TMI Tax Updates - e-Newsletter
December 18, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Law of Competition PMLA Service Tax Central Excise Indian Laws

News

1. Due dates for filing of Form GSTR-3B for the Tax Periods from October, 2020 till March, 2021

2. Shri Piyush Goyal addressed CII's Session on Post-Brexit UK and India; Shri Goyal says India and UK are looking at possibilities of trade in goods & services and investments being a part of enhanced trade partnership; Expresses hope that early harvest proposition of India, within the framework of a larger Free Trade Agreementwill be accepted by the UK

3. Income Tax Department conducts searches in Tamil Nadu

4. Shri Piyush Goyal addresses Ministerial Session at the CII Partnership Summit; Says India has always risen to the occasion in helping other nations

5. IFSCA issues consultation paper on proposed Aircraft Leasing Regulations

6. Government of India and World Bank sign $400 million project to protect India’s poor and vulnerable from the impact of COVID-19

Notifications

Customs

1. 113/2020 - dated 17-12-2020 - Cus (NT)

Exchange rate Notification No.113/2020-Cus (NT) dated 17.12.2020

GST - States

2. 49/2020-State Tax - dated 23-11-2020 - Mizoram SGST

Appoints the 30th day of June, 2020, as the date on which the provisions of sections 2 and 12 of the Mizoram Goods and Services (Fourth Amendment) Act, 2020, shall come into force.

3. 43/2020-State Tax - dated 23-11-2020 - Mizoram SGST

Appoints the 18th day of May, 2020, as the date on which the provisions of section 11 of the Mizoram Goods and Services (Fourth Amendment) Act, 2020, shall come into force.

4. 78/2020 - State Tax - dated 26-10-2020 - Mizoram SGST

Amendment in Notification No. J.21011/1/2017-TAX/Vol-ll(i), dated the 19th July, 2017

5. 77/2020 - State Tax - dated 26-10-2020 - Mizoram SGST

Amendment in Notification No. 47/2019 – State Tax dated the 5th November 2019

6. 5/2020 - State Tax (Rate) - dated 26-10-2020 - Mizoram SGST

Seeks to amend Notification No. 12/2017- State Tax (Rate), dated the 7th July, 2017

7. G.O. Ms. No. 69 - dated 30-11-2020 - Puducherry SGST

Seeks to notify special procedure for making payment of 35% as tax liability in first two month

Circulars / Instructions / Orders

Customs

1. Instruction No. 21/2020 - dated 16-12-2020

Instructions for time bound processing of Duty Drawback claims

2. PUBLIC NOTICE NO. 143 /2020 - dated 10-12-2020

Procedure at FSP Cell, JNCH for revalidation/ new registration of Self Sealing Permission in EDI system for Electronic sealing of containerized cargo at factory or warehouse premises

3. PUBLIC NOTICE NO. 25/2020-21 - dated 2-12-2020

Setting up of Special Notified Zone (SNZ) for Import, trading and re- export of Rough Diamonds by notified entities at Gujarat Hira Bourse, lcchapore, Surat, Gujarat

4. PUBLIC NOTICE No. 24/2020 - dated 2-12-2020

Implementation of Express Cargo Clearance System (ECCS) at Ahmedabad Courier Terminal

5. PUBLIC NOTICE NO. -142/2020 - dated 24-11-2020

Tariff Related Quota – Implementation in System

6. PUBLIC NOTICE NO, - 51/2020 - dated 4-11-2020

Manufacturing and other operations undertaken in bonded warehouses under Section 65 of the Customs Act, 1962

7. PUBLIC NOTICE NO. 27/2020 - dated 25-9-2020

Guidelines regarding implementation of section 28DA of the Customs Act, 1962 and CARO TAR, 2020 in respect of Rules of Origin under Trade Agreements (FTA/PTA/CECA/CEPA) and verification of Certificates of Origin

8. PUBLIC NOTICE NO. 42/2020-Cus - dated 22-9-2020

Procedure to be followed in cases of manufacturing or other operations undertaken in Special warehouses under section 65 of the Customs Act

Highlights / Catch Notes

GST

• Court Grants Bail to Applicant in GST Exemption Misinterpretation Case; Rs. 75 Lakhs Deposited During Investigation.

  Case-Laws - HC : Grant of regular bail - mis-applying and mis-interpreting the exemption notifications - Whether or not the registered trademark has been foregone and whether or not the applicant has mislead the authority would be a matter adjudication. The applicant is reported to have deposited a sum of ₹ 75 Lacs during the course of investigation - Considering the facts and circumstances of the case, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant. - HC
  Visit to Get Source

  ---

• Court Orders Revised IGST Refund Form Submission for Export to UK; Follow Circular No. 40/2018-Customs Within One Week.

  Case-Laws - HC : Refund of IGST alongwith the interest - export of 740 cartons of garments to West Midlands, United Kingdom - This Court directs the petitioner to submit a Revised Refund Request Form as per the Board's Circular No. 40/2018-Customs dated 24.10.2018, within a period of one week from the date of receipt of a copy of this order - HC
  Visit to Get Source

  ---

Income Tax

• Section 68 Addition Deleted: Share Application Money Credited in Wrong Assessment Year, Company Had No Net Worth.

  Case-Laws - AT : Addition u/s 68 - share application money was received from the company which is having no net worth - there is no case for making addition for the A.Y. 2012-13 since, the amount was found credited in the books of accounts of F.Y. 2008-09, relevant to the A.Y. 2009-10. - the addition made by the AO deleted. - AT
  Visit to Get Source

  ---

• Grain Dealer's Tax Evasion: Income Diversion via Fake Family Transactions Confirmed by Tax Authorities.

  Case-Laws - AT : Addition on account of diversion of income - The assessee is a simple dealer in grains and obviously does not have any big brand name of his own but simply purchasing and selling grains through “mandi”, the same could have been done by these three persons also. These transactions in the name of the family members of the appellant raise doubts on the genuineness of the transactions. - Transactions in the name of the family members appear to be sham transaction and is a clear case of the income of the assessee being diverted in the name of the family members. - Additions confirmed - AT
  Visit to Get Source

  ---

• Manufacturing Agreement Limits Production to Specific Company; CUP Method Deemed Unsuitable for Benchmarking API Imports.

  Case-Laws - AT : TP Adjustment - The manufacturing agreement in an unambiguous manner has restricted the assessee to manufacture for Sandoz and its affiliates. Since the import and export transactions are within the group concerns and manufacturing is carried out in accordance with the orders received from AEs, we have no hesitation in holding that there is live link of the import and export transactions. - The assessee has imported APIs from its AEs for manufacturing FDFs and has exported FDFs to its AEs under manufacturing arrangement. - CUP cannot be adopted to benchmark the international transaction of import of APIs. - AT
  Visit to Get Source

  ---

• Section 41(1) Addition Challenged: Material Purchases Accepted by AO, Can't Be Bogus Liability Without Evidence of Cessation.

  Case-Laws - AT : Addition u/s 41(1) - Once the AO has allowed the assessee’s corresponding material purchases claim in the revenue account as a regular head of expenditure, the same very amount could not have been added as a bogus sundry creditor liability u/s 41(1) - when there is no indication about the said sum involving any cessation or remission of liability no reason to accept Revenue’s arguments seeking to revive the impugned sec. 41(1) addition - AT
  Visit to Get Source

  ---

• Rectification u/s 154 Corrects Omission of Bank FDR Interest in Assessment Order, Not a Debatable Issue.

  Case-Laws - AT : Rectification of mistake u/s 154 - Assessment order does not include income from other sources mainly on account of bank FDR interest - it is a clear-cut case of the AO carrying out rectification of a glaring and patent mistake committed in the original assessment order. By no standard, it can be construed as a debatable point amenable to two views.- AT
  Visit to Get Source

  ---

• For 2015-16, forfeited advances reduce asset value for capital gains tax, not immediately taxable.

  Case-Laws - AT : Characterisation of receipt - Forfeiture of advance received - till the assessment year 2015- 16, the amount of forfeiture is not liable to be taxed but will go only in reducing the value of the asset while computing the taxability of the assessee under the head “capital gains”. There is no taxability of the forfeited amount in the current year. The revenue may monitor or keep track of determination of capital gains as and when the asset is finally sold. - AT
  Visit to Get Source

  ---

• Reopening Assessments: Revenue Not Obligated to Issue Notice u/s 143(2) if Assessee Fails to Respond Timely.

  Case-Laws - AT : Reopening of assessment - requirement of issue of notice u/s 143 - The question will arise then that if the assessee was issued a notice u/s 148 of the Act and he does not file any return of income till the date of framing of the assessment order or also filed a return before passing of the assessment order u/s 143(2) of the Act, then what is the stand Revenue should take? In such case, it is not at all possible that the assessee can contest that notice u/s 143(2) should have been issued, in all such cases where reassessment is required to be made.- AT
  Visit to Get Source

  ---

• Reopening of Assessment u/s 147 Invalid Due to Incorrect Facts Recorded by Assessing Officer.

  Case-Laws - AT : Reopening of assessment u/s 147 - Unexplained loan - There were no justification for the A.O. to record non-existing, incorrect and wrong facts in the reasons for reopening of the assessment.The entirety of the facts clearly show that A.O. recorded wrong, incorrect and non-existing reasons for reopening of the assessment without application of mind and such reopening of the assessment would be invalid and bad in Law. - AT
  Visit to Get Source

  ---

• Tribunal Deletes Penalty for Inflated Agricultural Income; Tax Appeals Dismissed Due to Low Tax Effect u/s 158BFA.

  Case-Laws - HC : Penalty levied u/s 158BFA - inflated agricultural income - Tribunal deleted the penalty - The above tax case appeals are dismissed on account of the low tax effect. The substantial questions of law raised are left open. - HC
  Visit to Get Source

  ---

• No Evidence Found of International Transactions for AMP Expenses Beyond AE Reimbursement Under MDF Agreement.

  Case-Laws - AT : TP Adjustment - adjustment on account of AMP - we cannot infer the existence of international transactions qua AMP expenses between taxpayer and AE beyond the reimbursement already made by the AE under MDF Agreement. - AT
  Visit to Get Source

  ---

Customs

• Penalty Imposed on Importer for Violating Conditions on Canadian Green Peas; Deterrent Fine Added by Commissioner.

  Case-Laws - AT : Release of absolutely Confiscated Imported goods - levy of penalty - Canadian Green Peas - looking into the facts of the case that the appellant is a regular importer; is aware of the law and procedures regarding imports; has violated more than one condition of import, the interest of justice will be met if a deterrent redemption fine is imposed, in addition to the penalty already imposed by the Commissioner. - AT
  Visit to Get Source

  ---

PMLA

• Court Denies Anticipatory Bail in Money Laundering Case; Emphasizes Need for Further Investigation and Custodial Interrogation.

  Case-Laws - HC : Grant of anticipatory bail - money laundering - siphoning of funds - Apparently, the money that is alleged to be siphoned off is public money and the offence is grave in nature. Indeed, the Investigating Officer has interrogated the petitioner twice, however looking at the gravity of the offence and the aspect of pending investigation relating to finding out the real beneficiaries of the siphoned off money, this Court finds itself in disagreement with the submission that no more interrogation in custody is required. - HC
  Visit to Get Source

  ---

Service Tax

• Court Excludes Stay Order Period from Limitation Calculation for DGCEI Investigation u/s 73(1) of Finance Act.

  Case-Laws - HC : Validity of action of the DGCEI to initiate investigation against the Petitioner - Exclusion of period of stay from the period of limitation - The period between the 10th February, 2016 when the stay order was passed till the disposal of the review petition i.e. 4th December, 2020 would be excluded for the propose of computing limitation period for the issuance of Show Cause Notice under Section 73(1) of the Finance Act - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2020 (12) TMI 625
  Detention of goods - reason for detention was that the transportation of the goods was not supported by a valid e-way bill - HELD THAT:- The detention in question cannot be said to be unjustified. It is directed that if the petitioner furnishes a bank guarantee for the amount demanded in Ext.P3, the respondent shall permit the petitioner to clear the goods and the vehicle, and thereafter pass the final order under Section 129 of the Act

  ---

• 2020 (12) TMI 624
  Grant of regular bail - sections 132(1)(a) of the Central Goods and Services Tax Act, 2017 - mis-applying and mis-interpreting the exemption notifications - HELD THAT:- It appears that the applicant has taken benefit of the Notification, after intimating the Department vide communication dated 22.09.2017, which was acknowledged by the Department on 17.06.2020. It also appears that the returns were filed, which were also audited. Whether or not the registered trademark has been foregone and whether or not the applicant has mislead the authority would be a matter adjudication. The applicant is reported to have deposited a sum of Rs. 75 Lacs during the course of investigation - Considering the facts and circumstances of the case, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant. The applicant is ordered to be released on regular bail - Application allowed.

  ---

• 2020 (12) TMI 623
  Maintainability of petition - alternative remedy of appeal - Release of detained goods alongwith the truck - it is argued that the interpretation of Section 67(6) is not justified and is contrary to the provisions itself - HELD THAT:- Since the petitioner is already availing a statutory alternative remedy, this Court refuses to interfere in the writ petition. The writ petition is dismissed subject to the observation that appellate authority may decide the pending appeal as expeditiously as possible. Sri Amit Manohar states that the next date fixed in the appeal is 14th December, 2020 and in case the appeal is in order and in case the petitioner co-operates, the appeal will be decided on the next date fixed or within a week thereafter.

  ---

• 2020 (12) TMI 622
  Refund of ITC - petitioner submitted that the grievances ventilated in the petition about the non-acceptance of the refund claim for the period running from May, 2018 to September, 2018 does not remain in existence as the respondent has now accepted the refund application - HELD THAT:- The respondents are directed to decide the refund application as expeditiously as possible and practicable in accordance with law, rules, regulations and government policies applicable to the fact of the case. Liberty is reserved with this petitioner to the effect that litigation can be initiated by this petitioner before the appropriate forum in accordance with law, if the refund claim is not accepted by the respondent,. Petition disposed off.

  ---

• 2020 (12) TMI 584
  Refund of IGST alongwith the interest - export of 740 cartons of garments to West Midlands, United Kingdom - According to the petitioner, there still remains a balance of Rs. 1,11,254/- payable by the respondents towards refund of IGST - Board s Circular No.40/2018-Customs dated 24.10.2018 - HELD THAT:- The learned counsel for the petitioner drew the attention of this Court to Paragraph No.5 of the counter-affidavit filed by the first respondent, wherein they have admitted that the non-credit of the balance amount of Rs. 1,11,254/- happened as a result of technical fault in the computer system maintained by the respondents. Referring to the same, the learned counsel for the petitioner would submit that the respondents have admitted their liability to refund of IGST amount to the petitioner, but have expressed their difficulty in refunding the amount, only due to the fact that the petitioner has not sought for refund by filing necessary Form in accordance with the Board s Circular No.40/2018-Customs, dated 24.10.2018. The learned counsel for the petitioner on instructions would submit that the petitioner is prepared to submit the Form in accordance with the Board s Circular No.40/2018-Customs dated 24.10.2018 to seek refund of a sum of Rs. 1,11,254/- payable to the petitioner towards IGST refund under the shipping bill No.773482 on 21.09.2018. For this, the learned standing counsel for the respondents has also not raised any serious objection. This Court directs the petitioner to submit a Revised Refund Request Form as per the Board s Circular No. 40/2018-Customs dated 24.10.2018, within a period of one week from the date of receipt of a copy of this order, seeking for refund of Rs. 1,11,254/- - Petition disposed off.

  ---

• Income Tax

• 2020 (12) TMI 630
  Revision u/s 263 - CIT Meerut setting aside the issue relating to Sundry Creditors and Capital Gains issuing directions to the Id. A.O. to once again look into this issue - HELD THAT:- As perused all the documentary evidences filed by the assessee in the shape of paper book and we find that the confirmations received from aforesaid 16 sundry creditors obtained by the assessee and submitted to the AO. This fact was discovered in joint inspection of assessment record of the assessee and ld. CIT(DR). Since these confirmations of sundry creditors were not noticed by Ld. CIT during proceedings u/s 263 hence, we are of the view that Ld. CIT has not applied his mind and passed the impugned order in a routine manner. The issue regarding sundry creditors, in our view, Ld. CIT has wrongly applied the provisions of section 263 which is liable to be cancelled and hence, we cancel the same. Applicability of section 50C - Assessee has filed the detailed submissions before the AO as well as Ld. CIT and the AO has examined the same with the support of documentary evidences filed by the assessee on the applicability of section 50C of the Act and has not made any additions because Section 50C is not applicable in the case of the assessee and no material on record is available establishing that the assessee has received money over and above the total consideration. R. Samantha Ravindran [ 2013 (3) TMI 271 - MADRAS HIGH COURT] wherein, it has been held that the value of property transferred prior to 01.10.2009 cannot be computed under amended provisions, which came into effect on 01.10.2009 (the word or assessable was inserted w.e.f. 01.10.2009). Keeping in view of the facts and circumstances as explained above we are of the considered view that section 50C is not applicable in the case of the assessee. But the Ld. CIT has wrongly applied the same by ignoring the well reasoned order passed by the AO in the case of the assessee. Therefore, the second issue relating to applicability of Section 50C in the case of assessee is also decided in favour of the assessee and the order of the Ld. CIT on this issue is also cancelled. - Decided in favour of assessee.

  ---

• 2020 (12) TMI 629
  Addition u/s 68 - bogus loan received from a dummy company - notices have also come back unserved and the report of the Inspector proved non-existence of the lender company at the premises - HELD THAT:- AO held that the assessee company is neither having any stock nor fixed assets and suspected that the company to be of a non-viable entity. AO has also suspected the lender company also as a dummy company but without bringing anything tangible on record to prove both or either of the allegations. As decided in M/S. HIMACHAL FIBERS LTD. [ 2018 (8) TMI 873 - SC ORDER] in a case where the assessee has furnished all relevant facts within his knowledge and has offered a credible explanation, then the onus reverts to the revenue to prove that these facts are not correct. In such a case, the revenue cannot draw the inference based upon suspicion or doubt or perception of culpability or on the quantum of the amount involved particularly when the question is one of taxation under the deeming provision. It was further held that neither doubt/suspicion nor the quantum shall determine the exercise of jurisdiction by the AO. Thus, going through the entire factum of the case, we hold that the addition made by the AO on account of unsecured loan ould not pass the factual and judicial proprietary. Hence, the addition made by the AO is directed to be deleted.- Decided in favour of assessee.

  ---

• 2020 (12) TMI 628
  Advance finance charges collected by financier which is added to loan amount as well insurance paid by financier - HELD THAT:- One more opportunity need to be granted to the assessee to produce relevant evidences to substantiate contentions as are made with respect to advance finance charges collected by financier which is added to loan amount as well insurance of Rs. 1,00,000/- paid by financier on behalf of the assessee to insure the truck purchased by the assessee. Thus, we are remitting the matter back to the file of the AO for fresh adjudication of the matter denovo on merits in accordance with law. The assessee is directed to produce relevant documentary evidences before the AO to justify his stand. Non explanation by assessee of sources of income for making payment of installment - additions have been sustained by learned CIT(A) by holding that the assessee could not explain the sources from where payment of principal amount of repayment of loan vide installments paid during the year - HELD THAT:- Before us, the statement is made by learned counsel for the assessee that all the payments towards instalments of loan to Tata Motors Finance Limited was paid by assessee by banking channel. It is stated by ld counsel for the assessee that the said bank account was disclosed to department and hence no addition is warranted. The assessee has produced before us bank book and bank statements of Axis Bank, in the paper book filed with tribunal. DR on the other hand relied upon the orders of learned CIT(A). After hearing both the parties and perusing the material on record, we are of the considered view that the contentions of the assessee require verification by authorities below. Thus, it is considered fit to restore the matter to the file of the AO for fresh adjudication of the issue on merits in accordance with law. The assessee is directed to produce all the relevant evidences before the AO to justify its stand that the repayment of installments to Tata Motor Finance Limited was made from known sources and out of the declared income. Undisclosed investment in purchase of coal - assessee stated before us that there was wrong filing of the purchase amount in quarter four of the return of VAT filed with Sales Tax Authority, wherein third quarter amount of purchase was added once again by mistake into the fourth quarter purchases while filing VAT returns - HELD THAT:- As evidences filed before us, along with books of accounts requires verification by the authorities below. Thus, we are remitting the matter back to the file of the AO for fresh adjudication of the matter denovo on merits in accordance with law. The assessee is directed to produce relevant evidences along with the books of accounts before the AO to evidence that the purchases as per books of accounts are to the tune of Rs. 62,31,340/- and not an amount of Rs. 1,00,13,912/- as claimed to be shown in VAT return as purchases for the year under consideration, and an amount of Rs. 37,82,572/- was error in filing of the VAT return. The assessee is directed to produce relevant documentary evidences /books of account before the AO to justify his stand. The AO shall admit evidences filed by the assessee which shall be adjudicated on merits in accordance with law.

  ---

• 2020 (12) TMI 627
  Addition u/s 68 - AO has noted from the balance sheet that the assessee had obtained unsecured loan from Sri Bandaru Srinivasa Rao during the year - CIT- A deleted the addition - HELD THAT:- Considering the specific finding given by the ld. CIT(A) and also by considering the facts and circumstances of the case we are of the opinion that the assessee has discharged the burden casted upon him by producing all the relevant details before the AO - AO is not correct in making the addition on the ground that the creditor has no source to advance the funds to the assessee in spite of specific confirmation letter given by the creditor and in 131 examination he admitted that he advanced the loan to the assessee and also explained the source for the advance. No reason to interfere with the order passed by the ld. CIT(A). Thus, this appeal filed by the Revenue is dismissed.

  ---

• 2020 (12) TMI 626
  Capital gains on the profit derived towards transfer of property u/s 50C - Refrence to DVO s report - value of consideration for the purpose of computing the capital gains on sale of an immovable property - subject matter of the lands are Government lands - HELD THAT:- DVO s report extracted by the ld. CIT(A) gave a categorical finding that the subject matter of the lands are Government lands as per the Tehsildar to the DVO. Therefore, there is no SRO value, the value for the Government lands has to be treated as NIL. The AO without considering the report of the DVO, by invoking section 50C considered the sale value of the property at Rs. 10,53,18,400/- is deemed sale consideration. We find that the AO is not correct in invoking section 50C in this case as observed by the ld. CIT(A). We are also find that the ld. CIT(A) after examining the entire details directed the AO to delete the addition. We find no infirmity in the order passed by the ld. CIT(A). Thus, this appeal filed by the Revenue is dismissed. Reopening of assessment u/s 147 - non-communication of the reasons - HELD THAT:- Since no reasons are communicated to the assessee therefore as per the decision of Alapati Kasi Subrayan [ 2018 (12) TMI 1461 - ITAT VISAKHAPATNAM] and also N. Surya Prakash Rao [ 2014 (3) TMI 1170 - ANDHRA PRADESH HIGH COURT] CIT-A correctly quashed 148 notice and cancelled the assessment order.

  ---

• 2020 (12) TMI 613
  Disallowance u/s 14A read with Rule 8D - Tribunal directing the Assessing Officer to delete the disallowance as to exempted income was earned by the assessee - HELD THAT:- Substantial question of law raised for consideration was answered against the Revenue by the Hon ble Division Bench of this Court in the case of Marg Ltd. [ 2020 (10) TMI 102 - MADRAS HIGH COURT] wherein it was held that the disallowance under Rule 8D of the Income Tax Rules, 1962 read with Section 14A of the Act could never exceed exempted income earned by the assessee during the particular assessment year and that the same could be computed as per Rule 8D of the said Rules only after recording satisfaction by the Assessing Authority. - Decided against revenue.

  ---

• 2020 (12) TMI 612
  Disallowance u/s 14A r.w.r 8D - HELD THAT:- In controversy involved in the present appeals filed by the Assessee is covered by a recent Division Bench judgment in M/S. MARG LIMITED VERSUS COMMISSIONER OF INCOME TAX CHENNAI [ 2020 (10) TMI 102 - MADRAS HIGH COURT] wherein held that disallowance has far exceeded the exempted income in the form of dividends even though computed at the rate of 0.5% of the average investment made by the Assessee. In our opinion, the same is not permissible at all, because this average disallowance as computed under Rule 8D could be disallowed only if Assessee had actually earned Dividend income in excess of such amount of disallownace, that too after recording reasons for rejecting the apportionment of expenditure so incurred or claim that no such expenditure was incurred to earn that much of Dividend income was validly rejected by the Assessing Authority. We do not find any such reasons even recorded by the Assessing Authority in the present case. Thus issue is set aside and the appeals are restored on the file of the learned Tribunal to decide the appeals de novo afresh, in accordance with the law laid down by this Court in the judgment in M/s.Marg (cited supra).

  ---

• 2020 (12) TMI 611
  Penalty levied u/s 158BFA - inflated agricultural income, which was not declared by the assessee while filing return in Form 2D and on deficiency of closing stock that came to light on physical verification during the course of search - Tribunal deleted penalty - Whether Tribunal was right in upholding the direction of the CIT(A) not to treat the disclosed income as NIL as per Section 158BB(1)(ca) read with Clause (a) of Section 158B when the assessee s salary income in this case is above exempted level and no TDS was made on the salary ?- HELD THAT:- at the above appeals are not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. The above tax case appeals are dismissed on account of the low tax effect. The substantial questions of law raised are left open. In the event the tax effect in the respective cases is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeals to be heard and decided on merits.

  ---

• 2020 (12) TMI 610
  Bogus purchases - CIT-A sustaining addition @ 12.5% disallowance - HELD THAT:- In the present case, the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. As regards the quantification of the profit element embedded in making of such bogus/unsubstantiated purchases by the assessee, we find that as held in M Haji Adam Co [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] the addition in respect of bogus purchases is to be limited to the extent of bringing the gross profit rate on such purchases at the same rate as of other genuine purchases. We respectfully following the aforesaid judgement of the Hon ble High Court set aside the matter to the file of the assessing officer with the direction to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchases.

  ---

• 2020 (12) TMI 609
  Validity of revisional jurisdiction u/s. 263 - invocation of provisions of Sec.43CA - assessee sold flat for Rs. 24 Lacs as against stamp duty value (SDV) of Rs. 31.45 Lacs which would attract the provisions of Sec.43CA which was not considered by Ld. AO - HELD THAT:- After going through the terms of the agreement, it is evident that specific purchase rights were created in favor of purchaser in a specific property. This being the case, the subsequent execution of sale / conveyance deed and handing over the possession would merely be improvement in the existing title of the purchaser. The same is supported by the fact that whole of the sale consideration was already received by the assessee by May, 2012 which fall in financial year 2012-13. AR has made a statement that no sale deed or conveyance deed was executed in FY 2013-14. The sale has been offered in this year only due to the fact that the assessee was following project completion method. Undisputedly, the provisions of Sec.43CA were applicable only from AY 2014-15. It is another fact that details of agreement value as well as stamp duty value was already placed before Ld. AO during the course of original assessment proceedings and Ld. AO chose not to invoke the provisions of Sec. 43CA. This being the case, the revisional jurisdiction as exercised by Ld. Pr.CIT could not be sustained in the eyes of law. The primary condition to invoke the provisions of Sec.263 remains unfulfilled - Decided in favour of assessee.

  ---

• 2020 (12) TMI 608
  CIT (A) power to enhance an income - HELD THAT:- CIT(A) cannot enhance the assessment on the matter which is not arising out of assessment proceedings. As in the case of the assessee, the Ld. CIT(A) has enhanced the income of the assessee on account of consultancy which has not been arisen out of the order of assessment in dispute. Therefore, the impugned order dated 28.06.2019 passed by the Ld. CIT(A) is illegal and invalid and beyond the powers of the Ld. CIT(A) and is thus liable to be cancelled. Accordingly, we cancel the same. - Appeal of the assessee is allowed.

  ---

• 2020 (12) TMI 606
  Assessment u/s 153A - Whether any incriminating material found or seized during the course of search? - HELD THAT:- As relying on KABUL CHAWLA [ 2015 (9) TMI 80 - DELHI HIGH COURT] assessment u/s. 153A of the Act involving unabated proceedings has to be based on incriminating material found or seized during the course of the search in question. Both the lower authorities have erred in law and on facts in framing the impugned assessments in assessee s case not involving any seized material. The same stands quashed therefore. Unexplained cash credits u/s 68 - The assessee has already filed all the necessary evidence. We thus hold that the lower authorities have not correctly appreciated the fact. Hon ble Gujarat high court in PCIT vs. Gyscoal Alloys Ltd [ 2018 (10) TMI 1725 - GUJARAT HIGH COURT] held that such an instance of the share capital having group entities from thereby jurisdiction does not qualify for section 68 unexplained cash credits additions. - Decided in favour of assessee.

  ---

• 2020 (12) TMI 605
  Reopening of assessment u/s 147 - Unexplained loan - application for admission of additional evidences under Rule 46A explaining that due to change of address in the Registered Office and due to old age of one of the Director Mrs. Baleshwari Devi the documents could not be filed before the A.O - HELD THAT:- In the reasons A.O. found escapement of income to the tune of Rs. 1.59 crores on account of purchase of plot at Noida, but, in the re-assessment order A.O. found it is a case of unexplained loan to the extent of Rs. 33,18,842/-, thus, the reasons recorded by the A.O. are non-existing, incorrect and wrong and thus, A.O. did not apply his mind to the information available to him through O/o. Sub-Registrar. In case incorrect, wrong and non-existing reasons are recorded by the A.O. for reopening of the assessment and A.O. failed to verify the information so received due to non application of mind to the information, reopening of the assessment would be unjustified and is liable to be quashed. The same view have been taken by ITAT, Delhi E- Bench, Delhi recently in the case of Shri Natrajan Monie, Gurgaon [ 2020 (12) TMI 345 - ITAT DELHI] . In assessment year under appeal assessee has paid the installment of the impugned amount. Thus, even the information received from the O/o. Sub-Registrar was not gone into the entirety by the A.O. A.O. has not gone through the contents of the Lease Deed registered with the O/o. Sub- Registrar, Noida which clearly specify that no amount of Rs. 1.59 crore is paid by assessee in assessment year under appeal and the balance amount shall have to be paid by the assessee company in installments. There were no justification for the A.O. to record non-existing, incorrect and wrong facts in the reasons for reopening of the assessment.The entirety of the facts clearly show that A.O. recorded wrong, incorrect and non-existing reasons for reopening of the assessment without application of mind and such reopening of the assessment would be invalid and bad in Law. We are of the view that reopening of the assessment is illegal and bad in Law and is liable to be quashed. We, accordingly, set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted - Appeal of the Assessee is allowed.

  ---

• 2020 (12) TMI 604
  Reopening of assessment - requirement of issue of notice u/s 143 - assessee individual has not filed any return of income u/s 139(1) - HELD THAT:- When Section 148 notice was issued to the assessee, the assessee was given time for 30 days to file the return of income. The assessee neither filed original return u/s 139(1) of the Act nor filed any return in response to the notice u/s 148 of the Act within the time given by the Assessing Officer. The assessee filed the return of income only on 23rd September, 2017. Therefore, these returns cannot be considered as a return in response to the notice u/s 148 - return filed by the assessee is as such non-est. There is no requirement of issuance of notice u/s 143(2) of the Act, when there is no valid return available before the Assessing Officer. However, the judicial precedent clearly says that while framing the assessment order u/s 143(3) read with Section 147 AO must issue a notice u/s 143 (2) of the Act as per the Proviso to Sub-Section 143(2) of the Act provides specifically that where a return has been filed by the assessee, either u/s 139 or u/s 143(1) or u/s 148 of the Act. In this case, there is no such return filed by the assessee. In view of this, we categorically held that there is no infirmity in the order of the Coordinate Bench in holding that there is no requirement of issue of notice u/s 143 of the Act in the present case. Whether in case the return filed by the assessee as late as in the month of September, 2017 can be treated as valid return or not? - The answer is clearly No as even after 30 days any return of income filed by the assessee would not have been taken cognizance by the Assessing Officer. There is no requirement of the law that if the return is filed any time before Assessing Officer u/s 148 read with 143 (3) of the Act, the Assessing Officer should have been issued notice u/s 143(2). The question will arise then that if the assessee was issued a notice u/s 148 of the Act and he does not file any return of income till the date of framing of the assessment order or also filed a return before passing of the assessment order u/s 143(2) of the Act, then what is the stand Revenue should take? In such case, it is not at all possible that the assessee can contest that notice u/s 143(2) should have been issued, in all such cases where reassessment is required to be made.

  ---

• 2020 (12) TMI 603
  Rectification of mistake u/s 154 - income from business has been offered to tax by the appellant during assessment proceedings as per the working filed by the appellant during assessment proceedings which does not include income from other sources mainly on account of bank FDR interest - HELD THAT:- It is pertinent to note that the assessee agreed for Business income from contract receipts at Rs. 1.46 crores, which was independent of income from bank interest at Rs. 22.54 lakhs that was declared by the assessee under the head Income of other sources. Assessing Officer in the assessment order inadvertently adopted Business income of Rs. 1.46 Crores as Total income, which had the effect of excluding Income from other sources at Rs. 22.54 lakhs, which was independently offered by the assessee in its return of income and was not a subject matter of any dispute. It is this mistake which the AO rectified in the current proceedings u/s.154 of the Act by also including Income from other sources amounting to Rs. 22.54 lakhs in the total income, which was earlier omitted to be included in the original assessment order. In our considered opinion, it is a clear-cut case of the AO carrying out rectification of a glaring and patent mistake committed in the original assessment order. By no standard, it can be construed as a debatable point amenable to two views. We, therefore, uphold the impugned order. Appeal of the assessee is dismissed.

  ---

• 2020 (12) TMI 602
  Characterisation of receipt - Forfeiture of advance received during the assessment year - Addition on account of treatment of the earnest money forfeited in respect an agreement for sale of property as assessee s income under the head Income from Other Source - CIT (A) initially deleted the addition on the grounds that there is no provision to tax the amount forfeited in the Income Tax Act and held that the provisions of Section 51 and the provisions of Section 56(2)(ix) are not applicable to the facts of the assessee in the current year - HELD THAT:- Both the provision to section 51 has been inserted by the Finance (No.2) Act 204 with effect from 1.4.2015 and so as the provisions of clause (ix) of sub-section (2) of section 56 - AO chose to apply the provisions inserted from 01.04.2015 to the assessment year 2013-14 which cannot be held to be legally valid. The pre-amended provisions applicable to the case of the assessee for the instant assessment year directs as to how the advance or other money received is to be treated. As per the provisions in existence, any money or other money received in connection with negotiations of any capital asset and retained by the assessed shall be deducted from the cost for which the asset was acquired in computing the cost of acquisitions while determining the capital gains. Going through the provisions of Sections amended and pre-amended, we find that till the assessment year 2015- 16, the amount of forfeiture is not liable to be taxed but will go only in reducing the value of the asset while computing the taxability of the assessee under the head capital gains . There is no taxability of the forfeited amount in the current year. The revenue may monitor or keep track of determination of capital gains as and when the asset is finally sold. Not to leave the issue raised by the revenue of receipt of advance money from M/s Shine Star Built Co. Pvt. Ltd. of Rs. 18 crores during the assessment year 2007-08, we find that the Hon ble High Court [ 2013 (2) TMI 74 - DELHI HIGH COURT] deleted the addition made by the AO on similar grounds and held that the amount received should be treated in accordance with Section 51 of the Income Tax Act, thus, resting the arguments of the revenue.

  ---

• 2020 (12) TMI 601
  Reopening of assessment u/s 147 - Gain on sale of land - assessee is the power of attorney and signed the document on behalf of the owner of the land - HELD THAT- Undisputedly, in this case, the assessee is the power of attorney and signed the document on behalf of the owner of the land but claimed that no consideration was received by him. But as per the AO, in the clause of the agreement, it is clear that the power of attorney holder will receive the sale consideration in respect of transfer/sale of the land. Since in the original assessment, this was not discussed, the AO reopened the assessment on the ground that income has escaped assessment. Whether the sale consideration of the land belonging to Shri Pradeep Kumar Sethy will be taxed in the hands of the assessee who is only a power of attorney holder? - AO has observed that the assessee has failed to substantiate his claim with any legally admissible evidence that he has not received any consideration with regard to transfer of land. It is not in dispute that the assessee being the power of attorney holder has executed the sale deed before the Sub-Registrar, Khurda and acted as an agent of the owner of the land. Nothing was brought on record by the ld D.R. to substantiate that the assessee has received the sale consideration, which has not been declared as income of the assessee. D.R. could not controvert that the issue under consideration is not similar to the decision rendered by Jaipur bench of ITAT in the case of Shri Gyan Chand Agarwal [ 2017 (8) TMI 557 - ITAT JAIPUR] . Hence, facts being identical, we respectfully following the same direct the AO to delete the addition with the rider that the AO is free to take action against real owner of the land Shri Pradeep Kumar Sethy as per law. - Appeal of the assessee is allowed

  ---

• 2020 (12) TMI 600
  Validity of Reopening of assessment u/s 147 - denying excess allowance of deduction claimed u/s. 54F - HELD THAT:- Reasoning for reopening as mentioned in the order sheet clearly shows that the same material which was considered by the AO in the original assessment order was again considered by the Assessing Officer in the re-assessment order and based on that, the reassessment proceedings were finalized and income of the assessee was computed denying excess allowance of deduction claimed u/s. 54F. The ground that inadvertently deduction was allowed u/s.54 of the Act, in our considered opinion, cannot be a ground to reopen the assessment, which was completed u/s.143(3) of the Act and as it appears from the order sheet, the assessee has appeared time to time and produced the documents as directed by the AO. If there is any advertent mistake pointed out by the AO, the same could have been rectified under section 154 of the Act and not reopening the assessment. Therefore, on reading of the order sheet, we find that the reopening of the assessment has no jurisdictional foundation and, therefore, the reassessment order is liable to be annulled. See M/S. KELVINATOR OF INDIA LIMITED [ 2010 (1) TMI 11 - SUPREME COURT] - Decided in favour of assessee.

  ---

• 2020 (12) TMI 599
  Levy of penalty u/s 271(1)(c) - addition u/s.68 - concealment of particulars of income and furnishing inaccurate particulars of income - Defective notice - non specification of notice - HELD THAT:- It is clear that for the AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in notice u/s 274 vitiates the assumption of jurisdiction by the learned AO to levy any penalty. In this case, clearly establish that the notice issued under section 274 read with 271 of the Act is defective and, therefore, we find it difficult to hold that the AO rightly assumed jurisdiction to pass the order levying the penalty. We direct the Assessing Officer to delete the penalty levied u/s.271(1)(c). - Appeal of the assessee is allowed.

  ---

• 2020 (12) TMI 598
  Bogus sundry creditors liability - addition inviting sec. 41(1) - HELD THAT:- No dispute about the assessee having recorded the sundry creditors liability in question as pertaining to material purchases in the regular course of business. There is no denial from the department side qua the clinching aspect the corresponding material purchases have already been accepted under the head regular revenue in the course of assessment itself - assessee had also successfully filed all necessary detailed evidence of the sundry creditors in remand report proceedings. It emerges from a perusal of the Assessing Officer s remand record dated 30.03.2018 filed before the CIT(A) that he had verified the ledger account of the creditor parties with the bank statements and perused the balance(s) confirmation as well. Once the AO has allowed the assessee s corresponding material purchases claim in the revenue account as a regular head of expenditure, the same very amount could not have been added as a bogus sundry creditor liability u/s 41(1) - when there is no indication about the said sum involving any cessation or remission of liability as per this tribunal s co-ordinate bench decision in Income Tax Officer Ward 12(1) Kolkata vs. M/s Standard Leather Pvt. Ltd . [ 2016 (9) TMI 1437 - ITAT KOLKATA] no reason to accept Revenue s arguments seeking to revive the impugned sec. 41(1) addition - Decided in favour of assessee.

  ---

• 2020 (12) TMI 597
  Denial of deduction u/s 54F - claim was denied on the reason that the assessee has not deposited the net sale consideration in Capital Gain Scheme Account which is a clear violation provisions of Section 54F(4) - claim of the deduction u/s 54F was denied by AO on the reason that the assessee has not deposited the net sale consideration in Capital Gain Scheme Account which is a clear violation provisions of Section 54F(4) - HELD THAT:- As relying on K. RAMACHANDRA RAO [ 2015 (4) TMI 620 - KARNATAKA HIGH COURT] if he want of claim exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said account. If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein, then Section 54F(4) is not at all attracted and therefore the contention that the assessee has not deposited the amount in the Bank account as stipulated and therefore, he is not entitled to the benefit even though he has invested the money in construction is also not correct Section 54F is beneficial provision and should be interpreted liberally and the Assessing Officer has to see the end utilization of net sale consideration in the way prescribed in Section 54F of the Act, the assessee is entitled for exemption Under Section 54F of the Act. With this observation, we remit the issue to the file of Assessing Officer for fresh consideration.

  ---

• 2020 (12) TMI 593
  Assessment u/s 144 - case of the assessee was selected for scrutiny under CASS to verify unsecured loans from persons who have not filed return of income - CIT-A Rejected additional evidence as admitted u/sec. 46A - HELD THAT:- We find that there is negligence on the part of the assessee to file the details before the AO, however, in the interest of justice and by following the principles of the natural justice one more opportunity should be given to the assessee. Before us, ld. AR also assured that assessee will appear before the AO and file all the relevant details. In view of the above, we are of the opinion that one more opportunity should be given to the assessee to substantiate her case before the AO. Appeal filed by the assessee is allowed for statistical purpose.

  ---

• 2020 (12) TMI 592
  Capital gain - Capital asset u/s 2(14) - share application money as transferred / assigned by the assessee - whether it would constitute a Capital Asset within the meaning of Sec.2(14)? - whether loan given to its subsidiary in India, by the foreign company constitute capital asset? - HELD THAT:- As decided in Siemens Nixdorf Information Systems Gmbh Siemens Nixdorf Information Systems Gmbh [ 2019 (9) TMI 199 - BOMBAY HIGH COURT ] wherein held Tribunal has considered the meaning of the word property as given in the context of the definition of asset in the Wealth Tax Act to hold property to include the every interest which a person can enjoy. This was extended by the Tribunal to understand the meaning of the word property as found in the context of capital asset under Section 2(14). Revenue has not been able to point out any reasons to understand meaning of the word property as given in the Section 2(14) of the Act differently from the meaning given to it under Section 2(e) of the Wealth Tax Act, 1957. The Revenue has not been able to point out why the above decision of this Court rendered in the context of capital assets as defined in Section 2(14) of the Act, is inapplicable to the present facts. Nor, why the loan given to M/s. SNISL would not, in the present facts, be covered by the meaning of capital asset as given under Section 2(14) of the Act. As the issue raised herein stands concluded by the decision of this Court in M/s. Bafna Charitable Trust [ 1997 (9) TMI 93 - BOMBAY HIGH COURT ] and also by the self evident position as found in Section 2(14) of the Act, the question as framed does not give rise to any substantial question of law. The share application money is nothing but mere advances till the time the shares are allotted and share application money is converted into share capital. This is further fortified by the fact that the provisions of The Companies Act provide for refund of share application money with interest under certain circumstances. Thus we hold that the share application money as transferred / assigned by the assessee would constitute a Capital Asset within the meaning of Sec.2(14) of the Act. It does not fall under any of the exclusions. Consequently, the resultant losses would be allowable to the assessee - Decided against revenue.

  ---

• 2020 (12) TMI 591
  Additional of additional price/withheld price of milk produced - whether CIT(A) erred in not appreciating that the said payment is in the nature of distribution of profits without paying due taxes though there is no obligation to tax a final price? - search conducted u/sec.132 - HELD THAT:- As decided in own case [ 2017 (11) TMI 1363 - ITAT VISAKHAPATNAM] the only doubt expressed by the Assessing Officer is that the above payments are only made to avoid taxes. In our opinion, the assessee producer company running in the lines of mutuality basis for the benefit of the members, in the interest of the members instead of payment cash, some shares are allowed and established educational institutions and also hospitals for treatment of the members of the milk suppliers and certain payments made out of withheld price as per Companies Act and also Articles of Association followed by Board resolution. AO is not correct in saying that the assessee adopted device for avoidance of tax.Once the milk suppliers having shares in the company, they will be having a feeling of supplying milk to their own company. The assessee company will be able to procure milk from the milk producers continuously. Therefore, allotment of equity shares to the milk producers for the above reason has to be considered as business expediency. So far as case-laws relied on by the Assessing Officer are concerned, they have no relevancy to the facts and circumstances of the case. Keeping in view of the above, we find no infirmity in the order passed by the ld. CIT(A) and uphold the same - This appeal filed by the Revenue is dismissed.

  ---

• 2020 (12) TMI 590
  Deduction u/s. 80P(2) - AO denied the claim of deduction for the reason that assessee was essentially doing the business of banking and disbursement of agricultural loans by the assessee was only minuscule - HELD THAT:- AO after perusing the narration of the loan extracts for the financial periods under consideration, came to the conclusion that out of the total loan disbursement, only a minuscule portion has been advanced for agricultural purposes. The narration in loan extracts/audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In this case, such a detailed examination has not been conducted by the A.O s. In the light of the dictum laid down in the case of The Mavilayi Service Co-operative Bank Ltd. [ 2019 (3) TMI 1580 - KERALA HIGH COURT ] we are of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. A.O. shall list out the instances where loans have disbursed for non-agricultural purposes and accordingly conclude that the assessee s activities are not in compliance with the activities of primary agricultural credit society functioning under the Kerala Co-operative Societies Act, 1969, before denying the claim of deduction u/s. 80P(2).

  ---

• 2020 (12) TMI 589
  TP Adjustment - comparable selection - functional, asset and risk ( FAR ) profile of the assessee - stand of revenue the assessee is not a captive BPO service provider - HELD THAT:- The assessee provides BPO services to its holding company as a captive service provider in relation to some of the clients. The BPO services includes various types of services including e-recruitment services, financial accounting services and routine back office services which could be like indexing and enrollment for clients. The assessee reconciles claims to confirm that all payments required to be made to client s employees have been processed by the holding company. All client relations are maintained by the holding company and only a part of the data entry functions is outsourced to the assessee. The holding company, on the other hand, undertakes the entire marketing and business development activity to generate business, negotiates and enters into contracts with customers, bears the costs of the entire project transition phase, renders the requisite training to its employees or the employees of the respondent and oversees the running of the entire project. The assessee functions all along under the guidance and supervision of the holding company. The assessee s resources log into the application to retrieve the said data. Based on the claims submitted by the clients, the assessee performs the necessary data entry functions. In case any clarification or guidance is required by the assessee, these are provided by the holding company s subject matter experts. Respectfully following the judgment of the Coordinate Bench in assessee s case [ 2015 (6) TMI 677 - ITAT KOLKATA] we hold that assessee is engaged in providing captive BPO services to its holding company and hence we dismiss grounds Nos. 1, 2 and 3 raised by the Revenue. Comparable o selection - HELD THAT:- We note that the comparables chosen by the Ld. TPO are primarily engaged in KPO services, unlike the assessee which is engaged in providing BPO services. We note that the assessee is engaged in performing captive BPO services to its holding company and such view has been accepted by the Ld. CIT(A). When a tested party is a BPO service provider (akin to the assessee), KPOs cannot be considered as comparables from a transfer pricing perspective. Accentia Technologies Ltd should be rejected as a comparable as company is engaged in development of software products and rendering KPO services in the healthcare sector. TCS E-Serve International Ltd - Since the services are being provided as a part of an acquisition deal, pricing and the terms on which TCS E-serve International provided services would not have been at market defined rates. TCS E serve international is a subsidiary of Tata consultancy services Ltd. Behind the above comparable company, there is a Tata brand. For this reason that it belongs to Tata group and has also contributed to Tata brand which is one of the largest brand in the information technology segment, there is a definite impact on the pricing capacity of the comparable which the assessee lacks. Hence, we find that TCS E serve international Ltd. deserves to be excluded. e4e Healthcare Business Services Pvt. Ltd Company was engaged in business of providing healthcare outsourcing services and software development for the healthcare industries, the same cannot be compared with the assessee which was engaged in providing BPO services. Crossdomain Solutions Pvt. Ltd. should be rejected as a comparable as the said concern operates as a Knowledge Process Outsourcing services provider (KPO) and not a simple business process outsourcing services provider and cannot therefore be compared with the assessee. Cosmic Global Ltd is not comparable to the assessee as it has different functions which cannot be compared to those of the assessee. Timex Group India Ltd-Segment is engaged in providing IT and finance related back office support services which are similar to that provided by the assessee. AOK In-House BPO Services Ltd . should be accepted as a comparable as company is engaged in providing BPO services. As per their annual report, the company is a BPO service provider. Aditya Birla Minacs Worldwide Ltd company provides a variety of business process outsourcing services which are non-voice based. The services provided by Aditya Birla Minacs Worldwide Ltd, being non-voice based BPO services, are similar to those provided by the assessee. Omega Healthcare Management Services Pvt. Ltd. - services provided are similar to those provided by the assessee. Thus it should be accepted as a comparable. We agree with the view taken by the ld CIT(A). In House Productions Ltd-Segment - As per its annual report, the year under review has seen the company having income from Medical BPO activities - Therefore, based on the facts narrated above, the In House Productions Ltd-Segment should be accepted as a comparable.e Fortune Infotech Ltd. should be accepted as a comparable as this company is engaged in providing IT Enabled Services such as claims and document processing. Since the margin earned by the assessee is higher than the margin of the comparables, therefore the transaction of services rendered is at arm s length. We do not find any infirmity in the order of ld CIT(A) except that we have rejected Cosmic Global Ltd, and this does not give any impact so far the arm s length price adjustment is deleted by the ld CIT(A).That being so, we decline to interfere with the order of Id. C.I.T.(A) in deleting the aforesaid ALP adjustment.

  ---

• 2020 (12) TMI 588
  Addition u/s 68 - share application money was received from the company which is having no net worth - source of share capital was neither genuine nor the company is having net worth - HELD THAT:- there is no case for making addition for the A.Y. 2012-13 since, the amount was found credited in the books of accounts of F.Y. 2008-09, relevant to the A.Y. 2009-10. Accordingly, we set aside the order of the Ld. CIT(A), delete the addition made by the AO and allow the appeal of the assessee.

  ---

• 2020 (12) TMI 587
  Penalty levied u/sec. 271AAB - additional income admitted in search - HELD THAT:- Though search u/sec. 132 was conducted, no such evidence was found by the department in the hands of the assessee. Thus, it is established that the additional income admitted by the assessee was purely on estimation and not supported by any evidence. For the purpose of undisclosed income as provided in section 271AAB there must be money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions which required to be found during the course of search. In the instant case there was no such evidences were found evidencing undisclosed income. We are unable accept the contention of the AO that the penalty is liveable irrespective of unearthing any evidence of earning undisclosed income which fits in to the definition of undisclosed income. Since, the undisclosed is defined in the act for the purpose of penalty u/s. 271AAB, it is incumbent up on the department to show that the impugned addition falls under the definition of undisclosed income. In the instant case the department failed to establish that the additional income admitted represents the undisclosed income. Therefore, as rightly held by the ld. CIT(A), the additional income admitted by the assessee does not fall under the definition of undisclosed income hence, there is no case for levy of penalty u/sec. 271AAB - Decided in favour of assessee.

  ---

• 2020 (12) TMI 586
  Addition on account of diversion of income - Transactions in the name of the family members - HELD THAT:- We fail to understand why the family members were doing business through the assessee when they could have done the commission business in their own name. The assessee is a simple dealer in grains and obviously does not have any big brand name of his own but simply purchasing and selling grains through mandi , the same could have been done by these three persons also. These transactions in the name of the family members of the appellant raise doubts on the genuineness of the transactions. We fail to understand how the AO has conceded the issue in respect of Smt. Shashi Rustagi and Smt. Kamlesh Rustagi. Transactions in the name of the family members appear to be sham transaction and is a clear case of the income of the assessee being diverted in the name of the family members. No hesitation in sustaining the addition - Decided in favour of revenue. Addition being the difference in the value of closing stock of Bajra commodity - assessee has valued closing stock at the average rate of Rs. 750 p. quintals AO adopted the rate of Rs. 936 p. quintal thereby disturbing the method of valuation consistently followed by the assessee from past many years - HELD THAT:- AO should not have disturbed the method of valuation followed by the assessee consistently from past years. Merely because the assessee has not maintained stock register with quality wise details cannot justify the AO in discarding the method of valuation adopted by the assessee consistently. Looking into the nature of the business of the assessee non maintenance of quality wise details is not so fatal to justify the disturbance in the basis of valuation of closing stock. No merit in this addition and I accordingly direct the AO to delete the addition. Addition being 10% of the total expenses debited in the P L account - HELD THAT:- As during the assessment proceedings the assessee did not produce complete record and even in the remand proceedings complete bills and vouchers were not produced. Looking to the nature of expenses, business of the assessee and the place of business, ad-hoc disallowances of 5% should meet the ends of justice, hence, direct the AO to restrict the disallowance to 5% of the expenditure claimed by the assessee. Estimation of gross profit - AO adopted the GP rate of the immediately preceding year at 1.66% and made the addition - HELD THAT:- Merely because there is a slight drop in the GP rate would not justify the addition on this count. The fact of the matter is that the appellant is doing business in food grains, oil feed and other allied goods on commission basis and, therefore, it would be impossible for a business man in this line of trade to match the profitability with preceding years. Moreover in the immediately assessment year 2008-09 the gross turnover of the assessee was Rs. 86.50 lacs which has jumped to 3.21 crores during the year under consideration this also justifies the slight fall in the GP rate. Therefore, do not find any merit in this addition and accordingly direct the AO to delete the addition. Addition on account of alleged interest charged on interest free advances to the family members - HELD THAT:- From the balance sheet as find that the capital account show the balance of Rs. 656350/- out of which the assessee has given interest free advances of Rs. 190400/-. It is true that the assessee has some unsecured loans on the liability side of his balance sheet, but find that no interest have been paid by the assessee on the unsecured loans taken by him and only bank interest of Rs. 16902/- has been debited to the P L account. No merit in this addition and accordingly direct the AO to delete the addition.

  ---

• 2020 (12) TMI 585
  TP Adjustment - addition made in respect of international transactions of import of APIs - Selection of MAM - assessee is importing inputs for manufacturing of FDFs from its AEs and exporting final product to its AEs only, the assessee has treated the entire transaction of import and export as one composite transaction - HELD THAT:- A perusal of the chart shows that the assessee would be entitled for reimbursement of material cost including APIs, Bulk product and partially packed Drug Products without mark-up. The assessee shall be remunerated with mark-up of 15% on processing cost and transportation, warehousing and customer services cost. The Revenue has not disputed the fact that the assessee has imported inputs (APIs) for manufacturing of FDFs from its AEs and has exported the final products to its AEs, albeit to AEs other than the suppliers of APIs. The only objection raised by the TPO is that the import of raw material and the export of finished goods are to different entities. TPO has failed to appreciate the fact that the international transactions of importing APIs and export of FDFs are within group companies. The manufacturing agreement in an unambiguous manner has restricted the assessee to manufacture for Sandoz and its affiliates. Since the import and export transactions are within the group concerns and manufacturing is carried out in accordance with the orders received from AEs, we have no hesitation in holding that there is live link of the import and export transactions. In the instant case the distinguishable facts are: The assessee has imported APIs from its AEs for manufacturing FDFs and has exported FDFs to its AEs under manufacturing arrangement. Thus, the entire international transactions of import and export is within the closed loop of AEs. The assessee has imported 17 APIs. The TPO accepted TNMM adopted by the assessee in respect of 15 APIs and applied CUP in respect of only two APIs. The TPO failed to find appropriate comparables for closely linked transactions. Hence, in the peculiar facts of the present case CUP cannot be adopted to benchmark the international transaction of import of APIs. Although in all the years the nature of international transactions and the product imported from AEs were same. In AY 2013-14 the objections of the assessee against the adjustment were accepted by the DRP and the adjustment was deleted. The Revenue accepted the same as no appeal against the findings of the DRP has been filed by the Department. These facts have not been refuted by the Revenue. No material has been brought on record to distinguish the facts in the impugned assessment year. Once the TPO has accepted the cost of inputs determined by the assessee by applying TNMM as the most appropriate method in substantial part of international transaction, the TPO has no discretion of cherry picking two APIs and apply CUP to benchmark transaction. Whatever be the cost of inputs (APIs), the assessee would be getting reimbursement of the cost (without margin) after processing of the same into FDF. The international transactions of import of APIs and export of FDFs are within the close loop of group concerns and hence, interlinked. The findings of the TPO and the directions of the DRP are reversed and the adjustment made on the import cost of APIs is deleted. The assessee succeeds. Adjustment on recoveries of cost of APIs and cost of Bioequivalence studies under Contract Development Service agreement - HELD THAT:- As per Article-3 of the agreement, the assessee (service provider) shall invoice on monthly basis the service charges for services rendered and the assessee shall be entitled to mark-up of 10% on internal services cost only. Assessee has fairly admitted that in assessment year 2013-14, the DRP has held that the cost of APIs and cost of Bio-equivalence studies are integral part of Contract Development Services support activity. However, the DRP deleted the addition on the ground that the revised margin of the assessee after including the recovery cost of API and bio-equivalence studies are at arm s length - assessee stated at the Bar that the issue can be disposed of in the similar manner. The assessee has filed a chart giving the revised margin after including cost of APIs and Bio-equivalence studies. The revised margin of the assessee is 18.03% as against margin of comparable companies at 13.08%. Since the margin is within tolerance limit, therefore, no adjustment is required. Disallowance of expenditure incurred by the assessee on health care professionals(Doctors) - AO has made disallowance by placing reliance on MCI Regulations and CBDT Circular - contentions of the assessee is that the expenditure has been incurred for conducting seminars and not on gifts and personal travelling expenses of Doctors - HELD THAT:- We find that this issue has been considered by the Tribunal in catena of appeals and has held that MCI Regulations does not apply on pharmaceutical companies. Thus, any expenditure incurred by pharmaceutical company on medical professionals is outside the scope of MCI guidelines - AO while dealing with this issue has out-rightly disallowed the amount claimed by the assessee. We deem it appropriate to restore this issue to the Assessing Officer for the limited purpose of verification of the expenditure and allow the same in accordance with our above finding.

  ---

• 2020 (12) TMI 583
  TP Adjustment - adjustment on account of AMP - TPO made adjustment on account of AMP to the IT Segment (Contract Software Segment) using the intensity based a project wherein the Selling, General and Administrative (SG A)/sales ratio of each comparable was compared with that of the assessee - HELD THAT:- As decided in own case [ 2020 (9) TMI 319 - ITAT DELHI] merely by applying the BLT method which has no legal existence and merely on the basis of MDF agreement vide which taxpayer has received part reimbursement of the AMP expenses incurred by it duly disclosed this expenditure in Form 3CEB and in TP study, so called excessive AMP expenditure of the taxpayer cannot be treated as international transactions u/s 92B of the Act. So, we cannot infer the existence of international transactions qua AMP expenses between taxpayer and AE beyond the reimbursement already made by the AE under MDF Agreement. Comparable selection - HELD THAT:- OTS ESolutions Pvt. Ltd. was held as not comparable in subsequent assessment year i.e. A.Y. 2014-15 [ 2020 (9) TMI 319 - ITAT DELHI] by the Tribunal. The functional dissimilarity is apparent on record and there are no changes in the present assessment year. Hence, we direct the TPO to exclude this comparable from the final list of comparables. Celkon Impex Pvt. Ltd company is in designing and manufacturing of mobile phones while the assessee company is in trading of consumer electronics, home appliances, computers and IT peripherals which is different portfolio all together. From the perusal of the records it can be seen that Celkon Impex Pvt. Ltd. was held as not comparable in subsequent assessment year i.e. A.Y. 2014- 15 by the DRP. The functional dissimilarity is apparent on record and there are no change in the present assessment year. Hence, we direct the TPO to exclude this comparable from the final list of comparables. Micromax Informatics Limited ompany is also functionally dissimilar to the assessee company. The company undertakes all business activities and undertakes all associated business risks. The company outsources manufacturing activities to third party contractors and sells the products under its own brand name as an entrepreneur. The DRP in subsequent year i.e. 2014-15 has excluded Micromax Informatics Limited from the comparable list. The functional dissimilarity is apparent on record and there are no change in the present assessment year. Hence, we direct the TPO to exclude this comparable from the final list of comparables. United Telelinks (Bangalore) Pvt. Ltd is also functionally dissimilar to the assessee company. It has brand owning and outsources manufacturing activities to third party contractor. Redington India Limited company is engaged in distribution of IT products such as computers, printers, software storage systems and also a leading supply chain solutions provider for global brands of IT hardware and software product which appears to be similar to that of assessee s functions. Therefore, we direct the TPO to look into the portfolio of this company and applying the filters, this comparable may be included in the final comparable list. Tech Pacific (India) Limited (later name changed to Ingram Micro ) engaged it is trading in IT hardware and software products which appears to be similar to that of assessee s functions. Therefore, we direct the TPO to look into the portfolio of this company and applying the filters, this comparable i.e. Tech Pacific (India) Limited (later name changed to Ingram Micro ) may be included in the final comparable list. HCL Infosystems Limited company is engaged in distribution of telecommunication and digital lifestyle products such as cellular phones, computers, printers, scanners etc. and hence functionally similar to the assessee company. Besides this fact, this company is allowed as comparable in A.Y. 2005-06 to 2011-12 by the Tribunal and there are no different facts emerging as relates to function conducted by the present assessment year to that of previous assessment years. Therefore, we direct the TPO to look into the portfolio of this company and applying the filters, this comparable may be included in the final comparable list. Incorrect margin adjusted for working capital of computation of comparables - HELD THAT:- From the perusal of records, it appears that the margin adjusted for working capital of computation of comparables is incorrect and the same fact was not denied by the Ld. DR during the course of hearing. Therefore, we remand back this issue to the file of the TPO with the direction to compute the margin adjusted for working capital of computation of comparables correctly. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice Incorrect computation of proportionate adjustment by TPO for Trading Segment - HELD THAT:- Computation of Proportionate adjustment by TPO for Trading Segment is not in consonance with the computation provided by the assessee and the same needs verification. Hence, this issue is remanded back to the file of the TPO for proper verification as per the directions of the DRP. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.

  ---

• Customs

• 2020 (12) TMI 618
  Extension of time for passing final adjudication order by the adjudicating authority - HELD THAT:- After considering the fact that final adjudication order has in fact been passed on 23rd November, 2020, no further order is called for save and except that the additional time taken in passing the order-in-original following adjudication is accepted and condoned. Interim application is disposed of.

  ---

• 2020 (12) TMI 617
  Extension of time for passing final adjudication order by the adjudicating authority - HELD THAT:- After considering the fact that final adjudication order has in fact been passed on 23rd November, 2020, no further order is called for save and except that the additional time taken in passing the order-in-original following adjudication is accepted and condoned. Interim application is disposed of.

  ---

• 2020 (12) TMI 607
  Release of absolutely Confiscated Imported goods - levy of penalty - Canadian Green Peas - prohibited goods - the goods acquired the nature of prohibited goods by virtue of the deeming definition under Section 2(33) of Customs Act, 1962 - DGFT issued N/N. 37/2015-20 dated 18.12.2019, under Section 3(2) of the foreign Trade (Development and Regulation) Act, 1992, the subject goods would deemed to be prohibited under Section 11 of the Customs Act, 1962 - whether the goods can be released on payment of redemption fine in terms of Section 125 of Customs Act, 1962? - HELD THAT:- In the instant case, the impugned goods have been imported in violation of the conditions of the EXIM Policy Notification. By virtue of the same, the goods have acquired the nature of prohibited goods in terms of Section 2(33) of Customs Act, 1962 and have become liable for confiscation in terms of Section 111(d) ibid. In terms of Section 125 of the Customs Act, 1962, in case of goods other than prohibited goods, the adjudicating authority shall allow the goods to be redeemed on payment of fine in lieu of confiscation; in case of prohibited goods, the adjudicating authority has an option to allow the goods to be redeemed or to confiscate the goods absolutely. Whether absolute confiscation can be ordered in respect of goods which are not primarily prohibited goods but have acquired the nature of prohibited goods by virtue of the definition under Section 2(33) has been a subject matter of many judicial pronouncements - Courts and Benches of the Tribunal have been consistent in holding that such goods shall be allowed to be redeemed on payment of fine in lieu of confiscation. Though the Customs Act does not find mention of restricted goods , the Foreign Trade Policy along with Act and Rules made thereunder distinguish restricted and prohibited goods - it is provided that in respect of prohibited goods, the adjudicating authority may go for absolute confiscation. However, in respect of restricted goods, which are mostly commercial goods, the adjudicating authority can release the goods on payment of fine in lieu of confiscation. In the instant case, the appellant is an actual user and had been importing green peas regularly. In respect of the impugned import also they have applied to be DGFT for permission. It is pertinent to note that their application was not rejected and no order was passed on the said application. Under the circumstances, looking into the exigencies of the requirement of the impugned product, the appellants have imported the said goods. It is quite possible to accept the contentions of the appellants that they had a genuine expectation that their application would be considered in course of time and the permission would come forth about the time of import. Therefore, the impugned goods are in the nature of restricted goods, can be allowed to be redeemed on payment of fine in lieu of confiscation. The impugned goods can be allowed to be redeemed on payment of fine in lieu of confiscation under Section 125 of the Customs Act, 1962 and penalty under Section 112(a) of the Customs Act, 1962 - However, looking into the facts of the case that the appellant is a regular importer; is aware of the law and procedures regarding imports; has violated more than one condition of import, the interest of justice will be met if a deterrent redemption fine is imposed, in addition to the penalty already imposed by the Commissioner. The appeal is disposed of by allowing redemption of impugned goods on payment of fine of Rs. 12,00,000/- in lieu of confiscation under Section 125 of the Customs Act, 1962. However, penalty of Rs. 4,00,000/- imposed by the Commissioner is upheld - Appeal allowed in part.

  ---

• Law of Competition

• 2020 (12) TMI 596
  Approval of scheme of amalgamation - sections 230-232 of the Companies Act, 2013 - applicant is seeking dispensation of the meeting of the Equity Shareholders, Secured Creditors and Unsecured Creditors, and Applicant Transferee Company is seeking dispensation of Secured Creditors and appropriate directions for holding and convening of meeting of Equity Shareholders and Unsecured Creditors in respect of the Scheme of Amalgamation of Parsec Enterprises Private Limited - HELD THAT:- Various directions regarding the holding and convening of various meetings issued - directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

  ---

• Corporate Laws

• 2020 (12) TMI 595
  Approval of Scheme of amalgamation - Section 230 to 232 of the Companies Act, 2013 - HELD THAT:- Considering the facts and circumstances of the case and on perusal of the Scheme and the documents produced on record, of Amalgamation and the documents placed on record, it appears that the requirements of the provisions of section 230 and 232 of the Companies Act, 2013 are satisfied. However, as per the observation of the Regional Director the appointed date of the Scheme should be modified to 1st April, 2020 instead of 1st April, 2019. The Scheme of Amalgamation, which is annexed as Annexure E to the joint petition, is hereby sanctioned subject to appointed date being modified from 01st April 2019 to 01st April, 2020 and it is declared that the same shall be binding on the Applicant Companies, namely, Prerna Infrastructures Private Limited and Aditya Timpack Private Limited and their Shareholders and Creditors, and all concerned under the Scheme - Petition is allowed.

  ---

• 2020 (12) TMI 594
  Restoration of the Company s name in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT:- The restoration of the Appellant Company s name, i.e. M/s PBM Wires Private Limited, in the Register of Companies maintained by the RoC, is hereby ordered subject to prior submission to the RoC of physical copies of financial statements for the intervening period, from financial year 2013-14 till date, to the satisfaction of the RoC in respect of the format and requisite content of the said financial statements besides being in compliance with the provisions of the Act. The Appellant shall also submit relevant proof of continued ownership of fixed assets in the form of land and building at Industrial Area, Bagru, as affirmed in affidavit filed vide dairy no. 464/2020 dated 04.03.2020, for the confirmation of the RoC. The RoC shall give effect to this order only after ensuring compliance of tendering of cost and pre-submission of physical copies of financial statements and proof of ownership of fixed assets as stated hereinbefore. The Company is directed to file all the required documents and shall fulfil all other relevant statutory compliances, in accordance with law within 30 days from restoration of its name in the Register of Companies maintained by RoC - Appeal disposed off.

  ---

• PMLA

• 2020 (12) TMI 620
  Grant of anticipatory bail - money laundering - siphoning of funds - allegation of being allured to invest and purchase shares of EIPL by the petitioner - bogus contracts - HELD THAT:- The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. The alleged acts were committed when the petitioner was assuming office as a Director of ILRL and also as the Managing Director of ITNL. The Committee of Directors , which awarded the contracts, was constituted under the Chairmanship of the petitioner. The two contracts to M/s Suryamukhi Projects Pvt Ltd. and M/s AMR Constructions Pvt Ltd. were awarded during the petitioner s tenure in ILRL. In fact, the petitioner was the Managing Director of ITNL when all the 10 alleged bogus contracts were awarded. The petitioner s knowledge and involvement in the alleged awarding of contracts cannot be ruled out. The investigation qua the petitioner as well as the real beneficiaries of the siphoned off amount is still pending. Apparently, the money that is alleged to be siphoned off is public money and the offence is grave in nature. Indeed, the Investigating Officer has interrogated the petitioner twice, however looking at the gravity of the offence and the aspect of pending investigation relating to finding out the real beneficiaries of the siphoned off money, this Court finds itself in disagreement with the submission that no more interrogation in custody is required. This Court cannot overlook the submission made on behalf of the State that the petitioner had occupied the highest office and as such, the risk of his tampering with the evidence and influencing the witnesses also cannot be completely ruled out. The other co-accused namely R.L. Kabra and Mukund Sapre have been released on regular bail and as such, the petitioner cannot claim parity with them. The Court, in these facts and circumstances, cannot turn down the prayer of the Investigating Officer seeking custodial interrogation. Bail application dismissed.

  ---

• 2020 (12) TMI 616
  Grant of Anticipatory Bail - Money Laundering - diversion of funds - main plank of the prosecution is that funds from the bank are diverted for purposes other than stated business of the firm by routing funds obtained in the account of M/s HLF and M/s HSE and directed to M/S Mashreq Communication Limited, which is a Mumbai based company indulged in the production of films - HELD THAT:- No case for interference is made out at this stage for interference in the proceeding launched against the petitioner under PML Act, 2002 - The petitioner has full right and liberty to move an appropriate application for grant of anticipatory bail. In light of the fact that for the same property, indulgence have been shown by the appellate tribunal dealing with the fact and issue, it is provided that in case an application for anticipatory bail is moved by the petitioner within a period of ten days from today then the same may be considered and decided expeditiously by the Special Judge, PML Act in accordance with law and till the decision taken on the application for anticipatory bail of the petitioner, no coercive measure shall be taken against the petitioner - the Special Judge, PML Act shall decide the application for anticipatory bail of the petitioner expeditiously and the petitioner undertakes not to take any unnecessary adjournment and nor shall grant any unnecessary adjournments. Petition disposed off.

  ---

• Service Tax

• 2020 (12) TMI 619
  Validity of action of the DGCEI to initiate investigation against the Petitioner - non-payment of service tax - stand of NBCC is that the Respondent should inform the Petitioner as to what are PMC charges - Exclusion of period of stay from the period of limitation - HELD THAT:- Right from inception, the case of the Department has been that in the agreements entered into by NBCC, a percentage of the project cost called as PMC charges was collected by NBCC. No service tax was being paid in respect of these PMC charges which led to the issuance of the show cause notices. The said Show Cause Notices were challenged by NBCC in the present writ petition related to PMC charges. Thus, the NBCC is well aware as to what are PMC charges. The stand in the reply clearly shows that the NBCC is feigning ignorance. This Court had permitted Director General of Central Excise Intelligence (DGCEI) to investigate and enquire into the collection of these charges and liability, if any, for payment of service tax. NBCC is expected to co-operate in the investigation - the information sought by the DGCEI ought to be provided by NBCC and it should also fully co-operate with the investigation, both in letter and spirit. Computation of time limitation - HELD THAT:- The period between the 10th February, 2016 when the stay order was passed till the disposal of the review petition i.e. 4th December, 2020 would be excluded for the propose of computing limitation period for the issuance of Show Cause Notice under Section 73(1) of the Finance Act - It is made clear that this Court has not examined the merits of the allegations raised by the NBCC in its reply to this application as none of the said issues arise as part of the said application. Petition disposed off.

  ---

• Central Excise

• 2020 (12) TMI 615
  Rejection of declaration in form SVLDRS-1 - rejected on the ground that the appeal filed by the writ applicant is pending with the Textile Committee (Cess) Tribunal at Mumbai and such tribunal is not included in the definition of Appellate Forum - HELD THAT:- Mr. Dave, the learned counsel appearing for the writ applicant has invited the attention of this Court first to the definition to the term Appellate Forum as defined under Section 121 (f) of the Scheme, 2019. Thereafter, Mr. Dave invited the attention of this Court to Section 122, which prescribes as to which particular enactment the scheme would be applicable and in the last, he invited the attention to the provisions of Section 123 of the Scheme, which defines or rather explains the term tax dues . The argument of Mr. Dave is that Section 123(a) of the Scheme only talks about the Appellate Forum. It does not specify about any particular forum. Let Notice be issued to the respondents, returnable on 20.01.2021.

  ---

• Law of Competition

• 2020 (12) TMI 621
  Anti-competitive conduct - resale price maintenance - anti-competitive practices between drivers Ola and Uber - allegation that they entered into price-fixing agreements in contravention of section 3(1) read with section 3(3)(a) of the Act, and engaged in resale price maintenance in contravention of section 3(1) read with section 3(4)(e) of the Act - HELD THAT:- Given the context of the Act in which the CCI and the NCLAT deal with practices which have an adverse effect on competition in derogation of the interest of consumers, it is clear that the Act vests powers in the CCI and enables it to act in rem, in public interest. This would make it clear that a person aggrieved must, in the context of the Act, be understood widely and not be constructed narrowly, as was done in Adi Pherozshah Gandhi [ 1970 (8) TMI 86 - SUPREME COURT ] . Further, it is not without significance that the expressions used in sections 53B and 53T of the Act are any person , thereby signifying that all persons who bring to the CCI information of practices that are contrary to the provisions of the Act, could be said to be aggrieved by an adverse order of the CCI in case it refuses to act upon the information supplied. By way of contrast, section 53N(3) speaks of making payment to an applicant as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions of Chapter II of the Act, having been committed by an enterprise. When the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI and the appellate authority, i.e., the NCLAT, must be kept wide open in public interest, so as to subserve the high public purpose of the Act. Coming now to the merits, we have already set out the concurrent findings of fact of the CCI and the NCLAT, wherein it has been found that Ola and Uber do not facilitate cartelization or anti-competitive practices between drivers, who are independent individuals, who act independently of each other, so as to attract the application of section 3 of the Act, as has been held by both the CCI and the NCLAT. Appeal dismissed.

  ---

• Indian Laws

• 2020 (12) TMI 614
  Criminal misconduct - Benefit of encashment - income earned through special bearer bonds accounted or not - It is argued that no benefit of encashment was ever availed by petitioners or any of his family members nor were any properties purchased from encashment of the said bonds by the petitioners - whether a case is made out for trial on the basis of the documents presented? - HELD THAT:- What element of the monies came into the account of the accused i.e. the father and the son respectively, or whether the latter was a beneficiary of the alleged transactions through or by his father, remains unexplained. Simply because for a large part of the period of investigation, the son was a minor, would not by itself be a reason to disregard the fact that at least for seven years of the investigation period he was a major. In the circumstances, there appears to be material for the trial to be conducted. Section 3(2) of the Special Bearer Bonds Act makes the benefits of the said Act inapplicable to the PC Act or similar offences. The prosecution seeks to rely upon documents, upon statements of witness viz. Anit Mehta, Ashok Grover, Ramnivas, Sushil Salhotra, Vijay Kumar Lalla and Surender Malik - According to the CBI, some income tax related orders relied upon by the petitioners, are of a date after the filing the chargesheet, therefore they would be of no relevance. What is to be seen at this stage is whether there is a strong suspicion that the accused has committed the offence. The Court finds no reason to interfere with the order on charge and the framing of charge - petition dismissed.

  ---