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TMI Tax Updates - e-Newsletter December 28, 2019 Case Laws in this Newsletter: GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy FEMA Service Tax Central Excise Wealth tax Indian Laws Articles RECENT DEVELOPMENTS IN GST Preparedness for the new changes in GST News CCI approves acquisition of shares in My Home Industries by My Home Constructions and its affiliates Shri N K Singh’s Address to the Indian Economic Association Three Technology Development Projects Inaugurated Notifications GST Order No. 10/2019 - dated 26-12-2019 - CGST Central Goods and Services Tax (Tenth Removal of Difficulties) Order, 2019. 78/2019 - dated 26-12-2019 - CGST Seeks to extend the due date for furnishing of return in FORM GSTR-7 for registered persons in Assam, Manipur or Tripura for the month of November, 2019. 77/2019 - dated 26-12-2019 - CGST Seeks to extend the due date for furnishing of return in FORM GSTR-3B for registered persons in Assam, Manipur, Meghalaya or Tripura for the month of November, 2019 76/2019 - dated 26-12-2019 - CGST Seeks to extend the due date for furnishing of return in FORM GSTR-1 for registered persons in Assam, Manipur or Tripura having aggregate turnover more than 1.5 crore rupees for the month of November, 2019. 75/2019 - dated 26-12-2019 - CGST Central Goods and Services Tax (Ninth Amendment) Rules, 2019 74/2019 - dated 26-12-2019 - CGST Seeks to waive late fees for non- filing of FORM GSTR-1 from July, 2017 to November, 2019. GST - States S.O. 404 - dated 26-12-2019 - Bihar SGST Regarding Notification an invoice issued by a registered person S.O. 403 - dated 26-12-2019 - Bihar SGST Governor of Bihar appoints the 1st day of April, 2020, as the date from which the provisions of the rule 5 of the Bihar Goods and Services Tax (Fourth Amendment) Rules, 2019 shall come into force S.O. 402 - dated 26-12-2019 - Bihar SGST Regarding Notification of Registered Person S.O. 401 - dated 26-12-2019 - Bihar SGST Notified as the common Goods and Services Tax Electronic Portal S.O. 400 - dated 26-12-2019 - Bihar SGST Bihar Goods and Services Tax (Eighth Amendment) Rules, 2019. F A-3-26-2019-I-V-(93) - dated 18-12-2019 - Madhya Pradesh SGST Amendment in Notification No. F A-3-26-2019-I-V-(53) dated 29th June, 2019 F A-3-16-2019-I-V-(92) - dated 18-12-2019 - Madhya Pradesh SGST Amendment in Notification No. F A 3-16-2019-I-V(31) dated the 17th May, 2019 F A 3-35/2017/1/V (74) - dated 22-11-2019 - Madhya Pradesh SGST Seeks to amend Notification No. F A 3-35/2017/1/FIVE(63) dated the 30th June, 2017 F. 1-11(91)-TAX/GST/2019(PART-III) - dated 16-12-2019 - Tripura SGST Tripura State Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 20/2019-State Tax (Rate) - dated 1-10-2019 - Tripura SGST Amendment in Notification No. 11/2017- State (Rate), dated the 29th June. 2017 19/2019-State Tax (Rate) - dated 1-10-2019 - Tripura SGST Seeks to exempt supply of goods for specified projects under FAO 73/2019 – State Tax - dated 24-12-2019 - West Bengal SGST Seeks to extend the due date of filing return in GSTR-3B for the month of November, 2019 till 23.12.2019 Circulars / Instructions / Orders Customs 06/2019 - dated 27-12-2019 Centralised processing of proposal for foreign deputations Highlights / Catch Notes GST Central Goods and Services Tax (Tenth Removal of Difficulties) Order, 2019 - Furnishing of annual return - extension of due date. Visit to Get Source Central Goods and Services Tax (Ninth Amendment) Rules, 2019 - Conditions of use of amount available in electronic credit ledger Visit to Get Source Seeks to waive late fees for non- filing of FORM GSTR-1 from July, 2017 to November, 2019. Visit to Get Source Income Tax Disallowance of liquidated damages claimed by assessee - “Liquidated damages” are compensation paid for breach of contract. We are therefore, unable to understand how the sum paid by assessee on behalf of M/s Century Golflinks being its proportionate share towards incurring of expenses would amount to liquidated damages. Visit to Get Source Transfer pricing (TP) adjustments - notional/book adjustment - correct interpretation or construction of section 092 / 92C/ 92CA - whether the provisions of chapter X shall be invoked in a situation where the assessee is enjoying tax exemption under section 10A of the Act and/or where there is no motive to avoid tax? - Held Yes Visit to Get Source Unexplained expenses u/s 69C - bogus purchases - cancellation of sales tax registration certificate of the parties - claimed to be allowed as "business loss" u/s 28 or 37 - ad hoc addition at the rate of 10% of such purchases made in order to meet the end of justice and to stop the ongoing dispute Visit to Get Source Exemption u/s 11 - Disallowing the loss on sale of assets - the income u/s 11 has to be determined on commercial principles and to determine the same, the losses arising on sale of assets of the society shall be considered. Visit to Get Source Customs Centralised processing of proposal for foreign deputations Visit to Get Source Restriction on import of goods / Insecticides other than designated port - Isolated events of illegal imports cannot justify shutting out the entire Eastern and North-Eastern region of India from getting the benefits of imports of insecticides, which is patently violative of Article 14 of the Constitution of India from the perspectives of both importers as well as agriculturists. Visit to Get Source Finalization of provisionally assessed Bills of Entry, beyond a period of five years - neither there was any petition of petitioners pending before Competent Court nor was any stay of any court, thus there was no reason to withhold framing of final assessment. - final assessment u/s 18 cannot be made after the expiry of five years from the date of bill of entry. Visit to Get Source DEPB benefit - benefit obtained on the basis of forged documents - The liability of duty cannot be fastened on the appellant being a bona fide purchaser of DEPB scrips Visit to Get Source Provisional release of seized goods - the Court expects that the petitioner has come with clean hands and relying on the principle of uberrima fides, the Court passes orders at an interim stage. On coming to light of the suppression, it is the duty of the Court to recall its order and also impose costs upon the petitioner for such an act. Visit to Get Source Wealth-tax Wealth tax assessment - Period of limitation - Order was passed beyond period of one year as required u/s 17A(2) of the WT Act, and consequently the penalty proceedings initiated u/s 18(1)(c) - Wealth Tax Officer will have to consider this issue as well - The question cannot be answered in favour of the appellant, at this stage, as raised. Visit to Get Source Penalty u/s 18(1)(c) of Wealth tax Act - Defective notice - AO has not struck out the irrelevant portion of the notice - the penalty proceedings u/s.18(1)(c) of the Wealth Tax Act initiated by the AO is void ab initio Visit to Get Source Service Tax CENVAT credit - exempt service or not - Not unnaturally, such service, unacknowledgeable in the tax jurisdiction, fails the test of utilization in rendering of further service. These, therefore, cannot be ‘input services’ and the inclusive portion of ‘exempted services’ must be construed as referring to such and not to services that, though not yet, may still be subject to levy. Visit to Get Source Service of garnishee notice u/s 87 - The petitioner has not disputed the quantum of service tax dues quantified in the garnishee notices. Petitioner has only highlighted the need and necessity to allow it to pay the dues in installments. Therefore, in a case where the assessee admits to the service tax dues as specified in the show cause notice or in the garnishee notice, no adjudication would be necessary. - Allowed to paid in 48 equated monthly installments Visit to Get Source Adjustment to the excess payment of service tax with the short paid tax - Rule 6(4A) of the Service Tax Rules, 1994 - Tribunal granted the relief based on Chart shown by the assessee, which was not produced before the adjudicating authority - Order set aside - Matter restored before Tribunal. Visit to Get Source Central Excise Valuation - related party transaction or not - Mutuality of interest - the price at which the Appellant sold the manufactured goods to the subdistributor be considered as a transaction value as per Sec.4(1)(b) of CEA,1944 read with Rule 9 of The Central Excise Valuation Rules,2000. Visit to Get Source Case Laws: GST 2019 (12) TMI 1163 Unable to upload details of un-utilized ITC as per the accounts books to the electronically generated statutory Form TRAN-I - carry forward of unutilized CENVAT credit of duty paid - HELD THAT:- The issue decided in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] where it was held that Respondents are directed to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019. It is conveyed that the date for filing annual returns has been extended from 31.12.2019 to 31.1.2020. The present petition is allowed with permission / modification to file the said Statutory Form TRAN-I by 31.01.2020. 2019 (12) TMI 1162 Extension of time for filing of Form GST TRANS-1 - transitional credit - Rule 117 of the CGST Rules - HELD THAT:- The challenge to the constitutional validity of Rule 117 no more being res integra, this Court cannot entertain such prayer and accordingly reject the same, however, considering the fact that the Union of India and the Finance Department have extended the period contemplated under Rule 1A of Rule 117 till 31st December, 2019, we grant liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India i.e on or before 31st December, 2019. Application disposed off. 2019 (12) TMI 1161 Debiting amount into the input tax credit - HELD THAT:- This Court is of the view that the writ petition does not have any merits at this juncture for the reason that, during the course of argument, it is revealed that the petitioner was fully aware of the show-cause notice issued to him on 11.06.2019 and the said notice was uploaded in the online portal, in-spite of being aware of the show-cause notice proceedings drawn by the respondents, the petitioner did not respond to the same. Subsequently, the respondents have also uploaded the order on 27.07.2019, which is an order in pursuance to the show-cause notice proceedings initiated. The petitioner also has not been able to show any effort made by them to obtain the copy of the order 27.07.2019 so as to challenge the same nor making any effort in giving reply to the show cause notice at the first instance inspite of being in full knowledge of the same. This Court for the reason that the petitioner had an alternative statutory remedy available to him in-accordance with law under Section 107 and not availing the same promptly or within a reasonable period and subsequently filing the present writ petition only after the order dated 27.07.2019 was acted upon. This Court is of the view that the writ petition would not be maintainable at this juncture. Petition dismissed. 2019 (12) TMI 1160 The operation of the credit account for availing the Input Tax Credit blocked - only ground for blocking the credit account of the petitioner is that the petitioner has been doing business with a non-existing entity i.e. M/s Jai Bharat Enterprises - HELD THAT:- This Court is of the opinion that no fruitful purpose would be served in keeping the writ petition pending, rather ends of justice would meet if the writ petition is disposed of with a direction to the petitioner to file a representation/objection before the respondent no.2 in respect of the contention that it has raised in the present writ petition particularly in respect of the existence of M/s Jay Bharat Enterprises within 3 days from the date of receipt of copy of this order - The respondent no.2 in turn is directed to decide the representation/objection of the petitioner by 10th of November, 2019 so as to avoid any inconvenience to the petitioner in filing the return which has to be done by the 20th of November, 2019. Petition disposed off. 2019 (12) TMI 1159 Profiteering - purchase of flat - allegation that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in price of the flat - contravention of Section 171 of the CGST Act, 2017 - penalty - HELD THAT:- The ratio of input tax credit as a percentage of the turnover that was available to the Respondent during the pre-GST period from April, 2014 to March, 2016 was 1.54% and during the post-GST period from July, 2017 to December, 2018 the same was 5.79% and therefore, during the post-GST period the Respondent has benefited from the additional input tax credit to the extent of 4.25% [5.79% (-) 1.54%] of the turnover as is evident from the perusal of Table-E of the Report dated 25.06.2019 submitted by the DGAP. It is also clear from the Table-F submitted by the DGAP that the additional input tax credit of 4.25% of the turnover should have resulted in the commensurate reduction in the base prices as well as cum-tax prices charged by the Respondent from his buyers. Therefore, as per the provisions of Section 171 (1) of the CGST Act, 2017, the Respondent is required to pass on the benefit of such additional input tax credit to the recipients. Computation of profiteered amount has been done in respect of 473 home buyers whereas the Respondent has booked 493 units till 31.12.2018. 20 customers who have booked flats and also paid the booking amounts in the pre-GST period, have not paid any amount during the post-GST period from 01.07.2017 to 31.12.2018 (period under investigation). Therefore, the benefit of input tax credit in respect of these 20 units is required to be calculated when the consideration is received from such buyers taking into account the proportionate input tax credit in respect of such units. The Respondent is directed to commensurately reduce the prices of his units as per the provisions of Rule 133 (3) (a) of the above Rules. He is further directed to pass on the benefit of ITC of ₹ 9,03,44,071/- to the above 473 recipients including the Applicant No. 1 as per the details submitted by the DGAP vide Annexure-18 of his Report alongwith the interest @ 18% PA to be paid from the date when the above amount was collected by the Respondent from them till the amount is paid as per the provisions of Rule 133 (3) (b) of the CGST Rules, 2017 as all the buyers are identifiable - Since, the present investigation pertains to the period of 01.07.2018 to 31.12.018 any additional benefit which may accrue to the Respondent in future shall also be passed on by him to the eligible buyers failing which they shall be entitled to approach the Screening Committee on Anti-Profiteering Maharashtra for claiming the above benefit. The concerned Commissioner shall also ensure that the benefit of ITC is passed on to the eligible buyers. Penalty - HELD THAT:- The Respondent has denied benefit of ITC to the buyers of the flats and the shops being constructed by him in his Project Godrej City Panvel Phase-I in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has apparently committed an offence under Section 171 (3A) of the above Act and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section - Accordingly, a Show Cause Notice be issued to him directing him to explain as to why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioner of CGST/SGST Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is passed on to all the eligible buyers. A Report in compliance of this order shall be submitted to this Authority by the concerned Commissioner through the DGAP within a period of 4 months from the date of issue of this order. Income Tax 2019 (12) TMI 1158 Unsecured loan received by the assessee - Addition u/s 68 - HELD THAT:- As pursuant to notice issued by AO u/s 142(1) assessee explained that it had received sum of ₹ 16,20,000/- from M/s Dhoot Infrastructure Projects Limited, towards sale of shares to them. Copies of purchase and sale invoices were also furnished by the assessee. Copy of the invoice dated 15-03-2013 of ₹ 16,20,000/- against trade payable in the name of Dhoot Infrastructure Projects Ltd. against sale of equity shares along with copy of the ledger accounts for the period 01-04-2012 to 31-03-2013. We note that the nature of such Trade Payable was also explained to the AO. The assessee furnished the complete details including name, address, PAN, Bank statement highlighting the transaction before the AO. We also note that the Ld. CIT(A) has called for the remand report twice, however, the AO did not raise any adverse view about the veracity of the documents filed by assessee, therefore, the addition of sum received by the assessee as 'advance as unexplained cash credit under section 68 of the Act was not warranted and therefore the Ld CIT(A) rightly deleted the addition. So, we are inclined to confirm the order of the Ld. CIT(A) and dismiss the ground of appeal raised by the revenue. 2019 (12) TMI 1157 Addition on account of unsecured loan and interest paid thereon - AO concluded that loans obtained by the assessee were not genuine and made an addition u/s 68 - Search and seizure action u/s.132 - HELD THAT:- CIT(A) has incorporated various documents filed by assessee in respect of each party from whom loan is taken. CIT(A) has also incorporated from the balance sheet of these loan parties that they have the creditworthiness as their share capital and reserves are much more out of which loans are given to assessee company. It is also clear from the record that all the loans taken during the year were repaid in next financial year. Therefore no addition can be made.- See M/S. SKYLARK BUILD. [ 2018 (10) TMI 1513 - BOMBAY HIGH COURT] - Decided in favour of assessee. 2019 (12) TMI 1156 Disallowance of liquidated damages claimed by assessee - AR submitted that assessee entered into joint development agreement with M/s.Century Golflinks who were landowners - DR submitted that liability to make the said sum was not on assessee as per the agreement, and therefore, the said sum cannot be said to be an expenditure incurred for purposes of assessee s business - HELD THAT:- On perusal of agreement, it is observed that 45% of owners share were to be distributed between owner No.1 being S.Shivashankarappa and owner No. 2 being M/s Century Golflinks. In written submission placed at page 1-5 of paper book, assessee at page 2 of written submission gave details of expenditure incurred for power and water charges which in total amounted to ₹ 10,96,33,163/-. It has been submitted that proportionate cost from Mr. Shivashankarappa has been received whereas, M/s Century Golflinks refused to pay their share amounting to ₹ 1,08,11,537/-, which was claimed by assessee as liquidated damages in its P L account. Liquidated damages are compensation paid for breach of contract. We are therefore, unable to understand how the sum paid by assessee on behalf of M/s Century Golflinks being its proportionate share towards incurring of expenses would amount to liquidated damages. Assessee has also not brought on record to show that amount payable by M/s Century Golflinks is by way of compensation. Further, all decisions relied upon by Ld.AR in paper book filed before us emphasises circumstances and tests that has been laid down by various courts to consider any amount received, to be in the nature of compensation, and therefore an allowable deduction. On one breath assessee is arguing commercial expediency to spend such amount on behalf of M/s Century Golflinks, on the other hand, assessee is claiming it as liquidated damages. Assessee relied upon certain decisions wherein reasonableness of certain payments made has to be established by assessee. Also that assessee admitted for the said disallowance before Ld.AO during assessment proceedings, as per the order sheet entry dated 28/12/11 produced by Ld.Sr.DR before us. Ld.AR could not rebut aforestated noting, which is part of assessment records - Decided against assessee. 2019 (12) TMI 1155 TP Adjustment - comparable selection - exclusion of comparables, EInfochip Ltd. and Thirdware Solutions Ltd. - HELD THAT:- Referring to international transactions of software development services the above two companies should be excluded from the list of comparables for the purpose of computing ALP The assessee claims that, the TP ad ustment made in this regard would have to be deleted, if these two companies are excluded from the list of comparable companies. The TPO may verify this claim of the assessee and allow the claim if found correct. In the result, this ground of the assessee is allowed for statistical purposes. Adjustment made on account of outstanding receivable in excess of 60 days, considering the outstanding receivable as a deemed loan to AE - HELD THAT:- As relying on KUSUM HEALTH CARE PVT. LTD. [ 2017 (4) TMI 1254 - DELHI HIGH COURT] we uphold the contention of the assessee that the working capital ad ustment in this case, subsumes the ad ustment that is required to be made on account of interest on outstanding receivables. Hence, this ad ustment made by the TPO is hereby deleted and this Ground of the assessee is allowed. International transaction of guarantee fees paid to Associate Enterprises (AEs) - HELD THAT:- We find that the assessee has offered 1.5.% as corporate guarantee to its AEs, which is based on an internal CUP, which is the guarantee rate charged by the IDBI to the assessee company. Even under the Safe Harbor Rules, if the guarantee is provided to a subsidiary and the commission or fee declared is at the rate not less than one per cent per annum on the amount of guarantee. In this case, 1.5% rate of commission is charged by the assessee. In our view, this should be considered as at arm s length. The TPO has determined the ALP at three per cent, on an adhoc basis. After considering the facts and circumstances of the case, we direct the deletion of this adjustment as in our view. In the result, this ground of the assessee is allowed. Disallowance of bad debt and write off of sundry balances/advances - HELD THAT:- Assessing Officer in the final assessment order restricted the disallowance to ₹ 12,647/- being amounts paid to employees, which cannot be recovered and amount of ₹ 3,48,645/- receivable from group entities and an amount of ₹ 15,60,871/- receivable from clients. In our view, the receivables from clients and intra group entities have definitely been routed through the profit and loss account. Otherwise they would not be trade receivables. The balances in employee accounts, who have left are also not receivables. As relying on TRF. LTD. [ 2010 (2) TMI 211 - SUPREME COURT] we delete the disallowance in question and allow this ground of the assessee. 2019 (12) TMI 1154 TP Adjustment - 6% markup on cost / expenditure - Mutual agreement between the assessee and associated enterprises - assessee not in possession of any formal agreement - HELD THAT:- In the earlier years, the 6% markup on cost was the proposition considered by learned CIT(A) which was accepted by the ITAT. In the present assessment year there is no mention whatsoever about this claim of the assessee in the order of learned CIT(A). All the assessee s arguments before learned CIT(A) were confined to selection of comparables and certain other adjustments. We agree that this contention of the assessee deserves consideration provided the facts for the present assessment year are in conformity with the earlier assessment years. Furthermore as noted above this aspect has not at all been considered at the level of learned CIT(A). In the interest of justice, we deem it appropriate to remit this aspect of assessee s contention to the file of learned CIT(A) to consider the same and give a finding thereupon. Needless to add the assessee should be granted opportunity of being heard. - Matter remanded back to CIT(A). 2019 (12) TMI 1153 Transfer pricing (TP) adjustments - notional/book adjustment - correct interpretation or construction of section 092 / 92C/ 92CA - income chargeable to tax in India - whether the provisions of chapter X shall be invoked in a situation where the assessee is enjoying tax exemption under section 10A of the Act and/or where there is no motive to avoid tax? - HELD THAT:- the purpose behind the provision of transfer pricing is to determine true profits/income as if such international transaction has been entered with an unrelated party or non-AE, irrespective of the fact that the income of the assessee was eligible for exemption. - there is no express provision under the Act restricting the application of section 92C of the Act for determining the income at arm s length where such income is eligible for deduction u/s 10A of the Act. On the contrary, there is a proviso to section 92C(4) of the Act which prohibits the deduction u/s 10A of the Act on the income to the extent enhanced as an effect of a determination of ALP. If the purpose or object of Chapter X and/or Section 10A of the Act is being defeated, then it is up to the legislature, if they think so, to reconstruct the law as per the required object. - there is no need to look into the intention or purpose of the statute or application of reasonable construction. Accordingly, it is meaningless to apply the principles of purposive or object-based rules of interpretation Indeed, in the instant case, albeit the adjustment in the ALP for the year under consideration may be of notional value, and the same may not actually result in an inflow of foreign exchange. But the said proviso to section 92C(4) of the Act shall deter the practice of manipulating the prices as suiting to the parties. - Consequently, the purpose of the provisions of section 10A of the Act will not be defeated. We further note that assessee though claiming the exemption under section 10A of the Act can also manipulate the ALP with an objective to avoid corporate dividend tax by shifting its profits to AE. In the instant case we find that the provisions of chapter X are not impeding with the manner of the computation of exemption under section 10A of the Act, but it is to work out the true ALP qua the sale price of the impugned international transaction. Therefore we disregard the contentions of the ld. AR for the assessee that no reference to the TPO can be made for determining the ALP. AR also contended that it is a settled legal position that where two views are possible, the one in favor of the assessee should prevail and to support his contention, also placed reliance on a series of case laws. In this regard, we concur with the view of the ld. AR for the assessee. But in the case on hand there are contrary views on the impugned issue, accordingly, this special bench has been constituted to decide the question referred to it after considering the fact, rival submissions, and the legal position. Interpretation of the provision of the Act, which gives rise to two different possible views. In the case on hand, the issue relates to the provisions of section 10-A viz-a-viz Chapter-X of the Act which operates in different domains and has different objects. As such, none of the provision has neither been made subject to each other nor superseded by each other. Therefore we are of the view that the question of two views about the interpretation to section 10-A viz a viz chapter-X in the given facts and circumstances does not arise. But these provisions co-exits and their concordance are facilitated by the proviso to section 92C(4) of the Act. As such, there is a direct provision under chapter X of the Act restricting the deduction/ exemption to the assessee in this particular case, which will prevail in the given facts circumstances. Regarding the Non-discrimination clause in the DTAA between India and UK, we find that the learned counsel s arguments proceed on the fallacious assumptions that while examining the applicability of the non-discrimination provisions, the transactions with a resident assessee can be compared with transactions of non-resident. Even if at the most the company was to transact business with its non-resident related party, the same course was to follow. There is thus no discrimination viz a viz the assessee and the domestic enterprises. We are of the view that even if an assessee is eligible for tax exemption at the rate of hundred percent under section 10A/10B of the Act, then also the arm s length price on international transactions deserve to be determined under section 92C. Hence, question posed before the Special Bench is answered in negative against the assessee and in favour of the Revenue. 2019 (12) TMI 1152 Penalty u/s 271(1)(c) - disallowance of additional depreciation by the assessee on account of reclassification of certain assets resulting in change of rate of depreciation disclosed in the return of income filed u/s 153A of the Act vis- -vis the return filed u/s 139(1) - HELD THAT:- the assessee while filing the return of income u/s 153A of the Act for AY 2004-05 to AY 2009-10 had regrouped/reclassified its assets to the rate of depreciation which had resulted in the excess depreciation claim of ₹ 1,23,51,251/- for AYs 2004-05 to 2006-07. In the instant case, we are concerned with AYs 2004-05 and 2005-06. The application filed by the assessee has since been rejected by the ITSC u/s 245D(2C) of the Act, treating it as invalid. During the course of assessment proceedings, the AO asked the assessee to file full details in respect of the above excess claim of depreciation. But the assessee failed to furnish the relevant documents on the above. In a situation like the present one, the assessee had to file the relevant documents/evidence from which the AO could have drawn correct inference. The assessee failed to do so. As a logical corollary, the burden cannot be shifted to the Department. The burden of proof rests with the assessee. We are of the considered view that the Ld. CIT(A) has overlooked the above facts while passing the order dated 02.03.2017. A fortiori, he has not considered the fact that consequent to withdrawal of appeal before ITAT for AYs 2004-05 and AY 2005-06, the assessee re-worked its claim of depreciation for AY 2007-08 to AY 2014-15 before the Settlement Commission and as a result, the revised claim of depreciation on the basis of re-grouping of assets stood withdrawn. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a de novo order after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence regarding the claim of additional depreciation of ₹ 75,80,338.16/- on account of reclassification of certain assets during the year under consideration. As the matter has been restored to the file of the AO, we are not adverting to the case laws relied on by both sides. Appeals are allowed for statistical purposes. 2019 (12) TMI 1151 Unexplained expenses u/s 69C - Addition on basis of the information obtained from the website of the sales tax department about the cancellation of registration certificate of the parties - claimed to be allowed as business loss u/s 28 or 37 - HELD THAT:- assessee has already declared the GP in its books of accounts by recording the sales and the corresponding purchases. But to prevent the possible leakage of the Revenue, as the purchases from the local/grey market is normally cheaper, we are inclined to make the ad hoc addition at the rate of 10% of such purchases in order to meet the end of justice and to stop the ongoing dispute. Claim of Bad Debts - assessee failed to furnish the details of the parties viz a viz details of the sales made to them - Held that:- It is the settled law that the losses incurred by the assessee in the course of the business activities are allowable deduction either under section 37(1) or 28 of the Act - assessee is eligible for the deduction of the impugned loss as incurred in the course of the business but not as bad debts under the provisions of section 36(1)(vii) of the Act. Addition made for ₹ 4,899/- on account of the Act VAT credit written off. - Held that:- there was an allegation from the authorities below that the assessee has purchased the goods from the parties whose VAT/ CST registrations were cancelled. In the absence of the assistance from the side of the assessee, we can draw an adverse inference by holding that such amount of VAT credit relates to such parties i.e. the registrations were cancelled. If that be so, then it is clear that the claim was made by the assessee on account of such VAT credit for the purchases from the parties not having valid registration number. Therefore, it is inferred that such claim of the assessee was not bona fide in the absence of contrary documentary evidence. Thus we not find any reason to interfere in the order of the Ld. CIT(A). Hence, the ground of appeal of the assessee is dismissed. 2019 (12) TMI 1128 Exemption u/s 11 - Disallowance of depreciation on the assets purchased by the assessee by application of funds - HELD THAT:- In assessee s own case also, Hon ble jurisdictional High Court in DIT vs Indraprastha Cancer Society [ 2014 (11) TMI 733 - DELHI HIGH COURT] considered the question whether after claiming deduction in respect of the cost of the assets u/s 35(1) of the Act, assessee again claimed deduction on account of depreciation in respect of the same asset. Hon ble jurisdictional High Court held the issue in favour of the assessee. In view of the binding precedent of the jurisdictional High Court in assessee s own case, we do not find any unreasonableness in the order of the Id. CIT(A). We, therefore, confirm the order of the Id. CIT(A) and dismiss Ground Nos. 1 2. Disallowing the loss on sale of assets - Plea of the assessee is that the assets were sold at a price lesser than the WDV of the assets and when the depreciation is allowed following the commercial principle, there is no bar to consider the loss and the learned AO committed error in taking the sale proceeds as income and ignoring the loss - HELD THAT:- CIT(A) considered the plea of the assessee and satisfied that the assessee could demonstrate that the income u/s 11 had to be determined on commercial principles. We are also of the considered opinion that the income u/s 11 has to be determined on commercial principles and to determine the same, the losses arising on sale of assets of the society shall be considered. Therefore, the capital loss has to be considered while calculating the income of the assessee. With this view of the matter, we uphold the finding of the Id. CIT(A) on this ground and dismiss Ground No.3. Customs 2019 (12) TMI 1149 Restriction on import of goods / Insecticides other than designated port - deletion of Kolkata from the list of places through which insecticides shall be imported into India, including the sea and air routes - Vires of a Notification dated December 22, 2017 (G.S.R.) 1588 (E) published by the Union Ministry of Agriculture and Farmers Welfare (Department of Agriculture, Cooperative and Farmers Welfare) - amendment brought to Rule 45 of the Insecticides Rules, 1971 - HELD THAT:- In the present case, the respondents have not pleaded anywhere in their affidavit-in-opposition or in their written notes of argument that any such consultation with the Board was held prior to the amendment or that the Board was consulted within six months of the making of the Rules. The existence of necessary criteria, to satisfy the proviso to Section 36(1), for the dispensation of consultation with the Board, was not made out in the pleadings of the respondents - As such, the lame excuse of curbing illegal imports does not hold water, since there are several statutory provisions and measures in place to curb such imports and penal provisions to deal with such illegal imports. Moreover, isolated events of illegal imports cannot justify shutting out the entire Eastern and North-Eastern region of India from getting the benefits of imports of insecticides, which is patently violative of Article 14 of the Constitution of India from the perspectives of both importers as well as agriculturists. Not only would the importers of Eastern and North-Eastern India be forced out of market competition due to the huge increase in duties in the event they have to bring in the insecticides through the permitted places of import in other parts of India, the said increase in price would directly translate to the poor agriculturists of the East and North-East being unable to purchase insecticides at such high price, which would affect not only their livelihood, but the economy of the region as a whole. Such an event would have a cascading effect and would percolate to the citizens of India residing in the Eastern and North-Eastern parts of the country, since the prices of all agricultural and agro-industrial products would increase manifold, which is a complete violation of Article 14 of the Constitution of India. Even if the object of the 1968 Act is looked into, the same was enacted to regulate the import, manufacture, sell, transport, distribution and use of insecticides with a view to prevent the risk to human beings, animals and for matters connected therewith. There can be no reason why particularly the Kolkata port and airport, which is the gateway to the entire eastern and north-eastern states of the country, should be excluded from the zone of consideration as far as imports are concerned, while the other regions of the country will be getting benefits of such imports. As such, the introduction of the amendment by way of the impugned Notification is not a policy decision but an administrative decision which is palpably tainted with bias and designed to hit the economy of the Eastern and North-Eastern zones of India, for reasons best known to the Central Government - he said notification fails the tests of reasonableness and public interest, as stipulated in Article 19(6) of the Constitution, thus hitting Article 19(1)(g) as well as Article 14 of the Constitution of India. Even the object and policy of the 1968 Act, as reflected in Section 36(1), by providing for safeguards in that regard, has been violated in spirit by the Notification-in-question, thereby taking the Notification, and the consequential amendment, beyond the purview of the powers of the Central Government as conferred by the Act itself. Hence, the Notification is also de hors the 1968 Act itself. The impugned Notification, being GSR 1588(E) dated December 22, 2017, is declared ultra vires the Constitution of India and the Insecticides Act, 1968 and as such is struck down. 2019 (12) TMI 1148 Bail application - carrying contraband goods of others in good faith - gold was inside the iron press - allegation against the applicant is that he was taken into custody by the officials of the customs at the Airport - his statement was recorded before the Customs Authority u/s 108 Customs Act - HELD THAT:- Considering the material available on record as well as that the applicant is in jail since 17.11.2018 and the trial has yet not commenced. Accordingly, without expressing any opinion on merit of the case, the Court is of the view that the applicant is entitled to be released on bail. Let the applicant Shambhu Chauhan involved in crime case under Sections 135 (1)(a)(i)(A)r/w 104, 110, 119, 123 Customs Act, relating to police station Airport Sarojani Nagar, District Lucknow be released on bail on his furnishing a personal bond alongwith proper photo identity proof with two reliable sureties each in the like amount to the satisfaction of the court concerned subject to conditions imposed. 2019 (12) TMI 1147 Time limitation to frame assessment - finalization of provisionally assessed Bills of Entry, beyond a period of five years - Power of the Revenue to frame final assessment after the expiry of 5 years from the date of Bill of Entry - Section 18 of the Customs Act, 1962 - Valuation of imported goods - zinc skimming - HELD THAT:- This Court in case of M/S GUPTA SMELTER PRIVATE LIMITED VERSUS UNION OF INDIA AND ANOTHER [ 2018 (11) TMI 502 - PUNJAB AND HARYANA HIGH COURT] after noticing all the arguments of Respondents and relying upon judgment of this Court in the case of M/S GPI TEXTILES LIMITED VERSUS UNION OF INDIA AND OTHERS [ 2018 (9) TMI 25 - PUNJAB HARYANA HIGH COURT] has held that final assessment under Section 18 of Customs Act, 1962 cannot be made after the expiry of five years from the date of bill of entry. Admittedly, in the present case Bills of Entry were filed 7-8 years back from the date of impugned notice(s) and neither there was any petition of petitioners pending before Competent Court nor was any stay of any court, thus there was no reason to withhold framing of final assessment. The Bills of Entry in question are having no concern with order passed by said order of Tribunal. Interestingly, the respondent did not raise this plea while earlier matter of petitioner company was adjudicated on identical issue by this Court, even though at that point of time also the position was same. The respondent-Department has taken this frivolous plea just to conceal their negligence/ incompetency and mislead this Court, which cannot be appreciated. Hence the said plea is rejected. The impugned notices for framing final assessment of provisional assessment are hereby quashed - petition allowed. 2019 (12) TMI 1146 DEPB benefit - benefit obtained on the basis of forged documents - illegal imports - whether liability of duty can be fastened on the appellant when appellant is a bona fide purchaser of DEPB scrips which was found latter to be forged one or not? HELD THAT:- The said issue has been decided by the Hon'ble High Court of Punjab and Haryana in the case of Commissioner of Customs, Amritsar v. Vallabh Design Products [ 2007 (4) TMI 274 - PUNJAB HARYANA HIGH COURT ] and extended the benefit of DEPB scrips. The said order has been affirmed by the Hon ble apex Court reported in [ 2017 (1) TMI 402 - SC ORDER ]. The liability of duty cannot be fastened on the appellant being a bona fide purchaser of DEPB scrips - appeal allowed - decided in favor of appellant. 2019 (12) TMI 1145 Reduction in quantum of fine and penalty - import of restricted item - old used Multifunction Digital Print and copying machines (MFDs) with standard accessories - HELD THAT:- A similar issue came up before the Hon'ble High Court of Kerala in COMMISSIONER OF CUSTOMS VERSUS NAVPAD ENTERPRISES [ 2009 (6) TMI 696 - KERALA HIGH COURT] wherein, in similar circumstances, the goods were allowed to be cleared for home consumption subject to payment of fine of 10% and 5% penalty of the enhanced value of the goods. The redemption fine reduced to 10% of the enhanced value of the imported goods and penalty is reduced to 5% of the enhanced value of the imported goods - appeal allowed. 2019 (12) TMI 1131 Provisional release of seized goods - Fortified Refined Palm Olein Oil - case made out by the Customs Authorities is that the order was obtained by suppression of material facts that were very much relevant to the case - time limitation - 2nd Proviso to Section 110(2) of Customs Act - HELD THAT:- There is a clear case of suppression of material facts by the petitioner. In the light of the same, the order passed is hereby recalled. The petitioner is further saddled with costs of ₹ 50,000/- for having obtained the order from this Court by the above suppression of material facts. It is trite law that when a petitioner approaches the special jurisdiction of this Court seeking a Writ of Mandamus, the Court expects that the petitioner has come with clean hands and relying on the principle of uberrima fides, the Court passes orders at an interim stage. On coming to light of the suppression, it is the duty of the Court to recall its order and also impose costs upon the petitioner for such an act. Application for modification allowed. Securities / SEBI 2019 (12) TMI 1150 Order of the Whole Time Member ( WTM ) of SEBI restraining appellants from accessing the securities market directly or indirectly for a period of 10 years - direction to refund the investors/clients money with interest at the rate of 15% per annum from the date when the repayment became due till the date of actual payment - HELD THAT:- The appellant is a promoter and therefore by virtue of holding majority stake of more than 51% she is in control of Kassa. Therefore, we find no lacuna in the impugned order in holding the appellant guilty of the various provisions specified therein and the consequent directions issued thereunder. A common submission made by four of the appellants (excluding Manoj Kumar Agrawal) is that the impugned order does not crystallize the amount to be repaid/refunded to investors/clients and when the principal amount itself is not determined interest liability also becomes inconclusive and hence the order is unimplementable. It is also contended by them that the Demand Notice/Recovery Certificate dated December 18, 2018 has travelled beyond the impugned order. When the impugned order itself does not crystallize the amount due the Recovery Certificate for ₹ 80,97,62,785/- could not be issued by the Recovery Officer who is not an Adjudicating Authority. Further the Recovery Officer does not tell what is the amount to be adjusted in coordination with the NSE and BSE as directed in the impugned order. We find some merit in these submissions; it is not clear from the Recovery Certificate how the amount has been arrived at; what is the interest liability; whether payments made to various parties by NSE and BSE have been taken into account etc. In the light of the above, while upholding the impugned order on merit we remit the matter to SEBI to specifically decide the following issues: (i) The Recovery Officer shall crystallize the exact amount of liability for refund/repayment to investors/clients and issue a revised certificate. (ii) The WTM shall reconsider the period of restraint imposed on Manoj Kumar Agrawal, (appellant in Appeal No. 346 of 2017). (iii) The WTM shall consider the request of Manoj Kumar Agrawal for liquidation of his mutual funds units. The appropriate authority shall pass fresh order(s) on the above issues within a period of three months from the date of the receipt of this order after giving an opportunity of hearing to the appellant(s). 2019 (12) TMI 1144 Legality and veracity of the order passed by Forward Markets Commission which has now merged with the Securities and Exchange Board of India ('SEBI' ) - Appellant no. 1 challenged the show cause notice before the Gujarat High Court contending that no show cause notice was provided nor an opportunity of hearing was given - HELD THAT:- Admittedly the show cause notice was issued on June 21, 2011 which was received by appellant no. 2 shortly thereafter. The documents in part were only supplied on July 5, 2011. Accordingly, the appellant no. 2 cannot be faulted for the adjournment made on July 4, 2011. According to the appellant voluminous documents running into thousands of pages were provided and many documents were not provided for which further request was made which was rejected by the respondent. Request for further time to place their written submissions was granted till July 20, 2011. The request for adjournment on July 20, 2011 was rejected on the ground that the matter was being delayed. We find that only two weeks had elapsed from the date when the documents were supplied for filing a reply. Further request for adjournment was not unreasonable. Further, the period granted for filing reply was wholly inadequate considering the voluminous documents running into thousands of pages relied upon by the respondent. In the light of the aforesaid, we are of the opinion that no reasonable opportunity was given by the respondent no. 1 to the appellant no. 2 for the purpose of filing objection/reply to the show cause notice. The request on behalf of the appellant no. 2 to permit his advocate to place submissions on the issue of jurisdiction was not unreasonable and should not have been rejected. The finding that the appellant was avoiding to show cause on one pretext or the other is a finding based on surmises and conjectures. As per sequence of events stated aforesaid, it is clear that there has been no unreasonable request on the part of the appellant in seeking time to file their written submissions and for placing their arguments. In our opinion the rejection of the request of the appellant on July 20. 2011 for an adjournment, was violative of the principles of natural justice. Consequently, the impugned order against the appellant no. 2 cannot be sustained and is quashed. Since the impugned order has been quashed on account of violation of principles of natural justice it is not necessary for this Tribunal to go into the question of jurisdiction, namely, whether the FMC had jurisdiction to issue a show cause notice under the FCR Act. In the result, the appeal is allowed. The impugned order is quashed. The matter is remitted to respondent no. 1 and, if they are so advised, the respondent no. 1 can proceed afresh only after issuing the show cause notice to appellant no 1 and respondent no. 2. Since the appellant no. 2 has already been served with the show cause notice, no fresh show cause notice is thus required to be served. The respondents are further directed to grant adequate time to the appellants to file their objections/reply which will be considered by the respondent after giving an opportunity of hearing to the appellants. 2019 (12) TMI 1143 Order of delisting - denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate - No Adequate and reasonable opportunity of being heard provided - HELD THAT:- We find that the show cause notice was issued on 1st June, 2018. The first date of hearing before the delisting committee was fixed on 26th June, 2018. The request for adjournment was only made for 26th June, 2018. The denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate is against the settled principles of natural justice. Further, we find that it was the first date of hearing and there is no allegation that undue adjournment was sought by the appellant. Adequate and reasonable opportunity of being heard was not provided to the appellant. The impugned order is thus violative of the principles of natural justice and cannot be sustained. Two orders of the same date has been passed by the delisting committee - From a comparison of the two orders we find that certain more facts have been inserted in the second order of 26th June, 2018 primarily to cover the lacuna that was glaring and apparent in the first order dated 26th June, 2018. We are of the opinion that once a signed order dated 26th June, 2018 was sent by the delisting committee a second order of the same date could not have been passed without recalling the earlier order and without issuing notice to the parties which apparently in the instant case has not been done. The passing of the second order dated 26th June, 2018 incorporating further facts amounts to interpolation in the order. The impugned order of the delisting committee dated 26th June, 2018 as forwarded to the appellant by the letter dated 3rd July, 2018 and 23rd July, 2018 are quashed on payment of cost of ₹ 1 lakh. The matter is remitted to the delisting committee to decide the matter afresh after granting an opportunity of hearing to the appellant. The respondent will supply a copy of the show cause notice to the appellant and fix a date of hearing 2019 (12) TMI 1142 Decision of the Disciplinary Action Committee ( DAC ) of the National Stock Exchange of India Limited ( NSE ) - DAC has passed several directions including consolidated monetary penalty of ₹ 37.89 lakhs, suspension of membership and review by an independent auditor appointed by the Exchange to confirm that the appellant is complying with all the regulatory guidelines as well as adequacy of the internal controls in place - HELD THAT:- Although the DAC has found some deficiencies in the claim of the appellant that his relatives had excess margin in their accounts the issue is not conclusively settled. Accordingly, appellant deserves benefit of doubt. Moreover, it is an established principle in law that when there are two provisions in law the more beneficial provision should be applied wherever appropriate. This is particularly relevant in the context of the appellant who has been indefinitely suspended also for the various violations impugned in this appeal. Therefore, we reduce the amount of penalty imposed on wrong reporting from ₹ 15 lakhs to ₹ 1 lakh on the ground of proportionality. Regarding the penalty imposed on other violations we do not agree with the submissions of the appellant. As the documents clearly show that such violations have been committed, the appellants' hyper technical submissions do not have any merit; what is relevant is whether the appellant, based on the evidence available, has committed those violations and whether any satisfactory explanation has been provided either in mitigating the violation or in proving that the violations have not been committed. The facts and records speak volumes about the way in which the appellant has been running the business of broking and violating multiple provisions of bye laws and circulars issued by the respondent as well as by SEBI. Accordingly, we do not find any deficiency in reiterating the penalty imposed by the DAC when such violations have been noticed by the respondent. The appellant's attempt to prove that the CA Certificate provided to the respondent Exchange was in the correct proforma, since the same was accepted by the NSCCL does not stand to merit. We note that, many of the contents of those proformae are different. The fact that NSCCL has accepted the information in a particular proforma does not absolve the appellant from providing the necessary information in the proforma specified by the Exchange, though, some of the information/part of the format may be same/common. In any case, the appellant as a broker is bound to follow the bye laws/circulars/instructions of the respondent Exchange as the Exchange is the first tier regulator of brokers. While taking membership of the Exchange the appellant has also entered into an agreement to abide by the Exchange bye laws/circulars/rules etc. Even if the submission of the appellant is accepted that they received the proforma from the Exchange belatedly the same could have been furnished by the appellant at that point of time. The direction relating to suspension of the appellant contains a solution in itself. The said suspension of membership was only till receipt of confirmation from the appellant regarding its preparedness to run the operations as per regulatory guidelines and adequacy of the internal controls put in place and therefore providing a report from an independent auditor appointed by the Exchange to these effects. Therefore, it was open to the appellant to approach the respondent Exchange to seek such an audit after putting in place the required systems and internal controls. Appeal is partly allowed by reducing the total amount of penalty imposed on the appellant from ₹ 37.89 lakhs to ₹ 23.89 lakhs. Insolvency & Bankruptcy 2019 (12) TMI 1141 Initiation of CIRP - Permission for withdrawal of company petition - Parties settled the matter - Section 12A Read with Regulation 30A of IBBI (CIRP) Regulations, 2016 - HELD THAT:- Interim Resolution Professional stated that he has received full fee and cost of publication. The Committee of Creditors is not yet constituted. The Procedure prescribed under Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons), 2016 has been followed. This tribunal has power under Section 12A Read with Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 permitting for withdrawal of the application even after admission of Petition. Petition disposed of as Withdrawn under Section 12A of Insolvency and Bankruptcy Code, 2016. 2019 (12) TMI 1140 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - outstanding amount due and payable to applicant - HELD THAT:- The Corporate Debtor availed various financial facilities like working capital, term loan, current account etc with the applicant since 2012. The Corporate Debtor also executed various loan documents in favour of the applicant in July 2014, April, 2015 and March, 2017. However, the Corporate Debtor was unable to repay loan hence, the loan accounts were declared as non-performing asset on 13.03.2018. The loans are secured by way of hypothecation of movables and mortgage of immovable properties - The loan documents and acknowledgement of debt are filed along with the application. The loan account was declared as non-performing asset on 13.03.2018. Further, claim is also pending in the file of DRT Jabalpur. Hence, the debt is well within the period of limitation. The registered office of the Corporate Debtor is at Raipur, Chhattisgarh. Hence, this Adjudicating Authority has jurisdiction - The outstanding amount due and payable to applicant is sum of ₹ 10,26,54000/- as on 31.03.2018. The debt and default are proved beyond reasonable doubts. Hence, we are inclined to ADMIT this application. Application admitted - moratorium declared. 2019 (12) TMI 1139 Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - Default of debt - necessary records not produced by petitioner in support of his claim - time limitation - HELD THAT:- In column No.2 of Part IV, the applicant mentioned the date of default is on 31.07.2019 and the amount on which the applicant claimed as per the date of default is of ₹ 27,23,125.00/-. Part V, which relates to the particular of financial debt (Documents, Records and Evidence of Default) from serial No.l to 7, the applicant mentioned this fact that 'Not Applicable' and at serial No.8, which relates to the list of other documents, he mentioned that 'The Ledger account issued by the corporate debtor and the copy of bank passbook of the applicant showing the interest paid by the corporate debtor'. Whether the case of the applicant comes under the financial debt and the applicant is the financial creditor or not? - HELD THAT:- tt is very difficult to ascertain the amount, which has been shown in the ledger account in financial year 01.04.2018 to 28.02.2019, is in lieu of amount advanced by the applicant to the corporate debtor on 04.11.2010, 19.11.2010, 15.02.2011 and 08.11.2012. This document is also not sufficient to establish that the interest was paid prior to that period. Since, there is no other document to establish that on the amount shown in column 1 part IV, the interest was regularly being paid to the applicant by the corporate debtor, I am unable to place reliance upon this document. Time Limitation - HELD THAT:- The applicant has not produced any document, (same as referred in part V), therefore, it is admitted fact that the said debt of the applicant has not been acknowledged and so far as the document, which the applicant claimed, that the last interest has been paid in the financial year 2018-19, is the date of default is concerned, in my opinion, it is not liable to be accepted because there is no such agreement on the record to show that, when the applicant was entered into an agreement to the Corporate Debtor for providing financial assistance and what was the due date for repayment of the said amount in the absence of any specific period within which the amount is required to be refunded and in the absence of any acknowledgement of the debt after the expiry of three years, in my opinion, debt is barred by limitations. This Adjudicating Authority is of the considered view, that the present claim of the applicant in the absence of acknowledgement of debt is barred by Article 137 of Limitation Act - the present petition filed u/s 7 is not according to the provision of law and is not complete and it is also barred by limitation, thus this petition is not liable to be admitted. Petition dismissed. 2019 (12) TMI 1138 Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - debt due and payable - HELD THAT:- It is beyond doubt that the default has occurred with respect to the payment of the financial debt due to the Applicant. As per reply of the corporate debtor it is admitted that the occupation certificate was obtained in the year 2017 and when occupation certificate is received in 2017 how can the corporate debtor offer possession in 2016 to the applicant as claimed by it. The corporate debtor has not produced any completion certificate. Even if the defense for delay is considered in present case, the delay is more than three years and hence non-payment of assured returns and penalty by the corporate debtor as per MoU will amount to default. The intent of the code to protect the allottee would be completely defeated, if such a defense of the corporate debtor is to be accepted. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code. This Tribunal is satisfied that a default has occurred and the application under Section 7 is complete. The name of the IRP has been proposed and his/her consent in Form 2 has been duly filed. There are no disciplinary proceedings pending against the proposed Interim Resolution Professional. Application admitted - moratorium declared. 2019 (12) TMI 1137 CIRP proceedings - approval of resolution plan - HELD THAT:- As regards compliance of clause (b) of Section 30(2) of the Code, the Resolution Professional has certified that clauses 6.3 and 6.4 of the resolution plan provide for the payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under Section 53. - it is seen that clause (b) of sub-section (2) of Section 30 of the Code stands satisfied. It is pertinent to state here that Section 29A of the Code prescribes certain eligibility criteria and disqualifications for persons who submit a resolution plan. Resolution applicant has given adequate declaration and undertaking on their eligibility to submit the Resolution Plan. Resolution Professional has also confirmed that the Resolution Applicant M/s. Ajay Yadav Co. through its SVP Umaiza Infracon LLP has submitted affidavit in this regard and are eligible to submit resolution plan and does not fall under any of the category as mentioned in Section 29A of the Code - Regulation 36B(4A) of the CIRP Regulations requires that the Resolution Applicant shall provide a performance security. Resolution professional has certified that the Resolution Applicant has submitted Performance Guarantee of ₹ 44 Crores issued by AU Small Finance Bank Limited in compliance of Regulation 36B(4A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - we are satisfied that all the requirements of Section 30(2) are fulfilled and no provision of the law for the time being in force appears to have been contravened. The requirements as per the Code and regulations have been complied with. Moreover, the Resolution Plan has been unanimously approved by 100% voting share of the members of CoC and has been submitted in compliance of Section 30 of the Code for approval. In view of the aforesaid discussions and as no infirmity have been brought out upon screening of the Resolution Plan; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the Code 2019 (12) TMI 1121 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - default due and payable - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied with and after a conjoint reading of the aforesaid provisions along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete. The name of the IRP has been proposed by the petitioner and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional namely Ms. Maya Gupta and she is appointed as the Interim Resolution Professional - application admitted - moratorium declared. 2019 (12) TMI 1120 Maintainability of application - initiation of CIRP - whether in absence of any document applicant is able to establish that he is financial creditor and respondent is corporate debtor? - Section 7 of IBC,2016 - time limitation - HELD THAT:- It is admitted position of law that to initiate the proceedings under section 7 of IBC, it is not necessary to sent the notice upon the Corporate Debtor and that is the main distinction between the provision contained in Sections 7 and 9 of the IB code - the contention of applicants that the date of default is the date of notice sent by the applicants to the Corporate Debtor, cannot be accepted. If the date of notice is not treated the date of default, then according to the averments made in Part IV of the application, the last payment made by the applicant on 07.05.2016, whereas this application has been filed on 21.06.2019. Tine Limitation - HELD THAT:- As per the provision of Article 137 of Limitation Act, so far the recovery of money is concerned, the person is required to file the application within three years when the cause of action arises - Here the case in hand , the applicants has failed to show what is the date of cause of action or what is the date of actual default. Therefore, since the last amount claimed by the applicant was defaulted on 07.05.2016, therefore limitation runs from that day. Since this application has been filed on 21.06.2019, therefore, it is after the 3 years as provided under the law. So the present application is also barred by law of limitation. The applicant failed to produce any document to show that what was the agreed interest in-between the parties on the basis of which money was borrowed. Therefore, the case of the applicant, does not comes under Section 5(8)(a) of IB Code and also does not come either under (b) or (c) or (d) or (e) or (f) or (g) or (h) or (i) of Section 5 (8) of the I B Code - Therefore, the contention of the applicant that these payment shown in schedule Part IV of Form-1 comes under financial debt and The applicant comes under the definition of financial creditor in view of Section 5 (7) of the IB Code, cannot be accepted. The applicant failed to bring on record the default recorded with the information utility or such other record or evidence as maybe specified which is necessary to proceed for admitting the petition Under Section 7 of the l B Code - Application dismissed. 2019 (12) TMI 1119 Maintainability of application - initiation of CIRP - service of notice u/s 8 of IBC - corporate debtor has failed and neglected to make the payment to the Operational Creditor till date - present case has been filed on behalf of Operational Creditor against the Corporate Debtor U/s 9 of the I B Code and before filing the present petition, the Operational Creditor had sent the demand notice as required U/s 8 of the IBC - whether the notice sent U/s 8 of the IBC is deemed to be served or not? - HELD THAT:- It is a settled principle of law that there is a difference between the procedure for initiation of CIRP by the Financial Creditors U/s 7 of the IBC and the Operational Creditors U/s 9 of the IBC. So far as the Financial Creditor is concerned, as per Section 7 of the IBC, there is no need to deliver the notice before the initiation of CIRP and that has been decided by the Hon'ble Apex Court in Innoventive Industries Ltd. v. ICICI Bank [ 2017 (9) TMI 58 - SUPREME COURT ]. A mere plain reading of the provision shows that, in this provision like Section 8 of IBC, the word 'deliver the notice' is not mentioned, rather it is mentioned that 'the payee or the holder makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque', where in Section 8 of IBC, the word, 'deliver the notice upon unpaid operational creditor' is mentioned. There is a difference between these two Sections, Section 8 of TBC and Section 138(b) of the N.I. Act regarding the service of notice upon the person concern - The purpose to deliver the notice is to give an opportunity to the Corporate Debtor to raise a dispute or negotiate with the operational creditor and that was the intention of the legislatures, that is the reason the word 'delivery' has been given in place of 'sending or giving the notice upon the person concern'. The applicant had sent the demand notice only through the registered post, which was returned unserved and he has neither delivered it personally nor send the demand notice through electronic mail service to a whole time director or designated partner or key managerial personnel of the corporate debtor - the applicant has not complied the provision contained under Rule 5 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016, therefore, this Tribunal is of the considered view that the applicant has not delivered the demand notice as required U/s 8 of the IBC, which is the mandatory provision of law and so on this ground in the absence of delivery of demand notice as required U/s 8 of IBC, the present petition filed by the applicant/operational creditor is not complete and not maintainable and liable to be dismissed. Petition dismissed. FEMA 2019 (12) TMI 1136 Condonation of delay in filing applications for substitution of Legal Heirs (LRs) of the deceased appellant - common application for substitutions of LRs has been filed on 01.11.2018 i.e. around 370 days from the date of death of the deceased appellant - HELD THAT:- There is a huge delay of 370 days in filing the application. It is not the case of the proposed appellants that they are not aware of the pendency of the appeals before Appellate Tribunal, it is also not the case that the proposed LRs were not running the Company or that the Company was closed after the sad demise of deceased appellant for one year. In the present case, there is not only a huge delay but also there is no sufficient explanation as to why there is a delay of 370 days in filing the application. In the present case, there is not only a huge delay but also there is no sufficient explanation as to why there is a delay of 370 days in filing the application. No doubt while dealing with the application for condonation of delay a liberal approach is to be made. While considering the application liberally it is also to be considered the length of delay, the bonafideness on the part of the appellants, non-deliberate action of the applicants, merit of the case and also the prejudice to be caused to the nonapplicants in favour of whom certain benefit has accrued. Heard and considered the application for the condonation of delay in filing the applications for substitutions of LRs, the reply filed by the respondent, the oral submissions and the materials available on record, if the application is not allowed then the merit of the appeals cannot be considered and they would be bound to pay the penalty imposed by the Adjudicating Authority. No doubt the allowing of the application would prejudice the benefits accrued to the respondent but that can be compensated by imposing cost of ₹ 25,000/- (Rupees Twenty Five Thousand) in each appeal to be paid by the proposed appellants to the respondent within six weeks from the date of this order. Application for condonation of delay in filing the applications for substitutions of LRs are allowed subject to payment of ₹ 25,000/- (Rupees Twenty Five Thousand)in each appeals to be paid within six weeks of this order. Service Tax 2019 (12) TMI 1130 Adjustment to the excess payment of service tax with the short paid tax - Rule 6(4A) of the Service Tax Rules, 1994 - HELD THAT:- without specifically mentioning or referring to the relevant conditions for granting the benefit of adjustment in respect of the excess payment, the Tribunal simply observed that failure to comply with certain procedural conditions cannot be a ground to deny substantial benefit and that in principle, there can be no objection to the adjustment of service tax short paid and excess paid. But here again, it is to be noted that the said finding and reasoning were given by the Tribunal with reference to some chart prepared by the Appellant there, who is Respondent herein, as to the remittances revealing the excess payment. It is also evident from paragraph-3 of the order that, such a chart was not forming part of the proceedings before the adjudicating authority and that the said chart prepared on behalf of the assessee was produced by the learned counsel for the Respondent before the Tribunal with reference to the period of dispute, the payment affected to the tune of ₹ 1 crore 77 lacs and such other aspects. Since the remedy provided against the order of the Tribunal is only under limited circumstances as envisaged under Section 35G of the Central Excise Act, 1944, it was quite necessary for the Tribunal to have considered and discussed the relevant provisions of law, to sustain the order, which unfortunately is lacking in the instant case. More so, despite completion of service of notice to the Respondent, who was Appellant before the Tribunal has not chosen to appear before this Court, to put forth their version with regard to the sequence of events, the facts and figures and the relevant provisions of law. The substantial question of law suggested by the learned counsel for the Appellant-Revenue and raised, as taken note of by this Court in is answered in favour of the Revenue - Appeal allowed - decided in favor of Revenue. 2019 (12) TMI 1129 Service of garnishee notice u/s 87 - Section 73 of the Finance Act, 1994 - case of assessee is that without issuing such show-cause notice under Section 73, impugned garnishee notices could not have been issued under Section 87 (b) of the Finance Act, 1994 - Non-payment of service tax - permission to allow payment of service tax dues in installments - HELD THAT:- A reading of Section 73, would go to show that in the circumstances enumerated in Sub-Section (1) thereof the competent authority may within 18 months (and since 01.04.2017, 30 months), serve a show cause notice upon the assessee as to why he should not pay the amount specified in the notice. However, in a case of fraud the period for issuance of such notice would stand extended to 5 years. After service of show cause notice, if any representation is made by the assessee the same shall be considered and thereafter, the service tax dues may be determined. Further, in a case of self-assessment, the quantum of service tax dues along with interest shall be recovered under Section 87 - A conjoint reading of Sections 73 and 87 of the Finance Act, 1994 would go to show that in case of non-payment of service tax dues covered by the situations enumerated, the competent authority is empowered to issue show cause notice within the time frame provided for payment of service tax dues specified in the notice, the period of notice would stand extended in a case of fraud. The petitioner has not disputed the quantum of service tax dues quantified in the garnishee notices. Petitioner has only highlighted the need and necessity to allow it to pay the dues in installments. Therefore, in a case where the assessee admits to the service tax dues as specified in the show cause notice or in the garnishee notice, no adjudication would be necessary. Demand of Interest - HELD THAT:- Section 75 of the Finance Act, 1994, deals with levy of interest on delayed payment of service tax. It provides for payment of simple interest at such rate not below 10 % and not exceeding 36% per annum for the period of delay. It is thus clear that the interest that may be imposed in case of delayed payment of service tax is not a fixed percentage but ranges between 10% to 36% indicating an element of flexibility - In the instant case, what is seen is that respondent No. 2 has imposed the maximum percentage of interest i.e., 36 % without any exercise of discretion which indicates non-application of mind. Thus, the exercise is arbitrary. Payment of service tax dues in installments - circular dated 28.02.2015 - HELD THAT:- As per the said circular, Commissioners have been given the discretion for granting sanction to pay arrears in installments upto a maximum of 24 monthly installments and Chief Commissioners more than 24 and upto a maximum of 36 monthly installments. It has been emphasized that approval to pay in installments and the number of installments should be fixed in such a way so that an appropriate balance is maintained between recovery of arrears and survival of business. - Allowed to paid in 48 equated monthly installments Petition disposed off. 2019 (12) TMI 1127 CENVAT credit - exempt service or not - compensation for performance of a separate service - endowment policies - ULIP scheme policy - applicability of rule 6 of CENVAT Credit Rules, 2004 - exclusions from assessment for the different periods in the two categories of policies - while Revenue asserts these to be covered by the inclusive component of exempted services and, thereby, rendering rule 6 of CENVAT Credit Rules, 2004 to be applicable, it is the primary submission of the appellant that such vivisection of a composite consideration for a particular service is not the intent of the said Rules. HELD THAT:- It would not be out of place to peruse the inclusive component of the definition of exempted service which pertains to services that are not leviable to tax under section 66 of Finance Act, 1994. The most proximate of services that are subject to the levy are the entries in section 65(105) of Finance Act, 1994 as stated therein and it is only those which are exempted that can be held to be covered by the said definition which, having been described as the principal component, does not require restatement. It is obvious the legislature had not intended superfluity in incorporating the services that are not leviable to tax in the definition. There is no definition of service in Finance Act, 1994 and, therefore, forecloses an ascription that is non-existent. Consideration, though essential to determination of value of taxable service, is not the sole indicator of existence of a service. The presumption against superfluity in interpretation of statutes binds us to search for, and determine, the nature of inclusion. As we are dealing with the schema of mechanism for avoiding the cascading effect of taxation upon the final customer who bears the burden of indirect tax levy, it can be posted that there is a recipient of service with whom the buck stops. Such stoppage could be owing to lack of further commercial engagement of the service or because of the non-existence of such service within the jurisdiction to tax. Tax laws have nothing to do with the last consumer in the market chain. It would, therefore, leave us with no option but to determine that legislative intent of services that are not leviable to tax under section 66 of Finance Act, 1994 to be those to which the Union cannot extend its taxing arm. Not unnaturally, such service, unacknowledgeable in the tax jurisdiction, fails the test of utilization in rendering of further service. These, therefore, cannot be input services and the inclusive portion of exempted services must be construed as referring to such and not to services that, though not yet, may still be subject to levy. The proposition of Revenue that subsequent taxability imprints upon it the description of non-leviable under section 66 of Finance Act, 1994 fails and, with it, the support for sustaining the demand in the impugned order. The detriments also fail. Appeal allowed - decided in favor of appellant. 2019 (12) TMI 1124 Refund of service tax - rejection on the ground that the appellants have not obtained registration - Rule 5 CENVAT Credit Rules, 2004, read with N/N. 27/2002 - HELD THAT:- The issue of eligibility of Cenvat refund has been decided in favour of the Appellant by this Tribunal, this bench and other benches. Though the learned AR has cited a few cases decided by the co-ordinate bench at Delhi we find that Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT] has decided the issue in favour of the Appellant no contra judgement of any other high court has been placed before me. Therefore the issue is settled in favour of the appellants. Refund claim - input services - catering services - general insurance services - rent-a-cab services - HELD THAT:- The services are very much required for continuation of the appellants as a BPO and nothing has been brought on record to say that this have been availed for any other purposes than their business activities - the said services are also eligible for Cenvat credit and consequently for the refund. Appeal allowed - decided in favor of appellant. Central Excise 2019 (12) TMI 1126 Valuation - related party transaction or not - Mutuality of interest - Section 4(3)(b)(iv) of Central Excise Act, 1944 - price at which the P P medicines sold by them to sub-distributor be considered as the transaction value for the purpose of determination of duty or not? - HELD THAT:- It is not in dispute that the Appellants are manufacturing P P medicaments on job work basis for M/s Adelphi Pharmaceuticals and M/s Heilen Lab under loan licence agreement. It is also not in dispute that the entire quantity of the goods manufactured on job work basis are sold to the Appellant being appointed as sole selling Agent of M/s Adelphi Pharmaceuticals and M/s Heilen Lab at a price 30% less than the price at which the Appellant M/s Sigma Laboratories sold to the sub-distributors. It is the responsibility of the Appellant M/s Sigma Laboratories, to arrive at and fix the MRP of the P P medicines bearing the brand name of M/s Adelphi Pharmaceuticals and M/s Heilen Lab - Also, it is not in dispute that majority share holding in the Appellant s company is held by Shri Dilip S. Coulagi in association with his family members and only minor portion is held by the Financial Institution i.e.IDBI. In the present case, the mutuality of interest between the Appellant M/s Sigma Laboratories and other two proprietary-ship concerns viz. Adelphi Pharmaceuticals and M/s Heilen Laboratories is apparent inasmuch as the proprietors of these two companies are also the Managing Director and Director of the Appellant company, the family as a whole control the shareholding of the Appellant Company. Besides, the important factor to note is that the P P medicine manufactured on job work basis using the brand names of loan licensors viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories are sold to the Appellant at a price which is fixed by the Appellantafter extending 30% discount from the said price. The said discounted price is considered in arriving at the transaction value between the Appellant and the loan licensors viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories. This itself shows that the quantum of profit and benefit had been mutually shared by the two companies viz. M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories with that of the Appellant. Therefore, the price at which the Appellant sold the manufactured goods to the subdistributor be considered as a transaction value as per Sec.4(1)(b) of CEA,1944 read with Rule 9 of The Central Excise Valuation Rules,2000. Therefore, the learned Commissioner has rightly confirmed the differential duty short paid by the Appellant. Extended period of limitation - Penalty - HELD THAT:- The Appellant could not show that the agreement between them and M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories had been disclosed to the Department indicating that the fixation of price for the sellers M/s Adelphi Pharmaceuticals and M/s Heilen Laboratories was within the domain of the Appellant. Thus, invoking of extended period in confirming duty is justified - the penalty imposed on the Managing Director is reduced to ₹ 25,000/-. Appeal allowed in part. 2019 (12) TMI 1125 CENVAT Credit - byproduct/ waste product - Bagasse/Pressmud - reversal of credit under Rule 6(3)(i) of the CENVAT Credit Rules, 2004 - HELD THAT:- The issue of applicability of Rule 6(1) of CENVAT Credit Rules, 2004 to bagasse/pressmud which emerges during the course of manufacture of sugar and molasses, has been settled taking note of the judgment of Hon'ble Supreme Court in the case of Union of India Vs. DSCL Sugar Ltd. UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] in favour of the assessee. The principle laid down in DSCL Sugar Limited s case, has been accepted by the Department by issuance of Circular No. 1027/15/2016-CX dated 25.04.2016. Appeal allowed - decided in favor of appellant. 2019 (12) TMI 1123 CENVAT Credit - exempt goods or not - manufacture and clearance of insulated wires and cables to SEZ Developers - applicability of Rule 6 of the Cenvat Credit Rules, 2004 - HELD THAT:- This Tribunal in THE COMMISSIONER OF CUSTOMS CENTRAL EXCISE, HYDERABAD VERSUS M/S. SUJANA METAL PRODUCTS LTD. [ 2015 (3) TMI 781 - ANDHRA PRADESH HIGH COURT] has held that Since both during the period prior to and w.e.f. 10-2-2006, the supplies made to SEZ are held to be export , the application of provisions of Cenvat Credit Rules for recovery of amounts on goods supplied to SEZ units in terms of Rule 6 of CCR, 2002/CCR, 2004 does not arise. Appeal allowed - decided in favor of appellant. 2019 (12) TMI 1122 Reversal of CENVAT Credit - process amounting to manufacture or not - activity of cutting and slitting of Brass Strips, Phosphor Bronze Strips and Copper Strips - HELD THAT:- The appellant is engaged in the activity of cutting and slitting of Brass Strips, Phosphor Bronze Strips and Copper Strips falling under Chapter Sub-heading 7409 2100, 7409 1100 and 7409 3100 of the First Schedule of the Central Excise Tariff Act (CETA), 1985. Also, while procuring the raw materials, appellant has paid the full amount inclusive of excise duty and thereafter availed CENVAT credit of the duty paid on inputs and after converting the coils into strips by undertaking portion of slitting and cutting, clearing the final goods by utilizing the CENVAT credit availed on inputs as also in cash. The appellant had a bona fide belief that their activity amounts to manufacture and they have taken the registration by disclosing the complete facts and has been paying duty from time to time on clearance of final products which is also not disputed by the department - Appellants have also produced ER-1 returns for the disputed period wherein the details of CENVAT credit availed in respect of inputs and the duty paid on the final products are clearly shown - Further, in total, the appellants have availed CENVAT credit to the tune of ₹ 90,89,714/- during the relevant period but had paid an amount of ₹ 97,41,477/- which is more than the credit availed by them. This issue is squarely covered by the decision in ASHOK ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [ 2007 (11) TMI 67 - CESTAT, CHENNAI] where it was held that even if duty wasn t payable on final good (there being no manufacture), there was no question of recovery of credit, having been utilized towards payment of duty. Appeal allowed - decided in favor of appellant. Wealth tax 2019 (12) TMI 1135 Wealth tax assessment - Period of limitation - Order was passed beyond period of one year as required u/s 17A(2) of the WT Act, and consequently the penalty proceedings initiated u/s 18(1)(c) - ITAT which has, confirmed the order made by the Commissioner (Appeals), remanding the matter to the Wealth Tax Officer for re-examination and re-assessment after providing adequate opportunity of being heard to the appellant - HELD THAT:- In the impugned order, we are of the opinion that, the observation made therein that explanation (3) to Section 18 of the Wealth Tax Act is applicable, is really a prima facie observation. This is clear from the fact that both the Commissioner (Appeals) as well as the ITAT have directed the Wealth Tax Officer to re-examine the matter, after providing adequate opportunity of being heard to the appellant herein. ITAT has also observed that the issues raised in the matter require investigation of facts. From all this, it is quite clear that the observations made in the impugned orders of the Commissioner (Appeals) as well as the ITAT, are prima facie observations and such observations, are made only for the purpose of remanding the matter to the Wealth Tax Officer for fresh consideration. No reason to interfere with the impugned orders and revoke the remand order by the Commissioner (Appeals) and by the ITAT. The Wealth Tax Officer will have to investigate into the factual aspect and will have to reexamine the matter and thereafter, conclude whether the period of limitation, as prescribed under Section 17 of the Wealth Tax, is indeed attracted in this case, in the light of explanation 3 to Section 18 of the Wealth Tax Act. The issue as to whether, explanation 3 to Section 18 of the Wealth Tax Act, is attracted or not, is a mixed question of law and facts and therefore, the Wealth Tax Officer will have to consider this issue as well. Needless to mention that the Wealth Tax Officer will have to afford an opportunity of hearing before deciding the matter in pursuance of the remand. The substantial questions of law as framed, therefore, cannot be answered in favour of the appellant, at this stage, as raised. 2019 (12) TMI 1134 Penalty u/s 18(1)(c) of Wealth tax Act - Defective notice - HELD THAT:- In the present case, section 18(1)(c) of the Wealth Tax Act is para materia with section 271(1)(c) of the Income Tax Act. Being so, the facts for imposing penalty u/s. 271(1)(c) of the Act will be applicable to the facts of the present case. As seen from the above notice for imposing penalty u/s. 18(1)(c) of the Wealth Tax Act, the Assessing Officer has not struck out the irrelevant portion of the notice. In other words he has not specified whether he is levying penalty for concealment of particulars of income or furnishing of inaccurate particulars of income. As held in the case of CIT Anr. vs. M/s. SSA s Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] that the notice issued by the Assessing Officer u/s. 274 r.w.s 271(1)(c) is to be bad in law as it did not specify which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. This view was confirmed by the Supreme Court in the same case, i.e., CIT Anr. vs. M/s. SSA s Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] We are inclined to hold that the penalty proceedings u/s.18(1)(c) of the Wealth Tax Act initiated by the AO is void ab initio and allow the appeals of the assessee. Indian Laws 2019 (12) TMI 1133 Seizure of wildlife materials - 3 pieces of tiger skin - 13.4 kgs. of elephant tusks - 1 piece of baby rhino horn - 290 pieces of tiger nail - it was alleged by the officer of the DRI that the present petitioner failed to produce any valid documents for legal possession/acquisition/harboring of the goods so recovered - HELD THAT:- The deposition of the 5 witnesses relied upon by the prosecution, the documents so relied upon by the prosecution which were admitted in evidence as also the findings of the Ld. Courts below. While assessing the evidence of the prosecution witnesses, I do not find any material except the oral deposition of the witnesses particularly PW1 from where it would be evident that the said witness in his official capacity led the DRI officials for conducting search and seizure at the above mentioned said premises. No documents relating to search authorization or movement register reflecting that the DRI officers on the basis of information they received had been to the residence of the present petitioner, are available. The prosecution in order to prove its case was duty bound to connect the materials which they claimed to have received from the DRI Authorities. No document in evidence has been produced regarding the materials and/or the documents being seized/reseized by the complainant of the instant case being the Authorized Ranger attached to the office of the Conservator of Forest, Wildlife Circle from the DRI Authorities. The connecting document and/or transfer of document being absent failed to establish any official change of custody of the seized articles which were the subject matter of the case. On the evidence so relied upon by the prosecution it is not a case of mere irregularity but raises a grave suspicion regarding the manner and mode of search and seizure alleged to be conducted at the said premises and it would not be fit and proper to arrive at a finding of guilt on the basis of the search and seizure. The petitioner is acquitted from the charges under Section 40(2) of the Wildlife (Protection) Act, 1972 read with Section 51(1-A) of the said Act. The petitioner is on bail, he shall therefore be discharged from the bail bonds - Application allowed. 2019 (12) TMI 1132 Grant of leave to appeal - Service of notice - Dishonor of cheque - rebuttal of presumption - Section 138 read with Section 141 of the NI Act - HELD THAT:- There has been lapse on the part of the petitioner in not issuing any notice to the signatories of the cheques that had been dishonoured or to the persons who are in charge of the affairs of respondent no.1 company, namely, its directors. This Court finds no reason to interfere with the impugned judgment - The petition seeking leave to appeal is, accordingly, dismissed.
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