Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 22, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seizure of goods - goods seized on the ground that U.P. e-way bill was not accompanying the goods - section 129(3) of UPGST Act - On close, scrutiny of the record reveals that in the State of Uttar Pradesh, requirement for central e-way bill was implemented with effect from 01.04.2008. At the time of detention of the goods, there was no requirement for carrying central e-way bill. Therefore, the goods cannot/should not be seized or penalty/tax could not be legally demanded. - HC
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Seeking grant of Regular Bail - amount of the bond - Of course, there cannot be a straitjacket formula to fix the amount of the bond, but it should not be exorbitant to take it beyond the means of the accused, thereby frustrating the relief of bail, as it would amount to giving relief with one hand, but taking away with the other. Perhaps for this reason, Section 440 Cr.P.C. contemplates that the amount of every bond executed under this Chapter shall be fixed with due regard to the circumstances of the case and shall not be excessive. - HC
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Classification of goods - import of diagnostic and laboratory reagents - The ‘diagnostic and laboratory reagents’ imported and supplied by the applicant and classified under heading 3822 of the Customs Tariff Act, 1975 attracting a levy of Integrated Tax at the rate of 12% - AAR
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Classification of supply - composite supply or not - Naturally bundled goods or not - The combined service of setting up of Wet Limestone FGD plant and operation & maintenance of the said plant can’t be considered as a composite supply - The setting up of FGD plant merits classification under SAC 995429 and attracts GST at the rate of 12% - AAR
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Input tax credit - ST paid on the Motor cars of seating capacity not exceeding 13 (including Driver) leased or rented with Operators to the Vendors is not available to the applicant as INPUT TAX CREDIT(ITC) in terms of Section 17(5)(a)(A) - GST paid on the Motor cars of seating capacity not exceeding 13 (including Driver) registered as public vehicle with RTO to transport passengers, provided to their different customers on lease or rental or hire will NOT be available to as INPUT TAX CREDIT (ITC) - Supply of services by way of Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT is deemed as taxable supply; ITC is not admissible on Motor Vehicles procured as the same is restricted at S. 17(5)(a)(A) of the Act. - AAR
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Classification of goods - supply of Stator Coil - the fact of supply of stator (‘oils being meant for manufacture of WOEGs is established - The ‘Stator Coils’ in question falls under CTH 8503 and the supply is made for manufacture of WOEGs and therefore in the instant ease, the rate of GST is applicable @12% of IGST - AAR
Income Tax
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Levy of interest under Section 215 - Deputy Commissioner of Income Tax, Bombay, by order dated 20/03/1989 in the exercise of power under Rule 40 of Income Tax Rules, held that delay in finalization of assessment is not attributable to Assessee and therefore the Assessee is not liable to pay interest under Section 215 of the Act beyond the period of one year from the date of filing of return. - Therefore Appellant is not entitled to waiver of interest for a period of one year. Appellant is entitled to the benefit of order dated 20/03/1989 passed under Rule 40(1) only to the extent stated therein. - HC
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Reopening of assessment u/s 147 - Once a query has been raised by Assessing Officer through the assessment proceeding and the assessee has responded to that query, it would necessarily follow that Assessing Officer has accepted petitioner's submissions so as not to deal with that issue in the assessment year. Even if, the assessment order passed under Section 143(3) of the Act does not reflect any consideration of the issue, it must follow that no opinion was formed by Assessing Officer in the regular assessment proceedings - it would not be open to reopen the assessment based on the very same material with a view to take another view - HC
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Prosecution u/s 276C(1) - allegation against Petitioner is of evasion of tax - Petitioner failed to substantiate the claim of purchases - Taking into consideration accusations in the complaint and material on record, we are satisfied that, prima facie, the ingredients of the offences under Section 276C(1) of the said Act are satisfied. - HC
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Disallowance of cash payments in excess of prescribed limit u/s. 40A(3) - even though few payments is covered u/s. 40A(3) of the Act, because of peculiar nature of business of assessee, we find that those payments cannot be considered for disallowance u/s. 40A(3) of the Act. To sum up, all payments made by the assessee for purchase of materials in excess of prescribed limit provided u/s. 40A(3) of the Act cannot be disallowed - AT
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Unaccounted investment - Addition in the hands of the assessee on protective basis on account of expenses u/s. 69C - We find no infirmity in the order of learned Commissioner of Income-tax (Appeals) in deleting the addition in the hands of this assessee, made on protective basis, when addition already made in the case of other assesses on substantive basis, have been confirmed. - AT
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Reopening of assessment u/s 147 - addition of bogus expenditure - non-issuance of valid notice u/s 143(2) - Issuance of notice under section 143(2) of the Act prior to filing of return of income was invalid and in absence of valid notice under section 143(2) of the Act, the assessment order is rendered invalid. - AT
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Additions of commission income - Assessment u/s 153A r.w.s 144 - We also affirms the finding of ld CIT(A) that that when the actual business of assessee was importing goods for others and in the books credit in the name of exporters, thus exchange rate difference is not payable by the assessee and the assessee is not eligible for deduction of such exchange rate fluctuation. No evidence is filed by the assessee on record to prove the fact that the assessee entered into hedging contract with the Banker, the evidence found in the form of e-mail and other evidences show the facts otherwise. Therefore, the submissions made by the assessee do not inspire confidence. - AT
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Deduction u/s 80P - In case of co-operative credit society, income to which benefit of section 80P(2)(a)(i) is not allowed, e.g., rental income, interest income from surplus funds kept in FDs' of banks, etc., basic exemption of ₹ 50,000 as provided for in section 80P(2)(c)(ii) must be granted. - Though the word 'activity' is not defined, yet the investment activity, activity of renting of immovable property, etc., and the consequent income attributable to such activities would be covered under section 80P(2)(c). - AT
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Penalty Levy u/s 271D - assessee has received unsecured loan in cash in contravention of the provisions contained u/s 269SS - When source of the cash receipt is not in dispute and transaction between the Director of the company and his father has also not been disputed by Revenue and it has not prejudiced the interest of the Revenue in any manner as no tax avoidance and tax evasion has been alleged or proved - AT
Customs
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Jurisdiction - Additional Director General of DRI was a proper officer or not - The Additional Director General of DRI not having, in the first instance, assessed and cleared the goods, he will not be ‘the’ proper officer for issuance of show cause notice under Section 28(1) of the said Act. The revenue appeal has to fail because the show cause notice originally issued itself would be termed non-est. The entire proceeding in the present case initiated by the Additional Director General of DRI by issuing show cause notice is invalid without any authority of law and is liable to be set aside. - HC
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Revocation of customs broker licence - forfeiture of security deposit under regulation 18 - Admittedly, the appellant had not undertaken a sufficiently diligent verification and, instead, choose to rely upon the IEC registration which, fortunately for him, was genuine. To condone breach of this obligation would only encourage casual disregard of that obligation. The enquiry authority and the licensing authority cannot be faulted for considering this lapse on the part of the customs broker to be a breach of obligation. - AT
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Levy of Anti-dumping duty - certificate of origin - import of ‘pre-sensitized positive offset aluminium plates (for offset printing machine)’ - mere re-testing may not culminate in conclusion of proceedings even if the test report is conclusive enough for determination of the nature of the goods. No less critical to the eligibility is the ‘certificate of origin’ which has also been doubted by the original authority. The first appellate authority has not returned a finding on that aspect which is not dependent on the outcome of the re-test. That lack must be made good. - AT
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Mis-declaration of value of imported goods - No evidence is on record that the any payment over and above the contracted, and declared, price was made to the seller. The allegation hinges on the said transaction price being on Free on Board (FOB) terms while duties of customs are to be computed on value appraised on Cost Insurance Freight (CIF) terms. The authority for adoption of the base arises from rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is not a consequence of rejection of declared value attended upon by re-determination through rule 4 to rule 9 of the said Rules. Recourse to confiscation under section 111(m) of Customs Act, 1962 is, therefore, not tenable in law. - AT
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Import of old and used Maquet Servoi ventilator machine with standard hoses and accessories - hazardous goods or not - That would require evidence of the conveyance having been beyond the territorial waters which has not been demonstrated by customs authorities. The relaxation in the office memorandum supra applies to the impugned goods. - In the absence of any finding that the declared value did not represent the transaction value, the confiscation and imposition of penalty, as also the redetermination of value, is not valid in law - AT
Indian Laws
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Levy of additional surcharge leviable under Section 42(4) of the Electricity Act, 2003 - it is required to be noted that the consumers defined under Section 2(15) and the captive consumers are different and distinct and they form a separate class by themselves. So far as captive consumers are concerned, they incur a huge expenditure/invest a huge amount for the purpose of construction, maintenance or operation of a captive generating plant and dedicated transmission lines. - it is to be held that such captive consumers/captive users, who form a separate class other than the consumers defined under Section 2(15) of the Act, 2003, shall not be subjected to and/or liable to pay additional surcharge leviable under Section 42(4) of the Act, 2003. - SC
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Dishonor of cheque - petitioner is dormant Director - On an overall reading of the complaints, it cannot be said that the allegations levelled are bald and vague. The petitioner has also not placed on record any material of unimpeachable quality in support of his claim that he was a dormant Director which issue, alongwith other defences raised, shall be a matter of trial. Suffice it to say, the complaint cases ought not be quashed qua the petitioner at this stage. - HC
Service Tax
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Refund of service tax - condonation of delay in filing of claim - it is settled that in case of violation of condition of the notification which is in the nature of procedural lapse, the substantial benefit of the exemption notification cannot be denied. - In view of the above settled legal position, even though there is a delay the same was condoned by the lower authority which is absolutely in line of the above principle laid down by the Hon’ble Supreme Court. - AT
VAT
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Evasion of tax - sales suppression - inter-state sale or not - In the absence of any material evidence with respect to movement of goods, the quotations recovered from the business place of the petitioner, cannot be treated as sales. Hence, there was no inter-state sale taken place - HC
Case Laws:
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GST
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2021 (12) TMI 890
Revocation of cancellation of registration - revocation being considered/rejected on the ground that they have not been made within the time prescribed - contention of learned counsel for the petitioner is that this is an erroneous reading of N/N. 34 of 2021 dated 29.08.2021 - Section 30 of the Central Goods and Services Tax, Act 2017 - HELD THAT:- The interpretation sought to be placed by learned counsel appearing for respondents is unduly restricted. It cannot be lost site of that this notification was issued in view of the Covid pandemic, wherein even the Supreme Court had passed a blanket order of extending the period of limitation. Once the petitioners had already been granted benefit of the notifications dated 23.04.2019 (Annexure P-6), dated 25.06.2020 (Annexure P-7) and dated 29.08.2021 (Annexure P-10), the time limit for making such application should have extended up to the 30th day of September, 2021. These writ petitions are allowed and it is directed that in case these petitioners now move an application for revocation of cancellation (if necessary, manually) within a period of 30 days from the date of receipt of certified copy of this order, the same would be deemed to be within limitation and would have to be decided in accordance with law on merits.
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2021 (12) TMI 889
Seizure of goods - goods seized on the ground that U.P. e-way bill was not accompanying the goods - section 129(3) of UPGST Act - HELD THAT:- Admittedly, the goods in question were coming from Aurangabad (Maharashtra) to Kanpur Dehat. Along with the goods, documents as prescribed under section 7 of the IGST Act were accompanying and no discrepancy, whatsoever, was found in the said documents. The stand taken in the impugned orders is non-compliance as central e-way bill was not accompanying the goods. On close, scrutiny of the record reveals that in the State of Uttar Pradesh, requirement for central e-way bill was implemented with effect from 01.04.2008. At the time of detention of the goods, there was no requirement for carrying central e-way bill. Therefore, the goods cannot/should not be seized or penalty/tax could not be legally demanded. The Division Bench of this Court in M/S GODREJ AND BOYCE MANUFACTURING CO. LTD., L.G. ELECTRONICS INDIA PVT. LTD., BHARTI AIRTEL LIMITED, M/S GUALA CLOSURES (INDIA) PVT. LTD., M/S. RAS POLYTEX PVT. LIMITED, RIMJHIM ISPAT LIMITED, RIMJHIM ISPAT LIMITED, M/S. GAURANG PRODUCTS PVT. LTD., M/S. ADITYA BIRLA FASHION AND RETAIL LTD., M/S. NAVYUG AIRCONDITIONING AND M/S. PROACTIVE PLAST PVT. LTD. VERSUS STATE OF U.P. AND 02 OTHERS AND STATE OF U.P. AND 3 OTHERS [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT] has held that during the period from 01.02.2018 to 31.03.2018, the requirement of e-way bill under the U.P. GST Act read with Rules framed thereunder was unenforceable - thus, neither seizure of goods was justified nor can the penalty be sustained. Petition allowed.
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2021 (12) TMI 888
Seeking grant of Regular Bail - fixing of the amount of the bond for bail - wrongful loss of ₹ 15.91 crores to the complainant-Directorate General of GST Intelligence - Section 132(1)(b) of Central Goods Services Act, 2017 (for short 'CGST Act, 2017), punishable under sub-clause(i) of Section 132(1) of CGST Act, 2017 - HELD THAT:- Chapter XXXIII of Code of Criminal Procedure contains the provisions relating to bail and bonds and Section 437 and 439 Cr.P.C. deal with the regular bail of undertrial. The concession of regular bail liberates the undertrial from detention in prison during the pendency of the trial subject to fulfilling the conditions including execution of personal bond with or without sureties. Ordinarily, the Court before granting regular bail to the accused considers various factors like nature and gravity of the alleged crime, custodial period of the accused, stage of the trial, the alleged role/participation of the accused in the alleged offence and other attending circumstances. At the time of release, the accused is conditioned to execute bonds and furnish surety and the amount of bond is fixed by the Court/Officer granting bail to the accused and the object of such conditions is to ensure that the accused returns to stand trial. Of course, there cannot be a straitjacket formula to fix the amount of the bond, but it should not be exorbitant to take it beyond the means of the accused, thereby frustrating the relief of bail, as it would amount to giving relief with one hand, but taking away with the other. Perhaps for this reason, Section 440 Cr.P.C. contemplates that the amount of every bond executed under this Chapter shall be fixed with due regard to the circumstances of the case and shall not be excessive. This Court does not find any merit in the argument advanced on behalf of the complainant as the petitioner cannot be allowed to remain in jail indefinitely, because it would mean punishment to the accused before charges against him are even explained. The maximum sentence for the alleged offence in the present case is Five years, whereas the petitioner has already undergone a period of more than 11 months. Since the petitioner is yet to execute the bond and furnish the sureties, the condition directing the accused to furnish the bank guarantee/FDR is also not sustainable, as normally, such a condition can be imposed in lieu of executing the bond. This Court is mindful of the fact that admittedly, in the present case, till date no complaint/charge-sheet has been filed by the respondent and despite the concession of bail extended to the petitioner on 24.2.2021, he continues to be in prison. At this juncture, it is needless to observe that every accused is presumed to be innocent till the prosecution brings home the guilt of the accused, and further the grant of bail is a general rule, whereas denial is an exception. This Court is of the opinion that the impugned order dated 15.7.2021 (Annexure P-2), passed by the Addl. Sessions Judge, Ludhiana, calls for further modification. The petition succeeds and it is ordered that the accused shall be released on bail subject to his executing bond of ₹ 10 lakhs and two sureties of the like amount, and further the other condition of furnishing a bank guarantee for a sum of ₹ 20 lakhs is set aside - Petition allowed.
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2021 (12) TMI 887
Classification of goods - import of diagnostic and laboratory reagents - to be classified under heading 3822 of the Customs Tariff Act, 1975 are covered under Entry No. 80 of Schedule H to the Notification No.1/ 2017-Integrated Tax (Rate) dated 28.06.2017? - Circular No. 163/ 19/2021-GST dated 6th October, 2021 - HELD THAT:- The CBIC, vide para 10 of the Circular No. 163/ 19/2021-GST dated 6 th October, 2021, clarified the issue of whether the benefit of concessional rate of 12% would be available to laboratory agents and other goods falling under heading 3822 . It is held that the intention of the entry at S. No. 80 of Schedule II of notification No.1/2017- Integrated Tax (Rate) dated 28.6.2017 was to prescribe GST rate of 12% to all goods, whether diagnostic or laboratory regents, falling under heading 3822. Accordingly it is clarified that concessional GST rate of 12% is applicable on all goods falling under heading 3822, vide Entry at S. No. 80 of Schedule II of notification No.1/2017-Integrated Tax (Rate) dated 28.6.2017.
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2021 (12) TMI 886
Classification of supply - composite supply or not - Naturally bundled goods or not - combined service of setting up of Wet Limestone FGD plant and operation maintenance - applicability of entry no.3(iv)(e) of the Notification No.11/ 2017-Central Tax (Rate) dated 28.06.2017 - applicable GST rate and SAC/ HSN - HELD THAT:- Composite Supply is defined under section 2(30) of the CGST Act 2017 to mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. - The concept of naturally bundled supplies is not defined under CGST Act 2017. However Education Guide issued by CBEC (now CBIC) in the year 2012 refers Bundled service to mean a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. Though this reference is given with respect to bundled service it can be extended to bundled supplies in the GST regime. The applicant is involved in supply two services i.e. Setting up of FGD plat and O M of the said plant, one at a time - the service of Setting up of FGD plant, which is in the nature of turnkey project / EPC contract and examine whether setting up of the said plant qualifies to be a composite supply of works contract or not. In the instant case, the setting up of FGD plant includes civil works (tanks silo works, Mill Building, MCC building etc.), Equipment foundation works, duct works, installation works (mechanical / electrical) etc., Thus the applicant has undertaken erection, installation commissioning of FGD plant, which is permanently fastened to earth and hence the said plant becomes immovable property. Construction, supply of relevant goods, assembly, commissioning of such immovable structure qualifies as a works contract service - the tender Notification the Job order reveal that the FGD plant is primarily meant for the control of emission of Sulphur Dioxide, Nitrogen Oxide and other items as per the notification dated issued under the Environment Protection Act, 1986. Thus the said plant is meant for control of emission of hazardous gases. The service of setting up of FGD plant gets covered under the aforesaid entry 3(iv)(e), subject to the condition that the plant has to be a pollution control or effluent treatment plant and should not be located as a part of a factory. In the instant case, the FGD plant is integrated to the thermal power plant and hence we proceed to examine whether the thermal power plant amounts to a factory or not - the FGD plant is meant for the purpose of reducing emission of Sulphur Dioxide gas present in the flue gas coming out at the time of generation of thermal power, which is hazardous to the environment. Thus, the said plant is a type of pollution control device, which is useful for the control of air pollution by reducing emission of Sulphur Dioxide gas generated in the thermal power station. Both the conditions i.e. the FGD plant is a pollution control plant and is not located as part of a factory, are fulfilled and hence the applicant s service i.e. setting up of FGD plant, which is a composite supply of works contract service, is squarely covered under tariff heading 995429, is entitled for the benefit of the entry No.3(iv)(e) of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, thereby attracting GST at the rate of 12%. Classification of the O M services of the FGD plant - Applicable rate of GST - HELD THAT:- The applicant, during the O M contract period of 3 years, is responsible for achieving emission norms as notified by the Ministry of Forest and Climate Change with the optimum utilization of energy and consumption of limestone. Further, the applicant is also responsible for appointing experienced service engineer, supervisor etc. for proper operation and maintenance of the FGD plant during the O M period. The supply of O M of the FGD plant is the service covered under Business Support Service , falling under SAC 998599, as Other Support Services not elsewhere classified . Entry No.23 of the Notification 11/2017-Central Tax (Rate) dated 28.06.2017 covers support services falling under SAC 9985 and the impugned service of O M of the FGD plant is covered under entry number 23(iii) attracting GST @ 18%.
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2021 (12) TMI 885
Scope of Advance Ruling - Completion of various compliance actions would apply to the time limit provided for the export of goods under notification no. 41/2017 - Integrated tax (rate) Dated October 23, 2017 - relaxations provided vide the notification of 35/2020-Central Tax Dated April 3, 2020 - delay of one day over and above the 90 days specified - benefit of concessional rate of 0.1% IGST - HELD THAT:- The applicant is of the view that there is no violation of Notification No. 41/2017- Integrated Tax (Rate) and the goods have been exported within the extended time limit specified in the Notification No. 41/2017 - Integrated tax (rate) Dated October 23, 2017, read with Notification No. 35/2020 - Central tax dated April 3, 2020. Accordingly, the 0.1% CGST charged by them is correct and requires no further action. The applicant had made supply of goods vide Invoice No. 2019100603, 2019100601, 2019100605 all dated 11.03.2020, e -way bills raised and the goods had been dispatched to the recipient. Further, the applicant vide their letter dated 31.05.2021, has submitted the Proof of documents on the supply made by them vide Notification No. 41/2017 dated 23.10.2017 through mail to the Customs Jurisdictional Officer, in respect of the above invoices for which the ruling is sought before us. The applicant has contended that the question is admissible for ruling as the present application is in relation to the applicants transaction with the customer which is an ongoing transaction wherein the applicant supplies goods to customer as per Notification 41/2017. In the case at hand, it is found that the question raised is in relation to the supply which had been made by the applicant and the proof of documents of such supply furnished before the concerned authorities for further action as required under Notification No. 41/2017-I.T.(Rate) dated 23.10.2017. The necessary documents have been furnished vide their letter dated 31.05.2021 and the application seeking the ruling is made on 09.07.2021 - the question raised by the applicant as to whether the benefit of the concessional rate of 0.1% IGST, would still be available to them is not admissible before this authority. Applicability of relaxation provided under Notification No. 35/2020 C.T. - time-limit provided for the export of goods under Notification No. 41/2017 -I.T(Rate) - HELD THAT:- The questions admissible should pertain to the supply being undertaken or proposed to be undertaken by such applicant only. In the facts presented, it is noticed that supply has been undertaken by the Merchant Exporter .and not by the applicant as stated in their submissions. Hence, the applicant cannot seek the ruling for the supply undertaken by the Merchant Exporter and therefore the question which seeks ruling on the applicability of relaxation in the time-limit for export is not admissible. The Application for Advance Ruling is not admitted, under sub section (2) of section 98 of the CGST /TNGST Act, 2017 read with Section 95(a) of the Act.
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2021 (12) TMI 884
Input tax credit - Motor cars of seating capacity not exceeding 13 (including Driver) leased or rented to customers - Motor cars of seating capacity not exceeding 13 (including Driver) registered as public vehicle with RTO to transport passengers, provided to their different customers on lease or rental or hire - Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT - Section 17(5) (a)(A) of Central Goods and Service Tax Act, 2017 - HELD THAT:- The activity undertaken by the applicant is supplying services of car hire/rentals with the drivers and the recipient uses the services received for the transportation of their staff, Associate, etc. When in respect of Schedule-I of the agreement with Amazon, the payment is made per vehicle- wise as a 'Fixed Monthly Packaged Model', the payment is calculated based on vehicle-wise/Trip-wise in the case of Fidelity Business. The terms of service to be extended in all such agreements/schedules are supply of vehicles of certain standards, fixed with tracking accessories/panic buttons qualified drivers. The supply is restricted to the Vehicle with the Drivers. The usage, i.e., Trip Schedules, routes, etc are done by the Transport team of the Vendor - reading the full agreement clearly shows that the supply extended is only supply of services of renting/hiring of vehicles with operator classifiable under SAC 9966 - 'Renting of Vehicles with Operators' . This stands established by the fact that the applicant in their invoices raised on Amazon and Fidelity, copies of which are provided, have mentioned the SAC as 9966. The exception provided at Section 17(5)(a)(A) is that the ITC in respect of Motor vehicles having approved seating capacity of not more than thirteen persons are available when they are used for making further supply of such motor vehicles. The contention of the applicant is that they are buying and using the vehicles for supplying services of 'Renting of Vehicles with Operators' and the same is 'further supply of such vehicles' in as much as 'Supply' as defined under Section 7 of the Act includes all forms of supply of goods or services such as rental, lease for a consideration in the course of furtherance of business - it could be construed that Section 17(5) (a) (A) of CGST Act, 2017 allows ITC of GST paid on purchase of motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), only when the taxable person makes further supply of such motor vehicles. The applicant in this case is a service provider, who provides service of renting/leasing motor vehicles. The taxable outward supply in this case does not include further supply of such purchased motor vehicles. Hence the applicant is ineligible to avail ITC on motor vehicles as per section 17(5)(a) (A) of CGST Act 2017. In the case at hand, from the various clauses of the agreement it is seen that the applicant is obligated to supply on rental/hire basis vehicles of particular standards with the drivers to their vendors - Therefore, it is evident that the supply made by the applicant is rental/hire of such vehicles and the activity of transportation of employee/associates is undertaken by the Vendor. Thus, in as much as the activity undertaken by the applicant is only renting/hiring of the Motor Vehicles with the operators and not undertaking transportation of passengers, the exception at S. 17(5)(a)(B) is not available to the applicant. Whether the supply of services by way of Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT is deemed as taxable supply? - whether ITC is admissible on Motor Vehicles procured and used commonly for such supply to SEZ and other than SEZ supplies? - HELD THAT:- According to Section 7(5)(b) read in conjunction with section 5(1) of IGST Act 2017, supply of goods or services or both to a SEZ developer or a SEZ unit shall be treated as a supply in the course of interstate trade or commerce and leviable to tax under IGST Act. Also in accordance with Section 16(1) of IGST Act 2017, supply of goods or services to SEZ developer or SEZ unit is classified as Zero rated supply . In addition, section 16(3)(a) of IGST Act 2017 enables a registered person to make zero rated supply under LUT without payment of IGST. Therefore, supply of renting/hiring of such Motor Vehicles to SEZ under LUT is a taxable supply - since the ITC of the Tax paid on purchase of such vehicles are restricted as per the provisions of S.17(5)(a) and not Excepted under S. 17(5)(a)(A). The ITC is not admissible on the tax paid on procurement of such vehicles.
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2021 (12) TMI 883
Classification of goods - supply of Stator Coil by the Applicant to Coral Manufacturing Works India Private Ltd.- taxable at 12% or not - HELD THAT:- Para 11 of Circular No.80/51/2018 GST dated 31.12.2018, clarifies the applicability of GST on Waste to Energy Plant. It clarifies that the benefit of concessional rate is available to such equipment, machinery, etc which fall under Chapter 84, 85 and 94 and used in the initial setting up of renewable energy plants and devices; and that GST being self assessment tax, the taxpayer is to satisfy himself with the requisite document from a buyer such as supply contracts / Order for WTEP from the concerned authorities before supplying goods claiming the concession. The requisite document from a buyer such as supply contracts / Order for WTEP from the concerned authorities before supplying goods claiming the concession. The applicant has mis read the clarification and is before us considering this Advance Ruling authority as the concerned authorities mentioned in the said circular. The circular clarifies the doubt regarding the Waste to Energy Plants and it is clearly stated in Para 11.3, that the tax being self-assessed, the supplier, before effecting the supply adopting the concessional rate, has to satisfy himself with the requisite documents from the recipient, such as supply contracts or order for WTEP from the concerned authorities. Therefore, the Concerned authority specified in the said circular is not this Authority, but the buyer of such WTEP As its related parts. However, as the question raised is on the applicability of the entry of the notification, the same is answered. In the instant case, the applicant has produced copies of Purchase orders no.PO 61 dt.21.01.2021 and PO 133 dt. 16.02.2021 received from M/s. Coral Manufacturing Works India Pvt Ltd, wherein it has been specified that the purchase orders are for the supply of Form wound coil(Stator coil) HSN 85030090, for Enercon Make, Wind Operated Electricity Generator EP3 E138. Thus, the fact of supply of stator ( oils being meant for manufacture of WOEGs is established - GST being self assessed tax, the applicant should satisfy himself that such goods would be used in the WOEG on the basis of requisite document from a buyer such as supply contracts/orders for WOEG from the recipient before supplying goods claiming concession under said entry 234 (Now 201). Hence the onus of proving that such goods arc being supplied to WOEG is on the supplier of such goods with documentary proof to that extent. The Stator Coils in question falls under CTH 8503 and the supply is made to M/s. Coral Manufacturing Works Private Limited for manufacture of WOEGs and therefore in the instant ease, the rate applicable is 6% CGST as per Sl.No.201A of the Schedule II to Notification no. 01/2017-CT (Rate) dt.28.06.2017 as amended and 6% SGST as per SI. No. 201A of Schedule II to notification M.S.no.62/201 7 dt. 29.06.2017 as amended effective from 30.09.2021.
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Income Tax
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2021 (12) TMI 882
Regular assessment or not - Waiver of levy of interest u/s 215 - delay in finalisation of the assessment was not attributable to the Appellant - whether tribunal was right in holding that a fresh assessment which has been made by the Assessing Officer to give effect to the directions of the Commissioner of Income Tax under Section 263 of the Act setting aside the original assessment, would constitute a regular assessment for purposes of section 215 of the Act ? - HELD THAT:- For assessment year 1985-86, returned total income of Appellant was ₹ 1,63,41,650/-. In the regular assessment proceeding completed on 28/03/1988, the total income was determined at ₹ 2,74,47,780/- and interest under Section 215 of the said Act amounting to ₹ 13,67,999/- was charged. In the Appeal filed by the Assessee, the amount of interest was reduced to ₹ 8,53,650/-. In the facts of the case, since the interest under Section 215 was charged in the regular assessment order, the Assessing Officer had the power to charge interest under Section 215 of the Act, while carrying out reassessment. Section 215(4) empowers the Assessing Officer to waive or reduce the amount of interest chargeable under section 215 under circumstances prescribed in rule 40 of the Income Tax Rules, 1962. Deputy Commissioner of Income Tax, Bombay, by order dated 20/03/1989 in the exercise of power under Rule 40 of Income Tax Rules, held that delay in finalization of assessment is not attributable to Assessee and therefore the Assessee is not liable to pay interest under Section 215 of the Act beyond the period of one year from the date of filing of return. Accordingly, the Appellant was held to be liable to pay an amount of ₹ 4,40,020/-. The order of Dy.CIT, Bombay, dated 20/03/1989, has not been challenged by Revenue or Appellant, with the result said order attained finality. In the absence of challenge to the order under Rule 40(1) of IT Rules, the Appellant is not entitled to the benefit of Judgment of Division Bench of this Court in the case of CIT Vs. Bennett Coleman Co. Ltd. [ 1993 (6) TMI 3 - BOMBAY HIGH COURT ] Therefore Appellant is not entitled to waiver of interest for a period of one year. Appellant is entitled to the benefit of order dated 20/03/1989 passed under Rule 40(1) only to the extent stated therein. Appellant was liable to pay an amount of ₹ 4,13,630/-as per order dated 20/03/1989 annexed to this Appeal at Exh.C. The questions are answered accordingly.
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2021 (12) TMI 881
Reopening of assessment u/s 147 - Taxability of income of a non-resident by way of capital gain - HELD THAT:- The reassessment proceedings are initiated purely on change of opinion with regard to the rate of tax payable by petitioner on the long term capital gain made by it on the sale of shares of Hindustan Lever Ltd. The issue of applicability of first proviso to Section 48 as well as rate of tax under Section 112 were discussed and considered at the time of the said assessment proceedings under Section 143(3). As held in First Source Solutions Limited V/s. The Assistant Commissioner of Income Tax 12(2) (1) [ 2021 (9) TMI 248 - BOMBAY HIGH COURT ] reasons of re-opening the assessment has to be based / examined only on the basis of reasons recorded at the time of issuing a notice under Section 148 of the Act seeking to re-open the assessment. These reasons cannot be improved upon and/or supplemented much less substituted by an affidavit and/or oral submissions. Once a query has been raised by Assessing Officer through the assessment proceeding and the assessee has responded to that query, it would necessarily follow that Assessing Officer has accepted petitioner's submissions so as not to deal with that issue in the assessment year. Even if, the assessment order passed under Section 143(3) of the Act does not reflect any consideration of the issue, it must follow that no opinion was formed by Assessing Officer in the regular assessment proceedings - once all the material was placed before Assessing Officer and he chose not to refer to the deduction / claim which was being allowed in the assessment order, it could not be contended that Assessing Officer had not applied his mind while passing the assessment order. When a query has been raised, as has been done in this case, with regard to a particular issue during regular assessment proceedings, it must follow that Assessing Officer had applied his mind and taken a view in the matter as is reflected in the assessment order - once a query has been raised in the assessment proceedings with regard to rate at which capital gains should be taxed under Section 112(1)(c)(ii) and petitioner has responded to the query to the satisfaction of Assessing Officer as is evident from the fact in the assessment order dated 15th November 2006, accepts petitioner's submissions as to why taxation should be only 10% under Section 112 read with Section 148 of the Act, it must follow that there is due application of mind by Assessing Officer to the issue raised. Non rejection of the explanation in the assessment order would amount to Assessing Officer accepting the view of petitioner, thus taking a view / forming an opinion. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the very same material with a view to take another view. - Decided in favour of assessee.
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2021 (12) TMI 880
Reopening of assessment u/s 147 - Eligibility of reasons to believe - claim of unabsorbed depreciation and business loss - HELD THAT:- Perusal of the reasons record by respondent No.1 indicates that the notice of reassessment proceeds on the basis of material which was available during original assessment and is not based on fresh tangible material received. The record indicates that a specific query was raised during original assessment and Petitioner had submitted details of unabsorbed depreciation and business loss. Petitioner had disclosed the figures of unabsorbed business loss and unabsorbed depreciation in ITR Form-6. Petitioner had also filed computation of income under provisions of the said Act. Petitioner had also disclosed in Schedule relating to MAT in the said Form giving details of working of book profit including specific disclosures under the head Loss brought forward or unabsorbed depreciation, whichever is less . From the reasons recorded by Respondent No.1, it appears that there was no tangible material for Respondent No.1 to conclude that income had escaped assessment. For the aforesaid reasons the Assessing Officer has acted in excess of the limit of his jurisdiction to reopen the assessment in the exercise of powers under Section 147 read with Section 148 of the said Act. Accordingly, Petitioner would be entitled to succeed in this proceeding. - Decided in favour of assessee.
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2021 (12) TMI 879
Prosecution u/s 276C(1) - allegation against Petitioner is of evasion of tax and, therefore, ingredients of the offence alleged against Petitioner are, prima facie, satisfied - order of sanction at Ex. D-3 stating that Petitioner has failed to substantiate the claim of purchases to be treated as bogus - HELD THAT:- It is well settled that before granting sanction the authority must have before it the necessary report and the material facts which prima facie establish the commission of offence alleged for and that the sanctioning authority would apply its mind to those facts. The order of sanction is only an administrative act and not a quasi-judicial one nor is a lis involved. Therefore, the order of sanction need not contain detailed reasons in support thereof. But the basic facts that constitute the offence must be apparent on the sanction order and the record must bear out the reasons in that regard. A perusal of the sanction order clearly indicates that the sanctioning authority appears to have applied its mind to the facts placed before it and considered them and then granted sanction. Perusal of the complaint launched against Petitioner also disclose allegations that Petitioner failed to substantiate the claim of purchases amounting to ₹ 2,74,03,016/- and the assessing officer held the purchases to be bogus and made an addition of ₹ 34,25,377/(12.5% of the bogus purchases). On Appeal by Petitioner, CIT (A) vide order dated 19.12.2016 confirmed the addition. ITAT also confirmed said order. It is stated that, therefore, Petitioner has willfully and intentionally evaded his tax liability. Taking into consideration accusations in the complaint and material on record, we are satisfied that, prima facie, the ingredients of the offences under Section 276C(1) of the said Act are satisfied. Assessee Petition dismissed.
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2021 (12) TMI 878
Late remittance of employees contribution to PF and ESI - Payment prior to the due date of filing of the return of income u/s 139(1) - HELD THAT:- Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT [ 2021 (10) TMI 1196 - ITAT BANGALORE] by following the dictum laid down in the case of Essae Teraoka Pvt. Ltd [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] had held that the assessee would be entitled to deduction of employees contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) - It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. Employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the AO is deleted. - Decided in favour of assessee.
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2021 (12) TMI 877
Reopening of assessment u/s 147 - taxation as fees for technical services at the rate of 10% under Article 12 of the India Sweden DTAA - HELD THAT:- On going through the relevant material on record, it becomes emphatically clear that the assessee disclosed fully and truly all material facts necessary for the assessment during the course of original proceedings completed u/s.143(3) and there was nothing which was withheld by it. What inference the AO draws from the material placed before him is a secondary question and matter of concern for the Department only. Insofar as the proviso to section 147 is concerned, the same gets immediately magnetized when it is proved that the original assessment was completed u/s.143(3) and a period of four years has elapsed form the end of the relevant assessment year and further there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Adverting to the facts of the instant case, we find that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment completed u/s. 143(3). Since the period of four years from the end of the relevant assessment year expired at the time when the AO issued notice u/s. 148, we hold that such a notice and the consequential assessment order are bad in law and hence vitiated. A.Y. 2013-14 - Proviso to section 147 mandates that no reassessment can take place after four years from the end of the relevant assessment year when the original assessment was completed u/s. 143(3) and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary facts for reassessment. Here again, we find that the AO inquired about the amounts received by the assessee not offered for taxation during the course of original assessment proceedings by means of a notice u/s. 142(1) of the Act. The assessee furnished details of income of ₹ 9.26 crore not offered for taxation in its reply with the necessary justification. As evident that the AO initiated reassessment proceedings by means of notice u/s. 148 dated 29-03-2019 after four years from the end of the relevant assessment year when the original assessment was completed u/s. 143(3) and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment - we quash the notice u/s. 148 and the consequential assessment order - Decided in favour of assessee.
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2021 (12) TMI 876
Disallowance of interest expenses on perusal of the financials of the assessee - CIT(A) to allow deduction of interest expenses on loan taken in computation of capital gain by holding that the interest expenses is an expenditure incurred wholly and exclusively in connection with the transfer of commercial property - Whether CIT(A) was right in deleting the disallowances of interest expense and other revenue expenditure, without giving proper opportunity under Rule 46A to the AO for verifying the additional evidences - final accounts of relevant AYs, submitted during appeal proceeding, based on which relief has been given by the Ld. CIT(A) ? - HELD THAT:- We have perused the assessment order passed under section 143(3) r.w.s. 147 of the Act and find that the para 3 and 4 clearly speaks the reply submitted before the Assessing Officer that the interest paid on loans has been included in the cost of acquisition and not claimed as revenue expenditure. All the details furnished before the ld. CIT(A) were already furnished before the Assessing Officer in their letter dated 23.12.2013 and after examining the materials available on record, the ld. CIT(A) has held that the interest expenditure had been capitalized and not claimed as revenue expenditure, which was not disputed by the Assessing Officer in his remand report against the submissions of the assessee. In view of the above, we find no infirmity in the order passed by the ld. CIT(A) and thus, the ground raised by the Revenue stands dismissed.
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2021 (12) TMI 875
Disallowance of cash payments in excess of prescribed limit u/s. 40A(3) - HELD THAT:- In case of payments made for purchase of river sand in a village, it was an explanation of the assessee that said payments is made for purchase of product manufactured or processed without aid of power. Since, the processing of river sand is without aid of power and further such industry is in the nature of cottage industry, payment made for procurement of river sand comes under Clause (f) of Rule 6DD of IT Rules, 1962, and thus, same cannot be disallowed u/s. 40A(3). Remaining payments made which are not covered under any exception, we find all these payments are made to the traders which are supported by necessary evidence, and further such payments have been made at the instances of traders, that too in an emergency situation which compelled the assessee to make payments in cash - even though few payments is covered u/s. 40A(3) of the Act, because of peculiar nature of business of assessee, we find that those payments cannot be considered for disallowance u/s. 40A(3) of the Act. To sum up, all payments made by the assessee for purchase of materials in excess of prescribed limit provided u/s. 40A(3) of the Act cannot be disallowed. Hence, we direct the AO to delete the additions made towards disallowance of cash payments u/s. 40A(3) Additions towards unsecured loans received by the assessee u/s. 68 - assessee has failed to prove identity, genuineness of transaction and credit worthiness of the parties - HELD THAT:- Assessee has filed necessary evidences to prove identity, genuineness of transactions and creditworthiness of parties - once assessee discharges its burden, then the AO cannot make additions towards unsecured loans u/s. 68 of the Act as unexplained credit, unless he proves otherwise - it is a matter of fact that such unsecured loans has been treated as cessation of liability and offered to tax u/s. 41(1) of the Act for the assessment year 2014-15. This fact has not been disputed by the AO. Therefore, once a particular sum is considered for taxation in subsequent years then, said loan cannot be once again treated as income of the assessee for the impugned assessment year - AO has completely erred in making additions towards unsecured loans received from M/s. Park Field Developers Builders Pvt. Ltd., u/s. 68 - CIT(A) without appreciating facts as simply confirmed additions made by the AO. Hence, we set aside the order passed by the Ld. CIT(A) and direct the AO to delete additions made towards unsecured loans u/s. 68 - Decided in favour of assessee.
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2021 (12) TMI 874
Exemption u/s 11 - assessee claimed accumulation of income for application for charitable purpose at 15% of the gross receipts - AO was of the view that accumulation will be allowed only to the extent of 15% of the income after revenue expenditure - HELD THAT:- . We find that this issue is no longer res integra as held by the Special Bench of the Mumbai in the case of Bai Sonabai Hirji Agency Trust [ 2004 (9) TMI 300 - ITAT BOMBAY-E] - Also in the case BHAGWAN MAHAVEER MEMORIAL JAIN EDUCATIONAL AND CULTURAL TRUST, BANGALORE AND (VICE-VERSA) [ 2019 (8) TMI 1194 - ITAT BANGALORE] to hold that the accumulation u/s. 11(1)(a) of the Act should be allowed as claimed by the assessee and the AO is directed to do so - Decided in favour of assessee.
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2021 (12) TMI 873
Unaccounted investment - Addition in the hands of the assessee on protective basis on account of expenses u/s. 69C - Assessee has been held to be an entry provider through which, the money has been routed for making investment in another companies and considering the facts of the whole transactions made addition in the hands of the real beneficiary on substantive basis and in the hands of the assessee, on protective basis - HELD THAT:- The addition in the hands of the beneficiary has been confirmed by the Commissioner of Income tax (Appeals) in their respective cases holding that the addition is required to be made in the hands of those companies, on substantive basis. The revenue have not shown us any evidence that the addition in the hands of those companies having survived for the reason that it should be taxed in the hands of this assessee. AO has also made addition u/s. 69 C of the Act of expenses of obtaining the accommodation entry in the hands of the assessee, on protective basis. The expenditure of accommodation entries were also held to be the income of those assesses, who obtained accommodation entry and therefore, such expenditure is confirmed as unexplained expenditure of those beneficiaries. In view of this, the learned Commissioner of Income tax (Appeals), after carefully recording the order of the learned Commissioner of Income tax (Appeals) in the hands of the beneficiaries, have deleted the addition in the hands of the assessee. There is no evidence that income belongs to this assessee and further stand of the revenue is that this assessee is only a paper company. Further, if at any moment, in the case of the beneficiaries, if it is held that the income belongs to the assessee and not to those beneficiaries, the provisions of Section 153 of the income tax act will come to the rescue of the revenue. We find no infirmity in the order of learned Commissioner of Income-tax (Appeals) in deleting the addition in the hands of this assessee, made on protective basis, when addition already made in the case of other assesses on substantive basis, have been confirmed. - Decided against revenue.
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2021 (12) TMI 872
Exemption u/s 11 and 12 - denial of exemption as the receipts of income in relation to hiring of auditorium and conference hall and running of Hostel/canteen activities are in the nature of business receipts and thus, would fall outside the ambit of expression charitable purpose contemplated u/s. 2(15) - HELD THAT:- The issue is squarely covered in favour of the assessee. On a broader reckoning, it was held by the coordinate bench that the aforesaid income of the trust is incidental to attainment of the main objects of the trust that is to establish, maintain and conduct one or more National or International Youth Centers in India for the benefit of foreign students and youth delegations as well as individuals visiting India which activity has been recognized as charitable activity and the registration has been granted to the assessee by the Income Tax Department. The issue having been decided in favour of the assessee in identical facts situation in the earlier years, we do not see any reason to depart there from. We thus, see no merit in the appeal of the Revenue.
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2021 (12) TMI 871
Revision u/s 263 by CIT - source of cash deposited into the bank account of the assessee - agreement to sell was entered into by the assessee with Shri Sunil Khasa for sale of 20% share in the house, whereas as per the records submitted by the assessee, the house in question was transferred in the name of the assessee - assessee was not the owner of the above-said property at the time of execution of agreement to sell. He further observed that in the agreement to sell, the property was mentioned as a plot but actually it was a duplex house. He, therefore, observed that there was clearly lack of inquiries by the AO - HELD THAT:- CIT had proceeded on the wrong footing that the assessee had deposited the amount of ₹ 19 lacs in the account and further that the assessee had entered into an agreement to sell for 20% share in the house with Shri Sunil Khasa, whereas, the case of the assessee from the very beginning has been that the amount of ₹ 19 lacs was not deposited by her in the joint bank account, rather the amount in question was deposited by the other/second account holder i.e. her husband, namely Shri Surender Singh Taxak. When the assessee had explained that the account was a joint account and the amount was deposited by the second account holder, then in our view, the AO should have dropped the proceeding against the assessee and issued notice to the second account holder, i.e. the husband of the assessee - AO continued with the proceedings, wherein the assessee duly explained the source of cash deposited even by the second account holder. Whatever may be the shortcomings/discrepancies relating to the agreement to sell 20% portion of the house, that could have been taken into consideration in the assessment proceedings in the case of the second account holder i.e. the husband of the assessee. Once the assessee had explained that she has not deposited any amount in the joint account and further the second account holder had in clear term admitted that the amount was deposited by him, the assessee, in our view, was absolved of her liability to further explain about the transaction. However, the Ld. Pr. CIT proceeded on wrong footing that the aforesaid explanation relating to the agreement to sell 20% share in the house pertain to the assessee. Even it was explained that the father of the husband of the assessee was paralytic and was not in good health and, therefore, the agreement to sell was executed by the husband of the assessee i.e. the second account holder. The compulsion for execution of agreement to sell was also explained as installment was due of ₹ 17.25 lacs towards the Noida Authority/Developer and that the husband of the assessee was in dire need of money for which he obtained ₹ 19 lacs from his friend Shri Sunil Khasa and in lieu of that, he executed agreement to sell of 20% share of the house. The father-in-law of the assessee expired after some time and thereafter the house in fact, was transferred in the name of the husband of the assessee on 01.04.2015. The above facts show that the AO had duly made appropriate inquiries and even recorded the statement of Shri Sunil Khasa, who admitted that he had given ₹ 19 lacs to the husband of the assessee. In view of the above discussion, it is held that the Ld. Pr. CIT wrongly exercised his revision jurisdiction u/s. 263 of the Act. The impugned order passed by the Ld. Pr. CIT u/s. 263 of the Act being bad in law, is not sustainable and the same is accordingly, quashed - Decided in favour of assessee.
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2021 (12) TMI 870
Validity of reassessment proceedings - Proof of Change of opinion - initiation of reassessment proceedings on the ground that there is interest income and interest expenses which was shown Nil in the column of loan funds - HELD THAT:- The reopening in the present case has been done on the claim of interest expenses. The assessee in the original return of income has not mentioned the amount regarding loan funds. As per Section 147, Explanation-3 for the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issues which are escaped assessment and such issue comes to the notice subsequently in the course of proceedings under this section, notwithstanding that the reason for said issue has not been included in the reasons recorded under sub Section-2 of Section 148. The contention of the assessee that there is change of opinion is not a valid contention as in the present case the assessee has not decided the issue related to notice whether issue within the period of four years from the end of relevant Assessment Year. In the present case, the assessee admittedly stated that Tax Consultant committed error by not mentioning loan fund in the original return of income. The Assessing Officer in the original assessment dated 12.02.2016 has never doubted the claim of interest and there is no mention of actual disclosure of claim of interest at any stage of its Assessment Order. Thus, the Assessing Officer in assessment under Section 143(3) of the Act has not noticed that there is escapement of certain issues in the Assessment Order/assessment proceedings. Thus, explanation of section 147, to be specific Explanation-3, will come into picture and it will not amount to change of opinion. Thus, ground no. 1 of assessee's appeal is dismissed. Merits of the case Assessee has explained before the Assessing Officer that the loan fund was mentioned in the return of income filed in response to notice under Section 148 of the Act and thus the assessee has made valid claim of interest expenses on borrowed fund. The same should have been allowed by the Assessing Officer. Hence, the appeal of the assessee is partly allowed.
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2021 (12) TMI 869
Reopening of assessment u/s 147 - addition of bogus expenditure - non-issuance of notice under section 143(2) - Information received from DGIT (Investigation), Mumbai that assessee is one of the beneficiaries of bogus purchases shown from various entities managed by Rajendra K Jain - HELD THAT:- We find that on the Jurisdictional High Court in PCIT vs. Marck Biosciences Ltd. [ 2014 (11) TMI 812 - GUJARAT HIGH COURT] held that where notice under section 143(2) was issued to assessee prior to filing of return of income, said notice being invalid, assessment order passed in pursuance of same deserved to be set aside. CIT(A) in his order held that non-issuance of notice under section 143(2) of the Act is a curable defect, we find that Hon'ble Jurisdictional High Court in Marck Biosciences Ltd. [ 2019 (4) TMI 215 - GUJARAT HIGH COURT] also considered the provision of section 292BB and held from the language employed in section 292BB, which emerges that a notice would be deemed to be valid in three circumstances provided therein, namely where assessee has participated in the proceedings it would not be permissible him to raise objection that (i) notice was not served upon him; (ii) was not served upon him in time; (iii) was served upon him in an improper manner and held that all the circumstances contemplated under section 292BB of the Act are in case where a notice has been issued, has either not been served upon the assessee or not served in time or has been served in an improper manner. The said provision clearly does not contemplate the case where no notice has been issued at all. Issuance of notice under section 143(2) of the Act prior to filing of return of income was invalid and in absence of valid notice under section 143(2) of the Act, the assessment order is rendered invalid. - Decided against revenue.
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2021 (12) TMI 868
Addition made towards Bonus Payable, Salaries and Cash credits in capital account - HELD THAT:- As submitted that the bonus was paid during the months of April May, 2013 i.e. on 30/04/2013, 10/05/2013 30/05/2013. The assessee had furnished Annexure 1, in which the details of employees, amounts paid signature without the date of payment. The reason has taken by the CIT(A) for confirming the addition that date of payments were not mentioned, is not sufficient to dismiss the ground. He ought to have made an enquiry with the employees who have got the payment of bonus whether the have received the payment of bonus, of so, on what dates. CIT(A) failed to do so. As per the details submitted before us on 23/11/2021 the bonus has been paid on 30/04/2013, 15/05/2013 and 30/05/2013, which is much before the filing of return of income u/s 139(1). Therefore, we set aside the order of the CIT(A) and direct the AO to allow the assessee s claim of bonus. Disallowance of expenditure on sales - AO disallowed 10% of the salary expenditure on the ground that the appellant did not provide identification documents of few employees as requested by him - HELD THAT:- Assessee failed to provide the complete identification documents of the employees and has submitted on 23/11/2021 only for 24 employees. Therefore, to meet the ends of justice, we restrict the disallowance to 8% of the salary expenditure of ₹ 1,16,16,589/- as against 10% disallowed by the revenue authorities. Accordingly, ground No. 4 is partly allowed. Unexplained investment - CIT(A) confirmed the addition observing that in the course of appellate proceedings - HELD THAT:- Considering the facts noted by the lower authorities that the amounts were not entered in the cash book, we uphold the findings of the lower authorities with regard to the addition to capital account of the assessee. Thus, we uphold the order of CIT(A) and dismiss the ground No. 5 of the assessee
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2021 (12) TMI 867
Additions of commission income - Assessment u/s 153A r.w.s 144 - Whether additions are not based on incriminating evidence? - HELD THAT:- From the admission of assessee, Sachin Pareek and Surendra Jain in their statement and identification of actual beneficiary of import and delivery of diamonds by actual beneficiary and e-mail found to actual beneficiary, CIT(A) concluded that assessee and his group was providing accommodation entry. CIT(A) further concluded that once the business as per books is proved fictitious and bogus, the action of AO in rejecting the books is obvious. On the ground/ grievance of the assessee on additions of commission and allowance of 25% expenses the CIT(A) concluded that the addition made by AO is on lower side comparative to the addition in case of Bhanwar Lal Jain, who was also providing similar accommodation entry with similar modus operandi. Once books are rejected, the profit is to be estimated on the basis of commission rates and net profit is to be determined. On the grievance of assessee of exchange rate difference, CIT(A) held that when the actual business is importing for others and in the books credit in the name of exporters (other beneficiary), the exchange rate difference is not payable by the assessee and rejected the ground raised by the assessee. Assessee basically made two fold submissions that no incriminating material/ evidence was recovered during the course of search and that the assessee retracted from his statement recorded by the search party and the assessee was doing real business and not engaged in providing accommodation entry. We find that during the search action more than sufficient incriminating evidence was found, which is also supported with the corroborative evidence found in the form of e-mails and other evidence in the form of books of account recovered from the pen drive, which itself is incriminating evidence against the assessee. Assessee in his retraction statement has not explained the material evidence found in the form of e-mail, from his e-mail account, his background history as to how he entered in the this particular business of providing entry, which he himself disclosed during the search action that he learnt all this business module of providing accommodation entry from his ex-employer namely Ratanlal Jain. The said retraction is filed for the first time before AO after gap of 12 months period. The reliance in case Manoj Begani[ 2017 (12) TMI 1408 - ITAT KOLKATA] , passed by Kolkata Tribunal which is case of beneficiary of the alleged accommodation entry from Rajendra Jain, is not helpful to the assessee. Here in the present case, there is clear admissions of the assessee about the entire business affair carried out by him with his associate for providing bogus entry, mere obitor in case of beneficiary by the Coordinate bench, will not absolve the assessee from his own admission. The finding of Tribunal in Manoj Begani vs. ACIT(supra) is based on the facts and evidences produced by that assessee. Therefore, in view of the abovesaid discussions, we are in full agreement with the finding of ld CIT(A) that once the books are rejected the profit is to be estimated on the basis of commission rates and net profit is to be determined. We also affirms the finding of ld CIT(A) that that when the actual business of assessee was importing goods for others and in the books credit in the name of exporters, thus exchange rate difference is not payable by the assessee and the assessee is not eligible for deduction of such exchange rate fluctuation. No evidence is filed by the assessee on record to prove the fact that the assessee entered into hedging contract with the Banker, the evidence found in the form of e-mail and other evidences show the facts otherwise. Therefore, the submissions made by the assessee do not inspire confidence. None of the case laws relied by the ld AR for the assessee is helpful to the assessee as there was sufficient incriminating material seized during the search action on the assessee on the basis of which it is clearly proved that the assessee is in the business of entry provider. Commissions has already included by the assessee in his sales transaction - Considering the facts that the lower authority have categorically held that the assessee was not doing any genuine business transactions and was engaged in providing accommodation entry, books of the assessee was rejected and only very meager rate of commission income was added to the total income of the assessee, which we have already affirmed. If for the sake of assuming it is considered that the assessee was doing genuine business, thus, keeping in view of volume of transactions in his bank account, the income of assessee would be estimated many fold comparative to the commission income added by the AO. Thus, the alternative ground of appeal is also rejected.
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2021 (12) TMI 866
Revision u/s 263 - Reopening of assessment u/s 147 - transaction of sale of land property - whether the impugned land was an ancestral land which was inherited by the assessee from his forefathers? - HELD THAT:- Tenancy right was converted into the ownership of the land by virtue of Gujarat Devasthan Inam Abolition Act 1969 and section 32 read with section 88E of Bombay Tenancy and Agricultural Act 1948 which was subsequently confirmed by the order of the Mamlatdar and Krishi Panch - as Shri Remnik bhai Patel who held the property for the 1st time as owner. Thus, it is transpired that there was a change in the character of right in the land as far as tenancy and ownership of the land. From the above fact it is inferred that the land bearing survey Nos. 182, 183 and 185 was acquired by Shri Ramnikbhai N Patel in his individual capacity for his 1/4th interest and not as the family property. As such land was not devolved to him as per section 6 of the Hindu Succession Act 1956 as Mitakshra coparcenary as the same was not the property of his ancestor as they were only the tenant of land and not the owner. Therefore, in our considered view any income arising from the sale of such land is taxable in his individual capacity as he was the owner of the said land. AO dropping the assessment proceeding under section 147 of the Act against the HUF is not prejudicial to the interest of the Revenue as the land in question is not the property of HUF. Hence, the HUF is not liable to capital gain on transfer of such land. Here, it is pertinent to note that in order to set aside the order of the AO u/s 263 it must proved that the order of the AO is erroneous as well as prejudicial to the interest of the Revenue. For sake of understanding if an order of the AO is erroneous but not prejudicial to the interest of the Revenue or vise-versa then power under section 263 of the Act cannot be invoked - we set aside the order of the learned Pr. CIT passed under section 263 of the Act. Hence ground of appeal of the assessee is allowed. Reopening of assessment u/s 147 - amount of capital gain as shown represents the income from other sources - As none of them had any right in the property in their individual capacity as such the property belongs to HUF of Ramnikbhai. So, the income declared by this them under the capital gain is the income from other sources. There is no dispute to the fact that they have shown the income on the sale of the property of which they were not the owners. The revenue is also admitting this fact. As also pertinent to note that we have already given a finding in the previous Paragraph of this order that such property was the personal property of Shri Ramnikbhai Patel and therefore any gain arising in consequence to sale of the property has to be taxed in the hands of Shri Ramnikbhai only. In the light of this fact, if any addition is made in the hands of the other parties either as capital gain or income from other sources, it would lead to the double addition. Under the provisions of law, there is no concept of making the addition to the total income of the assessee twice for the purpose of the tax until and unless such addition falls in the exception categories. Accordingly, we are of the view that all the assessee is not subject to tax on the income which they have offered to tax under the bona fides believe. We are of the opinion that there should not be any addition in the hands of the other assessee, treating the capital gain income under the head other sources. Before parting, it is also important to note that all the assessee have already declared and offered the capital gain taking the sale consideration as ₹70 Lacs which have not been disputed by any of the assessee before us. In other words the learned AR for all the assessee before us agreed not to dispute the income already shown in the income tax return. Accordingly, the status quo with respect to the income by the assessee in the income tax return shall be maintained. Hence the ground of appeal of all the assessee are allowed.
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2021 (12) TMI 865
Reopening of assessment u/s 147 - Unexplained cash credits u/s 68 - HELD THAT:- From reasons recorded for reopening proceedings u/s 147 and there is no discrepancy in the reasons. Hence assessee s appeal is dismissed. It is seen that the information received from investigation wing was part of the reopening, yet the reopening was based on the records and facts of the assessee s case. As observed in the reasons for reopening that certain cash withdrawals was seen in respect of assessee company s records. The CIT(A) has correctly stated that the information on the basis of which AO had initiated proceedings under Section 147 was certain and it could be construed to be sufficient and relevant material on the basis of which a reasonable person could have formed a belief that income had escaped assessment. Therefore, the reassessment proceedings initiated by the Assessing Officer under Section 147/148 is valid and rightly upheld by the CIT(A). There is no need to interfere with the findings of the CIT(A). Hence, Ground No. 1 to 4 in assessee s appeal are dismissed. Addition on account of unexplained cash credits u/s 68 - AO has given a categorical finding that evidences were not produced related to creditworthiness and genuineness of the sources of funds and the parties thereon. Though the CIT(A) has mentioned in general statement that evidences were put up, but from the records it is seen that these are general statements and the source of the funds upon which the creditworthiness is depended has not been established by the assessee through any document and the condition of creditworthiness was not satisfied. From the perusal of records it can be seen that the assessee has also not given plausible explanation in respect of genuineness of the transactions. As regards, the unsecured loan taken from Shri Sanjeev Dhingra, no bank statement was filed before the Revenue authorities. Hence, it deems appropriate to remand back both the issues to the file of the Assessing Officer for proper adjudication on verification of the evidences. Needless to say the assessee be given opportunity of hearing by following principles of natural justice
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2021 (12) TMI 864
Deduction u/s 80P - Assessee is a co-operative society and engaged in the activity of providing credit facilities to the members - HELD THAT:- The provisions of section 80P(2)(a)(i) of the Act provides the deduction to a co-operative society engaged in the business of banking or providing credit facilities to its members. The provisions of the section are without any ambiguity. In other words, the income from the activity of financing from the members is only eligible for deduction under section 80P(2)(a)(i) of the Act. If there is any income arising to the co-operative society from the non-members that will not be subject to deduction under section 80P(2)(a)(i). It is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the Banks other than cooperative bank is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i). The profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee. How to determine the income which is not eligible for deduction under section 80P(2)(a)(i) - The income on the deposits from the bank has been treated as income from other sources but the gross income cannot be excluded from the deduction available to the assessee under the provisions of section 80P(2)(a)(i) - It is the net interest income on the deposits from the bank which needs to be excluded from the amount of deduction claimed under section 80P(2)(a)(i) of the Act and the same should be brought to tax under the head income from other sources as per the provisions of section 56 - To determine, the net income on the deposits from the bank, amount of expenses incurred in generating such interest income should be allowed as deduction from the gross income of interest in pursuance to the provisions of section 57(iii) . In case of co-operative credit society, income to which benefit of section 80P(2)(a)(i) is not allowed, e.g., rental income, interest income from surplus funds kept in FDs' of banks, etc., basic exemption of ₹ 50,000 as provided for in section 80P(2)(c)(ii) must be granted. Though the word 'activity' is not defined, yet the investment activity, activity of renting of immovable property, etc., and the consequent income attributable to such activities would be covered under section 80P(2)(c). Hence, we direct the AO to allow the deduction under section 80P(2)(c) of the Act. Thus, in view of above discussion the appeal of the assessee is partly allowed subject to the discussion made in previous paragraph. Appeal filed by the assessee is partly allowed for the statistical purposes.
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2021 (12) TMI 863
Penalty Levy u/s 271D - assessee has received unsecured loan in cash in contravention of the provisions contained u/s 269SS - HELD THAT:- Undisputedly AO has verified the claim of the assessee as to taking loan of ₹ 6,00,000/- in cash from his father out of the sale proceeds of the agricultural land sold by him to deposit the bank guarantee with Delhi Doordarshan Kendra which he has actually deposited by way of cheque on 20.03.2013 so as to enable him to get a 50% advance against making TV serials of 13 episodes on 31.03.2015, it was a genuine reason and contingency exercised by the assessee company as a purely business prudence. When source of the cash receipt of ₹ 6,00,000/- is not in dispute and transaction between Shri Sanjay Malik and his father Shri Iqbal Singh Malik has also not been disputed by Revenue and it has not prejudiced the interest of the Revenue in any manner as no tax avoidance and tax evasion has been alleged or proved, we find that AO/ld.CIT(A) have erred in levying/confirming the penalty. Consequently, impugned order passed by the ld. CIT (A) is set aside and penalty levied by AO and confirmed by ld. CIT(A) is ordered to be deleted - Decided in favour of assessee.
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2021 (12) TMI 862
LTCG - date of Transfer of Immovable property as the date of registration of sale deed or date of agreement, date on which the possession is given - value of the property as per Section 50C - appellant contended that Section 50C came into operation from 01.10.2009 and the agreement of the instant property was entered into on 06.08.2006 and part payment was also received. Hence, Section 50C is not having any application - HELD THAT:- CIT(A) has considered the net consideration of ₹ 41,41,000/- (which is the value given by SRO) in respect of computation of capital gains and the value mentioned in the sale deed for the transaction of the property is ₹ 25,25,000/-, which has not been disputed by any of the authorities. From the detailed written submissions of the assessee it is clear that the agreement was made for the sale of property on 06/08/2006 through cheque No. 754963 drawn on Andhra Bank for ₹ 5,50,000/- and paid cash of ₹ 50,000/- also and the subsequent payments received through cheques only. Therefore, the proviso of section 50C(1) will clearly apply here. Therefore, the assessee s net sale consideration shall be considered as ₹ 25,25,000/- for the computation of capital gains as it is immaterial that whether reference of the agreement is included in the sale deed or not because it is evident from the payments received by the assessee by way of cheques, which proves that there was genuine agreement made for the sale/purchase of the property. As decided in SHRI VUMMUDI AMARENDRAN [ 2020 (10) TMI 517 - MADRAS HIGH COURT] AO could not have based his finding solely relying upon the guideline value especially when the Assessing Officer is not a person who is computing stamp duty under the provisions of Indian Stamp Act on the Deed of conveyance - AO could not have based his finding solely relying upon the guideline value especially when the Assessing Officer is not a person who is computing stamp duty under the provisions of Indian Stamp Act on the Deed of conveyance - Decided in favour of assessee. Exemption u/s 54F on the construction of new asset - AO has accepted construction value of ₹ 16,26,000/- for three individual houses, but, had denied for remaining houses the claim of exemption u/s 54F. This issue has been settled by various High Courts and the issue relates to prior to the amendment in the Act. Therefore, the assessee is eligible for claiming exemption u/s 54F for remaining two houses also - See VITTAL KRISHNA CONJEEVARAM, ANAND KRISHNA CONJEEVARAM, VINOD KRISHNA CONJEEVARAM [ 2013 (8) TMI 757 - ITAT HYDERABAD] , SYED ALI ADIL [ 2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT] , M/S. TILOKCHAND AND SONS [ 2019 (4) TMI 713 - MADRAS HIGH COURT] - Assessee appeal allowed.
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2021 (12) TMI 861
Disallowance of CSR expenses - Addition by invoking Explanation 2 to Section 37(1) - HELD THAT:- Representatives of both the sides have agreed that the same is squarely covered in favour of the assessee by the decision of this Tribunal in the case of Misrilall Mines Pvt. Ltd. [ 2018 (6) TMI 893 - ITAT KOLKATA] wherein it was held that deduction claimed by the assessee on account of CSR expenses actually incurred can be disallowed by invoking Explanation 2 to Section 37(1] of the Act, only from Assessment Year 2015-16 as the same was applicable prospectively w.e.f. 01/04/2015. Provision made for CSR expenses - .As rightly pointed out by the Id. D/R, this claim of the Id. Counsel for the assessee requires verification by the Assessing Officer inasmuch as if the provision made by the assessee is found to be ascertained liability representing actual expenditure incurred by the assessee on CSR, the same is allowable as deduction as held by this Tribunal in the case of Misrilall Mines Pvt. Ltd. (supra). We, therefore, restore this issue to the file of the Assessing Officer for deciding the same afresh after necessary verification from the relevant record. Appeal of the assessee is treated as allowed for statistical purposes
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2021 (12) TMI 860
Reopening of assessment u/s 147 - Addition of bogus purchases - addition on account of disallowance of 25% of purchases - HELD THAT:- AO has not disputed the sales of the assessee. No sale is possible without purchases. The statement of accounts of the assessee was not rejected by the assessing officer. CIT(A) confirmed the addition made by AO - even if the parties are failed to prove the genuineness of entire transaction of such tainted purchases, the revenue authorities are not entitled to bring the substantial or entire transaction to tax, rather to tax the income component in such tainted transactions to avoid the possibility of revenue leakage. After considering the decision of Tribunal in assessee s own case for earlier year and the GP and NP ratio declared by assessee for the year under consideration. We find that assessee has declared in AY 2009-10 the assessee has declared GP at 4.95 %, in AY 2010-11 at 17.55% and in AY 2011-12 at 5.38%. It is a settled law that principles of res judicata is not applicable in the income tax proceeding, similarly it is also settled legal view that consistency must be followed if there is no variation in the facts qua earlier or subsequent years. Therefore, in order to avoid the possibility of revenue leakage 6%, would meet the end of justice. Similar view was adopted by this combination, wherein the beneficiary of such purchases has shown very meagre GP. Therefore, we modify the order of ld. CIT(A) and restrict the addition of impugned/bogus purchases to the extent of 6%.Appeal of assessee for AY 2009-10 is partly allowed.
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Customs
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2021 (12) TMI 859
Jurisdiction - Additional Director General of DRI was a proper officer under Section 28 of Customs Act or not - HELD THAT:- The proper officer, to whom power is conferred by Section 28 of the said Act and other related provisions would necessarily mean the proper officer, who in the first instance, assessed and cleared the goods, i.e., Apprising Officer of Air Cargo Complex. Therefore, the Additional Director General of DRI, cannot be the proper officer in the facts and circumstances of the case. The Additional Director General of DRI not having, in the first instance, assessed and cleared the goods, he will not be the proper officer for issuance of show cause notice under Section 28(1) of the said Act. The appeal has to fail because the show cause notice originally issued itself would be termed non-est. The entire proceeding in the present case initiated by the Additional Director General of DRI by issuing show cause notice is invalid without any authority of law and is liable to be set aside. Appeal disposed off.
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2021 (12) TMI 858
Valuation of imported goods - import of consignment of automobile parts from Malaysia - assessment of Bill of Entry without taking into consideration of the discount 50% given to the petitioner by the overseas seller in the invoice - Section 17 of the Customs Act, 1962 - HELD THAT:- It is to be noticed that the order of the Appellate Commissioner has not been implemented by the 2nd respondent. In fact, the 2nd respondent as an Assessing Officer is bound to implement the order of the Appellate Commissioner - In absence of a valid challenge to the order of the Appellate Commissioner, the 2nd respondent has no choice but to pass a speaking order. The 2nd respondent is directed to pass appropriate orders on merits and in accordance with law and implement the order of the Commissioner of Customs (Appeal) Order - Petition allowed.
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2021 (12) TMI 857
Revocation of customs broker licence - forfeiture of security deposit under regulation 18 - penalty under regulation 22 of Customs Broker Licensing Regulations, 2013 - mis-declaration warranting recourse to section 117 of Customs Act,1962 - HELD THAT:- The combining of invoice with packing list is not unusual in international trade. Both originate with the consignor and are filed along with the bill of entry for assessment and examination by the customs authorities. There is no allegation that any of the documents had been tampered with before being presented to customs authorities or that any had been suppressed by the appellant. The appellant, under the Customs Broker Licensing Regulations, 2018 and section 146 of Customs Act, 1962, is the agent of the importer. Any lack in the documentation issued by the consignor, except in circumstances evidencing complicity of the importer or the agent in contrivance of documents, cannot be held against the person who filed the bill of entry. It is only upon an examination that inadequacy of description is verifiable and there is no finding in the impugned order that the appellant herein had access to the goods before being subjected to examination. The non-submission of a separate packing list has, thus, been wrongly construed as breach of obligation devolving on the customs broker under the relevant regulation. The importer of the goods was, doubtlessly, an existing person who did participate in proceedings and did comply with the adjudication order - Admittedly, the appellant had not undertaken a sufficiently diligent verification and, instead, choose to rely upon the IEC registration which, fortunately for him, was genuine. To condone breach of this obligation would only encourage casual disregard of that obligation. The enquiry authority and the licensing authority cannot be faulted for considering this lapse on the part of the customs broker to be a breach of obligation. Penalty - HELD THAT:- The imposition of all three penalties for this one breach is unduly harsh. If the harshness of every available penalty is to be visited upon each and every breach of obligation, there would be no difference between magnitude of offence and major breaches will be resorted to with impunity - the fiscal penalty of ₹ 50,000/- imposed under regulation 18 of Customs Broker Licensing Regulations, 2018 suffices for the established offence and the other detriments are disproportionate. The appeal is allowed to the extent of setting aside the revocation of licence and the forfeiture of deposit ordered in the impugned order.
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2021 (12) TMI 856
Refund of anti-dumping duty - assessment of the bills of entry not challenged - HELD THAT:- The facts of the case are not in dispute. The appellant filed bills of entry and assessed duty including Anti-Dumping duty and paid the same. Thereafter, without challenging the assessment of the bills of entry, it filed refund claims. Relying on the judgment of the Delhi High Court in AMAN MEDICAL PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, DELHI [ 2009 (9) TMI 41 - DELHI HIGH COURT] , the matter was remanded to the Original Authority by this Tribunal in the first round of litigation directing the matter to be decided based on whether or not there was a lis between the appellant and the Revenue in these matters. Aman Medical Products has been set aside by the Larger Bench of the Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] . It has been categorically held that any assessment including self-assessment needs to be appealed against and in the absence of such an appeal and consequential re-assessment no refund can be sanctioned. This judgment of the Supreme Court is binding on all judicial and quasi-judicial authorities and the Commissioner (Appeals) has, in the impugned order, correctly relied upon this judgment and upheld the rejection of refunds. Appeal dismissed.
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2021 (12) TMI 855
Levy of Anti-dumping duty - import of pre-sensitized positive offset aluminium plates (for offset printing machine) - discarding of certificate of origin , and thereby denying eligibility for exemption and laying the ground for re-determination of origin of the goods, without following the process of verification prescribed in circular no. 31/2016-Cus dated 12th September 2016 - HELD THAT:- Anti-dumping duty is leviable on digital offset printing plates within which are three sub-categories, viz., violet, thermal and CtCP. Even if the outcome of the test evidences the impugned goods to be CtCP , the origin of the goods both in manufacture and of export must be from Peoples Republic of China for the levy to be valid in law. It has not been controverted that the goods were not procured from the exporter in Malaysia - the certificate of origin must be discarded and not by reliance on any circumstantial evidence. Without determination of the authenticity and correctness of the contents of certificate of origin , the testing of the product is a half measure that may not conclude the proceedings except in circumstances that confirm the declaration of the importer. This should have found a place in the impugned order. The question that follows is whether the first appellate authority, and arising from inability to proceed with determination on merits, is within its competence to direct fresh evidence to be incorporated in the proceedings - proviso to section 128A(3) of Customs Act, 1962 empowers Commissioner of Customs (Appeals) to issue show cause notice subject to conditions prescribed therein and, though rarely resorted to, impliedly authorizes directions, such as re-test of the goods once again for issue of addendum to show cause notice, without compromising principles of natural justice. In the absence of a finding on the nature of the goods, the dispute remains undetermined. The rival claims of feasibility of testing and the futility of the exercise do not suffice for determination and testing appears to be the only option. Learned Consultant has also not placed any alternative for determination of the nature of the goods - However, mere re-testing may not culminate in conclusion of proceedings even if the test report is conclusive enough for determination of the nature of the goods. No less critical to the eligibility is the certificate of origin which has also been doubted by the original authority. The first appellate authority has not returned a finding on that aspect which is not dependent on the outcome of the re-test. That lack must be made good. Matter remanded back to the first appellate authority without disturbing the directions in the order impugned - appeal allowed by way of remand.
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2021 (12) TMI 854
Jurisdiction - empowerment vested in the assessing officer to forbear from applying policy prescription on admitted facts pertaining to the imported goods - HELD THAT:- All goods conforming to the EXIM code enumerated supra are required to comply with all three elements prescribed in policy condition no. 2 in chapter 95 of ITC HS, 2017. Admittedly, the appellant has not produced any of these and object to the sampling prescribed therein as substitute for the certificate of confirmation that was mandated till 24th December 2019. Even if the objection were to be acceptable as valid, the other two certifications prescribed therein have not been furnished. In the absence of report from the designated authority that the articles under import meet the prescribed safety standards or of a report that these are not required to conform to the detailed specifications therein, the assessing officer cannot accept a claim of exclusion to suffice in their stead. Difficulties, or commercial detriment, in complying with the sampling prescriptions is not justifiable ground for excluding the import consignment from the rigours of prescribed testing that is obligated on the importer by the Foreign Trade Policy - The records do not indicate that this facility had been offered to, or sought for, by the appellant. Neither has the appellant conformed to the policy prescriptions nor have the customs authorities enforced the prescriptions in letter and spirit. The goods are yet pending for clearance for home consumption and the samples are yet to be subjected to the prescribed test. At the same time, the importer does not have be inconvenienced by continued detention of the imported cargo while awaiting compliance with the rigours of conditions effective from 2nd December 2019 - Appeal disposed off.
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2021 (12) TMI 853
Mis-declaration of value of imported goods - non-inclusion of certain elements of cost incurred for the import of two tugs, Nancy 3 and Greenville 11, and of attempt to import Nancy 3 without declaration - Confiscation - penalty - HELD THAT:- Unlike goods , as conventionally understood, deployment of conveyances in the territory of the country of import does not erase its identity. Conveyances , by reason of their very existence, are subject to control of the State while in use, commencing with registration, and till scrapping. Indeed, it is the compulsion of the registration statutes that triggers the transformation of foreign going vessel or aircraft from conveyance to goods for that very purpose - The Flying Dutchman and Mary Celeste are stuff of legend that commercial consideration of contemporary shipping can acknowledge only at the cost of bottom line. The appellant-company stands to be deprived all commercial flows by non-declaration of intent to import and, hence, it would appear that the impugned order is in error for concluding so after withholding permission to amend the manifest. Confiscation under section 111(f) of Customs Act, 1962, as well as attendant penalty on the appellant-directors under section 112 of Customs Act, 1962, is unwarranted. Alleged undervaluation in the declaration pertaining to Nancy 3 for which, in addition to quantification of duty liability, the vessel has been confiscated under section 111(m) of Customs Act, 1962 - HELD THAT:- Conceptual commotion is manifest in this salmagundi of statutory provisions invoked by the Commissioner of Customs; while finalizing assessment, in exercise of authority conferred under section 18 of Customs Act, 1962 on the proper officer , the duty so assessed has been ordered for recovery under section 28 of Customs Act, 1962. It is also seen from the record that, by the time the bill of entry was permitted to be filed on 27 th November 2009, the appellant-company had, on 31st October 2009 deposited ₹ 45,00,000 as the estimated duty liability on the payment of US$ 1,020,000 effected to the seller against two invoices which was appended to the bill of entry - it would appear that full value of both invoices were declared in the entry, made under section 46 of Customs Act, 1962 and, thus, precluding any scope for suggesting, let alone alleging, that importer had misrepresented or suppressed any material fact that offers the ingredient for invoking section 114A of Customs Act, 1962. The enhancement of declared assessable value is based on examination of the vessel and the reported improvements and additions during dry docking in August 2009. There is nothing on record to suggest that this work was undertaken at the instance of the appellant-company or that the cost, even if accurately estimated, was borne by, or on behalf of, the appellant to justify inclusion in assessable value - It may not be out of place to draw the attention of customs officers to the empowerment under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, to be invoked to discard the value declared in the bill of entry, does extend to rejection of value in the invoice which is a commercial engagement between a buyer and seller under the law of contract. Uninformed approach to the provisions of law, manifest in inappropriate phraseology, does not reflect well on the professional credibility of the tax administration. Suffice it to say that the enhancement of 15% in the assessable value is arbitrary and not tenable. No evidence is on record that the any payment over and above the contracted, and declared, price was made to the seller. The allegation hinges on the said transaction price being on Free on Board (FOB) terms while duties of customs are to be computed on value appraised on Cost Insurance Freight (CIF) terms. The authority for adoption of the base arises from rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is not a consequence of rejection of declared value attended upon by re-determination through rule 4 to rule 9 of the said Rules. Recourse to confiscation under section 111(m) of Customs Act, 1962 is, therefore, not tenable in law. Appeal is allowed to the extent of setting aside the duty liability on Nancy 3 beyond that leviable on the value of the two invoices - appeal disposed off.
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2021 (12) TMI 852
Import of old and used Maquet Servoi ventilator machine with standard hoses and accessories - hazardous goods or not - applicability of relaxation afforded by OM dated 10th June 2021 issued from F.no. 23/8/2021-HSMD by the Government of India in the Ministry of Environment, Forest and Climates Change - HELD THAT:- The imports effected by the appellant-importer is a small consignment of five ventilators with a declared value of ₹ 9,49,430/- and duty implication of ₹ 47,472/-. Considering the size of the consignment and the circumstances in which the imports had been effected, it is not necessary for us to go into the issue of whether ventilators are to be considered as medical equipment within the meaning of the expression deployed in Hazardous and Other Wastes (Management, Handling and Trans-Boundary Movement) Rules, 2016. Suffice it to say that all old and used medical equipment had been temporarily relieved from the prohibition, otherwise existing, owing to the pandemic and urgency of deploying any available equipment and that the relaxation ordered on 10th June 2021 was available to all goods that were yet uncleared as on 8th June 2021. The impugned goods, shipped on 17th May 2021 and included in manifest dated 8th June 2021, would conform to the definition of imported goods which, merely because these had not been landed on 8th June 2021, does not take these out of the purview of goods lying uncleared at the port. That would require evidence of the conveyance having been beyond the territorial waters which has not been demonstrated by customs authorities. The relaxation in the office memorandum supra applies to the impugned goods. In the absence of any finding that the declared value did not represent the transaction value, the confiscation and imposition of penalty, as also the redetermination of value, is not valid in law - appeal allowed.
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Corporate Laws
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2021 (12) TMI 850
Seeking sanction to Composite Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- All statutory requirements of the provisions of Sections 230-232 of the Act are satisfied. The present Company Amalgamation Scheme appears to be genuine and bona fide and it appears to be in the interest of its shareholders and creditors. The present Company Amalgamation Scheme Petition deserves to be allowed - application allowed.
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Insolvency & Bankruptcy
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2021 (12) TMI 851
Renewal of trading licence in terms of the Orissa Minerals (Prevention of theft, Smuggling Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 - rejection of FACOR s representation for waiving the demand raised against it by virtue of the Resolution Plan approved by the National Company Law Tribunal (NCLT), Cuttack Bench - HELD THAT:- The central issue being the alleged outstanding dues owed by FACOR to the Opposite Parties. It is not disputed by the State that the aforementioned demand pertains to the period prior to the plan effective date of the ARP. As pointed out in the rejoinder affidavit, the ARP also talks about government dues which fall within the definition of 'operational debt as indicated in Section 5 (21) of the IBC - Section 31(1) of the IBC further makes it clear that once the ARP is in place, approved by the CoC, it shall be binding on the corporate debtor and its employees, members, creditors including the Central Government, any State Government to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. The plea of the Opposite Parties that the State Authorities were unable to file their respective claims before the NCLT in the sum of ₹ 204,63,06,573/- since it has not finalized and in any event NCLT is not competent to decide the legality of the demands is untenable. Under Section 3(6) of the IBC a claim inter alia includes a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, weaken, equitable secured or unsecured . In terms of Section 31 of the IBC, the ARP is binding on all creditors including Central Government and the State Government. Since all of the impugned demands raised against FACOR pertain to the period prior to the Plan Effective date i.e. 31st January, 2020, all such demands stand automatically extinguished in terms of the ARP - the impugned demand raised against the Petitioner by the Opposite Parties are unsustainable in law. Petition disposed off.
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2021 (12) TMI 849
Refund of money paid for the allotment of a house - whether the IRP or the RP, as the case may be, is entitled to refund the money to any of the allottees during the CIRP period? - HELD THAT:- The CIRP of Jaypee Infratech Ltd. (Corporate Debtor) was going on when the Appellant submitted his request for refund. According to the provisions of IBC, the claim of the Appellant shall be settled in accordance with relevant provision in the approved Resolution Plan of the Corporate Debtor. A perusal of the Impugned Order makes it clear that it was passed by the Adjudicating Authority during the currency of the CIRP and the prayer of Appellant for full refund, while the CIRP was going on, was declined - in view of the fact that now the Resolution Plan of the Jaypee Infratech Limited approved by the Committee of Creditors is pending approval of the Learned Adjudicating Authority, it is clear that the Impugned Order has lost relevance. The Appellant will be entitled to receive his rightful dues as contained in the Resolution Plan once it is approved by the Adjudicating Authority. Appeal disposed off.
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Service Tax
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2021 (12) TMI 848
Refund of service tax - condonation of delay in filing of claim - carrying out authorized operations in their SEZ unit - service tax paid under reverse charge mechanism for the taxable services received for carrying out authorized operations in SEZ - refund of service tax distributed to SEZ Unit under ISD Invoices under Rule 7 of Cenvat Credit Rules, 2004 - Para 3 (III)(e) of Notification No.12/2013-ST - HELD THAT:- As regard the issue that the respondent is required to file only one refund claim for each quarter in terms of Clause (f) of Para 3 (III) of the notification, firstly, the respondent have admittedly filed only one refund claim for each quarter therefore, it cannot be said that the respondent have filed more than one claim in each quarter. Secondly in the facts that the respondent have filed refund claim in quarter July 2017 to September 2017 which includes the claim of the invoices which are for the period from August 2013 to October 2017 even if, it is assumed that the refund claim for the part of the invoices which were pertaining to earlier quarter filed in the quarter July 2017 to September 2017 only on this ground, refund cannot be denied. It is settled law that discretion exercised by a statutory authority who is empowered to exercise such discretion cannot be interfered with lightly or routinely. The mere fact that the committee of Commissioners found the reasons assigned to be not convincing, without any basis it is not sufficient for filing a review as the reasons given in exercise of its statutory powers of exercising discretion. In the grounds of appeal there is no averment by the revenue that the reasons assigned suffer from any perversity or are premised on non-existent facts so as to warrant interference with the exercise of the discretion - In the present case it is not only the Deputy Commissioner who has extended the period by recording the reasons but the learned Commissioner (Appeals) also endorsed the said reasoning. As per the ground of appeal of the revenue, the main contention is that the respondent have not complied with the contention of Para 3(III)(e) of the Notification No.12/2013-ST in as much as the refund claim in case of refund claimed under Table-II of Form A-4 of Notification, the refund claim was filed beyond one year from the date of actual payment of service tax made by the respondent to the registered service provider. In the present case there is no dispute that the respondent has filed the refund claim within one year from the date of ISD Invoices. It is clear that without the ISD Invoices, refund cannot be filed. As per the format of Table-II in such case it is impossible to file a refund claim from the date of actual payment of service tax to the service provider therefore, the condition prescribed under clause (e) of Para 3 (III) is applicable only in respect of Table-I of Form A-4 - clause 3(III)(e) of Notification No.12/2013-ST is not applicable in respect of refund claim made on the basis of ISD Invoice in Table-II of Form A-4 apended to the said notification. As per the condition Para 3(III)(e) of notification, the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such developer or SEZ Unit to the registered service provider. From this condition, it is mandatory that the payment of service tax has to be made by the SEZ Unit. In the present case, only the services covered under the Invoices which are exclusively used by the SEZ Unit and refund of which claimed under Table-I payment of service tax is directly made by the SEZ to the service provider. However, in case all the services which are attributed to the SEZ Unit as well as DTA Unit of the respondent company the payment was made by the Head Office of the respondent SEZ Unit and the credit related to service attributed to the SEZ unit was distributed through ISD Invoice to the respondent s SEZ Unit - Legislators intention is very clear that one year period is applicable only in case of payment directly made by SEZ Unit and not in a case where the Head Office of the SEZ unit is making the payment. In the case of expenses of all services received by SEZ Unit can be ascertained only on the basis of input service distribute invoices, on the basis of which the SEZ unit s books of accounts can be maintained properly and correctly therefore, the ISD Invoice is the only document for all the purposes for the SEZ Units - The words used in clause (e) of Para (III) of notification that prescribes one year from the date of payment by the SEZ Unit should be construed directly and according to which the one year period for filing refund shall apply only in case where the payment is directly made by SEZ Unit for which Table-II is prescribed for claiming the refund in that condition (e) shall be applied in case of refund made in Table-II of Form A-4 accordingly, the condition of Para 3(III)(e) of notification is clearly not applicable in case of refund claim made by the respondent in Table-II of Form A-4 apended to the notification. In the present case, the main issue is that there is a delay in filing the refund claim which as per the department is in violation of Clause (e) of Para 3 (III). This being a procedural lapse cannot be the ground for denying the substantial benefit of the exemption notification which is granted by way of refund of service tax in the SEZ - it is settled that in case of violation of condition of the notification which is in the nature of procedural lapse, the substantial benefit of the exemption notification cannot be denied. Even though there is a delay the same was condoned by the lower authority - there are no infirmity in the impugned order. Appeal dismissed - decided against Revenue.
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2021 (12) TMI 847
CENVAT Credit - input service - capital goods - motor vehicles - proper documents in terms of Rule 9 of Cenvat Credit Rules - period 2011-12 and 2012-13 - HELD THAT:- Admittedly M/s Shivam Motors is a Authorised dealer of M/s Tata Motors Limited and thus a representative of the manufacturer of the motor vehicle. Admittedly, the appellant have produced the invoices of the dealer alongwith invoice-cum-challan issued by M/s Tata Motors Limited, when they initially cleared the goods to their specific counterpart mentioning on the invoice internal customer - the details of excise duty and cess as per the invoice of M/s Shivam Motors is not in dispute, as have been taken notice of in para 2.1 of the show cause notice and also in para 2.2 of the order-in-original. There is an error on the part of Revenue in appreciating the documents, where a provider of service has received the capital goods manufactured by M/s Tata Motors Limited through its authorised dealer - the show cause notice is mis-conceived and no case of wrong cenvat credit taken as alleged, is made. Appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (12) TMI 846
CENVAT Credit - input services - outward GTA services availed for delivery of goods from factory gate to the buyer s premises - place of removal - Circular:1065/2018-CX. Dated 08-June-2008 - HELD THAT:- An identical circumstances in appellant s own case for a different period in SHRI KHEMISATI POLUSACKS PVT. LTD. VERSUS C.C.E. S.T. -DAMAN [ 2021 (12) TMI 729 - CESTAT AHMEDABAD] the demand has been set aside and matter was remanded where it was held that the adjudicating authority can go into the facts and if it is found that the contract is of supply is on FOR basis and the ownership of the goods is transferred at the buyer s premises then the benefit of the credit may be allowed. The matter is remanded to the original adjudicating authority for afresh adjudication - Appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2021 (12) TMI 845
Reopening of assessment - Section 27 of the Tamil Nadu Value Added Tax Act, 2006 - attachment of Bank Accounts - Assessment Years namely 2010-2011, 2011-2012, 2012-2013, 2013-2014, 2014- 2015 and 2015-2016 - HELD THAT:- The proper method was to determine tax by invoking best judgement method under the Act. Considering the fact that the said petitioner has also not participated in the proceedings before the respondents by responding to the notice issued prior to the assessment order dated 21.12.2018 nor paid any amount. The impugned orders dated 21.12.2018 are quashed subject to the petitioner in W.P.No.11414 of 2021 etc., batch in depositing a sum of ₹ 25 lakhs within a period of 60 days from the dated of receipt of copy of this order with the respondent as and when such deposit is made by the petitioner within the aforesaid period, in two instalments the respondent shall take up the case and pass fresh order on merits and in accordance with law. The impugned orders which stand quashed subject to payment of the amount within the prescribed period, shall be treated as Show Cause Notice to the petitioner - petition disposed off.
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2021 (12) TMI 844
Evasion of tax - sales suppression - inter-state sale or not - Section 3 of the Central Sales Tax Act, 1956 - HELD THAT:- Admittedly, the petitioner is a registered dealer under the TNGST and CST Acts and an assessee on the file of the second respondent herein. It could be seen that in respect of the assessment years in question, the second respondent passed the orders treating the amounts mentioned in the quotations recovered from the petitioner, as sales suppression and imposing tax at 10% along with penalty under section 9(2) of CST Act r/w Section 16 of the TNGST Act. On appeal, the said assessment orders were set aside by the First Appellate Authority, after holding that if the transaction was to be treated as an inter state sale in terms of Section 3(a) of the CST Act, there must be a sale of goods and movement of such goods from the one state to another, as a result or as an integral part of the sale, whereas, in this case, there was no proof available with respect to delivery of goods. In the absence of any material evidence with respect to movement of goods, the quotations recovered from the business place of the petitioner, cannot be treated as sales. Hence, there was no inter-state sale taken place, as rightly held by the first Appellate Authority. This court has no hesitation to set aside the orders passed by the Tribunal - Petition allowed.
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Indian Laws
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2021 (12) TMI 843
Levy of additional surcharge leviable under Section 42(4) of the Electricity Act, 2003 - captive consumers/captive users are liable to pay or not - HELD THAT:- Ordinarily, a consumer or class of consumers has to receive supply of electricity from the distribution licensee of his area of supply. However, with the permission of the State Commission such a consumer or class of consumers may receive supply of electricity from the person other than the distribution licensee of his area of supply, however, subject to payment of additional surcharge on the charges of wheeling as may be specified by the State Commission to meet the fixed cost of such distribution licensee arising out of his obligation to supply. There is a logic behind the levy of additional surcharge on the charges of wheeling in such a situation and/or eventuality, because the distribution licensee has already incurred the expenditure, entered into purchase agreements and has invested the money for supply of electricity to the consumers or class of consumers of the area of his supply for which the distribution license is issued. Therefore, if a consumer or class of consumers want to receive the supply of electricity from a person other than the distribution licensee of his area of supply, he has to compensate for the fixed cost and expenses of such distribution licensee arising out of his obligation to supply - the levy of additional surcharge under sub-section (4) of Section 42 can be said to be justified and can be imposed and also can be said to be compensatory in nature. However, sub-section (4) of Section 42 shall be applicable only in a case where the State Commission permits a consumer or class of consumers to receive supply of electricity from a person other than the person distribution licensee of his area of supply. So far as captive consumers/captive users are concerned, no such permission of the State Commission is required and by operation of law namely Section 9 captive generation and distribution to captive users is permitted. Even otherwise, it is required to be noted that the consumers defined under Section 2(15) and the captive consumers are different and distinct and they form a separate class by themselves. So far as captive consumers are concerned, they incur a huge expenditure/invest a huge amount for the purpose of construction, maintenance or operation of a captive generating plant and dedicated transmission lines. However, so far as the consumers defined under Section 2(15) are concerned, they as such are not to incur any expenditure and/or invest any amount at all - it is to be held that such captive consumers/captive users, who form a separate class other than the consumers defined under Section 2(15) of the Act, 2003, shall not be subjected to and/or liable to pay additional surcharge leviable under Section 42(4) of the Act, 2003. Appeal dismissed.
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2021 (12) TMI 842
Dishonor of cheque - petitioner is dormant Director - Sections 138/141 of the Negotiable Instruments Act, 1881 - HELD THAT:- A perusal of the complaints would show that the complainant alleged that the present petitioner, who has been arrayed as accused No. 2, had agreed to guarantee repayment of all payments payable by the accused company in terms of the Factoring Agreement. It was also alleged that the present petitioner along with other accused persons was in-charge and responsible for making financial decisions of the accused company. This Court is of the opinion that the N.I. Act being a penal statute should receive strict construction. Thus, specific averments in a criminal complaint which satisfy the requirements of Section 141 N.I. Act are imperative. On a prima facie view of the material placed on record in the present case, it is apparent that specific allegations have been levelled against the petitioner. Apart from the basic averment that the petitioner was in-charge of and responsible for the day-to-day business of the accused company, it was further averred in the complaint that the petitioner, being a Director, was in charge of the financial decision-making of the accused company and he had agreed to guarantee repayment of all amounts payable by the accused company to the complainant in terms of the Factoring Agreement. On an overall reading of the complaints, it cannot be said that the allegations levelled are bald and vague. The petitioner has also not placed on record any material of unimpeachable quality in support of his claim that he was a dormant Director which issue, alongwith other defences raised, shall be a matter of trial. Suffice it to say, the complaint cases ought not be quashed qua the petitioner at this stage. Petition dismissed.
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2021 (12) TMI 841
Dishonor of cheques - insufficiency of funds - settlement of dispute between rival parties - annulment of conviction recorded by learned trial Court - HELD THAT:- Chapter XVII of the Act deals with penalties in case of dishonor of cheques for insufficiency of funds in the accounts. A complete procedure in this behalf is provided under Section 138 to 147 of the Act. Section 142 deals with cognizance of offence and Section 143 empowers a Court to try cases under Section 138 of the Act summarily. As per Section 147 of the Act, every offence punishable under the Act is compoundable notwithstanding anything contained in the Cr.P.C. While it is true that the offence is compoundable but a pivotal question, which has emerged for consideration, is whether revisional powers can be exercised by this Court to compound the offence under Section 138 of the Act after conviction of the petitioner by appellate Court. The instant revision petition is allowed.
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