goods procured from the DTA. - In the absence of any specific provision for exemption by way of refund in the SEZ Rules or under Central Excise Rules, the appellant is not entitled to refund of the duty
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CENVAT Credit - use of capital goods exclusively in the manufacture of exempted goods - Rule 6(4) was amended - Since the amendment is by way of substitution, it will be applicable from the retrospective effect.
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Classification of goods - manufacture of PVC pipes - As the PVC pipes manufactured and cleared by the appellants are evidently shows to be for irrigational purposes in agriculture/horticulture, the classification of the same is correctly done under CETH 8424 9000 and not under CETH 39.17
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CENVAT Credit - transfer of credits from one unit to another - The satisfaction of AC or DC or otherwise should also be based on same cogent reasons - when the entire business itself has been transferred at the very same premises to the successor entity, there are no reasons or doubts - Demand set aside.
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Clandestine removal - Gutkha - There has to be clinching evidence in the matter of purchase of raw material, use of electricity, removal of final product and its sale in order to prove that the material was removed in a clandestine manner with a view to evade duty.
VAT
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Without having itself seen the books, the latter observation made by the Tribunal cannot be sustained. Being a fact finding authority and the rejection of books of account being an issue raised before it, Tribunal was bound to return a proper finding upon appraisal of material and evidence.
Case Laws:
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GST
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2019 (11) TMI 344
Contempt application - power of levy advertisement tax post GST - bye-laws were notified in the Official Gazette and were enforced w.e.f. 6.1.2018 - vires of the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017 - submission is that the aforesaid bye-laws were notified in the Official Gazette and were enforced w.e.f. 6.1.2018 but on the said date the Municipal Corporation had no authority in law to impose any advertisement tax - HELD THAT:- The Court has proceeded to examine the record in question and from perusal of record it is apparent that now fresh cause of action has arises in the present matter and in case the order dated 1.11.2019 is being flouted by the opposite party, the applicants would be at liberty to invoke the remedy as is available to them in law. Contempt application disposed off.
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2019 (11) TMI 343
Detention Order - invalid E-way bill - vehicle was plying in the wrong direction - demand of tax and penalty without affording the petitioner an opportunity of being heard - principles of Natural Justice - CGST and SGST Acts - HELD THAT:- At the time of detention the driver of the vehicle did not produce any e-Way Bill, either manual or electronic, corresponding to the goods that were carried on in the vehicle. It is further pointed out that a statement was given by the driver before the authorities wherein he had stated that there was no e-Way Bill with him. Under the said circumstances, prima facie there appears to be a justification for the detention of the vehicle. Further, there was no opportunity granted to the petitioner to rebut the inferences drawn by the authorities while detaining the goods, through a hearing afforded to the petitioner before passing Ext.P11 order confirming the demand of tax and penalty on the petitioner. The 1st respondent is directed to pass fresh orders in lieu of Ext.P11 within a week from the date of receipt of a copy of this judgment, after hearing the petitioner - petition allowed by way of remand.
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Income Tax
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2019 (11) TMI 345
Validity of reopening of assessment u/s 147 - Bogus purchases - HELD THAT:- The reasons for non-verifiable of the purchases made by the assessee due to non filing of the return of income as stated by the AO is absolutely incorrect and wrong and contrary to the record when the assessee has filed the return of income electronically on 29.10.2007. This fact was also subsequently accepted by the AO that the assessee filed the return of income under section 139(1). The second aspect of the reasons that the assessee has made bogus purchases is also not based on any enquiry or verification of record by the AO but this is simply reproduction of information received from the Investigation Wing. The said information is also incomplete as regards the details of the purchases and the parties from whom such purchases were made by the assessee. Thus the reasons recorded by the AO manifest that there is no application of mind and the averments as recorded in the reasons are very vague and general and rather inconsistent with the facts available on record so far as the filing of return of income by the assessee. The formation of belief on such incorrect and vague reasons would lead the reopening of the assessment as invalid. Making the wrong statement in the reasons recorded and ignoring the relevant and correct facts available on record established that the AO has not applied his independent mind while forming the opinion. The Chandigarh Bench of the Tribunal in case of Baba Kartar Singh Dukki Educational Trust vs. ITO . [ 2015 (5) TMI 1200 - ITAT CHANDIGARH] has also considered an identical issue and held that the AO proceeded for reopening of the assessment for non-existent and factually incorrect reasons and has not applied his mind. When the AO has initiated the proceedings on the basis of non-existent and factually incorrect facts and reasons without application of mind and without verification of the facts available on record, then the proceedings initiated under section 147/148 are not sustainable in law. The same are set aside and consequential reassessment order is quashed.
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2019 (11) TMI 342
Disallowance of contribution made to the Employees Provident Fund Trust - legitimate business expenditure - HELD THAT:- Principal Commissioner of Income Tax -07 vs. Punjab and Sind Bank [ 2017 (9) TMI 1528 - DELHI HIGH COURT] although contributions to the pension funds may not be allowable under Section 36 (1) (iv) of the Act, the same is allowable under Section 37 Disallowance of expenditure u/s 14A - HELD THAT:- As decided in Maxopp Investment Ltd vs. CIT [ 2018 (3) TMI 805 - SUPREME COURT] whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. The Tribunal has held in favour of the respondent assessee that it had earned the revenue on the shares held as stock in trade only by a quirk of fate.
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2019 (11) TMI 341
TP Adjustment - adjustment on account of overdue receivables - HELD THAT:- No merit in the present appeal. This is for the reason that the perusal of the transactions undertaken by the assessee with the associated enterprise in respect whereof the TPO sought to make an addition towards interest on delayed payment, shows that no pattern is discernible which would suggest any arrangement or understanding between the assessee and its associated enterprise, that would qualify the said transaction as an international transaction. In fact, the pattern which emerges from several invoices examined by the TPO, is that more often than not, the payment was made by the associated enterprise even before the expiry of the credit period of thirty days. Thus, on facts, there was no basis to make the said addition. The grounds of challenge urged are all factual.
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2019 (11) TMI 340
ower to withhold refund in certain cases u/s 241A - Claim of Interest u/s 244A - adjust the outstanding amount of TDS and GST payable by Petitioner Company against the pending refund amount without charging of any interest for the delayed payments - HELD THAT:- The entire purpose of Section 241A would be negated, in case the AO was to construe the said provision in the manner he has sought to do. It would be wholly unjust and inequitable for the AO to withhold the refund, by citing the reason that the scrutiny notice has been issued. Such an interpretation of the provision would be completely contrary to the intent of the legislature. The AO has been completely swayed by the fact that since the case of the assessee has been selected for scrutiny assessment, he is justified to withhold the refund of tax. The power of the AO has been outlined and defined in terms of the Section 241A and he must proceed giving due regard to the fact that the refund has been determined. The fact that notice under section 143(2) has been issued, would obviously be a relevant factor, but that cannot be used to ritualistically deny refunds. AO is required to apply its mind and evaluate all the relevant factors before deciding the request for refund of tax. Such an exercise cannot be treated to be an empty formality and requires the AO to take into consideration all the relevant factors. The relevant factors, to state a few would be the prima facie view on the grounds for the issuance of notice under section 143(2); the amount of tax liability that the scrutiny assessment may eventually result in vis-a-vis the amount of tax refund due to the assessee; the creditworthiness or financial standing of the assessee, and all factors which address the concern of recovery of revenue in doubtful cases. Therefore, merely because a notice has been issued under section 143(2), it is not a sufficient ground to withhold refund under section 241A and the order denying refund on this ground alone would be laconic. Additionally, the reasons which are to be recorded in writing have to also be approved by the Principal Commissioner, or Commissioner, as the case may be and this should be done objectively. The entire exercise under Section 241A has not been correctly undertaken by the respondents. The petition is disposed of and the directive portion of the judgment as recorded in the order dated as dictated in the open Court must be duly adhered by the parties.
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2019 (11) TMI 339
Exemption u/s 11 and 12 - principle of mutuality - income of the assessee is received from members as well as non members - Whether assessee society will be assessed as normal AOP - HELD THAT:- The differential membership subscription is only fixed to recover higher subscription from those having larger turnover, while seeking to support fledglings/new entrants. The membership based on the turnover, carry differential voting rights. However, uniform service is provided by the assessee to all categories of members, irrespective of the membership fee paid. No specific services are being provided to members in lieu of payment of higher membership subscription charges. During the relevant previous year, the assessee received gross amount of ₹ 20.84 crores on account of annual membership subscription from members. In the return of income, the assessee, claimed exemption in respect of an amount on the principle of mutuality, arrived at, after reducing/allocating expenses incurred during the year out of gross membership subscription receipts. As submitted that on the issue of exemption claimed by the assessee on the basis of principles of mutuality have been decided by the CIT(A) in favour of the assessee for the A.Y 2009-10. CIT(A) reproduced the submissions of the assessee and order of Ld. CIT(A) for AY. 2009-10 in the order and following the same, deleted the entire addition observing assessee has also shown the amount received from non-members as income. The exemption has been claimed on income which is received from the members of the association on the principle of mutuality. It is also seen that the indirect expense has been duly apportioned and the services provided to members are same irrespective of the membership fees voting rights being different. The assessee has also relied on various case laws on the principle of mutuality. After considering all the facts and circumstances of the case which are same as that of A.Y. 2009-10 and A.Y. 2010- 11 benefit on principle of mutuality be granted to the assessee on membership fees from members only Further due credit to TDS Advance Tax may be given after verification - Decided against revenue
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2019 (11) TMI 338
Assessment u/s 153C - Additions u/s 69C - pertaining to construction of house belonging to HUF - HELD THAT:- It is an admitted fact that search was conducted in the case of assessee and no incriminating material was found against the assessee. However, some documents were found in search in the case of Sri L.K. Yadav. A.O. on the basis of those papers recovered from third party inferred that assessee has made payments by cheque and cash for construction of house. Copy of the seized paper is available on record which contains that claimed but not paid . There is no other facts stated in the seized document, therefore, it is clear that no incriminating material was found and seized during the course of search from the possession of assessee despite search was conducted in the case of assessee also The Judgment in the case of Meeta Gutgutia [ 2017 (5) TMI 1224 - DELHI HIGH COURT] have been confirmed by the Hon ble Supreme Court by dismissing the SLP of the Department [ 2018 (7) TMI 569 - SC ORDER] . In view of the above facts, we are fo the view that the issue is covered by the Judgments of Hon ble Delhi High Court (supra). Therefore, no additions could be made against the assessee. In this view of the matter, we set aside the Orders of the authorities below and delete both the additions in both the assessment years. Appeals of Assessee are allowed.
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2019 (11) TMI 337
Revision u/s 263 - disallowance u/s 14A computation - doctrine of merger - CIT (A) deleted this disallowance and the appeal of the department against the order of the Ld. CIT (A) before this Tribunal was also dismissed [2017 (2) TMI 1254 - ITAT DELHI ] - HELD THAT:- On the factual matrix of the case, the doctrine of merger will apply. The logic underlying the doctrine of merger is that there cannot be more than one decree or operative order governing the same subject-matter at a given point of time. The question before the Hon ble Madhya Pradesh High Court in NARPAT SINGH MALKHAN SINGH [ 1980 (7) TMI 66 - MADHYA PRADESH HIGH COURT was whether the Ld. CIT, while exercising power u/s 263, could set aside the assessment order after the appellate order was made by the AAC. The Division Bench took the view that the Ld. CIT could not have invoked power u/s 263 as the ITO s order had merged with the order of the AAC. In the present appeal before us, going by the doctrine of merger, since the Ld. CIT (A) had already decided the issue in favour of the assessee, the Ld. Pr. CIT could not have exercised his revisionary powers u/s 263 of the Act. If the department was aggrieved by the order of the Tribunal deleting the disallowance, proper recourse would have been to approach the higher forum. Therefore, we are of the considered opinion that the jurisdiction u/s 263 of the Act could not have been invoked by the Pr. CIT in this case. Accordingly we quash the assumption of jurisdiction u/s 263 of the Act by the Ld. Pr. CIT. We have not examined other merits of the matter. Appeal filed by the assessee is allowed.
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2019 (11) TMI 336
TDS u/s 194J - payment made to Matrix India on behalf of Ms. R.K. Kaif - HELD THAT:- Admittedly, the services rendered have nothing to do with the production of a cinematographic film. Further, before parting with the order, it is pertinent to mention that a person can have many skills i.e acting skills in Films, modeling skills for display of merchandise, singing skills etc. and such person can make earning out of such skills. It is not that total earning of that person in lieu of services rendered must attract the provisions of section 194J The expressions services rendered used in the said Explanation assume significance and therefore, the taxable receipts u/s 194J of the Act are services-specific and not person specific. In the instant case, the payments are payable for the 'services of modeling .and it is unconnected .with the production of cinematographic film. While 'modeling' is aimed at display of merchandise, the 'acting' is defined as to act in play or film www.freedictionaty.com) i.e. to portray a role authored by a story-writer with different purposes and objects and certainly not to displace the merchandize to boost the sales of a manufacturer or a trader of the product or services. Therefore, the impugned payments made by the assessee to Matrix India on behalf of Ms Katrina Kaif do not attract the provisions of section 194J TDS not deductible from payments made to custom house agents on account of reimbursement of clearing and forwarding - CIT (Appeals) giving relief to the assessee by holding that TDS is not deductible on supply of Cameras manufactured by Hical Magnetic Private Limited by treating the same as contract for sale - HELD THAT:- As decided in own case [ 2013 (5) TMI 154 - ITAT MUMBAI] the procurement of the raw material is also arranged by the assessee as per the tripartite agreement Thus, it is nothing but a job work contract under these two agreements. Further the assessee is paying the entire cost in advance being working capital and compensation with the margin on cost of raw material and labor at the rate of ₹ 8.04 per Camera to Hical which is nothing hut the job work charges. The price arrangement as agreed between the parties clearly shows that it is a job work of assembling of cameras by Hical Magnetic Pvt. Ltd The Hical Magnetic Pvt. Ltd. in fact, receiving only the Iabor charges and mark up of ₹ 8.04 per camera which is subjected to TDS being job work charges paid by assesses. Therefore, it is not the entire payment to the Hical Magnetic Pvt. Ltd. but only the labor charges of ₹ 20.84 and margin of ₹ 5.04 total amounting to ₹ 20.8H per camera towards the assembling job is subjected to TDS. Accordingly, we set aside the impugned order of CIT[A) on this issue and restore the order of Assessing Officer to the extent of applicability of section 194C only on the payment of ₹ 2Q.88 per camera. TDS deductible on supply of batteries manufactured by power cell batteries India Ltd. by treating the same as contract for sale - HELD THAT:- It transpires that this issue stands covered in favour of the assessee by the aforesaid Tribunal order for Assessment Year 2009 10, wherein the Tribunal has decided the issue in favour of the assessee by dealing with the same at paragraphs 7 and 8 of the said order. The Tribunal agreed with the learned CIT(A) that the agreement in this regard was not job work agreement but it was simply an agreement for purchase of a specific battery with the name of the assessee printed on the cell. The Tribunal had followed the decision of Hon ble jurisdictional High Court in the case of CIT vs. Glenmark Pharmaceuticals Ltd. [ 2010 (3) TMI 289 - BOMBAY HIGH COURT] . Respectfully following the precedent as above, we uphold the order of learned Commissioner of Income Tax (Appeals) in this regard and decide the issue against the Revenue.
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2019 (11) TMI 335
Revision u/s 263 - as per CIT-E AO has omitted to consider valuation made by the DVO for capital gains, hostel expenses and bonus to the staff and thus set aside the order of the Assessing Officer and directed him to redo the assessment in accordance with law - HELD THAT:- Valuation made by the DVO for capital gains - During the appeal hearing the ld.DR could not submit any reason for making reference to the DVO. Section 50C provides for reference to valuation of the property in a situation where the assessee objects for adoption of 50C value. In the instant case the department has not made out case that the sale consideration was less than the value determined by the Stamps Registration Authorities. From the sale deed it is found that the sale consideration declared by the assessee is equivalent to the value of Stamps and Registration Authorities and thus there is no case for reference to the DVO. Since the Assessing Officer has considered all the facts and accepted the sale consideration of ₹ 2,55,94,000/- which is on par with the value of SRO there is no error in the order passed by the Assessing Officer, hence, there is no case for revision u/sec. 263 Disallowance of hostel expenses and bonus to staff - assessee had accepted the disallowance in view of the fact that even though the expenses are disallowed, the increases in income, is entitled for exemption u/sec. 10(23C)(iiiad) of the Act and does not result into taxable income - HELD THAT:- Assessing Officer has called for various information as per the questionnaire issued during the assessment proceedings. The assessee s gross receipts did not exceed the prescribed limit as mentioned in section 10(23C) of the act, hence, granting of exemption u/sec. 10(23C) is not required in assessee s case. There is no discussion with regard to the disallowance of expenses in the assessment order. In the instant case, the assessee contended that increased income due to disallowance of expenses also gets exemption and net the result would be zero taxable income. As per the act, the assessee is entitled for exemption of income u/sec. 10(23)(iiiad) of the Act. Thus, the assessee is also eligible for exemption of the increased income since, it is carrying on educational activity. During the appeal hearing, ld.AR has submitted that the assessee had explained before the Assessing Officer that the disallowance relating to hostel expenses, bonus to the staff though increases the income, the same was exempt u/sec. 10(23C)(iiiad) of the Act which the Assessing Officer had accepted. Therefore, there is no error in the order passed by the Assessing Officer and we are of the view that the ld.CIT(E) has erroneously assumed the jurisdiction u/sec. 263 Even if it is presume for the sake of argument that the rental income, hostel expenses and bonus needs to be added to the total income since the assessee stated to have agreed before the AO, the assessee had returned the loss of ₹ 21,87,886/- against which the AO made the assessment on total income of ₹ 30,51,396/- relating to the movable assets, without considering the loss declared by the assessee in the return of income. The assessee is entitled for set off the loss against the additions made in the scrutiny assessment - Against which the Assessing Officer computed the total income of ₹ 30,51,400/- without allowing the set off the current year loss. The assessed income was more than the correct income of the assessee. Thus, there is no under assessment which caused prejudice to the revenue and hence, there is no case for revision u/sec. 263 - Decided in favour of assessee
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2019 (11) TMI 334
Reopening of assessment u/s 147 - addition u/s 68 - borrowed satisfaction - change of opinion after four years - reopening on the basis of the findings in the search action u/s. 132 in the case of Praveen Kumar Jain group, wherein evidence was gathered that a large number of entitites managed and controlled by the Jain Group were engaged in providing accommodation entries and the assessee was a beneficiary in as much as unsecured loans - HELD THAT:- AO has made an addition as unexplained cash credit u/s. 68 and simultaneously disallowed interest exclusively on the basis of the information received from the Investigation Wing of the Department that the assessee, through M/s. Kunal Gems, a concern controlled by Shri Praveen Kumar Jain had taken an accommodation entry. Although, the assessee had filed before the AO confirmation of loan of Kunal Gems and bank statements showing loan and repayment, the AO did not examine it. We are of the considered view that the AO should have verified the genuineness of transaction by starting with the confirmation of loan from Kunal Gems filed by the assessee and the bank statements showing loan and repayment. He has not done so. Also we find that the ld. CIT(A) confirmed the addition made by the AO after examining (i)the statement recorded on oath u/s.132(4) dated 01.10.2013 of Shri Praveen Kumar Jain, (ii)the statement of Shri Nilesh Parmar, proprietor of M/s. Mohit International recorded u/s.131 dated 02.10.2013, (iii) note on the findings of search action u/s. 132 by the Investigation Wing of the Department in the case of Shri Praveen Kumar Jain group. The ld. CIT(A) could have remanded the matter to the AO u/s. 250(4) of the Act to make further enquiry before disposing of the appeal. To arrive at a finding without any verification of the transactions, would lead anyone to the realm of pure conjectures. The reliance placed by the ld. DR on the decision in McDowell Co. Ltd [ 1985 (4) TMI 64 - SUPREME COURT] is misplaced as in the instant case the AO has not done any enquiry. It is well-settled that u/s.68, the primary onus as to the receipt of the amount is on the assessee to show the identity of the lenders, their creditworthiness and the genuineness of the transactions. Only where the assessee discharges the burden prima facie, does the burden shift on to the Revenue. In the instant case, the assessee has discharged the burden prima facie by filing the confirmation of loan of Kunal Gems and bank statements showing loan and repayment. An explanation, prima facie reasonable cannot be rejected on capricious or arbitrary grounds or on mere suspicion or on imaginary or irrelevant grounds. We set aside the order of the ld. CIT(A) and delete the addition made by the AO u/s. 68 of the Act and disallowance of interest - Decided in favour of assessee.
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2019 (11) TMI 333
TP Adjustment - Advertising, Marketing and Promotional ( AMP ) Expenses addition - AMP expenditure as international transactions - HELD THAT:- The assessee who is in the business of distribution of goods manufactured by its foreign controlling parent and did not own any trademark or brand, had performed significant functions like brand development, market development, marketing customer support, technical and administrative support on behalf of its AEs in India bearing cost, investing huge sum and using its skilled manpower and time. These facts clearly prove that the assessee had developed marketing intangible for brand owned and goods manufactured by its foreign AEs by bearing significant cost and risk. Accordingly, the assessee was entitled to get reimbursement of the cost incurred by it and was entitled to retain intangible income in India. All these contentions of both the Ld. AR and Ld. DR has not been taken into account by the TPO/AO which needs to be verified by the Revenue. Therefore, it will be appropriate to remand back this entire issue to the file of the TPO/AO for adjudication on merit as well as in light of the decisions of the Hon ble High Court and the Special Bench in case of L G Electronics [ 2013 (6) TMI 217 - ITAT DELHI] Addition in respect of Software Development Services segment (SDS) - comparable selection - Application of various filters - HELD THAT: - The assessee did not dispute the profit margin in case of on-site work which is normally low as compared to offshore work. In the present year also the TPO demonstrated with facts and figures that there is considerable difference between the average rate per hour in the case of offshore projects vis- -vis on site projects. The TPO was right in applying the on-site revenue s filter considering the companies generating more than 75% of their export revenue s from onsite operation. Therefore, this filter was rightly applied. As regards to filter relating to employee cost more than 25% of sales and companies falling less than this threshold have been excluded, the said issue is held in favour of the assessee in assessee s own case for A.Y. 2007-08 wherein it has been held that the employee cost/sales of the assessee is 65% and hence a range of 50% to 80% should be applied instead of the threshold limit of 25% as applied by the TPO - this filter is wrongly applied by the Revenue. Hence we direct the TPO/AO to apply a range of 30% to 60% as it will be most appropriate ratio for the SDS segment. The companies having diminishing revenue or consistent losses are definitely cannot be compared with the assessee company. Thus, this filter was rightly rejected. Related party transactions (both income and expenditure) being more than 25% of sales - We direct the TPO to take into consideration only those comparables where related party transactions are to the extent of 15% because it is not the case of revenue that by applying the threshold limit of 15%, it will not get sufficient number of comparables. Filter relating to Research and Development Sales which is less than/equivalent to 3% ( =3%) were accepted by the assessee Advertisement, marketing and distribution cost less than/equivalent to ( =) 3% were accepted the Tribunal partly held in favour of the assessee in assessee s own case for A.Y. 2007-08 and held that application of this filter will have to be seen on a case by case basis. Denial of economic adjustment for difference in working capital - HELD THAT:- It is pertinent to note that the TPO has given the benefit of working capital adjustment in the previous year and there is no change in the factual aspect in the present assessment year as well. Inappropriate comparable companies selected by the TPO/AO in respect of Software Development Services Segment - Companies functionality dissimilar with that of assessee's Software Development Services Segment need to be deselected from final list. Error in margin computation - TPO while computing the adjustment amount in SDS segment has incorrectly taken margin of Assessee as 5 10% instead of 8.22% - HELD THAT:- From the perusal of the records it can be seen that there is error in the margin computation which needs to be verified. Therefore, we remand back this issue to the file of the AO/TPO for verifying the said computation and quantifying the same correctly. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Adjustment made in respect of provision of Administrative support services and market support services segment (MSS) - HELD THAT:- We direct the TPO to take into consideration only those comparables where related party transactions are to the extent of 15% because it is not the case of revenue that by applying the threshold limit of 15%, it will not get sufficient number of comparables. Marketing Support Services Segment - Companies functionally dissimilar with that of assessee need to be deselected from final list. Denial of economic adjustment for difference in Risk profile - HELD THAT:- Computation of risk adjustment as per CAPM model by availing the services of technical experts. The experts of the field are to be appointed by both the sides to come to an acceptable conclusion Addition on account of corporate recharges and reimbursements paid in the nature of Intra Group services - HELD THAT:- From the perusal of the records it can be seen that the additional evidences filed before us and before the DRP has a relevance in deciding this issue. The TPO did not have these documentary evidences at the time of deciding, therefore, it will be appropriate to remand back this issue to the file of the TPO/AO for verifying these evidences and taking cognizance in respect of the claim made by the assessee on merit. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice Disallowance of provision of liquidated damages - HELD THAT:- Clause on liquidated damages clearly fixes amount of liquidated damages in delay and therefore liability of the Assessee to pay accrues immediately upon delay and such liability is fully ascertainable. Thus, provisions made in that respect is allowable Disallowance of capitalization of software purchases - Nature of expenses - HELD THAT:- DRP has not given any finding on this issue. It is the Assessee s case that these software expenses do not have a benefit of permanent or enduring nature and, therefore, are not a capital asset. These are only for updating and maintaining the existing software. It is pertinent to note that issue is identical. Therefore it will be appropriate to remand back this issue to the file of the TPO/AO Disallowance of deduction under section 10A/10B - Assessing Officer rejected this claim on the basis that revised CA certificate was not issued - HELD THAT:- AR submitted before us that in the return of income, the Assessee had also made suo-moto adjustment of ₹ 18.81 Crores on account of ALP for the software segment being lower than TP margin required as per law. Out of the said adjustment of ₹ 18.81 Crores, ₹ 10.16 Crores pertain to the 10A/10B units allocate in proportion to the turnover which is now reflected in the revised CA certificate. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer for verifying whether the claim of the assessee is proper or not and adjudicate the same on merit after considering the revised CA certificate. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice
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2019 (11) TMI 332
LTCG - Claiming exemption u/s. 54F - deduction allowed against the income from sale proceeds of the flat - income accrued to assessee on sale of flats - HELD THAT:- In the present case, the assessee has constructed 12 flats out of which 4 flats were sold in the assessment year 2013-14 and partial capital gain was accrued to the assessee during this period. From the table submitted by the assessee and not disputed by the department, it is clearly discernible that the assessee has incurred huge expenditure of ₹ 1,91,22,401/- and ₹ 1,92,80,023/- during financial year 2012-13 relevant to assessment year 2013-14 and obviously, this cost has been incurred by the assessee towards construction of flats, which were kept by him for his residential purposes and for claiming exemption u/s.54F. Therefore, no hesitation that the assessee is very much entitled for claiming exemption u/s.54F of income accrued to him on sale of flats during present assessment year 2012-13. Consequently, direct the AO to allow exemption u/s.54F of the Act to the assessee and recalculate the capital gain while giving appeal effect in pursuance to this order. Charging of interest u/s. 234A 234B - HELD THAT:- As find that Hon'ble Jharkhand High Court in the case of Ajay Prakash Verma Vs. ITO [ 2013 (1) TMI 140 - JHARKHAND HIGH COURT] has held that the revenue can levy the interest only on the total income declared in the return of income and not on the income. Therefore, the AO is directed to delete the interest levied u/s. 234A and 234B of the Act as the same has been charged on the assessed income.
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2019 (11) TMI 331
Penalty u/s 271(1)(c) - sundry creditors u/s 68 as alleged unexplained cash credit - HELD THAT:- After considering the submissions of both the parties and perusing the entire material available on record along with the orders of authorities below as well as the case relied upon by the assessee, we find in this case that the lower authorities have disallowed only sundry creditors for want of verification but the corresponding purchase, sales and net profit declared by the assessee have been accepted by the authorities below. Our this view is supported by the decision of coordinate bench of the Tribunal in the case of M/s Gulf Steel Minerals [ 2018 (5) TMI 627 - ITAT RANCHI] AO is wrong in making the impugned addition on account of sundry creditor, which are related to purchases and the same also accepted by the AO as genuine. Without rejecting the purchases, the sundry creditors cannot be treated as income of assessee. - Decided in favour of assessee.
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2019 (11) TMI 330
LTCG - Claim of exemption u/s. 54 - HELD THAT:- The certificate issued by the Bank and reproduced verbatim by the CIT(A) at page 3 is self-contradictory, which reveals that the amount was deposited in SB A/c and then it was transferred to fixed deposit account No.31117783705 but no proof or account detail or statement of account was filed by the assessee before the authorities showing that fixed deposit was in the capital gain scheme, which could enable the assessee for making the claim of exemption u/s.54 of the Act. However, it is not disputed that the amount was initially parked in the capital gains account and later on the same was transferred to fixed deposit account. No details of the same were furnished before us at the time of hearing. Hence, we set aside the addition of ₹ 26 lakhs to the file of the Assessing Officer to verify once again whether the deposit of money of ₹ 26 lakhs in bank account fulfil the requirement of section 54 of the Act.Accordingly, this part of ground is restored to the file of the AO for verification and decision afresh about claim of exemption u/s.54 of the Act. So far as remaining amount of ₹ 3 lakhs is concerned, undisputedly, the assessee issued a cheque to West Bengal Housing Board alongwith application for allotment of house, but the same was not allowed and no allotment was made to the assessee. In our humble understanding, the provisions of section 54 of the Act making an application for allotment of a house with West Bengal Housing Board or any other Housing Board is not sufficient to claim exemption u/s.54 of the Act. Therefore, the authorities below are right in dismissing the claim of exemption u/s.54 of the Act pertaining to claim of ₹ 3 lakhs. Hence, Ground No.1(B) is dismissed. Addition of foreign trip - HELD THAT:- Neither before the lower authorities nor before this Bench, the assessee has filed any cogent and reliable evidence to show that the expenses incurred in Vietnam and UAE tour were borne by the host The CBDT Circular No.5 /2012 dated 1.8.2012 clearly provides that the expenses incurred in providing freebees to medical practitioner by Pharmaceutical and allied health sector industries and inadmissible expenses. In the present case, admittedly, the assessee made foreign tour to Vietnam and UAE during the relevant financial period and do not show or procure any expenses incurred towards such foreign trips. Therefore, the authorities below were right in making addition u/s.69C of the Act treating the same as undisclosed expenditure of the assessee during the relevant financial period. Accordingly, Ground No.2 of appeal is dismissed. Addition of share of agricultural income - HELD THAT:- We find that similar agricultural income has been accepted by the department in assessment years 2005-06 to 2007-08, 2010-2011 and subsequent assessment year 2016-17. The departmental authorities have also not doubted the holding of agricultural land of 45 acres in the name of the father of the assessee and only disbelieved the income towards agricultural income as the same was not reflected in the bank account of the assessee. There may be various reasons to park the fund out of agricultural income in the bank or in hand to meet further expenditure for this purpose. It is not the case of the revenue that similar amount of agricultural income should be reflected in the bank account to prove the agricultural income. There was no evidence to establish that the assessee has sold the agricultural land or that the assessee has stopped the agricultural operations. The Revenue has not placed on record any positive material to disbelieve the agricultural income claimed by the assessee, therefore the addition cannot be sustained. Hence, we set aside the orders of lower authorities and direct the Assessing officer to delete the addition - Appeal of the assessee is partly allowed.
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2019 (11) TMI 329
Capital gain computation - Cost of acquisition - what is the transferred is the property right ? - Capital asset u/s 2(14) - Assessee retired from the firm and as per retirement deed he is entitled to receive certain amount in cash or certain share in property to be constructed by the firm - cost of acquisition shall be the market value as on 30.04.2005 or ₹Nil as adopted by the AO - assessee contended that the cost of acquisition shall be the market value of the property when first, the property was owned by the assessee since in the present case, the property was first owned by the assessee on 30.04.2005, the prevailing market rate as on 30.04.2005 will remain same - HELD THAT:- What is the transferred is the property right therefore, the same is capital asset within the meaning of section 2(14) of the Act. In our view such right has been sold by the partnership firm M/s Keshav Co. and therefore, the same is a transfer within the meaning of section 2(47) of the Act and therefore capital asset. Even if the market value as on 30.04.2005 is not taken as cost of acquisition then the cost of acquisition remains unconclusive and cannot be determined and once the same cannot be determined, the decision of Hon ble Supreme Court in the case of B.C. Srinivasa Setty [ 1981 (2) TMI 1 - SUPREME COURT] comes into play and computation provision fails. In any eventuality, the assessee has not earned any profit because the cost of acquisition as on 30.04.2005 should be the market value of the entitlement as on 30.04.2005 because the same is the value in the books of accounts as on 30.04.2005 at ₹17,22,47,975/- as the date of retirement. Hence, in our view, the CIT(A) has rightly deleted the addition and we confirm the same. The appeal of Revenue is dismissed.
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2019 (11) TMI 328
Allowance of deduction u/s 10B - non reduction therefrom the deduction claimed u/s 35(2AB) - HELD THAT:- As rightly observed by the Commissioner (Appeal), the doubt raised by the Assessing Officer was on account of factual misconception that the EOU was approved on 26.02.2010. On the contrary, the material on record clearly demonstrates that the EOU was approved on 27.02.2007 and the approval was ratified by the Board of Approval on 14th January, 2011. Thus the doubt raised by the AO also stands clarified. In so far as the objection raised by the Revenue relating to non reduction of expenses claimed under section 35 (2AB) of the Act, it is observed, in paragraph 5.4.11 of his order learned Commissioner (Appeal) has recorded a factual finding that after verifying the details furnished by the assessee it was found that expenses claimed under section 35(2AB) were reduced while computing deduction 10B thereby, requiring no further adjustment. DR has not brought any material on record to controvert the aforesaid factual finding In view of the above said we do not find any reason to interfere with the decision of Commissioner (Appeals) on this issue. The ground raised being devoid of merit is dismissed. Addition made to closing inventory - HELD THAT:- Since, assessee s claim of write off has been fully allowed in A.Y. 2009 10, the relief granted in the impugned assessment year has to be withdrawn. Learned Departmental Representative agreed with the aforesaid submission of learned Authorised Representative. Having considered rival submissions, we find that assessee s claim of write off of inventories amounting to ₹ 14,40,81,661/ stands allowed fully in A.Y. 2009 10 by the decision of the Tribunal, as referred to above. Thus, the additional relief granted to the assessee in the impugned assessment year has to be withdrawn. Therefore, the decision of learned Commissioner (Appeals) on the issue is reversed. Ground raised is allowed.
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2019 (11) TMI 327
Penalty u/s 271AAB - whether the penalty levied by the AO under section 271AAB is valid as the initiation of penalty was under section 271(1)(c) of the Act by issuance of notice under section 274 read with section 271(1)(c) dated 30.03.2015 - HELD THAT:- From the penalty order or the order of CIT(A), it is not coming out that the alleged undisclosed income is false claim of deduction or claim of income is false or claim of expenditure is false. The definition provided in section 271AAB under Explanation (c) of undisclosed income sub-clause (ii) clarifies that any income of the specified previous year represented either wholly or partly by any entry represented in respect of expense recorded in the books of accounts maintained in the normal course of business should found to be false or would not have been found to be so had the search not being conducted. We noted that the aforesaid expenses have not been found to be false or it is not a case of the Revenue that such expenses are not allowable under the provisions of the Act. Here the simplicitor case is that the assessee during the course of search in the statement recorded under section 132(4) of the Act admitted this to be the income to avoid litigation and to buy peace of mind. It is good piece of evidence for making assessment but not for levy of penalty under section 271AAB of the Act because for levy of penalty falsity of the expense is a pre-requisite under the provision. Hence, we delete the penalty and allow the appeal of the assessee on merits. Appeal of the assessee is allowed
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2019 (11) TMI 326
Revision u/s 263 - deduction u/s 80IB(10) - while completing the original assessment AO disallowed assessee s claim of deduction u/s 80IB(10) primarily on the reasoning that the approval for the housing project was granted by the local authority prior to 01/10/1998 - FAA while deciding the appeal of the assessee allowed the deduction while disposing of the revenues appeal against the aforesaid order of the learned Commissioner (Appeals), the Tribunal restored back the issue to AO for fresh adjudication - HELD THAT:- Tribunal has observed that from the appeal order passed under section 47 of the Maharashtra regional and city planning Act,1966, it appeared that there was some construction in the project prior to the amendment proposal in the development plan forwarded by the owner of the land which was rejected by CIDCO vide order dated 18/06/1998. The aforesaid observation of the Tribunal assumes considerable importance as the commencement of the housing project post or prior to 1/10/1998 will have a crucial bearing in deciding the legibility of the assessee in availing deduction under section 80IB(10) Actual date of completion of project is also very much relevant for fulfillment of the other condition of section 80IB(10). Though, it is the say of the assessee that both the aforesaid conditions have been fulfilled, however, reading of the impugned assessment order does not throw any clarity on the assessee s claim as the AO has not at all recorded any factual finding regarding fulfillment of basic conditions of section 80IB(10) of the Act. Assessment order passed is very cryptic and without any discussion. The Assessing Officer has passed the order in a summary manner allowing assessee s claim of deduction under section 80IB(10). Though AO has referred to certain submissions made by the assessee on different dates, however, he has not made any discussion about the enquiry/verification conducted by him in compliance to the specific directions of the Tribunal and what is the result of such enquiry/verification qua the issue of deduction claimed under section 80IB(10). Though, it may be a fact that in course of assessment proceedings, the assessee might have furnish certain information/details in support of its claim however, the Assessing Officer is required to enquire into and actually verify assessee s claim to reach a logical conclusion. On the face of specific direction by the Tribunal on the issue, the minimum the Assessing Officer was required to do was to record a factual finding regarding the actual commencement and completion of the housing project. Unfortunately, a reading of the impugned assessment order as well as the other material on record clearly reveal that the Assessing Officer has failed to make proper enquiry in compliance to the directions of the Tribunal before allowing assessee s claim. That being the case, the assessment order is erroneous and prejudicial to the interest of the revenue. Hence, in our opinion, learned PCIT was well within his jurisdiction in exercising power under section 263 to revise the assessment order. Therefore, we do not find any reason to interfere with the decision of learned PCIT in exercising power under section 263 of the Act. - Decided against assessee.
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2019 (11) TMI 325
Penalty u/s 271C - penalty barred by limitation u/s 275 - Challenging the levy of penalty u/s 271C for non failure to deduct tax u/s 194H - HELD THAT:- The assessee has raised legal issue before the Ld. CIT(A) also. However CIT(A) dismissed the grounds of assessee merely by observing that no such objection was raised at the level of the AO. We are of the opinion that this being a legal ground should have been adjudicated by CIT(A) after examining the relevant records. Since this issue has not been dealt by CIT(A) by passing a speaking order, we are of the considered view that this legal ground needs to be set aside to the file of CIT(A) for afresh adjudication in accordance with law, after providing reasonable opportunity of being heard to the assessee to place relevant material on record in support of its submissions. In the result common ground no.1 raised in three appeals for assessment years 2008-09, 2009-10 2010-11 are allowed for statistical purposes. Ground No.1 for statistical purposes for examining the limitation issue of the order passed u/s 271C of the Act r.w. section 275 of the Act. Dealing with the issue on merit relating as to whether the lower authorities were justified in levying penalty u/s 271C of the Act we find it merely academic deal with this issue at this stage.
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2019 (11) TMI 324
Estimation of income - Rejection of books of accounts - Gross profits in post survey period at 12.69% - survey u/s.133A survey u/s.133A - unaccounted stock of yarn and unexplained cash deposits in bank account were detected which were accepted by the assessee as his undisclosed income - HELD THAT:- We are in agreement with CIT(A) that the rejection of books of account is justified, as in spite of specifically requirement made during the course of remand proceedings, the assessee could not produce the stock register and production register nor the assessee has able to justify the fall in GP rate in comparison to presurvey period and preceding years also. We find that the GP disclose during the post-survey period is at ₹ 30,83,474/- on sales of ₹ 3,25,72,550/- which comes to 9.46% whereas GP during a pre-survey period is 12.69% and GP for A.Y. 2007-08 is 10.09% and A.Y. 2008-09 is 10.00%. Therefore, it would be reasonable and fair and just to estimate the average GP rate from assessment year 2007-08 to pre-survey period which comes to 9.31% (10+79+10+12.69+9.46+3.65), therefore it would be met the end of justice if the GP rate is 9.35% is applied to post-survey sales amounting to ₹ 3,25,72,550/- which work out to ₹ 30,32,504/-. Therefore, the income of the assessee to this extent is sustained which inter-alia includes the returned of income of ₹ 4,20,413/- and including the disclosure made during survey. In view of this total income of the assessee determining at ₹ 30,32,504/- as against ₹ 33,65,089/- determined by the CIT(A). In view of this fact, these above grounds of appeal are partly allowed in favour of the assessee.
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2019 (11) TMI 323
Addition on account of non genuine purchases - addition @ 12.5% of the non genuine purchases - HELD THAT:- The facts on record reveal that before the Departmental Authorities, the assessee has not been able to conclusively prove genuineness of purchases. Even, attempt made by the AO to independently verify the purchases bore no result. In such circumstances, assessee s claim of purchases made being genuine cannot be accepted. The fact that the assessee had furnished quantitative details relating to purchase, consumption and sale of goods cannot be completely overlooked. Thus, a reasonable presumption can be drawn that the assessee may not have purchased the goods from the declared source but has purchased them from third parties and for regularizing such purchases has obtained accommodation bills. In such circumstances, the entire purchases made by the assessee cannot be disallowed and added back to the income of the assessee. It would be reasonable to estimate the profit element embedded in such purchases and consider it for addition. Addition @ 12.5% of the non genuine purchases would be reasonable. Accordingly, direct the Assessing Officer to restrict the addition to 12.5% of ₹ 11,66,082. Assessee s appeal is partly allowed.
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2019 (11) TMI 322
Rectification of mistake u/s 154 - Addition on account of commission received - said amount of commission received was already offered to tax for the assessment year 2007-08 but inadvertently the assessee again offered the said amount to tax for the year under consideration while filing the return under section 139(1) - HELD THAT:- Inadvertent mistake to offer the said income to tax was brought to the notice of the AO, the AO was under obligation to take the necessary steps under section 154 to correct the said mistake in the return of income filed under section 139(1) of the Act. Since it is not a claim of deduction made by the assessee in the return of income filed in response to notice under section 148, therefore, it would not amount to claim any benefit in the said return which was not claimed in the return of income filed under section 139(1) but it is only a rectification of a bonafide mistake and, therefore, the AO was required to assess only the correct income for the year under consideration and not to take the advantage of the mistake committed by the assessee. Hence income on account of commission received from the Insurance Company was already offered to tax for the assessment year 2007-08, the same cannot be taxed for the year under consideration. Accordingly to that extent the assessment order is required to be rectified under section 154 and the amount of commission shall be deleted from the total income of the assessee. Rejecting the claim of deduction u/s 54 - house was constructed within a short period - HELD THAT:- Assessee s house construction could not be completed within a short span of two months and it took more than that time, once the construction could have been completed within three years from the date of sale of existing asset, the claim of the assessee is eligible. The AO has not conducted any enquiry to dispute the claim of existence of the residential house. Once the house was actually constructed after purchasing of the plot of land, then the construction is possible only after the said purchase vide sale deed dated 4th February, 2008. Hence once the assessee has brought on record the evidence to show that the house was in existence and the plot of land was purchased vide registered sale deed, then in the absence of contrary material to disprove the said fact, the claim of the assessee cannot be denied merely on suspicion and conjectures. The funds for construction of the house were also explained by the assessee through her bank account and, therefore, the said objection of the AO is also contrary to the facts emerging from record. Accordingly when there was sufficient time with the assessee to complete the construction then the claim of the assessee that the house was constructed within a short period cannot be a reason for denial of the claim under section 54 of the Act. Appeal of the assessee is allowed.
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2019 (11) TMI 321
Reopening of assessment u/s 147 - CIT(A) upholding the action of AO in reopening u/s 147/148 - Additions on account of so called bayanas as forged or bogus - HELD THAT:- DR has tried to made out a case that the triggering factor was the payments in cash amounting to ₹ 75 lakh odd for purchase of property. He has attempted to argue that a perusal of the return would not have addressed the issue. Thus, maintaining that the material fact was payments made in cash for purchase of property and not filing of the return. Accordingly, noting the objections of the Sr.DR and in the inability of the ld. AR who was also not in a position to address the relevant facts namely whether the assessee has been a regular Income Tax assessee over the years and be said to expect that the stated amounts noticed in the transaction could readily be said to be available to him. Thus, in the absence of relevant discussion on facts, we deem it appropriate to set aside the said ground back to the file of the CIT(A) with the direction to pass a speaking order in accordance with law after obtaining necessary remand reports, if any on the past history of the assessee, if need be and of course providing the assessee a reasonable opportunity of being heard. On a perusal of the impugned order of CIT-A we find ourselves constrained to hold that the order cannot be upheld. The order cannot be said to be a speaking order in the eyes of law as the affidavit relied upon on behalf of the assessee has neither been discussed nor any reasons have been given why it has to be discarded. In the absence of any discussion on the facts and submissions advanced by the assessee before the CIT(A), we are not in a position to conclude whether the finding arrived at by the CIT(A) is correct on facts or not. Accordingly, we set aside the impugned order and restore the issue back to the file of the CIT(A) with the direction to pass a speaking order in accordance with law. - Appeal of the assessee is allowed for statistical purposes.
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2019 (11) TMI 320
Deduction u/s 80P(2)(a)(i) in respect of interest income received by the assessee on investments made with Sub-Treasuries, District Co-operative Banks, Other Banks etc. - whether interest income received by the assessee on investments with sub-treasuries and banks was liable to be assessed under the head income from other sources or income from business ? - HELD THAT:- We noticed that an identical issue was considered by the Cochin Bench of the Tribunal in the case of The Azhikode Service Co-operative Bank Ltd. Others [ 2017 (7) TMI 1138 - ITAT COCHIN] we are of the view that the assessee is entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest income received on investments made with sub-treasuries and banks. The latest judgment in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [ 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] had also decided on identical issue in favour of the assessee held that co-operative societies engaged in providing credit facilities to its members had in course of business made investments with treasury, bank etc. and earned interest income, such income was eligible for deduction u/s 80P(2)(a)(i). In the instant case, the assessee had made investments with sub-treasuries, District Co-operative Banks, other Banks in the course of its business of banking / providing credit facilities to its members. Therefore, it was entitled to deduction u/s 80P(2)(a)(i) in respect of interest income that was received on such investments in view of the above judicial pronouncements
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2019 (11) TMI 317
Depreciation on valuation of investment portfolio - Tribunal allowable it by treating the investments held by the assessee bank as stock-in-trade once the RBI Master Circular read with CBDT Circular No.665 came into force - whether Tribunal's order can be said as perverse in nature since the Tribunal has followed the decisions which have not reached finality? - HC decided the issue in favour of assessee - HELD THAT:- SLP dismissed.
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2019 (11) TMI 315
Deduction of interest u/s 36(1)(iii) - Installation of cell site towers amounted to extension of existing business as stipulated in proviso to Section 36(1)(iii) - warranting proportionate disallowance of interest under that provision - HELD THAT:- The appellant has a licence for extending telecom services in certain Circles and the present issue arises from its activities in relation to the Circle of Rajasthan, Haryana, U.P.(East). As a result of the view taken by the High Court, the decision of the Tribunal rejecting the claim of the appellant would be final with respect to said Circle. As regards its activities pertaining to Mumbai Circle, the very same issue was answered by the Dispute Resolution Panel in favour of the appellant s group companies. The decision rendered by the Dispute Resolution Panel-2, Mumbai on 21.09.2017 in respect of Objection No.101 has been placed on record. We had adjourned the matter on few occasions to enable the respondent to place material indicating whether the decision of the Dispute Resolution Panel was under challenge before any of the authorities but no such affidavit has been filed. In any case, in our considered view, Question B raised by the Appellant is a substantial question meriting consideration and the High Court ought to have admitted the appeal even with respect to Question B . The appeal is therefore allowed and the order passed by the High Court is modified to the effect that in addition to the questions framed by the High Court for its consideration, Question B shall also be considered by the High Court. We have considered the matter only from the perspective whether Question B ought to be considered or not and we shall not be taken to have expressed any opinion on the merits of the submissions pertaining to said Question, which will be gone into independently.
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2019 (11) TMI 314
Stay of demand u/s 220 - Deduction u/s 80P - Addition u/s 68 - HELD THAT:- Writ petition by directing the 2nd respondent to consider and pass final orders on Ext.P3 appeal pending before him, within an outer time limit of four months from the date of receipt of a copy of this judgment, after hearing the petitioner. It is made clear that till such time as orders are passed by the 2nd respondent in the appeal as directed, and the order communicated to the petitioner, further proceedings including those pursuant to Exts.P4, P7, P9 and P12 communications, for recovery of amounts confirmed against the petitioner shall be kept in abeyance on condition that the petitioner pays an amount equivalent to 1% of the tax demanded on the additions made in the assessment order u/s 68 within one month from today. It is made clear that the attachment over the accounts of the petitioner, as contemplated in Ext.P9 notice, shall stand lifted forthwith on the petitioner depositing the aforementioned 1% amount with the respondents.
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2019 (11) TMI 312
Reopening of assessment u/s 147 - validity of reasons to believe - HELD THAT:- Under section 148, if the assessing officer has reasons to believe that income has escaped assessment he can issue a notice for passing order under Section 147. The sufficiency of those reasons cannot be gone into by this Court. If relevant germane reasons exist and have been communicated to the assessee that is enough for reassessment proceedings to hold the field. In this case, during scrutiny the appellant was further asked to furnish the details of the invoices for the expenses incurred vide letters dated 31.07.2019 However, the appellant failed to furnish the same. Therefore, it would be improper to hold that the respondent Income Tax Officer had erred in invoking the reassessment jurisdiction vested with him under Section 147/148 in the facts and circumstances case. Only when there are no grounds at all for invoking the reassessment jurisdiction under Section 148 of the Act, the notices can be challenged. The appellant has himself replied and participated in the impugned proceedings. The reasons were also communicated to the appellant to which the appellant has also replied. Therefore, it is not open for the appellant to question the same to scuttle the proceedings initiated under the Act. Therefore, we find no reasons to interfere with the order of the learned Single Judge while dismissing the above Writ Appeals.
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2019 (11) TMI 310
Addition u/s 68 - unexplained cash credit - HELD THAT:- The plea of the Appellant that on filing of the bank statement and PAN details, the burden stood discharged or that it shifted on to the revenue is tenuous and is not correct. The credit worthiness of the transaction cannot be said to be proved merely on the strength of the bank statement or identity of the creditor. The assessee did not produce the income tax return of the lender or any confirmation. The purported confirmation has been found to be only a copy of unsigned account of the creditor. The source of funds has also not been explained. The credit worthiness and the genuineness of the transaction cannot be said to have been proved so as to shift the onus on the revenue. The stand of the Appellant that since the alleged transaction is made through normal banking channels, it is sufficient to prove the genuineness of the transaction and the credit worthiness of the creditor, cannot be accepted. The identity as well as the credit worthiness of the creditor must be proved. The credit reflected in the bank account of Ms. Jasmine Kochhar Kapoor, is not explained, as a result her credit worthiness is not proved. In view of the above facts, we do not find any infirmity in the impugned order. The findings of fact are against the Appellant, as held concurrently by all the tax authorities. The Appellant has not raised any question of law much less substantial question of law. - Decided against assessee.
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2019 (11) TMI 309
Registration u/s 12AA - ITAT allowed the registration - no relevant document was produced before the Commissioner (Exemption) to prove that the assessee is involved in charitable activities in consonance to the object for which it was established - HELD THAT:- Perusal of the order passed by the Commissioner (Exemption) shows that the assessee did not appear before it when the matter was fixed for hearing. The Commissioner (Exemption) considered the matter in reference to the material produced before it. Since no documents to prove charitable activities was produced by the assessee, finding was drawn against it for denial of registration under Section 12AA. It has not recorded its finding in reference to the material produced before it and that too after holding finding of the Commissioner (Exemption) to be perverse. In fact the order impugned herein shows that in reply, the assessee has stated that all the relevant documents are available for perusal thus, it can be verified. It shows that no relevant document was produced before the Commissioner (Exemption) to prove that the assessee is involved in charitable activities in consonance to the object for which it was established. Tribunal has failed to exercise its jurisdiction, as is vested even as per the judgment of the larger Bench in the case of Income Tax Exemption U.P. State Cons. Infra. Vs. M/s Reham Foundation Kandhari Lane Lal Bagh Lucknow [2019 (10) TMI 151 - ALLAHABAD HIGH COURT] Any judgment in conflict with the aforesaid would not be relevant now for any purpose. Thus, the judgments referred by the Tribunal in its order impugned herein are not more relevant after the judgment of the larger Bench of this Court, where both the questions have been answered after detailed discussion of the issue.
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Customs
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2019 (11) TMI 302
Confiscation - illegal removal of goods from in factory bonded private warehouse - import of base paper for impregnation without payment of Customs Duty and warehoused it in the Customs private bonded warehouse situated inside their factory premises - removal of 509 reels of base paper of various varieties from the warehouse without filing an Ex-bond bills of entry and without paying customs duty - inherent contradiction in the impugned order - HELD THAT:- There is an inherent contradiction and ambiguity in the impugned order itself. The impugned order was passed on 10.08.2011. There is an inherent contradiction between the two findings. Para 13 records that the assessee was asserting that they were very much available. In Para 17, learned Commissioner records that since the goods were not available within the premises of the bonded warehouse, they are not liable for confiscation. In fact, if the goods were available within the bonded warehouse and have not been removed from there, they are not liable for confiscation at all - On this ground the goods will be liable for confiscation only if they have been removed from the customs bonded warehouse clandestinely without filing ex-bond bill of entry and without paying the customs duty. In such a case, if the goods are available outside the bonded warehouse, they are liable for confiscation. In view of the contradictory stand taken by the learned Commissioner, it is a fit case to be remanded back to record the correct position regarding availability of goods for confiscation (not availability of goods within the bonded warehouse) and pass an order accordingly - Appeal allowed by way of remand.
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2019 (11) TMI 296
STPI units - Unauthorised procurement of inputs - Benefit of N/N. 153/93-CUS - Appellant procured the goods from three Indian manufactures without payment of duty of central excise on the basis of the certificates given by the authorities - It is the contention of the appellant that they had procured the goods from the local manufactures only on the basis of the certificate given by the Superintendent and as such there cannot be any contravention of the permission granted by the Director STPI or the Notification No.153/1993-CUS. - penalties - HELD THAT:- The permission to import the goods in terms of the notification was granted, which permission has not been utilized by the assessee, inasmuch as there is no dispute that no imports were made by the appellant and the entire dispute revolves around the procurement of indigenously made goods, without payment of duty. Admittedly the certificate of the Superintendent has permitted the appellant to procure such duty free goods but such permission was subject to the execution of B17 bond. The procurement of the goods from indigenously manufactures is not covered by any exemption notification. The said manufactures have cleared the goods without payment of duty on the basis of the representations made by the appellant by showing the certificates etc. and intimating the manufactures that the goods are entitled to be received by them without payment of duty. The demand stand raised and confirmed against the appellant in terms of the B17 bond, which is only for an amount of ₹ 40,00,000/-(forty lakhs). As such we are of the view that asssesse s liability would be restricted to the amount covered by the said B17 bond - As such we reduce their liability to the interest of ₹ 40,00,000/-(forty lakhs) in toto. Penalties - HELD THAT:- The procurement of the goods free of duty, were on the basis of the said certificates issued by the authorities and does not reflect upon mala fide or the assessee so as to invoke any penal action against them - Penalties set aside. Appeal allowed in part.
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2019 (11) TMI 295
Levy of Anti-Dumping duty - import by SEZ unit to DTA, after manufacturing activity - import of various types of Narrow Woven Fastening Tape Hook and Loop - tapes so imported by the respondents subsequently underwent the process of slitting and cutting into various sizes and by converting the same to Velcro, the same were cleared in the DTA - process amounting to manufacture or not - if the activity under taken by the appellant amounts to manufacture, no Anti Dumping Duty is attracted. HELD THAT:- To constitute manufacture, it is not necessary that huge lengthy technical processes are undertaken and it is sufficient if the resultant product is having a distinct name, character and use is commercially known differently than the raw material. In other words if by application of labour and skill, the object is transformed to the extent that it is commercially known differently, with the persons who deal with it, it has to be held that manufacture has taken place. Also, Revenue has not advanced any arguments to show that the resultant product i.e. Velcro is not known differently in the market than the running length tapes imported by the respondents. There are no reasons to take a view different than the one taken by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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Corporate Laws
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2019 (11) TMI 319
Disqualification of Directors - defaulting directors - Use of DSC and DIN no by the disqualified director - Interpretation of statute - provisions of Section 164(2) and Section 167(1)(a) of the Companies Act, 2013 - default on the part of concerned companies in filing the annual returns and financial statements for the financial years 2014-2016. Whether the provisions of Section 164(2)(a) are retrospective? - HELD THAT:- A plain reading of Clause (a) of Section 167 (1) of the Act indicates that a Director would demit office if he incurs the disqualification under Section 164 of the Act. The proviso to Clause (a) of Section 167(1) of the Act was introduced with effect from 07.05.2018, by virtue of the Companies (Amendment) Act, 2018 Indisputably, the plain language of Section 164(2) read with Section 167(1)(a) of the Act leads to an absurd situation as discussed earlier. In this view, the rule of literal interpretation cannot be applied for interpreting the provisions of Section 167(1)(a) of the Act. There is no dispute that the provisions of Section 164(2) of the Act must be applied prospectively - The Karnataka High Court, Gujarat High Court and Madras High Court have also considered a similar challenge - All of the aforesaid Courts are unanimous in their opinion that the provisions of Section 164 apply prospectively. The petitioners would not demit their office on account of disqualifications incurred under Section 164 (2) of the Act by virtue of Section 167(1)(a) of the Act prior to the statutory amendments introduced with effect from 07.05.2018. However, if they suffer any of the disqualifications under Section 164(2) on or after 07.05.2018, the clear implication of the provisos to Section 164(2) and 167(1)(a) of the Act are that they would demit their office in all companies other than the defaulting company. Automatic vacancy of officer of director - Whether the consideration of the default committed in filing financial statements and annual returns for the financial years 2013-14 would amount to applying the provisions of Section 164(2) of the Act retrospectively? - HELD THAT:- The proviso to Section 167(1) of the Act imposes a punitive measure on directors of defaulting companies. Such being the nature of the amendment, the same cannot be applied retrospectively. It is well settled that the Statute that impairs an existing right, creates new disabilities or obligations otherwise than in regard to matters of procedure cannot be applied retrospectively unless the construction of the Statute expressly so provides or is required to be so construed by necessary implication. Therefore, the office of a director shall become vacant by virtue of Section 167(1)(a) of the Act on such director incurring the disqualifications specified under Section 164(1) of the Act. It shall also become vacant on the directors incurring the disqualification under Section 164(2) of the Act after 07.05.2018. However, the office of the director shall not become vacant in the company which is in default under sub-section 164(2) of the Act. Whether a law is retrospective has to be viewed in the context whether it divests a person of accrued rights, or creates new obligations, or attaches a disability in respect of transactions or actions done in the past? - HELD THAT:- The penal consequences of not filing returns for three consecutive financial years would be attracted on section 164 of the Act coming into force. Section 164 of the Act came into force on 01.04.2014 and thus, the failure of a company/its directors to file annual returns (for three financial years) thereafter would result in the directors incurring the disqualification as specified under Section 164(2) of the Act. It is of little consequence that such defaults relate to filing annual returns that pertain to a period prior to 01.04.2014 Section 164(2) of the Act operates prospectively. However, such prospective operation would entail taking into account failure to file the financial statements pertaining to the financial year ending 31.03.2014 on or before 30.10.2014. This Court is of the view that the taking into account such default does not amount to a retrospective application of Section 164 of the Act and the contentions advanced by the petitioners in this regard, are unmerited. Whether principles of natural justice are applicable is required to be considered in the context of the statutory provisions? - HELD THAT:- The principles of natural justice have been accepted as a part of procedural law, where it is necessary to supplement it. The question whether such principles are required to be read into any law must be considered in the context of the basic scheme of the statutory provisions - the contention that the impugned list is void as having been published without following the principles of natural justice, is rejected. Deactivation of the DIN of the defaulting directors - Held that:- Neither any of the provisions of the Companies Act nor the Rules framed thereunder stipulate cancellation or deactivation of DIN on account of a director suffering a disqualification under Section 164(2) of the Act. It is relevant to note that Rule 11 of the Company (Appointment and Qualification of Directors) Rules, 2014 was amended with effect from 05.07.2018 to provide for deactivation of DIN in the event of failure to file Form DIR-3-E-KYC within the period as stipulated under Rule 12A of the said Rules. The amendment so introduced also does not empower the Central Government to cancel or deactivate the DIN of disqualified directors. - None of the provisions of Rule 14 of the said Rules indicates that the DIN of directors incurring the disqualification under section 164(2) of the Act, is required to be deactivated. Conclusion: the office of a director shall become vacant by virtue of Section 167(1)(a) of the Act on such director incurring the disqualifications specified under Section 164(1) of the Act. It shall also become vacant on the directors incurring the disqualification under Section 164(2) of the Act after 07.05.2018. However, the office of the director shall not become vacant in the company which is in default under sub-section 164(2) of the Act. As discussed above, there is also much merit in the contention that the DIN and DSC of the petitioner could not be deactivated. Accordingly, the respondents are directed to reactivate the DIN and DSC of the petitioners. It is clarified that the petitioners would continue to be liable to pay penalties as prescribed under the Act. Petition disposed off.
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2019 (11) TMI 318
Oppression and mismanagement - alleged oppression of a sole majority shareholder by the minority shareholders - preventing the Company from being struck-off by the Registrar of Companies as the Petitioner has not conducted any Meeting for a period of 6 years from the inception of the Company - Respondent No. 2 transferred part of his Shareholding to Respondent Nos. 3 and 4 (whom he claims to be his family members) in violation of the Articles of Association of the Company - also Respondent No. 3 and 4 as Additional Directors of the Company without the consent of the Petitioner who is the sole Majority Shareholder (by virtue of owning shares in excess of 90% of the total paid-up share capital of the Company). HELD THAT:- We are inclined to hold that the primary reason for the dispute between the parties arise on certain misunderstanding and miscommunications, and hence, we feel that there is a possibility of the parties settling the issue, if they are provided with a forum to deliberate the same on. It is vital to mention here that the Company has not undertaken any substantial business from the date of its incorporation and there is a need to put it in motion, the reason for which the Company was envisaged. The dispute between the parties has paralysed the Administration and ordinary business of the Company. Section 397 and 398 of the Companies Act, 1956 read with Section 242 of the Companies Act, 2013 provide that the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. It is hereby directed to prepare an agenda of the meeting now authorized and place it before the Chairman on or before 19.07.2019 and after obtaining the approval conduct the meeting within 21 days' time i.e., on or before 09.08.2019 - application disposed off. Petition disposed off.
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Insolvency & Bankruptcy
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2019 (11) TMI 316
Initiation of CIRP - Exclusion of period from 17th September, 2018 till 4th June, 2019 for the purpose of counting 270 days Corporate Resolution Process period - power of the NCLT or NCLAT, as the case may be, to exclude any period from the statutory period in exercise of inherent powers sans any express provision in the I B Code in that regard - HELD THAT:- The inevitable fall out of accepting the stand taken by the appellants would be to set aside the impugned judgment and relegate the parties to a situation where the only option would be to proceed with the liquidation process concerning JIL under Chapter III of Part II of the I B Code, on the premise that no resolution plan has been received before the expiry of the Insolvency Resolution Process under Section 12 of the I B Code or being a case of rejection of the resolution plan under Section 31 of the I B Code. In the present case, there is unanimity amongst all the parties appearing before this Court including the resolution applicant that liquidation of JIL must be eschewed and instead an attempt be made to salvage the situation by finding out some viable arrangement which would subserve the interests of all concerned. We are of the considered opinion that we need to and must exercise our plenary powers to make an attempt to revive the corporate debtor (AIL), lest it is exposed to liquidation process under Chapter III of Part II of the I B Code - the IRP is directed to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plan only from Suraksha Realty and NBCC respectively, who were the final bidders and had submitted resolution plan on the earlier occasion and place the revised plan(s) before the CoC, if so required, after negotiations and submit report to the adjudicating authority NCLT within such time. In the second phase of 45 days commencing from 21st December, 2019, margin is provided for removing any difficulty and to pass appropriate orders thereon by the Adjudicating Authority. Appeal disposed off.
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2019 (11) TMI 294
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - existence of debt and default or not - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- After having gone through the documentation reflecting the Corporate Debtor availing the credit facilities in respect of loan amounts from the Original Lender, thereafter the Bank declaring this loan as NPA on 14.09.2014, since there being regular correspondence between the Corporate Debtor and the Original Lender reflecting acknowledgement of this debt from time to time, this Bench is satisfied that this claim is within the time prescribed under the Limitation Act - As the applicant has placed material reflecting existence of debt as well as default, it is opined that the Financial Creditor established existence of debt as well as existence of default . Petition admitted - moratorium declared.
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2019 (11) TMI 291
Maintainability of application - initiation of CIRP - Corporate Debtor committed default in paying the operational debt - existence of dispute or not - HELD THAT:- Operational Creditor has produced all invoices to show that operational debt is due and payable by the corporate debtor. He also produced on record the demand notice under section 8 of I B Code sent to the Corporate Debtor and the track report to show that notice was duly delivered to the corporate debtor. The corporate debtor did not reply the notice within ten days of its receipt pointing out the fact that the payment of operational debt is made or there exists genuine dispute about the amount claimed. The operational creditor filed affidavit stating that he did not receive any notice or reply and the corporate debtor did not pay amount. He thereby complied with the provisions of section 9(3)(b) and 9(3)(c) of I B Code. The application requires to be admitted - Petition admitted - moratorium declared.
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2019 (11) TMI 290
Jurisdiction - power of Adjudicating Authority has to pass order u/s 213 of the Companies Act, 2013 - whether the Adjudicating Authority which is National Company Law Tribunal having dual jurisdiction under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 can direct the Central Government to refer the matter to the Serious Fraud Investigation Office (SFIO) for further investigation into the affairs of the Corporate Debtor , Bank of Maharashtra and other group of companies including the Directors of the companies of Corporate Debtor and group companies and officials of Bank of Maharashtra basing it on the Forensic Audit Report ? HELD THAT:- As per Section 60(1) of the I B Code the National Company Law Tribunal having territorial jurisdiction over the place where the registered office is located will be the Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors - The provision of this section makes it clear that the National Company Law Tribunal is empowered to deal with insolvency resolution and liquidation for corporate persons including corporate debtor and others. Merely because additional power of Adjudicating Authority has been vested, the power of the National Company Law Tribunal under the Companies Act, 2013 does not stand extinguished. In the case of Y. SHIVRAM PRASAD AND ASSET RECONSTRUCTION COMPANY (INDIA) LTD. VERSUS S. DHANAPAL ORS. AND SERVALAKSHMI PAPER LTD. ORS [ 2019 (5) TMI 386 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , the Appellate Tribunal held that the Adjudicating Authority has dual role of Adjudicating Authority and National Company Law Tribunal for the purpose of I B Code - Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] while dealing with the matter of settlement between the parties also observed that the National Company Law Tribunal has inherent power under Rule 11 of the National Company Law Tribunal Rules, 2016. Thus, the Adjudicating Authority which is the National Company Law Tribunal has dual and interwoven role and power to pass order under Section 213 of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016. Therefore, in public interest, it is always open to the National Company Law Tribunal after giving a reasonable opportunity of being heard to the parties concerned refer the matter to the Central Government for investigation, if the Tribunal/Adjudicating Authority forms a prima facie opinion that acts of fraud have been committed by company or group of companies or its Director(s) or officers - In the present case Forensic Audit Report alleged that the members of the Corporate Debtor and its Group Companies along with officers of the Bank of Maharashtra have committed certain fraud, which, inter alia, suggest that a sum of ₹ 3,172.25 Lakhs are receivable by the Corporate Debtor - The Appellant and others were given reasonable opportunity of hearing by Adjudicating Authority. As such no interference is called for against the impugned order. Appeal dismissed.
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2019 (11) TMI 289
Maintainability of application - initiation of CIRP - Corporate Debtor committed default in making payment - existence of dispute or not - Section 9 of I B Code read with Rule 6 of Insolvency Bankruptcy (AAA) Rules, 2016 - HELD THAT:- The dispute raised by the Corporate Debtor that they are not liable to pay interest as claimed by the Petitioner, which was categorically informed to the petitioner when reply was given to the first Demand Notice, as early as on 10.01.2019, whereas the second Demand Notice based on which this petition is filed was sent only on 15.01.2019, this is a clear dispute in existence as defined under Section 5(6)(a) of the Code. Petition dismissed.
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Service Tax
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2019 (11) TMI 304
Demand of service tax - clearing and forwarding agent service - Handling expenses - Misc Expenses - Re-stacking/reconditioning expenses - EDP expenses - Bank charges - CASM expenses - Primary freight - Secondary Freight - Service charges - whether the appellant is liable to pay service tax on various amounts enumerated at Sl No 3 to 11 in the table above on which they had not discharged service tax? - extended period of limitation. Handling expenses - HELD THAT:- Revenue wanted to treat mere loading of sugar in the factory and unloading it into railway wagons as clearing and forwarding agency service. In the present case, handling is done in course of CFA operations - demand to this extent has to be confirmed. Miscellaneous expenses towards electricity, telephone, electrical maintenance etc. of the depots - HELD THAT:- The service rendered by the appellant is only the operation of such godowns. Electricity, electrical maintenance sweeping etc. of the godowns are directly relatable to the maintenance of such premises which belong to M/s HLL. Instead of M/s HLL undertaking these activities, the appellant is doing these jobs and claiming reimbursement from M/s HLL. In our considered view, these cannot form part of the taxable services rendered by the appellant in this factual matrix - demand do not sustain. Restacking, reconditioning expenses - HELD THAT:- These pertain to arrangement and rearrangement of the goods in the depot which lie at the heart of the C F Agent s activity and do not pertain to maintenance of the premises belonging to M/s HLL although this amount is paid separately to HLL - this forms part of the assessable value for the CFA services. EDP expenses - HELD THAT:- The computer stationery, cartridges and computer maintenance are used in the godown as is evident from the agreement for the given activities of the appellant as C F Agent such as generation of invoices - these charges are essentially input expenses towards rendering of the C F agent services. Therefore the same are includible in the assessable value. Bank charges and CASM expenses - HELD THAT:- It is not clear as to what these charges specifically pertain to from the records. Therefore, we do not find sufficient evidence on record to say that these are input services for rendering of C F agent services by the appellant. Primary freight secondary freight and service charges - HELD THAT:- The C F Agent agreement that it does not include transportation of the goods as part of the service to be rendered. It is the case of assessee that they have a separate agreement with M/s HLL for transportation of goods which is not part of the CFA agreement. This can only be considered as Goods Transport Agency service - there is no evidence to the contrary. At any rate, if these are GTA services no service tax can be demanded from the service provider as the liability for paying service tax rests on the service recipient in terms of Section 68(2) of the Finance Act, 1994, read with Rule 2(d) of the Service Tax Rules, 1994 - demand do not sustain. Extended period of limitation - HELD THAT:- It is not in dispute that the assessee has not disclosed all these facts to the department and they have come to light only on investigation/audit/ enquiries by the department. It is true that the assessee had filed service tax returns but these did not reflect the full and true value of the amounts received by them for rendering the services - there is nothing in the show-cause notice to justify the allegation of suppression knowingly and consciously with an intent to evade as above. Hence there are no sufficient grounds to invoke extended period of limitation. Penalties - HELD THAT:- During the period, Section 80 was in vogue and hence invoking this provision, the penalties are set aside. The demand on handling expenses, restacking/reconditioning expenses, EDP expenses within the normal period of limitation made in the impugned order are upheld and the remaining demands are set aside - the matter is remanded to the original authority only for the purpose of calculation.
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2019 (11) TMI 298
Exemption form payment of service tax - Club and Association Service for the purpose of treatment of effluent - exemption by virtue of Section 145 of Finance Act 2012 - financial assistance sanctioned by Government of Gujarat in the Ministry of Industry - HELD THAT:- The Club and Association Service for the purpose of treatment of effluent has been exempted by Section 145 of Finance Act, 2012 - the Club or Association Service set up for a project for treatment and recycling of effluents and solid wastes is exempted subject to condition that the same is set up with the Financial assistance by the Central Government or a State Government. As per the sanction letter dated 09.09.2010 issued by the Industry Commissionerate, it is clear that the project was financially assisted by the State Government of Gujarat. The Service is clearly exempted under Section 145 - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 297
Valuation of services - Construction of Residential Complex - inclusion of the amount collected by the appellant as Interest Free Maintenance Security (IFMS) in the assessable value - classification of services - Revenue s contention is that the said collected amount would fall under the category of Management Maintenance and Repair Services and would be liable to service tax separately. HELD THAT:- The said amount collected by the appellant from the flat owners is towards the security for the purpose of maintenance of the building and to cover the eventual default made by any of the flat owners for payment of monthly maintenance charges. As per the agreement with the flat owners, the said amount is liable to be refunded to them within the period of Six months from the date of termination of the said agreement. The Adjudicating Authority observed that the genuineness of the said term is very much doubted inasmuch as the appellant had not produced any evidence to show that the said IFMS was ever refunded to anyone. The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded. As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits and was not for the purpose of providing any services, so as to levy tax on the same. Reference can be made to the Tribunal decision in the case of CCE ST, Jaipur vs. Sand Dunes Construction Pvt. Ltd. [2018 (7) TMI 1383 - CESTAT NEW DELHI], whereby while taking note of the precedent decision of the Tribunal in the case of Kumar Beheray Rathi vs. CCE, Pune [2013 (12) TMI 269 - CESTAT MUMBAI]. It was held that the security deposits collected by the Builder for providing maintenance to immovable property services would not be taxable under the category of Management Maintenance or Repairs Services . Demand set aside - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 293
Rectification of error - error apparent on the face of record or not - HELD THAT:- There is definitely an error in recording the submissions made during the course of argument - Accordingly, para 3.2(iii) would be amended as required - ROM Application allowed.
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2019 (11) TMI 287
Demand of service tax - revenue neutrality - reverse charge mechanism - Consulting Engineering Services - amount paid will be later available as credit - Revenue s only contention in the appeal memo as regards the said finding of Commissioner (Appeals) is that it was statutory requirement of the assessee to first discharge the said service tax on reverse charge basis - HELD THAT:- Admittedly the service tax required to be paid by the assessee was available to them as credit. Further it seems that appellant was providing output services, which were also taxable. During the period in question, they paid service tax on output services by way of cash. Had they paid service tax on the input services received by them, they could have taken the credit and utilized that credit for payment of duty, instead of paying service tax in cash. The Appellate Authority has gone to the figures of the cash payment of tax and by comparing the same with their liability to pay tax, has come to the right conclusion of Revenue neutrality. Appeal dismissed - decided against Revenue.
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2019 (11) TMI 286
Refund of service tax - service tax on the commission received by him under Business Auxiliary Service - On the basis of return filed by the appellant with Income Tax Authorities the Lower Authorities have held that the payment received by the appellant was in the form of commission and it was not salary and therefore the refund was rejected - HELD THAT:- On going through the record, we do not find any infirmity in the order passed by learned Commissioner (Appeals) - Appeal dismissed.
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2019 (11) TMI 285
Maintainability of appeal - appeal was dismissed for want of non-prosecution - HELD THAT:- Perusal of record shows that despite the due service of notices i.e. more than thrice, the appellants have not marked the presence either in person or through representative. This is the sufficient ground to form an opinion that the appellants are no more interested in pursuing the present appeals and the continuous absence of the appellants amount to non-prosecution on their part - this appears to be a good reason for adjourning the matters in further. Appeals are hereby dismissed for want of non-prosecution.
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2019 (11) TMI 284
Early hearing application - prayer to take up the appeal out of turn - Renting of immovable property service - HELD THAT:- The issue is with regard to service tax demand on the renting of immovable property; that appeals relating to similar issue are listed for hearing on 14.05.2019 - Hence the appeal is granted out of turn hearing. To list the instant appeal along with appeals on similar issue listed for hearing on 14.05.2019. Early hearing application allowed.
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Central Excise
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2019 (11) TMI 308
Discard of documents relied upon by the Enforcement Authorities - Clandestine removal - Gutkha - no material evidence found in support of allegation - Whether CESTAT had committed an error in discarding the documents relied upon by the Enforcement Authorities and in that regard whether such decision is contrary to the provisions as contained in Section 36(B) of the Act? HELD THAT:- It is evident that the Tribunal has found that the Commissioner has found clandestine clearance of gutkha by the assessee involving duty of 4.60 crores on the basis of copies of railway receipts as well as the material retrieved from the computer seized from the premises of M/s. Dwaraka Mai Associates viz., the dealer of the assessee - From perusal of the record maintained by the dealer of the assessee, the Commissioner has held that the daily sales of Hira brand gutkha did not match with the invoices issued for the sale of gutkha by the assessee. There has to be clinching evidence in the matter of purchase of raw material, use of electricity, removal of final product and its sale in order to prove that the material was removed in a clandestine manner with a view to evade duty. The aforesaid material is not available on record - The Revenue has failed to produce any cogent evidence in respect of the aforesaid aspect of the matter to prove the allegation against the assessee. The tribunal has, therefore, rightly reversed the order passed by the Commissioner and has allowed the appeals of the assessee. It is equally well settled legal proposition that this court in an appeal under section 35G of the Act cannot re-appreciate the evidence unless and until the evidence recorded by the tribunal are shown to be perverse. Learned counsel for Revenue was unable to point out as to which evidence adduced by the revenue has been discarded by the Tribunal. The question of law, in fact, framed by this Court does not arise for consideration in the fact situation of the case as entire evidence adduced by Revenue has been considered by the Tribunal - Appeal dismissed - decided against appellant.
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2019 (11) TMI 305
Clandestine removal - manufacture of Pan Masala Gutkha bearing the brand name Shyam Bahar - opportunity to cross-examine - opportunity of personal hearing - it is alleged that the charges of clandestine removal are based on third party documents and based on the oral statements who were not cross-examined - HELD THAT:- Since the said cross examinations were not conducted, the basis for conclusion of total quantity of Gutkha alleged to be clandestinely cleared has not been established. Further, wherever Zarda, Masala and Shyam Bahar was stated in the GRs and lorry challans the same was clandestinely removed Shyam Bahar Gutkha without payment of duty by the appellant has also not been established because the cross examination of the representatives of transporters was not allowed. We, therefore, hold that the clandestine manufacture and clearance of alleged quantity of gutkha is not established. The seized currency of about ₹ 4.38 crores cannot be held to be sale proceeds of clandestinely removed gutkha - the demand of Central Excise duty of about ₹ 7.17 crore is not sustainable - the confiscation of currency of ₹ 4.38 crores approximate is not sustainable - therefore, penalties are also not imposable interest is not recoverable. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 303
Refund of Central Excise Duty - supply of goods from Domestic Tariff Area (DTA) to SEZ - section 11B of the Central Excise Act - HELD THAT:- The appellant, a developer of SEZ unit has procured goods from a DTA unit which he could have also procured without payment of excise duty if he had followed the appropriate procedure prescribed under SEZ Act and Rules. SEZ area is treated for all practical purposes as a place outside India. For this reason, goods which are imported into SEZ are not subject to customs duties. Goods from DTA which are supplied to SEZ units are treated at par with exports. In fact, documents such as ARE-1 and Bill of Export which are usually filed in case of exports are also filed in case of SEZ units. In case of actual exports, Central Excise Act provides for two options viz., (1) Export under Bond under Rule 19 and (2) Export under claim for rebate under Rule 18 of Central Excise Rules, 2002. The SEZ Rules, however, have only provided a mechanism for clearance of goods under bond. There is no mechanism under SEZ Rules for claiming rebate/refund on goods procured from the DTA. In the absence of any specific provision for exemption by way of refund in the SEZ Rules or under Central Excise Rules, the appellant is not entitled to refund of the duty - The assessee is not entitled to refund at all in the present case, both on account of lack of explicit provision for such refund as well as on the ground that the assessments were not challenged by the appellant. Appeal dismissed - decided against appellant.
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2019 (11) TMI 301
Valuation - inclusion of freight and insurance in the assessable value - whether the freight and insurance charges have to be included in the assessable value when the goods are delivered at the buyers premises? - HELD THAT:- The facts show that freight and insurance charges are separately quoted in purchase orders and price of goods is agreed to be Ex-Works price - The Hon ble Apex Court in the case of M/s Ispat Industries Limited [ 2015 (10) TMI 613 - SUPREME COURT ] has considered the very same issue and held that the buyers premises can never be the place of removal. The issue is settled in favor of the assessee and the freight and insurance charges is not required to be included in the assessable value - The demand of duty by including freight and insurance charges cannot sustain - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 300
Classification of goods - manufacture of PVC pipes - appellants have classified the said PVC pipes under CETH 8424 9000 and availed the exemption contained at Sl.No. 70 of Notification No. 03/2005-CE, dated 24.02.2005 - Department contended that the classification adopted by the appellants is wrong and the pipes are classifiable under CETH 3917 and accordingly are not eligible for the said exemption - Whether classified under CETH 8424 9000 or under CETH 3917? HELD THAT:- There is no allegation by the Department that the said pipes have been sold/utilised for general purposes. It is pertinent to see that Shri Shyam Sundar Dash vide his statement dated 12.10.2010 stated that the product manufactured by them is nothing but a PVC pipe, the same is being used as an integral part of the drip irrigation system being manufactured by their company and hence their company was calling them as parts of Micro/drip irrigation system. As the PVC pipes manufactured and cleared by the appellants are evidently shows to be for irrigational purposes in agriculture/horticulture, the classification of the same is correctly done under CETH 8424 9000 and not under CETH 39.17 as contended by the Department - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 299
CENVAT Credit - transfer of credits from one unit to another - inputs meant for use in the manufacture of these computers - IBMI was amalgamated with IBM Global Service India Pvt. Ltd. (IGSI) as per the scheme of amalgamation - unconditional exemption notification No.23/2004-CE (as amended) - it is alleged that the availment of credit attributable to the inputs lying in stock as such or contained in the finished goods / semi-finished goods when the computers became exempt w.e.f. 09.07.2004 is irregular - transitional credit - Rule 11 (3) of CCR 2004 - whether they are entitled to cenvat credit taken by the predecessor unit under Rule 10 CCR 2004 or such transfer is invalid in view of Rule 10 (3) of CCR 2004? Reversal of CENVAT Credit - inputs lying unutilized in the cenvat credit account or contained in the inputs lying in stock or final products lying in stock on the day when the final products becomes fully exempt - Rule 11 (3) of CCR 2004 - HELD THAT:- Rule 11 (3) of CCR 2004 specifically provides for such a reversal. This sub rule was inserted from 1.3.2007. There is nothing on record for us to believe that this sub rule had retrospective application. In the absence of any specific provision, fiscal statutes are only presumed to have prospective application - in respect of exemptions based on the value or quantity of clearances in a financial year sub rule (2) of Rule 11 had always provided for such reversal. The present case does not pertain to exemption based on value of clearances - the demand for reversal of the cenvat credit is without any authority of law applicable during the relevant period. After the introduction of Rule 11 (3) by Notification No.10/2007 dt 1.3.2007 the Tax Research Unit of CBEC has issued Circular No.334/1/2007-TRU dt. 28.2.2007 clarifying that it will come into effect immediately. The letter does not suggest that Rule 11 (3) was supposed to have retrospective effect. Therefore, we find that it has never been the intention to give retrospective application to Rule 11 (3). In consequence, demand on this count along with interest and penalties on this account needs to be set aside. Demand on account of transfer of cenvat credit - HELD THAT:- It is clear from the details narrated in the SCN and the impugned order that all assets and liabilities of the previous entity have been passed on to the successor entity. Under these circumstances, the allegation that there is no evidence to satisfy the Asst. Commissioner or Deputy Commissioner of Central Excise that stock of inputs as such or in process or the capital goods have also been transferred to the successor entity is, at best, far fetched. The satisfaction of AC or DC or otherwise should also be based on same cogent reasons - there are no reasons or evidence because of which the Asst. Commissioner or Deputy Commissioner has come to the conclusion that the inputs or capital gods have not been transferred to the successor unit when the entire business itself has been transferred at the very same premises to the successor entity - Demand set aside. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 292
CENVAT Credit - use of capital goods exclusively in the manufacture of exempted goods - concessional exemption N/N. 29/2004-CE dated 09/07/2004 - contention of the department is that since at the time of receipt of capital goods, the appellant was manufacturing exclusively exempted goods with the help of the said warping machine, they are barred from availing the Cenvat Credit on such capital goods - Rule 6 (4) of the Cenvat Credit Rules, 2004 - HELD THAT:- Rule 6(4) was amended by N/N. 13/2016- CE (N.T.) dated 01/03/2016 but the amendment is by way of substitution of Rule 6 (4). As per the above substituted Rule, it is clear that the bar on availing the credit in respect of capital goods used in manufacture of exempted goods shall apply only if the capital goods are used for two years from the date of installation/commencement of production - As per the facts of the present case, though the appellant received and installed the capital good in their running unit in November, 2014 but before completion of two years, in August, 2016 the capital good was used for manufacture of goods which were cleared on payment of duty, availing the exemption N/N. 29/2004-CE. Therefore, the capital goods was not used continuously for two years for manufacture of exclusively exempted goods. Since the amendment is by way of substitution, it will be applicable from the retrospective effect. Cenvat Credit on the capital goods is admissible - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 288
Rejection of Remission of duty - destruction of final product as also semi finished goods and raw materials - Cenvat credit - inputs lying as such or as contained in the semi finished goods - HELD THAT:- Reliance stands placed on the Tribunal s Order in the case of VFC Industries Pvt. Ltd. [ 2016 (9) TMI 1020 - CESTAT AHMEDABAD ] by Commissioner (Appeals), which has clearly held that eligibility criteria of using inputs in or in relation to manufacture of Final Product is not satisfied as the inputs were lying in stock and were destroyed before being used and as such he has held that the same require reversal of Cenvat credit. Reference by the appellant to the decision of the Tribunal in the case of Arihant Studs Ltd. [ 2015 (11) TMI 661 - CESTAT NEW DELHI ] is not appropriate, inasmuch as, the issue in that case was remission of duty in respect of the Final destroyed products. Appeal dismissed - decided against appellant.
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CST, VAT & Sales Tax
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2019 (11) TMI 313
Classification of goods - spent malt - Tribunal has treated the same to be unclassified goods and subjected them at a highest rate - rejection of books of accounts - Whether the Tribunal was justified in holding that spent malt is not cattle fodder and therefore not exempt from trade tax under Notification KA.NI.-3129/XI-9(40)/92 U.P. Act 15/48- Order-(38)2000, dated 30.9.2000 w.e.f. 1.10.2000? - HELD THAT:- In absence of any ground of appeal having been raised by the revenue before the Tribunal seeking such enhancement on the ground of classification of the goods, the Tribunal has clearly erred in subjecting the goods spent malt treating them to be unclassified goods - In so far as the Tribunal has dismissed the assessee's appeal on that count and drawn a third conclusion that order is found to be lacking as noted above. It is, accordingly, set aside and the matter is remitted to the Tribunal to pass a fresh order in accordance with law. Rejection of books of accounts - Whether the Tribunal was justified in remanding the issue of books rejection and ordering for reexamination of figures furnished by the petitioner and passing assessment order afresh, when it had made a categorical finding that there is no material with the department to disapprove the figures furnished by the petitioner? - HELD THAT:- The Tribunal appears to have recorded unsustainable findings, inasmuch as, in one breath it has recorded that though no books of account were produced by the assessee before it, yet on a prima facie basis, there is no deficiency in the same. Without having itself seen the books, the latter observation made by the Tribunal cannot be sustained. Being a fact finding authority and the rejection of books of account being an issue raised before it, Tribunal was bound to return a proper finding upon appraisal of material and evidence. Since the matter is being remitted to the Tribunal to record a finding on the issue of classification of the goods, it is desirable that the Tribunal may pass proper order on second issue regarding to rejection of books of account - Appeal allowed by way of remand.
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2019 (11) TMI 311
Refund of sum under VAT - Delhi VAT - financial year 2006-07, 2007-08, 2010-11 and 2014-15 - Claim of the petitioner is to get refund of the amount along with interest @ 6% as per Section 42 of the DVAT - HELD THAT:- The respondent no. 3 are directed to decide the claim of the petitioner under the DVAT in accordance with law, rules, regulations and Government policies applicable to the facts of the present case as early as possible and practicable, preferably within eight weeks from the receipt of copy of the order of this Court. If any refund is to be paid, claim of interest will also be appreciated by the respondent no. 3 in accordance with law. Petition disposed off.
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2019 (11) TMI 306
Maintainability of appeal - appeal dismissed on the ground that fresh Form F as directed by the appellate authority could not be produced by the petitioner before the appellate forum - HELD THAT:- In view of the orders of the Commercial Taxes Officer of the State of Jharkhand present at Annexure-3 series coupled with the endorsement present in the Form F as manifest from the enclosures to Annexure-3, which confirms the issuing State, a mindless mechanical objection by the appellate authority has led to the present proceeding which as we have observed was completely unwarranted and was avoidable. In view of the order of the taxing authority of the State of Jharkhand at Annexure-3 series whatsoever may have been the doubt in the minds of the statutory authority concerned, should have been laid to rest and there was no occasion for the appellate authority to direct the petitioner to obtain fresh Form F from Commercial Tax Department of the State of Jharkhand knowing fully well that having once issued such form as manifest from Annexure-3 series - Petition allowed.
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Indian Laws
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2019 (11) TMI 307
Grant of Bail - Smuggling - Ketamine Hydrochloride - Drug or not - section 50 of NDPS Act - petitioner is alleged of offences punishable under Sections 8, 22, 23, 27A, 28, 29 and32B(a) of the Act. HELD THAT:- In order to grant bail, Court must record satisfaction on two aspects. Firstly that there are reasonable grounds to believe that petitioner is not guilty of alleged offence and secondly that he is not likely to commit any offence while on bail. Admittedly, Ketamine finds its place at Sl. No.110A of the Schedule. Salts and preparations find place at Sl. No.111. Hence, Ketamine Hydrochloride will have to be treated as a preparation of Ketamine. - the contention urged by Shri. Hasmath Pasha that petitioner is required to be tried only for violation of Drugs and Cosmetics Act, is also untenable. A careful analysis of dates and events discernable from petitioner s statement, seized documents and contraband do not instil confidence to record satisfaction that there exist grounds to believe that petitioner is not prima facie guilty of the alleged offence and that he is not likely to commit any offence, if released on bail. Petition dismissed.
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