TMI Tax Updates - e-Newsletter
December 11, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

News

1. Goods & Services Tax refund

2. CCI approves acquisition of stake in Future Supply by Nippon Express

3. Transparency in chit fund schemes

4. Sanctioned for prosecution given to 366 cases in violation of CSR norms

5. Education sector received maximum CSR funds from 2014-15 to 2017-18

6. Disinvestment of BPCL

7. Minister of Commerce and Industry, Piyush Goyal meets Japanese Minister of Economy, Trade and Industry in New Delhi

8. EEPC celebrates 50th year of Engineering Exports Awards

9. THE CITIZENSHIP (AMENDMENT) BILL, 2019 - AS PASSED BY LOK SABHA

10. Auction for Sale (Re-Issue) of ‘6.18% GS 2024’,

Notifications

GST - States

1. ORDER NO. 08/2019 - dated 26-11-2019 - Karnataka SGST

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

2. 26/2019 - No. FD 48 CSL 2017 - dated 22-11-2019 - Karnataka SGST

Seeks to insert explanation regarding Bus Body Building in Notification No. (11/2017) No.FD 48 CSL 2017, dated the 29th June, 2017

3. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol.1)/246 - dated 30-9-2019 - Nagaland SGST

Amendment in Notification No. F.NO.FIN/REV-3/GST/1/08(Pt-1)”N” dated 30th June, 2017

4. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol.1)/245 - dated 30-9-2019 - Nagaland SGST

Seeks to exempt supply of goods for specified projects under FAO

5. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol. 1) /244 - dated 30-9-2019 - Nagaland SGST

Amendment in Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-I) (Vol .1) /78 dated the 07th March, 2019

6. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol. 1) /243 - dated 30-9-2019 - Nagaland SGST

Amendment in Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-I) (Vol 1) /04, dated the 31st December, 2018

7. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol. 1) /242 - dated 30-9-2019 - Nagaland SGST

Amendment in Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-1) “F” dated the 30th June, 2017

8. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol. 1) /241 - dated 30-9-2019 - Nagaland SGST

Amendment in Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-1)”E” dated the 30th June, 2017

9. F.NO.FIN/REV-3/GST/1/08 (Pt-1) (Vol. 1) /240 - dated 30-9-2019 - Nagaland SGST

Seeks to amend Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-1) “D” dated 30th June, 2017

Circulars / Instructions / Orders

GST - States

1. GST-32/2019-20 - dated 5-12-2019

Withdrawal of CCT Circular No. GST-11/2019-20 dt. 29.07.2019

2. GST-28/2019-20 - dated 2-12-2019

Restriction in availment of input tax credit in terms of sub-rule (4) of rule 36 of KGST Rules. 2017

3. GST-29/2019-20 - dated 2-12-2019

Clarification regarding optional filing of annual return under Notification (20/2019) No. FD 47 CSL 2017 dated 16th October, 2019

4. GST-30/2019-20 - dated 2-12-2019

Fully electronic refund process through FORM GST RFD-01 and single disbursement

5. GST-31/2019-20 - dated 2-12-2019

Clarification on scope of the notification entry at item (id), related to job work, under heading 9988 of Notification (11/2017) No. FD 48 CSL 2017 dated 29-06-2017

Highlights / Catch Notes

GST

• No Bail for Accused in Fraudulent Tax Credit Case Under GST Act Sections 132(1)(b)(c)(d) Amid Ongoing Investigation.

  Case-Laws - HC : Grant of Bail - availment of input tax credit - offences u/s 132 (1)(b)(c) & (d) of GST - the matter is still at the stage of investigation and having regard to the seriousness of the offence and without expressing any opinion on the merits of the case, benefit of bail to the accused-petitioner cannot be granted.
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• Challenge to Show Cause Notice on GST Interest Demand u/r 142(1); Proceedings Stayed Pending Review.

  Case-Laws - HC : Validity of SCN - demand of Interest on delayed payment of GST - SCN issued in Form GST DRC 01 under Rule 142(1) of the CGST Rules, 2017 - impugned SCN is issued in relation to section 50 - Reference was made to rule 142 of the Rules to point out that the same no where contemplates issuance of notice thereunder in respect of section 50 - Further proceedings stayed.
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• Revenue Urged to Appeal Supreme Court Order on Extended TRAN-1 Filing Date in GST Case Law Review.

  Case-Laws - HC : Review of order - Permission to file Form 'TRAN-1' by the extended date - the appropriate remedy for the Revenue would be to approach the Hon'ble Supreme Court by filing an appeal.
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Income Tax

• Interest on Borrowings Disallowed Due to Lack of Commercial Expediency in Diverting Funds to Sister Concerns.

  Case-Laws - AT : Disallowance of interest on borrowings - assessee has not been able to prove that there is commercial expediency in diverting interest free funds to the sisterconcerns when assessee was paying huge interest on its borrowings - Therefore, the interest expenditure to the extent of funds diverted to sister concerns has been rightly disallowed by the A.O.
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• Assessee's 6300% Return in 12 Months Deemed Dubious; Authorities Uphold LTCG Fraud Concerns, Possible Tax Evasion.

  Case-Laws - AT : Bogus LTCG - assessee had earned a return of approximately 6300% over a very short period of just over 12 months - The conduct of the assessee who is a novice, aises reasonable doubt to suspect the bona fides of the transaction and in the absence of any satisfactory explanation offered by the assessee on the vital points raised by the learned Assessing Officer, it is not possible to brush aside the orders of the authorities below
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• Assessing Officer Must Maintain Consistency in Section 10A Deductions When Facts Remain Unchanged, Despite Res Judicata Inapplicability.

  Case-Laws - AT : Deduction u/s.10A - When the facts and circumstances are identical, the AO should be barred from taking a different view in the matter. The ‘principle of res judicata’ is not attracted considering the ‘principle of consistency’.
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• Assessing Officer Limited to Specific Scrutiny Issues; Section 263 Revision Power Not Applicable Beyond Scope.

  Case-Laws - AT : Power of revision - scope of assessment under limited scrutiny - It is settled position of law that while completing the assessment under limited scrutiny, the Assessing Officer cannot look beyond the issue for which the case was selected for scrutiny. - Revision u/s 263 cannot be made when AO has not power to adjudicate an issue.
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Customs

• Claim Ownership of Seized Goods: File Application u/s 125 of Customs Act for Authority's Decision.

  Case-Laws - HC : Seizure of goods - When the ownership of the property is in dispute, the proper course for the petitioner no.1, who is claiming to be the owner of the property, is to file proper application under Section 125 of the Customs Act before the authority of proper jurisdiction who will take a decision in accordance with law
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Corporate Law

• Company Election Dispute on Electronic Voting Resolved by Tribunal, Not Civil Courts, per Companies Act Sections 241, 242, 424-430.

  Case-Laws - HC : Oppression and mismanagement - election dispute of a company involving voting through electronic means - Sections 241 and 242 on the one hand and along with Sections 424 to 430 of the Act on the other hand, an election dispute would not lie before the Civil Court, but only before the Tribunal.
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Indian Laws

• Cheques are valid even if not fully completed by the drawer; no legal requirement for personal handwriting.

  Case-Laws - HC : Dishonor of Cheque - It is nowhere provided under any law that a cheque would be a valid instrument only if all parts of the same are filled up by the drawer or the holder of the account himself or in his own handwriting.
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PMLA

• Bail Denied in Money Laundering Case: Court Finds No Errors in Investigation or Offenses Against Petitioner.

  Case-Laws - HC : Petition for grant of regular bail - Money Laundering - siphoning of funds - it was found that these Companies were having an amount of ₹ 90.03 Crores as Cash-in-Hand on 31-03-2016. However, by the end of the financial year on 31-03-2017, this Cash-in-Hand was reduced to ₹ 1.15 Crores - post demonisation - the investigation, the complaint or the cognizance of the offences against the petitioner are not vitiated in any manner. - Bail rejected.
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Service Tax

• Appellant's Transaction Subject to VAT Under State Government VAT Act; Services Not Classified as Tangible Goods for Use.

  Case-Laws - AT : Classification of services - this transaction is undisputedly liable to VAT as the appellant are paying the VAT as per the provision of the State Government VAT Act. Thus, the services would not fall under the category of ‘tangible goods for use’.
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Central Excise

• Amendment to Section 35L clarifies appeal forums for Central Excise; deemed retrospective, applies to past and future cases.

  Case-Laws - HC : Maintainability of appeal - appropriate forum - SC or HC - Scope of amendment made to Section 35L of the Act on 6th August, 2014 - The amendment is in the nature of a clarification and not bringing about any change in the law - The amendment made to Section 35L of the Act by insertion of sub-section (2) therein is clarificatory and retrospective in nature.
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• Appellants can claim input service credit for contractor activities maintaining fly ash collection systems in thermal plants.

  Case-Laws - AT : CENVAT Credit - The appellants are entitled to avail the input service credit on the activities performed by the contractors who are maintaining the systems to collect the fly ash generated in the thermal power plant
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• CENVAT Credit Refund Denied for Closed Manufacturing Units u/ss 11B and 11B(2) of Central Excise Laws.

  Case-Laws - AT : Cash Refund of unutilized amount of CENVAT Credit - closure of manufacturing activities - refund is not permissible under Section 11B and Section 11B(2) where CENVAT credit could not be utilised due to closer of manufacturing activities.
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VAT

• Tax Classification of Parachute Oil, Medikar, and Starch: Stick to Legislative Intent When Language is Ambiguous.

  Case-Laws - HC : Classification of goods - Parachute Oil - Medikar - Revived Instant Starch - when the Legislature itself is silent a meaning or interpretation to a word used in the statute must not be given which the Legislature itself did not intend and did not say in so many words.
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Case Laws:

• GST

• 2019 (12) TMI 417
  Grant of Bail - availment of input tax credit - offences u/s 132 (1)(b)(c) (d) of the Central Goods Services Tax Act, 2017 - allegations made against the accused petitioner goes to show that bailable offence is made out as provided under Section 132(4) read with Section 132(5) of the Act - HELD THAT:- Looking at the gravity of the offence specially the fact that there are serious allegations against the petitioner of wrong availment of input tax credit of more than Rs. 40.53 Crores involved on supply of goods, the matter is still at the stage of investigation and having regard to the seriousness of the offence and without expressing any opinion on the merits of the case, benefit of bail to the accused-petitioner cannot be granted. Bail application dismissed.

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• 2019 (12) TMI 416
  Unable to upload Form TRAN-1 - details of its un-utilized Input Tax Credit not uploaded - HELD THAT:- The issue raised in the present petition is squarely covered in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] , where it was held that The Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit. Petition allowed.

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• 2019 (12) TMI 415
  Validity of SCN - demand of Interest on delayed payment of GST - SCN issued in Form GST DRC 01 under Rule 142(1) of the CGST Rules, 2017 - impugned SCN is issued in relation to section 50 of the Central Goods and Service Tax Act, 2017 - Reference was made to rule 142 of the Rules to point out that the same no where contemplates issuance of notice thereunder in respect of section 50 of the Act - HELD THAT:- Issue Notice, returnable on 26.12.2019. By way of ad-interim relief, further proceedings pursuant to the impugned notice dated 19.07.2019 are hereby stayed.

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• 2019 (12) TMI 414
  Review of order - Permission to file Form TRAN-1 by the extended date - HELD THAT:- Merely, because the implementation has been stayed in Review by the Hon ble Gujarat High Court, in our considered opinion, is no ground to review our judgment, however, in our view, the appropriate remedy for the Revenue would be to approach the Hon ble Supreme Court by filing an appeal. Review application dismissed.

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• 2019 (12) TMI 413
  Input tax credit - Scope of Section 17(5)(d) - construction of immovable property (shopping malls) intending for letting out for rent - Reliance upon the decision of HC [ 2019 (5) TMI 1278 - ORISSA HIGH COURT] - HELD THAT:- Notice issued. It is made clear that in case the petition is allowed, the petitioner would be entitled to claim the credit even if the time limit for the same has lapsed. Notice of motion for 12.12.2019.

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• Income Tax

• 2019 (12) TMI 412
  Reopening of assessment u/s 147 - the assessment has been concluded and the petitioner has challenged the said assessment by filing an appeal before the Commissioner Appeals - HELD THAT:- - HELD THAT:- SLP dismissed.

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• 2019 (12) TMI 411
  Review petition - order passed by the Commissioner of Income Tax refusing to entertain the Revision Application filed by the Petitioner against the assessment order - HELD THAT:- Review Petitioner has reiterated the grounds taken in the review petition. The learned counsel submits that the judgment under review proceeds on an erroneous premise that the Petitioner is guilty of suppression and contends that no notice was served. It is also contended that the Petitioner is not connected with the film laboratory and the findings rendered are not borne out from the record. Division Bench had refused to exercise its extraordinary writ jurisdiction for the reasons set out in the judgment. We find that the review petition is seeking rehearing of the writ petition on the issues already argued and concluded. The review petition urges grounds about correctness of the findings recorded. It is not possible for us to entertain the grounds raised in the review jurisdiction, as we cannot exercise appellate jurisdiction. The Petitioner has his remedy to challenge the judgment and order under review as per law.

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• 2019 (12) TMI 410
  Penalty u/s 271AAA - assessment order framed u/s 143(3) r.w.s 153A - undisclosed income - HELD THAT:- A bare perusal of the penalty order shows that the AO has levied the penalty mechanically by taking difference in the return of income and assessed income. Entire penalty order is devoid of any specific findings in respect of any specific seized material or undisclosed income detected as a result of search. In our understanding of the law, it was incumbent upon the Assessing Officer to first establish that there was undisclosed income within the meaning of section 271AAA of the Act before any penalty under the said section could be levied. As relying on DURGA KAMAL RICE MILLS VERSUS COMMISSIONER OF INCOME-TAX. [ 2003 (4) TMI 26 - CALCUTTA HIGH COURT] burden of proof in the penalty proceedings is independent and larger than in the assessment proceedings and the assessment proceedings and penalty proceedings are different. Findings in the assessment proceedings are not sufficient to impose penalty. Further, penalty cannot be imposed when assessment has been enhanced merely on estimates. Considering the facts of the case in totality, we do not find any error or infirmity in the findings of the ld. CIT(A). - Decided against revenue.

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• 2019 (12) TMI 409
  Deduction u/s 80IA(4)(iv) - additional claim before the CIT(A) made by filing revised return of income - HELD THAT:- CIT(A) refused his indulgence towards the additional claim arose on account of reworking of deduction in the light of prevailing judicial precedents and CBDT Circular No.1 of 2016 dated 15.02.2016 on the ground that the assessee has failed to file the revised return and consequently the additional relief cannot be entertained as it would have the effect of bringing the assessed income below the returned income. We do not find any merit whatsoever in such reasoning propounded by the CIT(A). The rationale adopted by the CIT(A) for refusal of the additional claim is in direct contravention with the judicial precedents cited on behalf of the assessee - We have no hesitation to hold on first principles that the additional claim requires to be entertained when found eligible as per the relevant provisions of the Act in the light of the judicial precedents and CBDT Circular issued in favour of the assessee. It is well settled that the appellate authority is not precluded from adjudicating the additional claims of an assessee regardless of whether the return was revised or not. The Revenue is under duty to assess the true profits of an assessee and cannot take advantage of the ignorance of the assessee on the provisions of the Act. Thus, the action of the CIT(A) to this extent requires to be set aside and additional claim of the assessee requires to be entertained. However, in the same vain, we notice that the quantification aspects of additional claim flowing from notional set off / carry forward of losses of earlier years from eligible profits has not been examined by the authorities below. We set aside the issue to the file of the AO for the limited purposes of determination of correct quantum of deduction to be computed without setting off any notional losses of the windmill power project pertaining to the earlier assessment years as discussed hereinabove. AO shall allow enhanced deduction u/s 80IA(4) as eligible to assessee in accordance with law regardless of claim made by the assessee in this regard in its return of income. Substantial ground of appeal is allowed for statistical purpose.

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• 2019 (12) TMI 408
  Disallowance of interest on borrowings - account of diversion of funds to sister-concern - no tax deducted at source - only contention raised is that the advances were made to sister-concern out of commercial expediency and hence no disallowances can be made for the interest expenditure - HELD THAT:- The financial constraints of the sister-concerns and damage to goodwill cannot be accepted as deciding factors of commercial expediency unless the assessee proves that failure of business of sister-concerns has an impact on the business / goodwill of the assessee. The assessee in this case has not been able to prove with necessary evidence that the failure of the business of the sister concern has an impact on the assessee. The assessee has not been able to prove that there is commercial expediency in diverting interest free funds to the sisterconcerns when assessee was paying huge interest on its borrowings - Therefore, the interest expenditure to the extent of funds diverted to sister concerns has been rightly disallowed by the A.O. Disallowance of interest by invoking the provisions of section 40(a)(ia) of the I.T.Act - HELD THAT:- Admittedly, the loans were advanced by the Directors of the assessee-company. As per the assesseecompany s audited balance sheet, the loans in question are standing against the Directors (and not in the name of the banks). Once it is admitted that the loans are from Directors, the interest on such loans have to be paid to the Directors. Therefore, undoubtedly, tax ought to have been deducted at source on such interest payment by the assessee-company under the provisions of section 194A of the I.T.Act - In the instant case, since there is no deduction of tax at source u/s 194A of the I.T.Act, the Assessing Officer has correctly invoked the provisions of section 40(a)(ia) of the I.T.Act and disallowed interest payment. The appeal filed by the assessee is dismissed.

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• 2019 (12) TMI 407
  Purchase of the jewellery, gold, diamond and property - Allowable business expenses - HELD THAT:- CIT(A) has given a categorical finding that the loan of Rs. 2.50 crores taken from ICICI Bank is not home loan and is loan against the property which was purchased way back in 1970 and, therefore, the observation of the AO that the property purchased against the loan is factually incorrect could not be covered by the Ld. DR. CIT(A) has given a finding that the intention of the assessee for purchase of the jewellery, gold, diamond and property which reflected from the trading account and P L account declared from 2008-09 onwards and were shown under the head purchased/ closing stock / opening stock of properties and jewelleries. He has also given a finding that the documents purchased during the assessment proceedings clearly reveals that the loan availed from ICICI Bank is utilized for purchase of jewellery and property w.e.f. 01.04.2007 further the assessee was showing the sale and purchase of the jewellery and property under the head business and profession a detailed factual finding given by the Ld. CIT(A) could not be controverted by the DR. We find under identical circumstances the Tribunal in assessee s own case for A.Y.2009- 10 has deleted similar addition sustained by the CIT(A) - no infirmity in the order of the CIT(A) in deleting the disallowance made on account of business expenses Addition of unsecured loan - HELD THAT:- As given a finding that the payment was made directly by Standard Chartered Bank to ICICI Bank and, therefore, such entries cannot appear in the bank statement of Mr. Jaswinder Singh. In our opinion such entries cannot appear in the bank statement of the assessee as well as her husband since the amount has been paid directly by Standard Chartered Bank to ICICI Bank for taking over the loan. Since the deletion by the CIT(A) is based on facts and there is nothing on record to controvert the same by revenue, therefore, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly the ground No.2 raised by the revenue is dismissed. Low house hold expenses - HELD THAT:- CIT(A) while deleting the disallowance has considered the size of the family, withdrawal by other members and has also given an observation that the same was based on surmises. Nothing contrary was brought to our notice against the reasons given by the CIT(A) on this issue. Accordingly the ground raised by the revenue on this issue is also dismissed. Reopening of assessment - assessment was earlier completed u/s. 143 (1) and not u/s. 143 (3) - HELD THAT:- Hon ble Supreme Court in the case of Raymond Woolen Mills Ltd. Vs. ITO [ 1997 (12) TMI 12 - SUPREME COURT] has held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could re-open the case. The sufficiency and correctness of the material is not a thing to be considered at this stage. Further, the assessment was earlier completed u/s. 143 (1) and not u/s. 143 (3). No merit in the arguments advanced by assessee that the re-opening of the assessment was not valid and not as per law. In our opinion the reassessment proceeding in the instant case has validly been initiated and, therefore, the Ld. CIT(A) was fully justified in upholding such reassessment CIT(A) has given a finding that the intention of the assessee for purchase of the jewellery, gold, diamond and property which reflected from the trading account and P L account declared from 2008-09 onwards and were shown under the head purchased/ closing stock / opening stock of properties and jewelleries. He has also given a finding that the documents purchased during the assessment proceedings clearly reveals that the loan availed from ICICI Bank is utilized for purchase of jewellery and property w.e.f. 01.04.2007 further the assessee was showing the sale and purchase of the jewellery and property under the head business and profession a detailed factual finding given by the Ld. CIT(A) could not be controverted by the Ld. DR

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• 2019 (12) TMI 406
  Reopening of assessment in exercise of powers u/s 153A - Tribunal quashing the order u/s 153A stating that in absence of any incriminating material on issue which has already been examined and finalized in original assessment cannot be reexamined and reopened - HELD THAT:- This Court in Commissioner of Income Tax II vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. [ 2015 (5) TMI 656 - BOMBAY HIGH COURT ] and noticed that an identical issue had come up for consideration. The Division Bench had rejected the Revenue s appeals and confirmed the decision of the Special Bench of the Tribunal - It was held in the said case that such assessment cannot be reexamined or reopened in exercise of powers under section 153A of the Act. Appeal dismissed.

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• 2019 (12) TMI 405
  Addition of income - allegation that primary ingredients of section 68 not fulfilled - fresh unsecured loans received from four parties - failure to discharge its onus of proving the creditworthiness of parties who advanced the loans - Ld. AO came to a conclusion that although the assessee established the identity of the lenders but failed to establish the creditworthiness of the lenders and also genuineness of the said transactions since the assessee did not furnish necessary documentary evidences such as copy of return of income of the lenders, statement of total income, Balance Sheet Profit Loss account etc. of the lenders - scrutiny assessment - principles of natural justice. HELD THAT:- The basic facts as enumerated in preceding paragraphs are not under dispute. It is quite evident that no independent inquiry has been made by Ld. AO to ascertain the genuineness of the transactions from loan creditors either in original assessment proceedings or in remand proceedings. It transpires that the additions were made by Ld. AO merely on doubts without bringing on record any corroborative material which would suggest that the loans represented assessee s unaccounted money - In fact, the identity of the loan creditors was accepted by Ld. AO in the assessment proceedings itself. The documents furnished by the assessee with respect to loan creditors include copies of return of income of the lenders, computation of income, Balance Sheet, ledger extracts and bank statements etc., which we have carefully perused. Regarding loans from Shri Prashant Kamat, the assessee has placed on record Income Tax Return of the said lender, Computation of income, financial statements and ledger confirmations which matches with the outstanding balance reflected by the assessee. Regarding last entity i.e. M/s Shardha Energy Infraproject Private Limited, the assessee has placed on record the copy of Income Tax Return, Audited financial statements, ledger confirmation - In fact, no fresh loans have been obtained by the assessee from this entity during the year under consideration and the amount of Rs. 211.71 Lacs represent opening balance. The perusal of all these documents would establish that the assessee was successful in demonstrating the fulfilment of primary ingredients of Section 68. There are no reason to interfere in the impugned order - appeal dismissed - decided against Revenue.

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• 2019 (12) TMI 404
  Deduction u/s 80IA(4)(i)(c) in respect of civil works including irrigation Projects and 80IA(4)(iv)(b) in respect of Electrical Projects - HELD THAT:- Relying on the decision of Hon ble ITAT vide [ 2012 (4) TMI 149 - ITAT HYDERABAD] assessee submitted that all these issues have to be remanded to the file of CIT(A) for passing an order in compliance with the said order of the Tribunal. Referring to above note, Ld.Counsel for the assessee submitted that the assessee is entitled to deduction u/s.80IA(4) in respect of both the types of the Projects. The said order of the Tribunal helps the assessee if an effect is given and the said decision is honoured by the AO. Further, referring to the allowability of deduction u/s.80IA(4)(i)(c) - assessee submitted that the ITAT already taken a view in this regard and consequently, the appeals of the Revenue are dismissed - we are of the opinion that the directions should be given to the CIT(A) to go by the said order of the Tribunal. AO shall grant an opportunity of being heard. Accordingly, Ground Nos. 1 to 4 are allowed for statistical purposes. Disallowance u/s.14A - HELD THAT:- There is no dispute about the earning of the dividend income of Rs. 4.5 Lakhs. It is also a fact that the finance charges were incurred by the assessee as seen from the Profit Loss A/c. Considering the exempt nature of the dividend income, the onus of the assessee is to demonstrate that none of the finance charges were incurred for investments, which yielded the dividend income to the assessee in the year under consideration. The orders of the AO and CIT(A) are not clear about the extent of investments made by the assessee out of the interest bearing borrowed funds. It is also not emanating from the orders about the facts on the sufficiency of non-interest free funds for explaining the dividend yielding investments. Therefore, in all fairness, we are of the opinion that this issue should also be remanded to the file of AO for fresh consideration. Hence, this ground of assessee is treated as allowed for statistical purposes.

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• 2019 (12) TMI 403
  Bogus LTCG - Suspicious Long Term Capital Gain (LTCG) on sale of shares (inputs from investigation wing) - assessee had earned a return of approximately 6300% over a very short period of just over 12 months - HELD THAT:- In the case of Sanat Kumar [ 2019 (8) TMI 696 - ITAT DELHI] dealt with a similar situation, and made an observation that though the assessee meticulously completed the paperwork by routing his entire investments through banking channel, when the result of an altogether beyond human properties, what is apparent in making investment is not really and the examination of the entire transaction falsifies the same. The conduct of the assessee who is a novice, in investing in the stocks of a company whose financial results are not brilliant and where there is no apparent chance of lucrative gains at the time when such an investment was made - raises reasonable doubt to suspect the bona fides of the transaction and in the absence of any satisfactory explanation offered by the assessee on the vital points raised by the learned Assessing Officer, it is not possible to brush aside the orders of the authorities below. Both the authorities below have the cogent reasons for reaching the conclusions and we find it difficult to interfere with the same. With this view of the matter, we dismiss the grounds of. - Decided against assessee.

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• 2019 (12) TMI 402
  Disallowance of rental expenses - Nature of expenses - revenue or capital - HELD THAT:- Undisputedly, the subject premise in respect of which the assessee has claimed the rental expenses has been taken on lease by the assessee. Though, in the leave and license agreement, it is mentioned that it has been taken on lease for the use of residence of directors/employees, however, it cannot be said that in course of such user, the directors are not doing any official work, such as, meeting the investors, etc. Therefore, merely because as per the terms of the leave and license agreement the premise is to be used for residence purpose of the directors, assessee s claim cannot be rejected. Tribunal in Stuish Capital Services Pvt. Ltd. [ 2018 (5) TMI 1948 - ITAT MUMBAI] while considering the allowability of depreciation on a premise taken on lease for use of director s residence allowed assessee s claim by holding that since the company is engaged in share trading, the premise is used by directors for official work also, hence, as per CBDT Circular and the decision of the Hon ble Delhi High Court in CIT v/s Modi Industries Ltd. [ 1994 (4) TMI 61 - DELHI HIGH COURT] assessee s claim is allowable. Disallowance of interest expenditure - AO on the basis of AIR information called upon the assessee to reconcile the interest income earned by it during the year - specific contention of the assessee that the borrowed funds on which the assessee has paid interest was utilized for investing in derivatives and NCDs - HELD THAT:- If the borrowed fund or part of it has been utilized in acquiring the NCDs, then the interest on such borrowed fund has to be set off against the interest income earned on NCDs to the extent of utilization of borrowed funds in NCDs. The aforesaid claim of the assessee, therefore, needs factual verification. In case, it is found that a part of the borrowed fund was utilized for investment in NCDs, then the interest expenditure corresponding to the borrowed fund utilized in NCDs has to be set off against the interest earned on NCDs. With the aforesaid observation, the issue is restored back to the Assessing Officer for fresh adjudication after verification of facts on record and due opportunity of being heard to the assessee. This ground is allowed for statistical purposes.

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• 2019 (12) TMI 401
  Penalty u/s 271(1)(c) - Defective notice - non-striking off the irrelevant limb - HELD THAT:- It cannot be said that the penalty was levied for furnishing inaccurate particulars of income and concealment of income. When the penalty is levied for one of the offence, it is incumbent upon the Assessing Officer to struck down the irrelevant portion of the notice issued u/s 274 of the Act. We have gone through the contents of the notice issued u/s. 274 of the Act. As held in the case of CIT Anr. vs. M/s. SSA s Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] that the notice issued by the Assessing Officer u/s. 274 r.w.s 271(1)(c) is to be bad in law as it did not specify which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. This view was confirmed by the Supreme Court in the same case, i.e., CIT Anr. vs. M/s. SSA s Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] We are inclined to hold that the penalty proceedings initiated by the AO is void ab initio and allow the appeal of the assessee.

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• 2019 (12) TMI 400
  Deduction u/s.10A - Inclusion of foreign exchange fluctuation gain for the purpose of export turnover - HELD THAT:- The principle of parity demands inclusion of such gains in the definition of export turnover when the same are included in the definition of total turnover. The said principle stands now consolidated by the order in HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT] Hon ble Madras High Court in the case of CIT Vs. Pentasoft Technologies Ltd. [ 2010 (7) TMI 75 - MADRAS HIGH COURT] is for treating the said foreign exchange fluctuation gains as part of the export sales for the purpose of deduction u/s.10A . Both on merits, such gain constitutes eligible income for the purpose of deduction. Therefore, the principle of parity demands inclusion of the said gains in both the denominator as well as the numerator of the formula laid down for the purpose of quantification of deduction u/s.10A of the Act. Accordingly, Ground No.2 is allowed as covered. Allowability of benefit of deduction claimed u/s.10A of the Act on the revenue account, corresponding to 12% of cross charges made by the assessee to its overseas foreign company (ATI Canada) - HELD THAT:- As considered the arguments of assessee on the applicability of principle of consistency . The said rule demands that no disturbance is to be caused for in the assessment years when the facts of the issue are identical. In this regard, we also considered the binding judgment of CIT Vs. Gopal Purohit [ 2010 (1) TMI 7 - BOMBAY HIGH COURT]. Despite the labour demonstrated by the Ld.DR for the Revenue, we find that no differential facts were brought to our notice for the AO to deviate from his line of accepting the claim of assessee in the past years. When the facts and circumstances are identical, the AO should be barred from taking a different view in the matter. The principle of res judicata is not attracted considering the principle of consistency . Therefore, without going to the merits of the issue i.e., allowability or otherwise of the said parties, we are of the opinion that on the legal principle of consistency itself, the assessee should get relief. Accordingly, Ground No.3 is allowed.

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• 2019 (12) TMI 399
  Power of revision - scope of assessment under limited scrutiny - Validity of the revision order passed by the ld. PCIT u/s 263 of the Act - HELD THAT:- The Assessing Officer had completed the assessment after making addition of 3,00,000/- treating the gift received from his brother as unexplained cash credit. But it appears that the Assessing Officer had looked into issue of source only to the extent of 41,50,000/- which is apparent consideration paid for the purchase of property. The value adopted for stamp duty purpose is taken as deemed consideration u/s 56(2)(vii) (b) of the Act and this is only deemed provision and there is no occasion for the assessee to explain the source for deemed consideration paid. It is settled position of law that while completing the assessment under limited scrutiny, the Assessing Officer cannot look beyond the issue for which the case was selected for scrutiny. It is beyond the power of the Assessing Officer to look into any other issue which has come to his notice during the course of assessment proceedings. The impugned order passed by the ld. PCIT cannot be sustained in the eyes of law - appeal of assessee allowed.

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• Customs

• 2019 (12) TMI 398
  Seizure of goods - Smuggling - Confiscation of Zink Ingot alongwith vehicle - Contraband item or not - truck along with the goods were seized in exercise of power under Section 110 of the Customs Act, 1962 on reasonable belief that the goods brought into India from Nepal without any documents is liable to confiscation - point has been raised by the petitioner that before seizure, the authority was to form an opinion that he has a reasonable belief that the goods are liable for confiscation under the Act. HELD THAT:- Section 123 of the Customs Act does not apply to the matter as the material seized is not any of the item mentioned under Section 123 of the Customs Act but, it is the common law that if the goods has been seized on reasonable belief that it is a smuggled goods from third country then, in that circumstances, the person from whose possession the seizure has been made, he has to show that the goods, which has been seized, does not fall in the mischief of the Customs Act or is not of a third country material. In the present case, the driver in a specific term has stated that the goods were loaded by Manoj Sah and he has stated that it is likely the goods has come from Nepal. In such circumstances, the submission of the petitioner that it is not from Nepal territory, unless it is shown by valid document or material from the person they have purchased, in such circumstances, in view of the statement of the driver, rightly the confiscation has been made and the order has been passed holding that the material is from Nepal origin and, in the present case, the driver has stated that the materials are of Manoj Sah, the petitioner no.3 whereas the petitioner no.1 Shiv Shankar Prasad (Noticee No.2) is claiming to be the owner of the goods. So, it is an unverified material as to who is the owner of the property. The vehicle has already been released and Rs. 50,000/- has been forfeited, treated to be the value of the vehicle. When the ownership of the property is in dispute, the proper course for the petitioner no.1, who is claiming to be the owner of the property, is to file proper application under Section 125 of the Customs Act before the authority of proper jurisdiction who will take a decision in accordance with law - this Court does not find that the petitioners have made out a case for interference with the impugned order passed by the Assistant Commissioner, Customs Division, Muzaffarpur Camp at Bodh Gaya. Thus, this Court is of the view that if any of the petitioners file an application under Section 125 of the Customs Act, 1962, the Authority concerned will consider the case on merit - application dismissed.

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• Corporate Laws

• 2019 (12) TMI 397
  Temporary injunction in respect of the disputed property - Corporate Debtor - whether an application under Section 630(2) of the 1956 Act was maintainable, in spite of pendency of the civil suit and issue of temporary injunction in respect of the disputed property? - HELD THAT:- The mere issuance of a temporary injunction by the civil court directing maintenance of status quo in respect of the disputed property does not make the dispute bona fide or bar the company s right to recover the disputed property from the accused employee under Section 630 of the 1956 Act. At best, such an injunction would only bar the company from creating any rights in favour of third parties pending disposal of the civil suit. This is because the cause of action in the civil suit is completely different from the question of whether the employee is wrongfully withholding the company s property, which is the issue for consideration in the present criminal proceedings - If prima facie the trial court finds that the company has the right to possess the property, the issuance of a temporary injunction by the civil court cannot be used to defeat the company s lawful right of possession. Whether an order could be made under Section 630(2) prior to final disposal of the complaint under Section 630(1)? - HELD THAT:- Where the Magistrate has found that prima facie the company has a right to possession of the disputed property, he may grant interlocutory relief under Section 630(2) prior to conclusion of the trial under Section 630(1). Courts have time and again observed that Section 630 has to be given a liberal interpretation so as to facilitate expeditious recovery of the company s property - given that the primary object of Section 630 is to provide a speedy mechanism for restoration of wrongfully withheld property to companies, we find that the provision should be construed as far as possible to facilitate a remedy in favour of the aggrieved company and to prevent the wrongful retention of the property for an unduly long period by the accused - In the present case, the courts below have not committed any error in allowing the appellant company s application under Section 630(2) during pendency of substantive criminal proceedings. Whether the company is entitled to pray for dispossession of 2nd Respondent from the property? - Whether it is required that 2nd Respondent should have been in possession of the disputed property as a perquisite of his service? - HELD THAT:- Section 630 nowhere requires that the company should have title to the property. The emphasis is on whether the accused has obtained wrongful possession of the property which defeats the company s lawful right of exclusive possession, even though the property as such may not belong to the company but to a thirdparty landlord or licensor - it is true that in the majority of cases falling under the ambit of Section 630, it has been that property possessed by the company was allotted to an employee for the purposes of residential accommodation, etc. as an incidence of his service, at the first instance itself. In the present case, the 2nd Respondent has been a director of the company since 1988, and claims to be in permissive possession of the disputed property as per the alleged understanding between him and his relative, the deceased Arun Kumar Bajoria, since 1994. However the company acquired the disputed property only in 2008. Be that as it may, the 2nd Respondent has failed to rebut the fact that as of 26.4.2008 it is the company which has acquired the exclusive right to possess the property, and the company handed over possession to him w.e.f 1.5.2008 only in his capacity as the director of the company. Whatever may have been the situation prior to 26.4.2008, on and after that date the company became entitled to recover possession of the disputed property. Inherent powers under Section 482 of the Cr.P.C - HELD THAT:- Section 397(2) of the Cr.P.C provides that the High Court s powers of revision shall not be exercised in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding. Whereas Section 482 of the Cr.P.C provides that nothing in the Cr.P.C will limit the High Court s inherent powers to prevent abuse of process or to secure the ends of justice. Hence the High Court may exercise its inherent powers under Section 482 to set aside an interlocutory order, notwithstanding the bar under Section 397(2). However it is settled law that this can only be done in exceptional cases. This is, for example, where a criminal proceeding has been initiated illegally, vexatiously or without jurisdiction. In the present case, the order of the Magistrate under Section 630(2) was an interlocutory relief based on a prima facie assessment of facts and did not conclusively decide the ongoing trial under Section 630(1). If the Magistrate finds that the appellant company has been unable to prove that the 2nd Respondent was wrongfully withholding possession of the property, such interlocutory relief shall stand vacated - it is clear that there was no exceptional case of illegality or lack of jurisdiction in the interlocutory order of the lower court calling for the exercise of the inherent powers of the High Court under Section 482, Cr.P.C. Appeal allowed - decided in favor of appellant.

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• 2019 (12) TMI 395
  Oppression and mismanagement - Whether an election dispute of a company involving voting through electronic means done under Section 20 of the Companies (Management and Administration) Rules 2014 to the Board of Directors would be amenable to the jurisdiction of the National Company Law Tribunal? HELD THAT:- Section 424 of the Act deals with the procedure to be adopted by the Tribunal and the Appellate Tribunal. The forums are given liberty to go beyond the Code of Civil Procedure by applying principles of natural justice and subject to other provisions governing. Thus, they are not bound by the Code, which is obviously a procedural one. They can also formulate their own procedure - Under Sub Clause (2) of 424 of the Act, the Tribunals are vested with the powers of the Civil Court as granted under the Code of Civil Procedure. Sub Section (3) gives sanctity to an order passed by the Tribunal or the Appellate Tribunal by elevating to it that of a decree. Sub Section 4 makes the position clear by deeming the Tribunal as a Civil Court though for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure. The functioning of the Tribunal also has the protection for its action taken in good faith under Section 428 of the Act. The Tribunal can also seek assistance of Chief Metropolitan Magistrate etc., while taking custody of the properties, books of account or other documents of the said company - Section 430 of the Act provides for an absolute bar to a Civil Court to entertain any suit or proceedings, which the Tribunal is empowered to do so under the Act. This provision starts with a negative covenant and thus, makes the intention of the legislature very clear. The object is to decide the disputes of the company. This section gives power to the Tribunal to determine, enforce law qua the company for any violation. Law includes any other law also. Therefore, it is certainly a peremptory provision. This provision has to be read along with other provisions in Sections 241, 242 and 424 to 429. Once this position is made clear, then it is very easy to understand the scope and ambit of Section 241. The intendment of the legislature is to redress the disputes, more particularly, internal ones of a company within the four walls of the Tribunal. Therefore, the contention that complex or disputed issues to be adjudicated upon only through the Civil Court would never arise at all. Though, summary proceeding may be required by the Tribunal in a given case, the Tribunal is not meant to follow it in all cases. Such a leverage and flexibility is conferred on the Tribunal either act as a regular or a special Court depending upon the nature of the complaint behind it. Sections 241 and 242 on the one hand and along with Sections 424 to 430 of the Act on the other hand, an election dispute would not lie before the Civil Court, but only before the Tribunal. There are no hesitation in holding that the learned single Judge has not taken note of the relevant provisions involved - it was accordingly held that the proper remedy is by an adjudication before the Civil Court as complex issues issues are involved - the order passed by the learned single Judge set aside - appeal allowed.

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• 2019 (12) TMI 394
  Issuance of directions for liquidation of the corporate debtor - CIRP initiated - Section 21 of the Code read with Regulation 17 of the CIRP Regulations - It has been submitted in the application that despite several advertisements inviting Expression of Interest, no resolution plan in respect of the Corporate Debtor was received by the Resolution Professional - HELD THAT:- In the facts and upon failure of resolution process there being no resolution plan and also on expiry of the statutory Corporate Insolvency Resolution Period of 270 days; Liquidation as proposed by the CoC has to follow - In the factual background and in the absence of any resolution plan there is no other alternative but to order in conformity with the majority decision of the Committee of Creditors, for liquidation of the corporate debtor under Section 33 of the Code. The application is allowed by ordering liquidation of the corporate debtor, namely M/s. Mohan Gems and Jewels Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 with certain directions.

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• PMLA

• 2019 (12) TMI 396
  Petition for grant of regular bail - Money Laundering - siphoning of funds - when the account of the above said 70 CUI of Adarsh Group of Companies were investigated; it was found that these Companies were having an amount of Rs. 90.03Crores as Cash-in-Hand on 31-03-2016. However, by the end of the financial year on 31-03-2017, this Cash-in-Hand was reduced to Rs. 1.15Crores - during this relevant time, Demonetization of currency notes of denomination of Rs. 1000/- and Rs. 500/-. HELD THAT:- Referring to the provision of the section 212 the counsel for the petitioner has laid stress on the argument that the Investigating Officer has vast powers to arrest the accused if he had the valid reasons and material with him to justify the arrest. If during the investigation he had the material and he did not find the arrest of the petitioner to be justified then there is no reason for the court to take the petitioner into custody on the basis of the same material which the investigation officer had placed on record before the Court. In effect, the argument of the counsel is that the same material cannot be interpreted in two different manners, one by the Investigating Officer and the other by the Trial Court. However, this court does not find any substance in this argument as well. The provision regarding arrest of a person during investigation under the new Companies Act is contained in section 212(8). The perusal of this provision shows that under the new Companies Act, the investigating officer does not have unbridled or as much liberal powers to arrest a person, as are available under Cr.P.C. Under the new Companies Act, 2013; before arresting a person, investigating officer is required to have material in his possession and on the basis of that material, is required to record reasons in writing that a person has been guilty of offence punishable under sections, which are mentioned in section 212 (6) of this Act. Therefore despite having the material in his possession justifying the arrest of a person, the investigating officer under the Companies Act may not choose to arrest a person, so as to avoid onerous duty of recording reasons. The trial court is under a mandatory duty to appreciate the said material in the manner a judicially trained minds should appreciate, while considering the matter for grant of bail to such an accused. Otherwise also, provision of section 212(6), if read as it is, requires consideration for grant of bail by much higher standards as compared to the standards prescribed for consideration for arrest by the investigating officer. Therefore in a given case, investigating officer may think that despite the availability of the material with him, since the accused has been cooperating during the investigation, therefore, he need not arrest such a person and that this job would be better left to be done by the court. This Court does not find any force in the other argument of the counsel for the petitioner as well, that since the investigating officer had not obtained prior approval from Central Government for investigating the petitioner or his companies separately, therefore, the investigation qua him is unauthorised and, hence, even the cognizance by the Court taken upon such investigation stands vitiated. Since, as per the provisions of Section 212 (14), on receipt of investigation report the Central Government can order initiation of prosecution; not only against the officers and employees etc. of the Company under investigation; but also against any person directly or indirectly connected with affairs of the company under investigation as well, therefore, if a person, not otherwise the employee or officer etc. of the Company under investigation, is also found colluding or conspiring in perpetuation of serious fraud; in relation to the affairs of the Company under investigation, then prosecution can be initiated against such person as well, despite the fact that the affairs of his own company were not directly under investigation for serious fraud in relation to their own affairs. A person can, very well, be prosecuted as a person abetting or as a conspirator or perpetrator of fraud in relation to a company not owned or controlled by him. Hence this Court finds that the investigation, the complaint or the cognizance of the offences against the petitioner are not vitiated in any manner. This court finds substance in the argument of the learned Counsel for the SFIO that since, as per the charge-sheet the petitioner is given to manipulations, for earning commissions, therefore, it cannot be denied that by nature, the petitioner could be manipulative. Hence, this court has no reason to believe that if the petitioner is released on bail, he is not likely to influence the witnesses of the case and also not likely to destroy the evidence against him. The past conduct of the petitioner has also not been exemplary - Also the argument of the counsel for the SFIO that since the vocation of the petitioner and his Companies is only to commit crimes to earn money, therefore, by any means, it cannot be said that if the petitioner is released on bail, he would not commit any offence again, also finds favor with this court. Petition dismissed.

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• Service Tax

• 2019 (12) TMI 393
  Classification of services - service of Supply Of Tangible Goods for use or not - appellant are providing Cylinder to their subsidiaries on rating basis - HELD THAT:- Under the same set of fact and on the legal issue, this tribunal has decided the matter in the appellant s own case AIMS PHARMA PVT LTD VERSUS C.C.E. S.T. -VADODARA-I [ 2019 (5) TMI 240 - CESTAT AHMEDABAD] where it was held that supply of tangible goods on lease basis with transfer of right to possession and effective control will go out of ambit of taxable services. Moreover this transaction is undisputedly liable to VAT as the appellant are paying the VAT as per the provision of the State Government VAT Act. Thus, the services would not fall under the category of tangible goods for use . It is also observed that in the present case the show cause notice is only in the form of statement to the earlier show cause notice which was covered in the cited judgment, therefore, the absolutely identical issue for the earlier period has been decided, accordingly, the issue is no longer Res-Integra. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (12) TMI 392
  Maintainability of appeal - appropriate forum - SC or HC - Appealable order of not - Classification of goods - marketibility - whether such an order is appealable to this Court or the Hon ble Supreme Court under the Act? - HELD THAT:- The appeals from the orders of the Tribunal under the Finance Act, 1994 and the Act prior to the introduction of Sub-Section (2) to Section 35L of the Act were governed by Section 35G(1) and 35L(1) of the Act. In terms of Section 35G(1) of the Act, every appeal from order of the Tribunal passed after 1st July, 2003 giving rise to a substantial question of law would be to the High Court except orders of the Tribunal relating to the rate of duty of excise or value of goods for the purpose of assessment. The above orders were excluded from the jurisdiction of the High Court and were appealable only to the Hon ble Supreme Court in terms of Section 35L(1)(b) of the Act. Appeals from orders of the Tribunal relating to taxability / excisability passed prior to 6th August, 2014 i.e. the date of insertion of sub-section (2) to Section 35L of the Act being a rate of duty issue, would be appealable only to the Hon ble Supreme Court and not the High Court. Scope of amendment made to Section 35L of the Act on 6th August, 2014 by insertion of sub-section (2) therein - clarificatory or prospective in nature? - HELD THAT:- The amendment / insertion of sub-Section (2) to Section 35 of the Act became necessary to set at rest all doubts as to where appeals arising out of orders of the Tribunal relating to excisability / taxability would lie whether before the Hon ble Supreme Court or the High Court. It appears that this insertion of sub-section (2) to Section 35L of the Act became necessary as this issue, viz. where such an appeal would lie, was being urged time and again before various High Courts. To settle the issue being urged and set the matter at rest, it appears that the amendment has been introduced. The amendment, therefore, is in the nature of a clarification and not bringing about any change in the law, i.e. excluding a set of orders of the Tribunal, which were earlier appealable to the High Court, now made appealable to the Honb le Supreme Court for the first time - The amendment made to Section 35L of the Act by insertion of sub-section (2) therein is clarificatory and retrospective in nature. The appeal be placed before the Division Bench for appropriate decision in accordance with law.

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• 2019 (12) TMI 391
  CENVAT Credit - input services or not - service provided by them for operation and maintenance of thermal power station - case of Revenue is that appellants are not entitled to take credit on such services rendered by their suppliers - HELD THAT:- The maintenance of PDFACS systems by the contractors or the appellants in terms of thermal power station is undoubtedly under round the clock collection and supply of fly ash. Therefore, it is evident that service rendered by the contractors of the appellants are certainly in or in relation to the manufacture of cement by the appellant. As long as the services are used directly or indirectly in the manufacture of dutiable products by the appellants such services are to be deemed to be services rendered to them and the input services for that purposes. Tribunal has been consistently taking the view that the service rendered directly and used in the primary activity of the appellant or eligible to be treated as input service. The Tribunal in the case of Birla Corporation Ltd. [ 2014 (5) TMI 213 - CESTAT NEW DELHI ] has held that services availed in respect of plant set up in the premises of NTPC for extraction and handling of fly ash is to be treated as service availed for procurement of inputs. The appellants are entitled to avail the input service credit on the activities performed by the contractors who are maintaining the systems to collect the fly ash generated in the thermal power plant - Appeal allowed - decided in favor of appellant.

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• 2019 (12) TMI 390
  Cash Refund of unutilized amount of CENVAT Credit - closure of manufacturing activities - Section 11B of CEA, 1944 - HELD THAT:- The order of the Hon ble Supreme Court in the case of UNION OF INDIA VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. [ 2007 (1) TMI 556 - SC ORDER] cannot be read as a declaration of law since SLP was dismissed leaving the question of law open and the same has been answered by it holding that refund is not permissible under Section 11B and Section 11B(2) where CENVAT credit could not be utilised due to closer of manufacturing activities. Credit cannot be allowed - appeal dismissed - decided against appellant.

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• 2019 (12) TMI 389
  Principles of Natural Justice - demand of Excise duty alongwith penalties - the original authority had dropped the proceedings for want of appreciable evidence to sustain the allegations in the SCN - HELD THAT:- In the light of the extensive scrutiny of the claim of retraction, silence on the part of the first appellate authority in countering the claim made by the appellants before him is not an appropriate response. The veracity of the various documents submitted by the appellant, as well as the claim of the statements having been retracted, can be decided only at the level of the appropriate authority - There is no doubt that the Tribunal, in the absence of any empowerment to remand, had ordered the first appellate authority to issue an order on merit. His lack of wherewithal to render a finding on the other aspects submitted before him cannot be held to discredit the said order. The direction appears to have, even though only superficially, been complied with. Matter remanded back to the original authority with a direction to consider the various submissions and ascertain the extent to which those can counter the allegations in the show cause notice - appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2019 (12) TMI 388
  Classification of goods - Parachute Oil - Medikar - Revived Instant Starch - Entry 43 of Schedule II Part A of the U.P. VAT Act, 2008 - HELD THAT:- The issue decided in the case of MAURI YEAST INDIA PVT. LTD. VERSUS STATE OF UP. [2008 (4) TMI 101 - SUPREME COURT] , where it was held that The word Starch as used in Entry 118 of Schedule II Part A of the U.P. VAT Act, 2008 has neither been referred to as edible or inedible and therefore Revive Starch must be held to be falling within the meaning of word Starch as used in Entry 118. If it had been the intention of the Legislature to distinguish between edible and inedible Starch, the Entry 118 itself would have explicitly said so and therefore when the Legislature itself is silent a meaning or interpretation to a word used in the statute must not be given which the Legislature itself did not intend and did not say in so many words. Further, the counsel for the revisionist has also fairly submitted that questions of law framed in the present revision have already been answered in the judgment dated 12.09.2014 [ 2015 (3) TMI 431 - ALLAHABAD HIGH COURT ] and therefore the questions framed in the instant revision would be squarely covered by the said judgment. Revision dismissed.

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• Indian Laws

• 2019 (12) TMI 387
  Pensionary Benefits - respondent had completed twenty years of service and had voluntarily retired and not resigned from service - whether the respondent s resignation amounted to a forfeiture of his past service disentitling him from pension or was in fact voluntary retirement ? - HELD THAT:- Rule 26 states that upon resignation, an employee forfeits past service - Irrespective of whether the first respondent had completed the requisite years of service to apply for voluntary retirement, his was a decision to resign and not a decision to seek voluntary retirement. If this court were to re-classify his resignation as a case of voluntary retirement, this would obfuscate the distinction between the concepts of resignation and voluntary retirement and render the operation of Rule 26 nugatory. Such an approach cannot be adopted. Accordingly, the finding of the Single Judge that the first respondent voluntarily retired is set aside. Whether the first respondent had completed twenty years in service? - HELD THAT:- No evidence has been placed on the record to show that the first respondent took issue with the denial of voluntary retirement between 25 May 1990 and 7 July 1990. To the contrary, in the legal notice dated 1 December 1992 sent by the first respondent to the appellant, the first respondent admitted to having resigned. The first respondent s writ petition was instituted thirteen years after the denial of voluntary retirement and eventual resignation. In the light of these circumstances, the denial of voluntary retirement cannot be invoked before this Court to claim pensionary benefits when the first respondent has admittedly resigned. Whether the first respondent has served twenty years? - HELD THAT:- The question is of no legal consequence to the present dispute. Even if the first respondent had served twenty years, under Rule 26 of the CCS Pension Rules his past service stands forfeited upon resignation. The first respondent is therefore not entitled to pensionary benefits. Appeal allowed.

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• 2019 (12) TMI 386
  Dishonor of cheque - acquittal of accussed - Respondent No.2/accused failed to discharge the onus in order to rebut the precipice - rebuttable presumptions or not - HELD THAT:- From the record, it is evident that altogether three PWs have been examined who are PW-1, Dilip Kumar, PW-2, Binod Kumar and PW-3, Deepak Kumar. Side by side, prosecution has also exhibited Cheque, Ext-1, copy of Advocate notice, Ext-2, Registered Postal receipt, Ext-3, complaint petition, Ext-4. Nothing has been adduced on behalf of defence/Respondent No.2 - The evidence of PWs-1 and 2 are not at all relevant because of the fact that they are not the persons anyway concerned with the affairs, although, came to the side of the complainant, PW-3. PW-3, during course of examination-in-chief has stated that he gave friendly loan of an amount of Rs. 25 Lacs on an undertaking at the end of the accused that the same will be returned back within one month. In the month of April, 2014, a sum of Rs. 1, 24, 000/- was returned back whereupon, Rs. 23, 76,000/- remained due for which, on persistent demand, accused issued a Cheque on 18.06.2014 which he deposited in his account running in the Axis Bank, Danapur which was dishonoured as, the bank had reported that signature is mismatching. From the record, it is evident that nothing has been adduced in defence. On 27.11.2017, while argument was going on, a petition was filed on behalf of defence that the cheque be sent to a hand-writing expert in order to examine the signature over the relevant cheque which the learned lower court vide order dated 10.01.2018 rejected the same and, Respondent No.2/accused had not challenged the same. The appellant is found guilty for an offence punishable under Section 138 of the NI Act and hence is directed to undergo RI for one year as well as fined twice of the amount of cheque, in default thereof, to undergo SI for three months - Appeal allowed.

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• 2019 (12) TMI 385
  Dishonor of Cheque - specimen handwriting on the cheque - application of the petitioner/ accused dismissed for taking his own specimen handwriting for comparison of the same with the writing on the body of the cheque involved the complaint - section 138 of nI Act - HELD THAT:- In the present case, the petitioner has not even disputed his signatures on the cheque. Therefore, the only attempt which is being made by the petitioner is that he wants to prove the nonexistence of the consent of the petitioner qua drawing of the cheque by asserting the fact that body of the cheque was not filled up by the petitioner/ accused. However, it is not even disputed by the petitioner that the cheque which is on the Court file is complete in all respects, containing all the necessary particulars meant for a cheque. Therefore, in considered opinion of this Court, even if the Court would have acceded to the request of the petitioner and sent the cheque for comparison of the handwriting of the petitioner; and in an extreme case, even if the report would have come to the effect that the body of the cheque is not filled up by the petitioner; still it would not have proved the fact that the cheque was not issued or drawn by the petitioner or with his consent. It is nowhere provided under any law that a cheque would be a valid instrument only if all parts of the same are filled up by the drawer or the holder of the account himself or in his own handwriting. The fact that the body of the cheque might have been in a handwriting different than the signatures of the petitioner is totally irrelevant; for the purpose of offence under Section 138 of NI Act. For proving offence under Section 138 of NI Act against an accused, the complainant is not required by law to prove that body of cheque was filled up by the accused himself or even with his consent. Therefore, any report qua writing in the body of the cheque would not have rebutted any presumption , as claimed by the accused/ petitioner. There is no statutory or jurisprudential basis to hold that unless the body of the cheque is filled up by the drawer himself, the cheque would not be taken as having been validly drawn by him. Once the signatures are not denied then it contains an in-built presumption that all the material particulars have been filled up either by the drawer or with his authorisation, unless the drawer proves it otherwise, by leading some other independent evidence - in the present case, the fact that body of the cheque was filled up in handwriting other than that of the drawer of the cheque; is not any proof of the fact that the consent of the drawer; in drawing such a cheque; was missing. If this is permitted then the drawer of the cheque can frustrate the provisions of Negotiable Instruments Act in; virtually; every case. He can get the cheque prepared as per his choice from some other person and can subsequently start pleading that he had not filled up the body of the cheque or that he had not consented to the filling of the body of the cheque. The petitioner has already availed his remedy of revision against the order passed by the trial Court. The second revision by the same party is expressly barred under Section 397(3) Cr.P.C. - Since in the present case also, the petitioner has tried to reck up the issue of legality or propriety of the orders passed by the Courts, therefore, the present petition is nothing but a second revision; in the garb of petition filed under Section 482 Cr.P.C. However, a person cannot be permitted to do indirectly what he cannot do directly. This Court does not find even any illegality or perversity in the orders passed by the Courts below - petition dismissed as not maintainable.

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• 2019 (12) TMI 384
  Whether the writ petitioner could have been given benefit of grant of extraordinary pension under Rule 3 of the U. P. Police (Extraordinary Pension) (First Amendment) Rules, 1975? - HELD THAT:- For the purpose of grant of extraordinary pension under Rule 3 of 1975 Rules, death has to result directly from a fatal situation/contingency faced by the police personnel concerned in the line of duty in a hostile environment akin to the listed category/class. The appellant/writ petitioner s husband may have died on duty, but his death was due to natural causes and certainly not due to a fatal situation/contingency faced by a police personnel in the line of duty in a hostile environment akin to the listed category/class as specified in Rule 3 of the 1975 Rules. The legislature, in its wisdom, would have simply stated that any death occurring during the course of duty would entitle the family of the concerned police personnel to claim extraordinary pension in terms of the Rule 3 of the 1975 Rules. That possibly could not have been the intention of the legislature by any stretch of imagination in the facts of the instant case. The concerned authority of the State is directed to enforce Rule 3 of the Rules of 1975 strictly with an even hand and not allow similar claims to surface or grant such claims surreptitiously - appeal dismissed.

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