TMI Tax Updates - e-Newsletter dated: February 10, 2020 - with Direct Tax, Indirect Tax and GST Updates and Updates on FTP, FEMA, IBC & Corporate Laws etc. published on TMI with Latest Case Laws

Pricing Login

Tax Management India. Com
Law and Practice : Digital eBook
Research is most exciting & rewarding

For Sales / Support:
WhatsApp

9911796707

Case Laws Acts Notifications Circulars Classification Forms Manuals Articles News D. Forum Highlights Notes

TMI - e-Newsletter TaxTMI Excess Input Tax Credit penalty appeal dismissed... TaxTMI Income Tax Assessment Notice Issued by... TaxTMI Excessive delay in issuing show cause notice &... TaxTMI Rectification: Show Cause Notice quashed for period... TaxTMI Investor locked into long-term capital gains bonds;... TaxTMI Funds received by assessee overlooked during... TaxTMI Cash deposits explained through VAT returns, cash... TaxTMI Customs duty dispute: Imported goods classified as... TaxTMI Appointment of adjudicator for corporate penalties... TaxTMI Undisclosed investments, agricultural land... TaxTMI Taxpayer's victory: AO's order upheld, PCIT's... TaxTMI Non-resident Singapore firm's software licensing... TaxTMI Excessive transport expenses deduction and TDS... TaxTMI Importer imports "Ground Colemanite (B2O3 40%)... TaxTMI Bank penalized for delayed reporting of high-value... TaxTMI Latest Case-Laws TaxTMI Latest Notifications + Circulars TaxTMI GST Council Decisions TaxTMI

Follow us:


Tax Updates - TMI e-Newsletters

Home e-Newsletters Index Year 2020 February Day 10 - Monday ← Older Newer →
TMI e-Newsletters FAQ
You need to Subscribe a package.
Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter February 10, 2020 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles Whether input tax credit available on inward supply of motor vehicles which are used for demonstration purpose in the course of business of supply of motor vehicle HOW TO SELECT CASES IN SCRUTINY AND NEED FOR THE SAME Highlights / Catch Notes GST GST registration of the petitioners blocked - failure to pay GST for long period - It is for the petitioners to take necessary steps to ensure that due tax amounts are paid, so that, the default in that regard is not for more than a period of two months as envisaged in clause (b) of Rule 138E(1) of the Rules. Visit to Get Source Release of detained goods alongwith the vehicle - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. - It is now for the applicant to make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged. Visit to Get Source Detention/ seizure of goods alongwith vehicle - goods already released - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. Visit to Get Source Income Tax Exemption u/s 11 - cancellation of registration - Merely saying that the activities of the respondent is hit by the proviso to Section 2(15) of the Act, would not lead to automatic cancellation of registration as that is not a ground provided under Section 12AA(3) of the Act for cancellation of registration. Visit to Get Source Exemption u/s 11 - cancellation of registration - Merely saying that the activities of the respondent is hit by the proviso to Section 2(15) of the Act, would not lead to automatic cancellation of registration as that is not a ground provided under Section 12AA(3) of the Act for cancellation of registration. Visit to Get Source Disallowance of capital loss on account of capital reduction scheme - Extinguishment of rights in shares - definition of ‘transfer’ u/s 2(47) - Loss arising to the assessee for cancellation of its shares in CHIPL pursuant to reduction of capital should be allowed as long term capital loss eligible to be carried forward to subsequent years. Visit to Get Source Disallowance of deduction u/s. 35ABB(2) - expenses on surrender of National Long Distance (NLD) license - the assessee was engaged in the business of providing telecom services and the losses incurred on account of surrender of NLD license would be in the normal course of business Visit to Get Source Invalid approval obtained u/s 153D for assessment u/s 153A - Approval from Addl. CIT of the Range - So, when mandatory approval u/s 153D is not there, entire assessment made by the AO u/s 153A/143(3) is not sustainable as it is no approval in the eyes of law Visit to Get Source Disallowance of interest - assessee had taken unsecured loans from the family members of the partners in the earlier years and paying interest @ 15% on the same - Fresh borrowing during the year from HDFC bank has been utilized for advancing to the partners and the family members and there is thus a direct nexus - it would have been appropriate to compare the related party transaction with an independent third party transaction carrying the same qualitative unsecured loan parameters. Visit to Get Source Treatment of assessee as trust or AOP - the observations of taxability of trust and income being offered to tax in the hands of the beneficiary are all inter-dependent based on the outcome of the status of the assessee which we have already held to be taxed only in the status of trust and not as AOP. Visit to Get Source Reopening of assessment u/s 147 - as no addition has been made on the reasons for which the assessment of the assessee is reopened, the other it issuance made by the learned assessing officer cannot be sustained Visit to Get Source Computation of Exemption u/s 10(13A) for House Rent Allowance (HRA) - ‘performance bonus’ does not form part of ‘salary’ as defined in clause (h) of Rule 2A for the purposes of Section 10(13A) of the Income tax Act, 1961 Visit to Get Source In view of the second proviso to Section 153A(1), once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation Visit to Get Source Customs Validity of assessment order - order for auditing u/s 17(6) by the proper officer - enhancement of value of imported goods - Commissioner (Appeal) could not have directed such an audit in terms of sub section (6) because audit as contemplated is the internal function of the revenue, for purpose of safeguarding the revenue, in case where re-assessment has been done by way of speaking order or otherwise Visit to Get Source Service Tax Business Support services - activity of purchasing space on ocean going vessels from shipping companies and selling the same to various exporters for export of goods - any amount charged for space on ocean going vessels, over and above the purchase price is not liable to service tax Visit to Get Source The work relating to road construction, even in the premises of NTPC, which may be termed as private road is exempt service as per the definition of works contract service which specifically exempts ‘road service’. There is no distinction made out by the legislature with respect to public road and private road. Visit to Get Source Reduction in the quantum of penalty imposed u/s 78 - Unless the penalty under Section 78 of the Act itself is leviable on the Assessee, there is no question of any reduction of the quantum of penalty to 25% thereof by the learned Tribunal in its discretion. What is not at all leviable, cannot be reduced. Visit to Get Source Central Excise Classification of goods - Nimbooz - fruit pulp or fruit juice based drink - packaged nimbu pani - the classification declared by the appellant under the Chapter sub-heading 2202 9020 is held to be correct and hence the Revenue is not justified in reclassifying ‘’Nimbooz’’ as ‘’Lemonade’’ under Chapter sub-Heading 2202 1020. Visit to Get Source CENVAT credit - duty paying invoices - hand written serial numbers - The invoice should bear serial numbers, however, there is no mention in the rules that the invoice should bear Pre-printed Serial Numbers. Therefore, the invoice should be “Serially Numbered” irrespective, whether, it is hand written or Pre-printed. Visit to Get Source Recovery and demand of duty from the purchaser of goods in auction - auction by the official liquidator of the manufacturing company - assessee is neither a manufacturer of excisable goods nor it has used purchased goods for manufacturing of other goods, no duty can be demanded under Section 11A(1) of the Act, 1994. Visit to Get Source VAT Input tax credit - levy of purchase tax - there is no scope for ambiguity. Input tax credit can be adjusted only for payment of tax under Section 3(2) and not under Section 12(1) of the Act. Purchase tax payable under Section 12(1) of the Act has to be paid in cash. Visit to Get Source Withholding the refund of excess amount - In the absence of any assessment for the year 2011-2012 and more particularly, when the time period for completion of assessment is over as prescribed under the provisions of Section 34(9) and 34(10) of the Act, 2003, the respondents are not entitled to withhold the refund. Visit to Get Source Attachment of Bank Accounts - The action on the part of the respondent no.4 in attaching the bank accounts of the writ-applicant pending the appeals before the appellate authority is not justified. Visit to Get Source Case Laws: GST 2020 (2) TMI 343 Reopening of portal for uploading of returns - assessees are unable to upload their returns both GSTR-9 and GSTR-9C - HELD THAT:- An interim order needs to be passed in light of the fact that the GST portal of the Govt. of India has not been effectively functioning and clearly there appears to be a physical limit, to which extent returns/forms can be uploaded on any one day (apart from admitted intermittent technical shutdowns) - We are prima facie satisfied that even if an assessees is ready and willing to comply with the statutory duty, so far as filing of returns are concerned, the website appears to be having technical bottlenecks, which appears to limit the opportunity of an assessee from uploading the forms. The petitioner Association and the assessee, for whom they represent, may keep uploading their returns at the earliest possible and we direct that no late fee shall be charged till 12th of February, 2020 for uploading. The respondents are directed to enable compliance of such uploading by making necessary/consequential corrections on its official portal. List this matter on 12.02.2020. 2020 (2) TMI 342 GST registration of the petitioners blocked - failure to pay GST for long period - permission to purchase goods and other articles with their GST registration - HELD THAT:- It is the admitted case of the petitioners that they have not paid the tax dues pursuant to the assessment orders rendered in this case for the respective assessment years and that petitioners would contend that petitioners will be prosecuting statutory appeals to impugn the legality and correctness of the said assessment orders and that in the meanwhile, due to default in such payments, respondents have blocked the GST registration itself. It is for the petitioners to take necessary steps to ensure that due tax amounts are paid, so that, the default in that regard is not for more than a period of two months as envisaged in clause (b) of Rule 138E(1) of the Rules. In case the petitioners wish to prosecute statutory appeals to impugn the assessment orders for the years concerned, it is for the petitioners to avail such remedies, in accordance with law. Petition disposed off. 2020 (2) TMI 341 Release of detained goods alongwith the vehicle - validity of order of confiscation u/s 130 - HELD THAT:- The writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. It is now for the applicant to make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged. Application disposed off. 2020 (2) TMI 340 Challenge to the constitution of National Anti Profiteering Authority - adjournment of proceedings beyond the date specified in the Petitions - HELD THAT:- We defer the hearing of these Petitions to 11 March 2020. The Petitions to be listed under the caption For Directions . 2020 (2) TMI 339 Release of seized truck alongwith the goods - liability of damage / detention charges - HELD THAT:- Considering the material on record it appears that this Court, while admitting the matter, found that the impugned order dated 02.01.2019, passed under Section 130 of the State Goods and Services Tax Act, 2017, is without any reason and the same is passed without considering the objections raised by the petitioner - In view of such fact, the impugned order, passed under Section 130 of the Act, is hereby quashed and set aside. Petition disposed off. 2020 (2) TMI 338 Release of confiscated goods alongwith vehicle - e-way bill not generated - under-valuation - the petitioner has already deposited tax and penalty as per the provisions of section 129 of the Goods and Services Tax Act - HELD THAT:- We are convinced with the submissions of Mr.Sheth, as regards the legality and validity of the impugned order of confiscation in Form GST MOV-11 - this Writ Application is allowed, in part. The impugned order of confiscation, in Form GST MOV-11, is hereby quashed and set aside. The matter is remitted to the respondent No.2 for fresh consideration, so far as the issue of confiscation is concerned. 2020 (2) TMI 337 Release of detained goods alongwith vehicle - section 129 and 130 of CGST Act - validity of confiscation order dated 11.4.2019 in Form GST MOV-11 - the final order of confiscation came to be passed on the very same date on which the notice was issued. - HELD THAT:- We are convinced with the submissions of petitioner, as regards the legality and validity of the impugned order of confiscation in Form GST MOV-11. This Writ Application is allowed, in part. The impugned order of confiscation, in Form GST MOV-11, is hereby quashed and set aside. The matter is remitted to the respondent No.2 for fresh consideration, so far as the issue of confiscation is concerned. 2020 (2) TMI 336 Release of detained goods alongwith vehicle- Section 129 and Section 130 of the GST Act - HELD THAT:- The writ applicant availed the benefit of the interim order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It is now for the applicant to make good his case that the show cause notice, issued in Form GST MOV-10, deserves to be discharged. Application disposed off. Income Tax 2020 (2) TMI 335 Condonation of delay in fling of the related appeal u/s 254 - appeal filed by the appellant against the order passed by the jurisdictional administrative Commissioner under Section 263 - HELD THAT:- Tribunal did not accept the contention of the appellant that it was under a bonafide belief that since it had fled appeal against the consequential order of assessment as affirmed by the first appellate authority, its interest would be protected and therefore there was no need to independently challenge the order under Section 263. We feel that when Tribunal had entertained the appeal arising out of the consequential assessment, it was not justified on the part of the Tribunal to have rejected the appeal filed by the appellant against the order passed by the jurisdictional administrative Commissioner under Section 263 of the Act because that was the very foundation of the subsequent assessment proceedings. It would be in the interest of justice, if the delay in fling is condoned and the said appeal is heard on merit by the Tribunal. 2020 (2) TMI 334 Stay of demand in the case of Dharmendra Valji Karia on deposit of 20% of the tax demand - HELD THAT:- Same treatment be extended to the petitioner as he has also deposited 20% of the tax demand which is in conformity with the CBDT Office Memorandum. That apart, when the petitioner had deposited 20% of the tax demand and his appeal is pending before the first appellate authority, it was not justified on the part of the revenue authority in sealing the bank accounts of the petitioner thereby creating hurdles in his day-to-day activities. Consequently and in the light of the above, we issue the following directions : (i) Appeal of the petitioner pending before Commissioner of Income Tax (Appeals) Mumbai-26 shall be decided expeditiously and in any event within a period of three months from the date of receipt of an authenticated copy of this order. (ii) Since petitioner had deposited 20% of the tax demand in terms of the Assessment Order, there shall be stay of recovery of the balance amount till disposal of the appeal as aforesaid. (iii) Bank accounts of the petitioner which are stated to have been sealed by the respondents shall be resealed forthwith 2020 (2) TMI 333 Penalty levied u/s. 271(1)(c) - notices issued had not struck off the portion which were inapplicable - HELD THAT:- In the present case, as well if the notice dated 30/09/16 (at page 32) is perused, it is apparent that the inapplicable portions have not been struck off. This coupled with the fact adverted to in paragraph (5) of this order, leaves no ground for interference with the impugned order. The impugned order is quite consistent with the law laid down in the case of Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] and New Era Sova Mine [ 2019 (7) TMI 1002 - BOMBAY HIGH COURT] and therefore, warrants no interference. The contention based upon MAK Data (P.) Ltd. [ 2013 (11) TMI 14 - SUPREME COURT] also does not appeal to us in the peculiar facts of the present case. The notice in the present case is itself defective and further, there is no finding or satisfaction recorded in relation to concealment or furnishing of inaccurate particulars. 2020 (2) TMI 332 Deduction u/s 80HHC - Receipts by way of Shipping Agency fees and hire charges of machinery and installations - receipts under the head extraction charges could be considered as part of the total turnover as defined in the said clause (ba), for the purpose of computation of the deduction under section 80 HHC - subsidiary companies on loans lent to them to meet their working capital requirements, and claimed by the Appellant as forming part of the income from Profits and gains of business could be considered as assessable as Income from other sources - HELD THAT:- Parties agree that the aforesaid substantial questions of law had been framed even in Tax Appeal [ 2020 (2) TMI 309 - BOMBAY HIGH COURT] , which relates to the Assessment Year 1997-98. By a separate Judgment and Order, we have today disposed of Tax Appeal. Therefore, even these two appeals are disposed of in terms of what we have held in our Judgment and Order delivered today disposing. 2020 (2) TMI 331 Claim of warranty provision - allowability of the higher rate of depreciation at 40% on plastic moulds - HELD THAT:- We dispose of the present Appeal filed by the Assessee and setting aside the order of the learned Income Tax Appellate Tribunal dated 03.11.2008 for assessment year 2002-03, we remand the case back to the Income Tax Appellate Tribunal for deciding the said appeal in accordance with law afresh in terms of the aforesaid order passed by the Coordinate Bench of this Court for previous assessment years viz., 2000-01 and 2001-02. 2020 (2) TMI 330 Reopening of assessment u/s 147 - addition u/s 40A - HELD THAT:- Specific query had been put by the original AO to the assessee regarding sales and purchases and in response thereto, all details had been furnished by the assessee and therefore the issue of cash payments in contravention of Section 40A(3) read with Rule 6DD of the Rules was before the AO and therefore invocation of Section 148(1) was hit by the doctrine of change of opinion. Only contention raised before us is that in the original assessment order no opinion at all was formed and therefore, it was erroneous for the Commissioner and the Tribunal to held to be a case of change of opinion. This argument is to be rejected. It is not in dispute that the issue of cash payments and evidence thereof, was before the AO and wrongly he ignored it. The remedy before the revenue was to have challenge that order but the revenue did not do so and proceeded in the manner aforementioned. Once an issue and evidence there of, is clearly before an authority and the authority ignores it, it cannot later on decide to re-open on that ground and the specious argument that if there is no opinion there can be no change of opinion, would not apply. 2020 (2) TMI 329 Exemption u/s 11 - cancellation of registration of the respondent by the Director of Income Tax (Exemptions) under Section 12AA(3) - Charitable objects of the assessee - Tribunal quashing the order passed by the Director of Income Tax (Exemptions) cancelling the registration under Section 12AA(3) - HELD THAT:- Tribunal recorded the finding that order of the Director of Income Tax (Exemptions) did not disclose which activity of the respondent was not genuine or that the respondent was not genuine. Tribunal also recorded that there was no material in the said order explaining that activities of the respondent are not being carried out in accordance with its objects. On careful reading of the order passed by the Director of Income Tax (Exemptions) as well as the order passed by the Tribunal, we do not find any error or infirmity in the view taken by the Tribunal. In so far the view taken by the Director is concerned that respondent is directly hit by the proviso to Section 2(15) of the Act, we are of the view that such satisfaction may lead to denial of exemption to the respondent in the assessment proceeding for the relevant assessment year but certainly cannot be a ground for cancellation of registration under Section 12AA(3). The competent authority under Section 12AA(3) must be satisfied that the activities of the Trust are not genuine or that the activities are not being carried out in accordance with the objects of the Trust or the Institution. Such satisfaction must be recorded as a matter of fact on the basis of specific materials on record. Merely saying that the activities of the respondent is hit by the proviso to Section 2(15) of the Act, would not lead to automatic cancellation of registration as that is not a ground provided under Section 12AA(3) of the Act for cancellation of registration. A perusal of the order passed by the Director would go to show that no such finding was recorded by the Director that the activities of the respondent Trust are not genuine or that the activities are not being carried out in accordance with the objects of the respondent Trust. What the Director had done was that he took the view that the respondent was hit by the proviso to Section 2(15) of the Act and therefore, it was deemed that respondent Trust had become non-genuine. Such a view is wholly untenable being contrary to the mandate of Section 12AA(3) of the Act and was rightly interfered with by the Tribunal. There is no error or infirmity in the order passed by the Tribunal. - Decided against revenue. 2020 (2) TMI 328 Rectification of mistake u/s 154 - HELD THAT:- As decided in Haridas Das Vs. Usha Rani Bank (Smt) [2006 (3) TMI 686 - SUPREME COURT] rehearing of a case can be done on account of some mistake or an error apparent on the face of the record or for any other sufficient reason. In the present case, there is no error apparent on the face of the record and the petitioner infect under the guise of review is challenging the order passed by this Court, which is under review. 2020 (2) TMI 327 Deprecation to assessee trust - deduction of capital expenditure incurred on assets acquired for the objects of the trust as application - HELD THAT:- Question answered in favour of the assessee and against the revenue by this Court in Commissioner of Income Tax Vs. Institute of Banking Personnel Selection [ 2003 (7) TMI 52 - BOMBAY HIGH COURT] . This finding has been affirmed by the Supreme Court in Commissioner of Income Tax-III, Pune Vs. Rajasthan Gujarati Charitable Foundation Poona [ 2017 (12) TMI 1067 - SUPREME COURT] Carry forward of deficit and allowing set off against the income of the subsequent years - Whether allowing the deficit will tantamount to double deduction on account of expenditure out of exempt income? - HELD THAT:- concluded in favour of the assessee and against the revenue by the Supreme Court in Commissioner of Income Tax (Exemption), New Delhi Vs. Subros Educational Society [ 2018 (4) TMI 1622 - SC ORDER] 2020 (2) TMI 326 Reopening of assessment u/s 147 - failure of disclosure of not effecting the TDS - HELD THAT:- The Proviso going by its text and context needs to be construed strictly since the re-opening of an assessment is a power of an extraordinary nature vide ITO vs. MEWALAL DWARKAPRASAD [ 1989 (2) TMI 4 - SUPREME COURT] The text of the reasons nowhere states that there is failure on the part of the petitioner to disclose the alleged non-deduction of TDS; what is stated is that the petitioner had failed to deduct the TDS; the Proviso employs the expression by reason of the failure on the part of the assessee to disclose fully and truly all material facts ; the expression implies some guilt in mind howsoever little it may be, attributable to the assessee; in other words, a failure to deduct the TDS per se does not fit into the said expression as rightly contended by the counsel for the petitioner. Writ petition is allowed; a Writ of Certiorari issues quashing the impugned notice and proceedings and consequently the re-opening of assessment of the income of the petitioner for the Assessment Year 2010-11 is interdicted. 2020 (2) TMI 325 Disallowance of capital loss on account of capital reduction scheme - case of the assessee is that reduction of capital had resulted in Extinguishment of rights in shares and we find that the definition of transfer u/s 2(47) includes extinguishment of any rights in a capital asset - HELD THAT:- Assessee had incurred capital loss only due to claim of indexation benefit and not otherwise. The benefit of indexation is provided by the statute and hence there cannot be any malafide intention that could be attributed on the assessee in claiming the long term capital loss in the subject mentioned transaction. AO had held that there is no transfer pursuant to reduction of capital. But it is a fact that the assessee had indeed received a sale consideration of ₹ 39.99 crores towards reduction of capital . This sale consideration was not sought to be taxed by the ld AO under any other head of income. This goes to prove that the ld AO had indeed accepted this to be sale consideration received on reduction of capital under the head capital gains only as admittedly the same was received only for the capital asset i.e shares. Hence the existence of a capital asset is proved beyond doubt. The capital gains is also capable of getting computed in the instant case as the cost of acquisition of shares of CHIPL and sale consideration received thereon are available. Then how the ld AO is justified to hold that the subject mentioned transaction does not tantamount to transfer u/s 2(47) of the Act. This is the short dispute before us. We find lot of force in the argument advanced by the ld AR in this regard that merely because the transaction resulted in loss due to indexation, the ld AO had ignored the same. Had it been profit or surplus even after indexation, the ld AR argued that the ld AO could have very well taxed it as capital gains. Thus:- (a) capital reduction was effected by cancellation/ extinguishment of certain number of shares; (b) a consideration was received pursuant to such capital reduction; (c) the share of the assessee in the investee company remained the same even after the capital reduction. Loss arising to the assessee for cancellation of its shares in CHIPL pursuant to reduction of capital should be allowed as long term capital loss eligible to be carried forward to subsequent years. Accordingly, the grounds raised by the assessee in this regard are allowed. 2020 (2) TMI 324 Capital gain computation - determination of the full value of consideration in terms of section 50C - HELD THAT:- There is hardly a month s difference between the two sale dates of 08-01-2004 and 06-12-2003. It can further be seen that the DVO in the case of Shri Hemant Sudam Tupe considered the sale instances for land at Sy.No.187 in December, 2003 at ₹ 820/-. However, the DVO in the case of assessee has considered a sale instance of Sy.No.189 at ₹ 1,245/- per sq. mtr with date of sale at 16-09-2004. If we average the two rates, namely, ₹ 820/- per sq. mtr and ₹ 1,245/- per sq.mtr, the rate comes at ₹ 1,032/- per sq.mtr. This, is a more balanced and representative rate of the fair market value of the land as on the date of sale. Therefore, order to adopt ₹ 1,032/- as per sq.mtr value on the date of sale by the assessee, namely, 08-01-2004 against Sy.Nos. 187 and 243. In so far as the Sy. No. 198 is concerned, find that there are sale instances noted in the assessee s valuation report at ₹ 1,801/- p.s.m. against land at Sy.No.211 and in the report of Shri Hemant Sudam Tupe at ₹ 1,369/- against Sy.No.197 and ₹ 818/- against Sy.No.197. These surveys are admittedly close to the survey no. 198 sold by the assessee. Average of these three figures comes to ₹ 1,330/-. Therefore, direct to apply ₹ 1,330/- as per sq.mtr rate in respect of land at Sy.No.198 sold by the assessee as on 08-01-2004. Valuation as on 01-04-1981 - It is seen that amendment to section 55A in the above terms has been carried out and made effective from 01-07-2012. The assessment year under consideration is 2004-05 and the AO made reference to the DVO for determining the fair market value on 20-10-2011. Thus, it is apparent that, by no standard, the amended provision is attracted in the instant case. Going by the interpretation of the pre-amended provision by the Hon ble jurisdictional High Court in the case of Puja Prints (supra), as applicable to the facts of the instant case, it is vivid that no reference could have been made to the DVO when the value adopted by the assessee was more than the fair market value of the land in the opinion of the AO. Notwithstanding the above, it is seen that the assessee did file a Registered valuer s report along with computation of income, relevant part of which has also been placed in the paper book. Since valid reference could not have been made to the DVO, the value so determined by him as on 01-04-1981, ergo, becomes meaningless for the instant exercise. Going by the provision as applicable to the instant case, it is held that the value of the land as declared by the assessee on 01-04-1981, which is patently more than the value so determined by the DVO/AO, cannot be interfered with. Set-aside the impugned order and remit the matter to the file of the AO for determining the amount of capital gain afresh in accordance with the discussion supra . Needless to say, the assessee will be allowed a reasonable opportunity of hearing. 2020 (2) TMI 323 Exemption u/s.11(2) denied - Charitable activity u/s 2(15) - HELD THAT: - It is evident that assessee s appeal was allowed primarily in view of the fact that the assessee had only one object and hence, there would be no ambiguity in specifying the purpose of accumulation in Form No. 10. Upon perusal of factual matrix as enumerated in preceding paragraphs, it appears that facts are pari-materia the same in this year. Nothing has been placed on record to demonstrate any distinguishing features. Therefore, keeping in view the fact that exemption u/s 11(2) was ultimately allowed to the assessee in AY 2010-11 as well as in AY 2011-12. we hold that the assessee is entitled for exemption u/s 11(2). Ground No. 1 of assessee s appeal stand allowed. Admission of new claim u/s 10(23EA) - this exemption was already allowed to the assessee by Ld. AO himself while framing quantum assessment order. Nevertheless, this issue also stood covered in assessee s favor by the order of Tribunal for AY 2011-12. Resultantly, the revenue s appeal stands dismissed. Interest u/s 234C was to be charged on returned income and not on assessed income. Non-receipt of refund - Assessee has disputed receipt of any refund, which Ld.AO is directed to verify. The Ld. AO is also directed to re-compute the income in terms of this order and determine correct tax liability / refund against the assessee. All these grounds stand allowed for statistical purposes. 2020 (2) TMI 322 Disallowance of deduction u/s. 35ABB(2) - expenses on surrender of National Long Distance (NLD) license - HELD THAT:- Assessee has surrendered NLD license to DOT during the year and accordingly, wrote-off the amount of ₹ 2.50 Crores in its Books of Accounts, being license fees paid to acquire the NLD license. The allegation of Ld. AO was that NLD was an intangible asset which would be eligible for depreciation u/s 32. The perusal of financial statements for the year as placed before us also corroborate the said fact which is further fortified by the fact that the assessee has not claimed any depreciation on intangible assets in its Income Tax Return. This being the case, the assessee was clearly eligible to claim the write-off of ₹ 2.50 Crores as normal business loss as well as in terms of provisions of Sec.35ABB(2) read with CBDT Circular No. 763 dated 18/02/1998 . It is noteworthy that the assessee was engaged in the business of providing telecom services and the losses incurred on account of surrender of NLD license would be in the normal course of business and therefore, the same would be an allowable deduction to the assessee in the normal business losses also. The decision of Hon ble Bombay High Court rendered in CIT V/s Evergrowth Telecom Ltd. [ 2013 (1) TMI 64 - BOMBAY HIGH COURT] also support assessee s case and therefore, no fault could be found in the impugned order, in this regard. - Decided against revenue Interest on fixed deposits / margin money which was reduced from work-in-progress (WIP) and not credited to Profit Loss Account - HELD THAT:- The perusal of financial statements corroborates the same. The Note no. 4 of Schedule 17 also mention that the company has started operations in 8 of its 21 circles with effect from 29/07/2010. This being the case, we direct Ld. AO to verify the stated facts and accept assessee s claim after due verification since the learned first appellate authority agreed with assessee s proposition that interest received during pre-operative period could not be charged to tax and the revenue is not in further appeal on this point. If the said interest of ₹ 151.89 Lacs pertains to circle which were not operationalized during the year, the impugned addition would stand deleted. Accordingly, the appeal may be treated as allowed for statistical purposes. 2020 (2) TMI 321 Levy of penalty u/s 271(1(c) - search and seizure operation u/s 132 - assessee(s) offered additional income which includes undisclosed investment in hundies - alleged penalty notices issued u/s 274 of the Act no specific charge has been leveled against the assessee - HELD THAT:- We observe that the facts of the case before the Hon ble jurisdictional High Court in the case of Kulwant Singh Bhatia [ 2018 (5) TMI 960 - MADHYA PRADESH HIGH COURT] were almost identical issue penalties were also confirmed by the CIT(A) but were deleted by the Tribunal holding the same as not sustainable in law, as no specific charge was levied in penalty show cause notice. as no specific charge was levied in the penalty show cause notice. As notice issued u/s 274 r.w.s 271(1)(c) of the Act is suffering from serious technical error and non application of mind by Ld.A.O who failed to level specific charge on the assessee at the time of initiating penalty proceedings due to which the principle of natural justice seems not to have been followed. We accordingly allow the assessee s appeal on this legal ground and hold that the impugned penalty notices issued u/s 274 r.w.s. 271(1)(c) of the Act as invalid and untenable and thus deserves to be quashed which renders the penalty proceedings void ab intio. We therefore allow the common legal ground raised by the assessee in these bunch of five appeals challenging the legality of notice issued u/s 274 r.w.s. 271(1)(c) of the Act and accordingly direct the Ld.A.O to delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee. Penalty u/s 271AAB - Defective notice - HELD THAT:- Matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of Section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. Since the penalty proceedings itself has been quashed the impugned penalty in respect of Shri Hemant Kumar Jain and in respect of Shri Harsh Jain for Assessment Year 2014-15 and Assessment Year 2015-16 respectively stands deleted. We accordingly allow the legal ground raised by the assessee challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act and quash the penalty proceeding as void ab intio. 2020 (2) TMI 320 Invalid approval obtained u/s 153D for assessment u/s 153A - Approval from Addl. CIT of the Range - HELD THAT:- Approval given by the Addl. Commissioner of Income-tax shows that approval to the draft assessment order u/s 153D is granted in case of the assessee, Shri Bhupesh Kumar Dhingra along with 8 other assessee without perusing the draft assessment order in this case. Because when assessment proceedings were going on 27.12.2010 before the AO then it is beyond comprehension that as to how the draft assessment order has been placed before the Addl. Commissioner of Income-tax on 24.12.2010. It goes to prove that approval has been given contrary to the provisions of section 153D. To controvert this factual position, ld. DR has not brought on record or argued any new facts. So, when mandatory approval u/s 153D is not there, entire assessment made by the AO u/s 153A/143(3) is not sustainable as it is no approval in the eyes of law, hence rightly quashed by the ld. CIT (A). So, without going into the merits of the other grounds raised by the Revenue which have otherwise become academic and as such not been argued in the face of the fact that the assessment order is not sustainable on ground of invalid/no approval obtained u/s 153D of the Act. - Decided against revenue 2020 (2) TMI 319 Exemption u/s 11 - Entitled for registration u/s 12A/12AA - HELD THAT:- The first aspect of grant of registration under section 12A/12AA of the Act is that the object of the assessee society should be charitable in nature. The assessee was engaged in imparting education and the objects were of charitable in nature which has been accepted by the Hon ble High Court. As far as the genuineness of the activities of the assessee society were concerned, the assessee had filed on record the audited accounts for different assessment years alongwith the assessment orders for the respective years and no adverse comments have been made against any of the assessee society, which are listed before us. We hold that where the activities undertaken by the assessee in the field of education were genuine, the assessee were entitled to the claim of registration under section 12A/12AA. Accordingly, we hold so and direct the Commissioner, Moradabad to grant registration to the assessee from the date of the application moved by the assessee. Hence the claim of the assessee stands allowed. 2020 (2) TMI 318 Disallowance of minimum guarantee royalty as capital in nature - HELD THAT:- Apex court s recent decision in Taparia Tools vs. JCIT [ 2015 (3) TMI 853 - SUPREME COURT] has settled the law that of a revenue expenditure is otherwise allowable, the mere fact that the same ought to have been split up or claimed lump sum is not the deciding factor. Their lordships yet another landmark decision in Chainrup Sampatram vs. Commissioner of Income Tax [ 1953 (10) TMI 2 - SUPREME COURT] also held long back that the principles of conservatism consideration of prudence in the accounting treatment require that no anticipated profits be treated as income only if the same are utilized and converse is not true as anticipated losses can be allowed to be deducted from commercial profits at the first sight of reasonable possibility. We wish to make clear in light of the foregoing facts that the assessee had every reason to raise the impugned minimum guarantee royalty claim pertaining to acquisition of music rights in the year of actual payment going by the music industry market trends. We conclude in this backdrop of facts that the Revenue s latter argument also carries no substance. This issue is accordingly decided in assessee s favour. Disallowance of advertisement and sales promotion, consultancy, ad hoc head(s) - recording expenditure disallowance(s) from 10% made by the Assessing Officer to 2% in the lower appellate proceedings - HELD THAT:- We find no substance in Revenue s instant argument seeking to revive the impugned ad hoc disallowance under four head(s). Apart from the fact that the earlier co-ordinate bench s order(s) have already upheld the CIT(A) s identical action, we note that the assessing authority itself is very fair in estimating the impugned disallowance @ 10% meaning thereby that assessee s claim(s) stand accepted in principle @ 90%. We therefore adopt judicial consistency to affirm CIT(A) s findings restricting all four disallowance(s) items from 10% to 2% only. The Revenue as well as assessee s corresponding grounds fail therefore as a necessary corollary. Nature of expenses - training and development expenses - Revenue or capital expenditure - HELD THAT:- We find no substance in Revenue s grievance at the threshold itself since Motor Sales vs. Commissioner of Income Tax (1973) [ 1971 (10) TMI 20 - ALLAHABAD HIGH COURT] has already decided the issue in assessee s favour. The CIT(A) s findings under challenge to this effect are affirmed therefore. Disallowing / shortage of stock / breakage (prerecorded cassettes) - The Revenue fails to dispute the clinching fact that the assessee s corresponding receipts derived from the corresponding of scrap sales on account of broken cassettes have been accepted. This tribunal s decision for assessment year 2002-03 has already decided this very issue in assessee s favour. Rent amount addition - HELD THAT:- Both the learned representatives are ad idem during the course of hearing that the assessee s claim of impugned downward revision of rent charge and received in case of its sister concern requires necessary factual verification / computation once again in view of the learned lower authorities alleged failure in getting all the settlement records to this effect. We therefore deem it appropriate to restore the same back to the Assessing Officer to decide afresh as per law within three effective opportunities of hearing Addition of turnover mis-match in TDS certificates (in case of CESC and Indea Streamz) as well as part TDS credit - HELD THAT:- After giving our thoughtful consideration, we find that although the Revenue s instant technical argument deserves to be accepted the fact also remains that the Assessing Officer had not taken into consideration all the foregoing aspect(s) whilst making the impugned disallowance(s) / addition(s). We therefore conclude in this factual backdrop that the instant issue has been rightly restored back to the assessing authority for afresh computation as per law. We make it clear that the issues as to whether the assessee deserves credit of the impugned TDS in the year when it offers the corresponding income for assessment is fairly conceded by the department during the course of hearing. We accordingly affirm the CIT(A) s findings qua these two former issues. Expenditure on share investments and interest free loans given to sister concern - HELD THAT:- Assessee has not derived any exempt income in the impugned assessment year. Hon'ble jurisdictional high court s decision in M/s Ashika Global Securities Ltd. [ 2018 (7) TMI 1425 - CALCUTTA HIGH COURT] holds that the impugned disallowance does not come into play in case of absence of exempt income. Coming to latter aspect of interest free loans to sister concern, we notice that assessee had no interest free funds in the nature of share capital, reserves and surplus of ₹60.26 crores as against interest free loans of ₹24.17 crores; respectively. The CIT(A) has followed hon'ble s Bombay high court s decision in CIT vs. Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] that the necessary presumption in such an instance is of utilization of interest free funds only. We accordingly affirm the CIT(A) s findings under challenge Addition u/s 14A - HELD THAT:- Rule 8D carries prospective effect only from assessment year 2008-09. We notice that the CIT(A) has restricted the impugned disallowance to 1% of the exempt income only; coming to ₹23,230/- in his lower appellate order under challenge. The assessee s share capital and reserves against the exempt investments read figures ₹84.13 crores and ₹59.99 cores; respectively. The CIT(A) has followed a catena of case law Income Tax Officer Ward-12(1) Kolkata vs. Nupur Carpets Ltd. [ 2015 (7) TMI 679 - ITAT KOLKATA] that necessary disallowance @ 1% prior to assessment year 2008-09 is just and proper. We therefore decline the Revenue s instant second substantive grievance as well. Bad debt / business advance disallowance - HELD THAT:- We notice that the Assessing Officer had made the impugned disallowance after holding that there was no evidence of the impugned debt sums to have become actually bad. This this issue is no more res integra in view of in T.R.F. vs. Commissioner of Income Tax [ 2010 (2) TMI 211 - SUPREME COURT] that sec. 36(1)(vii) no more requires w.e.f 01.04.1989. Administrative expenditure disallowance - HELD THAT:- CIT-DR fails to rebuttal the crucial fact that lower authorities have taken into account the assessee s non exempt income yielding investment as well. The fact also remains that we are dealing with an indirect head of expenditure wherein some kind of proportional location on estimate basis is always involved. We therefore deem it appropriate that a lump sum disallowance of ₹8 lakh including suo motu figure of ₹ 7 lakh would be just and proper with a rider that same shall not be treated as a precedent in any other assessment year. The assessee gets part relief. Necessary computation to follow as per law. Disallowance its leave encashment provision u/s 43B(f) for want of actual payment - HELD THAT:- As during the course of hearing that hon'ble jurisdictional high court s decision in Exide Industries Ltd. vs. Union of India [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] quashing the statutory provision itself to be ultra vires stands has stayed by hon'ble apex court. Therefore the instant issue restored back to the Assessing Officer to be decided afresh after final outcome in Exide Industries Ltd. case. This last substantive grievance of assessee is accepted for statistical purpos during the course of hearing that hon'ble jurisdictional high court s decision in Exide Industries Ltd. vs. Union of India [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] quashing the statutory provision itself to be ultra vires stands has stayed on 08.05.2009 in hon'ble apex court. Therefore the instant issue restored back to the Assessing Officer to be decided afresh after final outcome in Exide Industries Ltd. case. This last substantive grievance of assessee is accepted for statistical purposes. es. 2020 (2) TMI 317 Addition u/s 68 - why the investors are not answering all the queries along with documents to establish their identity and creditworthiness and also genuineness of the transactions? - HELD THAT:- Respectfully following the decision of co-ordinate bench in assessee group company case, we are of the considered view that the identity, genuineness of transaction and creditworthiness of subscribers has been proved as required u/s 68 of the Act. We, therefore, direct the Ld. AO to delete additions made towards share capital and consequent commission u/s 68 - Decided in favour of assessee Assessment u/s 153A - Addition u/s 14A r.w.s.Rule 8D - HELD THAT:- Deletion of additions made by the Ld. AO u/s 14A r.w.s.Rule 8D of I.T.Rules, 1962, on the ground that in absence of incriminating material found as a result of search no additions could be made in the assessments framed u/s 143(3) r.w.153A - Decided in favour of assessee 2020 (2) TMI 316 Rejection of books of accounts u/s 145 - trading addition - HELD THAT:- CIT(A) has referred to non-maintenance of qualitative stock details, no separate rates for gold and diamond, non- reflection of work-in-progress and valuation of diamond in one of the export invoice. We find that each of these matters have been satisfactorily explained by the ld AR in his written submissions we have taken note above and hence, we are of the view that there is no justifiable basis for rejection of books of accounts in the instant case. In the result, the trading addition so made on rejection of books results is deleted and both the grounds are allowed. Disallowance of interest paid on secured loan taken from the HDFC Bank and disallowance of processing charges relating to bank loan - HELD THAT:- We find force in the arguments of the ld AR that where the assessee firm has charged interest from the family members and has not paid interest which it was supposed to pay on the opening credit balance in partners capital account which stay invested in the assessee s firm throughout the year, the interest paid to the bank shall be offset from the said recovery of interest and there should not be any disallowance to extent of such recovery. Therefore, for the limited purposes of determining the interest paid to the bank and interest recovered from family members/interest saved on partner s capital account for the period their opening capital remain invested and not withdrawn, the matter is remanded to the file of the Assessing officer who shall verify and allow set off of interest recovered from family members/interest saved on partner s capital account from interest on bank loan and balance, if any of interest expense shall only be brought to tax. In the result, the ground is disposed off in light of above directions. Disallowance of loan processing fee paid to HDFC loan - As submitted by the ld AR that no such disallowance was made by the AO and the ld CIT(A) without issuing any show-cause as required u/s 251(2) has enhanced the income by disallowing the said claim of the assessee firm. From perusal of order of ld CIT(A) and material on record, we find that no such show-cause was issued by the assessee firm and being a mandatory requirement u/s 251(2) before any enhancement being made by the ld CIT(A), the same cannot be dispensed with and in absence thereof, the addition so made by the ld CIT(A) is directed to be deleted. In the result, the ground of appeal is allowed. Disallowance of rent on showroom premises - HELD THAT:- The question is where there is no dispute that the rent payment has been made by the assessee firm for taking on rent premises for setting up a new showroom and thereby, expanding its existing business, can the same be allowed in the year the premises are ready to be used. Given that in the instant case, the assessee has also incurred expenditure on fit-outs/improvements on such leased premises, and has accumulated and shown the same under the head work-in-progress , drawing similar analogy, we are of the view that rent payment, pertaining to the period the premises are not ready to be used, can be accumulated and the same can be claimed and will be allowed in the year in which the premises were ready to be used i.e, next assessment year 2014-15. The ground of appeal is disposed off in light of aforesaid directions. Unexplained cash credit u/s 68 - HELD THAT:- There is no dispute on the proposition that where the cash so deposited represent the cash sales made by the assessee firm and such cash sales are duly recorded in the books of accounts, no addition can be made in the hands of the assessee firm. However, such a claim need to be substantiated by the assessee firm and to be verified by the Assessing officer. In this regard, we find that source of cash deposits of ₹ 13,77,000 on the specific dates were submitted along with cash book and sale bills for verification during the assessment proceedings as we have noted in para 36 above and however, there doesn t seem to be any specific finding by the Assessing officer. We therefore deem it appropriate to set-aside the matter to the file of the AO for the limited purposes of verification of source of cash deposits of ₹ 13,77,000 as submitted by the assessee firm as we have noted and where the same is found to be in order, allow the necessary relief to the assessee firm Disallowance of interest - assessee had taken unsecured loans from the family members of the partners in the earlier years and paying interest @ 15% on the same - AO made the addition of entire amount of interest paid to family members holding that the borrowings have not been used for business purpose - HELD THAT:- Fresh borrowing during the year from HDFC bank has been utilized for advancing to the partners and the family members and there is thus a direct nexus which has been established between the said borrowing and advancing the funds to the family members and has no nexus with the past borrowings. Further, the assessee has contended that the borrowing from family members being unsecured as compared to bank borrowings which was claimed to be taken on collateral of personal property of the partners and family members and thus carries a differential rate of interest. We find that the internal comparable relied upon by the Revenue is not appropriate given the qualitative difference in the two loan transactions and it would have been appropriate to compare the related party transaction with an independent third party transaction carrying the same qualitative unsecured loan parameters. In absence of the same, the addition so sustained by the ld CIT(A) is hereby directed to be deleted. 2020 (2) TMI 315 TDS u/s 195 - services provided by the non-resident foreign agent or being utilised in India - taxability under section 9(1)(i) and 9(1)(vi) (b) - HELD THAT:- The paper book filed before us shows that the assessee produced certain documentary evidence in support of rate difference, brokerages etc and now it remains an admitted fact that such material was not available before the Assessing Officer when the assessment was made. The impugned order also does not reveal that, before placing reliance on such documentary evidence, the Ld. CIT(A) gave any opportunity to the learned Assessing Officer to verify the correctness of the documents and to comment upon them. Following the view taken by the coordinate benches of this Tribunal for the assessment years 2010-11 and 2011-12 in assessee s own case, under identical facts and circumstances, we find it a fit case to set aside the impugned order on this aspect and to remand the issue to the file of the learned Assessing Officer for verification of the documents produced by way of additional evidence before the Ld. CIT(A) and to take a fresh view. We accordingly set aside the issue to the file of the learned Assessing Officer for verification of the documents produced by way of additional evidence before the Ld. CIT(A) and decide it afresh. Grounds No. 1 and 2 are accordingly allowed for statistical purpose. Addition u/s 40(a)(ia) - Not in dispute that the services of the foreign agents were rendered outside India for sales and the payment was also made outside India. Under similar circumstances for the assessment year 2011-12 observed that such payment of commission does not come under the purview of section 195 of the Act and therefore, the Ld. CIT(A) was justified in deleting the addition made under section 40 (1) (i)of the Act. Since facts are identical, we are of the considered opinion that a different view cannot be taken and while respectfully following the same we uphold the findings of the Ld. CIT(A) on this aspect 2020 (2) TMI 314 Validity of re-assessment proceedings - No notice under section 143(2) issued within the time as prescribed - HELD THAT:- No fresh return of income was filed in response to the notice under section 148 of the Act, there was no occasion for the Assessing Officer to issue notice under section 143(2) of the Act. It, therefore, goes that subsequent to the statement of the assessee in response to the notice under section 148 of the Act that the original return may be treated as a return in response to notice under section 148 of the Act, there was no notice under section 143(2) of the Act. This fact situation is squarely covered by the addition of the Hon ble jurisdictional High Court in the case of Jai Shiv Shankar Traders Private Limited [ 2015 (10) TMI 1765 - DELHI HIGH COURT] . Further the Ld. CIT(A) placed reliance on the decision of the in the case of Tilak Raj Satija [ 2013 (8) TMI 924 - ITAT DELHI] which, while placing reliance on the decision of the Delhi High Court in the case of Alpine Electronics Asia Private Limited vs. DCIT [ 2012 (1) TMI 100 - DELHI HIGH COURT] laid down that in view of the legal fiction created by section 148 of the Act that a return filed under that section is to be treated as one under section 139, proviso to section 143(2) of the Act also applies to a return filed in response to notice under section 148 of the Act and no assessment can be made, if the notice under section 143(2) of the Act is not served within the time as prescribed by the proviso to section 143(2) of the Act. - Decided against revenue 2020 (2) TMI 313 Bogus LTCG - Penny stock purchases - disallowance of exemption claimed u/s.10(38) - long term capital gain earned on sale of equity shares of Pine Animation Limited (PAL) - HELD THAT:- PAL is a penny stock company and the assessee obtained only accommodation entries in the garb of long term capital gain from transfer of its shares, for which an appropriate addition has rightly been made and upheld by the authorities below. Above view is fortified by the judgment in Sanjay Bimalchand Jain vs. Pr. CIT [ 2017 (5) TMI 983 - BOMBAY HIGH COURT] which has been briefly referred to by the AO as held that the assessee did not tender cogent evidence to explain how the shares in an unknown company worth ₹ 5 had jumped to ₹ 485 in no time. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. It was held that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. The gain was accordingly held to be rightly assessed as undisclosed income. - Decided against assessee. 2020 (2) TMI 312 Treatment of assessee as trust or AOP - whether profit on sale of shares should be treated as long term capital gains or business income ? - HELD THAT:- Settler, trustee and beneficiary are three separate and distinct entities. Hence, we hold that the assessee should be assessed in the capacity of trust only. We also find that the settler i.e Infrastructure Leasing and Financial Services Ltd. and beneficiary i.e. IL FS Financial Services Ltd. are two separate and distinct entities in the present case. We find that the observations of taxability of trust and income being offered to tax in the hands of the beneficiary are all inter-dependent based on the outcome of the status of the assessee which we have already held to be taxed only in the status of trust and not as AOP. There is no dispute with regard to the fact that the long term capital gain of subject mentioned shares of ₹ 27,38,484/-has been duly offered to tax in the hands of the beneficiary i.e. IL FS Financial Services Ltd., and the same has been assessed accordingly by the Income Tax department u/s.143(3) of the Act vide order dated 12/03/2013. Similarly, the interest income of ₹ 8,630/- was also duly offered to tax in the hands of the beneficiary and assessed as such. Hence, both these incomes cannot be taxed in the hands of the assessee. Taxable of income on sale of investments as long term capital gains / business income - we find that the same had been elaborately dealt hereinabove by the ld. CIT(A) as held appellant trust has got contribution only from one institution namely IL FS Financial Services Ltd. as Class P Beneficiary, and also there is only one transaction of sale of shares of Multi Commodity Exchange. In my opinion, such investment in a single company held for long term cannot be assessed as business income, hence the treatment of such income as LTCG is accepted - thus it does not require any interference. 2020 (2) TMI 311 Reopening of assessment u/s 147 - HELD THAT:- The effect of section 147 as it now stands after the amendment of 2009 can therefore, be summarised as follows : (i) the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year ; (ii) upon the formation of that belief and before he proceeds to make an assessment, reassessment or recomputation, the Assessing Officer has to serve on the assessee a notice under sub-section (1) of section 148 ; (iii) the Assessing Officer may assess or reassess such income, which he has reason to believe, has escaped assessment and also any other income, chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section ; and (iv) though the notice under section 148(2) does not include a particular issue with respect to which income has escaped assessment, he may none the less, assess or reassess the income in respect of any issue which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. Therefore, as no addition has been made on the reasons for which the assessment of the assessee is reopened, the other it issuance made by the learned assessing officer cannot be sustained. In view of this we allow ground number 1-3 of the appeal of the assessee. The effect of section 147 as it now stands after the amendment of 2009 can therefore, be summarised as follows : (i) the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year ; (ii) upon the formation of that belief and before he proceeds to make an assessment, reassessment or recomputation, the Assessing Officer has to serve on the assessee a notice under sub-section (1) of section 148 ; (iii) the Assessing Officer may assess or reassess such income, which he has reason to believe, has escaped assessment and also any other income, chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section ; and (iv) though the notice under section 148(2) does not include a particular issue with respect to which income has escaped assessment, he may none the less, assess or reassess the income in respect of any issue which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. Therefore, as no addition has been made on the reasons for which the assessment of the assessee is reopened, the other it issuance made by the learned assessing officer cannot be sustained. In view of this we allow ground number 1-3 of the appeal of the assessee. 2020 (2) TMI 310 Computation of Exemption u/s 10(13A) for House Rent Allowance (HRA) - As per AO performance bonus received by the assessee also formed part of salary for the purposes of Section 10(13A) and accordingly re-computed the exemption available u/s 10(13A) thereby resulting in disallowance of the entire exemption claim - HELD THAT:- Performance bonus received by the appellant did not form part of salary for the purposes of computing exemption u/s 10(13A) of the Act. Decision of the Hon ble Kerala High Court in the case of CIT Vs B.Ghosal [ 1980 (2) TMI 57 - KERALA HIGH COURT ] is on identical facts wherein on exact same set of facts the Court had held that performance bonus does not form part of salary as defined in clause (h) of Rule 2A for the purposes of Section 10(13A) of the Income tax Act, 1961. Considering the facts narrated above, we note that total rent paid by the assessee during the year is to the tune of ₹ 8,20,000/-. The basic salary for the purpose of computation of house rent disallowance is ₹ 3,00,000/- (10% of ₹ 30,00,000/- being basic salary). Therefore, excess of rent paid over 10% of salary comes at ₹ 5,20,000/- (₹ 8,20,000/- - ₹ 3,00,000/-). Therefore, assessee is entitled for house rent allowance at ₹ 5,20,000/- u/s 10(13A) of the Act. Assessing Officer is directed to allow the exemption of HRA at ₹ 5,20,000/-. - Decided in favour of assessee 2020 (2) TMI 309 Deduction u/s 80HHC - receipts by way of shipping agency fees and the hire charges of machinery and installations will have to be reduced from the profits in terms of the explanation clause (baa) to Section 80 HHC - HELD THAT:- In so far as hire charges of machinery and installations are concerned, this question has been squarely answered against the Appellant-Assessee and in favour of the Respondent-Revenue in [ 2015 (5) TMI 621 - BOMBAY HIGH COURT] . Incidentally, this was also an appeal instituted by this very Appellant in relation to the Assessment Year 1996-97. Applying the reasoning therein, it will, therefore, have to be held that the hire charges of machinery and installations will have to be reduced in terms of clause (baa) to Section 80 HHC. In so far as shipping agency fees are concerned, again, we note that for the previous assessment year, as also for the assessment year with which we are concerned in the present Appeal, the fact finding authorities have held that the shipping agency fees have no nexus as such with the export and, therefore, reduction of even these receipts is warranted in terms of the explanation (baa) to Section 80 HHC. Since this appeal is on substantial question of law and further, since no perversity as such has been pointed out in the findings of fact recorded by the fact finding authorities, we hold that even shipping agency fees are required to be reduced from the profits in terms of clause (baa) to Section 80 HHC. Reduction has to be made not on gross basis, but on net basis only. Accordingly, we hold that though the receipts by way of shipping agency fees and higher charges for machinery and installation will have to be reduced in terms of explanation (baa) to Section 80 HHC, such receipts will have to be computed on net basis and not on gross basis. Accordingly, the reduction will also have to be effected only on net basis and not on gross basis. See M/S ACG ASSOCIATED CAPSULES PVT. LTD. [ 2012 (2) TMI 101 - SUPREME COURT] Receipts by way of shipping agency fees and the higher charges of machinery and installation will have to be reduced in terms of the explanation (baa) to Section 80 HHC of the Income Tax Act. However, such reduction will have to be on net basis and not on gross basis. Receipts under the head extraction charges - whether could be considered as part of the total turnover as defined in the said clause (ba), for the purpose of computation of the deduction under section 80 HHC of the Act?- HELD THAT:- As relying on own case SESA GOA LTD. VERSUS COMMISSIONER OF INCOME TAX, PANAJI-GOA [ 2015 (5) TMI 621 - BOMBAY HIGH COURT] issue decided against the Appellant-Assessee and in favour of the Respondent-Revenue. Interest received from the subsidiary companies on loans lent to them to meet their working capital requirements - income from Profits and gains of business OR Income from other sources - HELD THAT:- Issue is covered in favour of the Appellant-Assessee and against the Respondent-Revenue in Principal Commissioner of Income Tax vs. Sesa Resources Ltd. [ 2017 (9) TMI 126 - BOMBAY HIGH COURT] and in the Commissioner of Income Tax vs. V.S. Dempo Co. Pvt. Ltd. [ 2016 (2) TMI 308 - BOMBAY HIGH COURT] . Accordingly, the substantial question of law (C) is answered in favour of the Appellant-Assessee Receipts in the Appellant's accounts under the heads proceeds of services; hire of Ship/transhippers; hire of barges; and epairs of vessels by Shipyards, which receipts have substantial costs, and arise from the main business activity of the Appellant, would have to be reduced in terms of the said clause (baa)? - HELD THAT:- Receipts towards hire of ships/transhippers and hire charges of barges will have have to be reduced in terms of the explanation (baa) to Section 80 HHC. However, the receipts towards proceeds of services and repairs of vessels by shipyards have not been covered under the explanation (baa) to Section 80HHC, will have to be reduced from out of the profits. Further, we add that in matters of such reductions, the computation will have to be on net basis and not on gross basis. Disallowance u/s 40(a)(i) - Non-resident Ship owners/charterers of the vessels - tax was not deductible - HELD THAT:- Issue covered in favour of the Appellant-Assessee and against the Respondent-Revenue in the decision of the Full Bench of this Court in the Commissioner of Income Tax vs. V.S. Dempo Co. Pvt. Ltd. Income Tax [ 2016 (2) TMI 308 - BOMBAY HIGH COURT] Bad debt actually written off as irrecoverable in the accounts of the Appellant - authorisation by the Board of Directors at a meeting held to approve the accounts after the close of the year, could be disallowed on the ground that the writing off of such bad debt did not take place in the relevant previous year - HELD THAT:- Issue covered in favour of the Appellant-Assessee and against the Respondent-Revenue as relying on TRF. LTD [ 2010 (2) TMI 211 - SUPREME COURT], KERALA STATE INDUSTRIAL DEVT. CORPORATION LTD [ 2012 (9) TMI 805 - SUPREME COURT] 2020 (2) TMI 307 Assessment u/s 153A - assessee made a new claim for treating gain on pre-payment of deferred VAT/sales tax on Net Present Value (NPV) basis as capital receipt . - pending assessment or reassessment on the date of initiation of search if abated - HELD THAT:- In the present case, search was conducted on the assessee on 30.11.2010. At that point of time assessment in the case of assessee for the assessment year 2008-09 was pending scrutiny since notice under Section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to Section 153A of the said Act, once assessment got abated, it meant that it was open for both the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained to be claimed in his earlier/ regular return of income. This is so because assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return filed under Section 153A of the said Act (which is in consequence to the search action under Section 132) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said Act, would be construed to be one filed under Section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1). We would further like to emphasis on the judgment passed by this Court in the case of Continental Warehousing [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] which also explains the second proviso to Section 153A(1). The explanation is that pending assessment or reassessment on the date of initiation of search if abated, then the assessment pending on the date of initiation of search shall cease to exist and no further action with respect to that assessment shall be taken by the AO. In such a situation the assessment is required to be undertaken by the AO under Section 153A(1) of the said Act. In view of the second proviso to Section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation. - Decided against revenue Customs 2020 (2) TMI 289 Refund claim - duty paying invoices - rejection of refunds on the ground that the refund claim was not based on the supporting documents and that the refund was sanctioned without verification of the supporting documents in respect of 24 Bills-of-Entry - HELD THAT:- It is clear that the Adjudicating Authority has sanctioned the refund after going through the original documents placed on record, a copy of which was also filed before the First Appellate Authority. The Revenue having not been able to locate the original documents, is apparently seeking indulgence at the cost of the taxpayer, which cannot be appreciated. The First Appellate Authority has not suspected the arguments of the assessee as regards filing of necessary documents before the Adjudicating Authority, the acknowledged copy of the letter of which was also duly verified by him and the Revenue has not been able to disprove the above factual findings. Appeal dismissed - decided against Revenue. 2020 (2) TMI 284 Validity of assessment order - order for auditing under section 17(6) by the proper officer - enhancement of value of imported goods - HELD THAT:- The Assessing Officer, on re-assessment was required to pass a speaking order, in terms of sub-section (5) specifying the grounds for such reassessment. In the present case Commissioner (Appeal) has while setting aside the order of reassessment directed the audit as per Section 17(6) ibid. Commissioner (Appeal) could not have directed such an audit in terms of sub section (6) because audit as contemplated is the internal function of the revenue, for purpose of safeguarding the revenue, in case where re-assessment has been done by way of speaking order or otherwise. In appeal Commissioner (Appeal) could have remanded the matter for a speaking order to be passed in terms of sub section (5) by the assessing officer. The matter is remanded to the assessing officer for reconsideration and disposing of the matter with a speaking order as per sub-section (5) of Section 17 of Customs Act, 1962 - appeal allowed by way of remand. Corporate Laws 2020 (2) TMI 300 Maintainability of petition - alternate equally efficacious remedy of filing an appeal - sections 32 and 61 of the IBC - HELD THAT:- In the present case, to consider the grievance of the petitioners that the impugned order is a nullity and the contra version that it is not a nullity, but at best vitiated by a irregularity, we would be required to go through the facts in detail. On the records being summoned and perused by us, we realised that there is indeed a serious factual dispute. A Writ Court would ordinarily abstain from going into and deciding such disputes, when parties are not prejudiced and the law provides for an appeal. In IBC, the (NCLAT) Appellate Authority is empowered to consider and decide all questions of fact and law. No general rule can be said to be laid down in the judgments brought to our notice. We do not think that we should, therefore, entertain the present petition. The preliminary objection raised to the maintainability of the Writ Petition and proceed to dismiss it on the ground that the petitioners have alternate and equally efficacious remedy of filing on Appeal to the National Company Law Appellate Tribunal and in that appeal, it can raise all grounds, including the one raised in the Memo of the present petition. The original record and proceedings be returned by the Registry to the advocate appearing for the Union of India. 2020 (2) TMI 295 Winding up of company - inability to pay the admitted debts - HELD THAT:- The law regarding scope and ambit of the Company Court whhile exercising jurisdiction under Section 433(e)(f), 434 and 439 of the Companies Act has been summed up by the Hon ble Supreme Court of India in the case of IBA HEALTH (I) (P.) LTD. VERSUS INFO-DRIVE SYSTEMS SDN. BHD. [ 2010 (9) TMI 229 - SUPREME COURT] , wherein it has been held that where there is a substantial dispute as to the liability and obligation, petition for winding up should not be entertained. It was observed that, a dispute to be substantial and genuine, has to be bona fide and not spurious. The issue raised in this petition pertains to the liability of the respondent company and not the inter se liability of the two groups over their right on the shares of the respondent company. The respondent company is a legal entity and an existing company within the meaning of Companies Act, 1956. The claim in this petition is against the respondent company and not the DCBL group or the BW group, as the case could be - the respondent company cannot deny its liability to pay the dues of the petitioner firm by seeking refuge under clause 14.15.1 of the agreement dated 16/01/2012. Having regard to the peculiar facts and circumstances of the case, more particularly the fact that there is an ongoing dispute between the DCBL and the BW Group pertaining to the implementation of share holders agreement, the respondent company is granted 60 (sixty) days time, with effect from the date of this order, to discharge its admitted debt by paying the amount of ₹ 1,77,03,540.68 to the writ petitioner - It is made clear that in the event of failure on the part of the respondent company to make full and final payment of ₹ 1,77,03,540.68 to the writ petitioner within the time frame provided by this Court, necessary order as per law shall be issued for advertising the petition. Let this petition be listed again, after 60(sixty) days, for necessary orders. Insolvency & Bankruptcy 2020 (2) TMI 287 Maintainability of petition - initiation of CIRP - whether the petitioner can maintain the present petition under section 9 of I B Code as the Petitioner is undergoing CIRP? - HELD THAT:- Section 11 of I B Code deals with the persons not entitled to make application. The persons shown in clauses (a) to (d) of section 11 of I B Code shall not be entitled to make an application to initiate corporate insolvency resolution process under this Chapter. We are looking into section 11(a) of I B Code which provides that a corporate debtor undergoing CIRP is not entitled to make an application to initiate CIRP - It is an undisputed fact that the Petitioner herein is undergoing CIRP. Insolvency resolution process can be started against a corporate debtor. Such a corporate debtor cannot initiate CIRP by virtue of section 11(a) of I B Code. Section 25 of I B Code provides duties of the Resolution Professional. Sub-clause (1) of section 25 of I B Code provides duties of the Resolution Professional to preserve and protect the assets of the corporate debtor including the continued business operations of the corporate debtor. Sub-clause (a) of section 25 of I B Code provides that Resolution Professional to take custody and control of all the assets of the corporate debtor. Sub-section 2(b) of section 25 of I B Code provides that the Resolution Professional to represent and act on behalf of the corporate debtor with third parties. Bar under section 11 of I B Code applies to Resolution Professional also, but the Resolution Professional can exercise powers conferred on him under sub-clauses 2(a) and (b) of section 25 of I B Code. The petitioner which is undergoing corporate insolvency resolution process cannot maintain the present petition under section 9 of the I B Code as there is bar under section 11 of the I B Code - Petition dismissed. 2020 (2) TMI 286 Maintainability of petition - initiation of CIRP - Corporate Debtor defaulted in repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT:- The corporate debtor has taken a ground that the application under Section 7 of I B Code is time barred in the appeal itself. Such ground is not agitated before the Adjudicating Authority. Therefore, there is no finding of Adjudicating Authority on this issue. We have carefully examined the issue of limitation. The Respondent has bonafidely prosecuted within limitation period under SARFEASI Act - Therefore, the Respondent is entitled for the exclusion of time period under Section 14(2) of Limitation Act i.e. the period of 3 years and 6 months. After exclusion of this period the application filed under Section 7 of I B Code is within limitation period. The application under Section 7 is within limitation and there is no force in the argument of Learned counsel for the Appellant that the application is time barred - appeal dismissed. Service Tax 2020 (2) TMI 304 Reduction in the quantum of penalty imposed u/s 78 - Assessee paid the said short levied service tax only upon the Audit Objection raised in the matter - Section 73(3) and sub-section (4) of the Act - HELD THAT:- The Audit Objection raised by the Audit Officer is also ascertainment of tax by a Central Excise Officer within the meaning of Section 73(3) of the Act and there is no dispute that an Auditor of the Department is also a Central Excise Officer. Therefore, payment of the service tax with interest by the Assessee in the year 2013 itself, of course, not on his own or suo motu but on the basis of the Audit Objection viz., on the basis of the determination by an Auditor of the Department would not take out the case of the Assessee from the ambit and scope of Section 73(3) of the Act. Therefore, the question of imposition of penalty under Section 78 of the Act on the Assessee would not arise in the present case. Unless the penalty under Section 78 of the Act itself is leviable on the Assessee, there is no question of any reduction of the quantum of penalty to 25% thereof by the learned Tribunal in its discretion. What is not at all leviable, cannot be reduced. The Assessee is entitled to get the relief in the present case and the Appeal filed by the Assessee deserves to be allowed - the penalty order of original adjudicating Authority as well as that of the learned Tribunal upholding the imposition of penalty under Section 78 of the Act to the extent of 25% both deserve to be set aside - Appeal allowed. 2020 (2) TMI 299 Refund of service tax - Whether the Tribunal was correct in allowing the appeal of the assessee in respect of the part of the refund claim relating to invoices for port services? - HELD THAT:- The learned Tribunal has not discussed the relevant facts relating to grant of refund of the service tax to the Assessee with regard to service provided by M/s.Natvar Parikh Industries to the Assessee. - the learned Tribunal has not decided the real issue arising in the matter as is sought to be canvassed before us by the learned counsel for the Revenue. The case is remanded for detailed examination - appeal allowed by way of remand. 2020 (2) TMI 294 Classification of services - construction service along with materials (composite contract) - classifiable under works contract service or commercial or industrial construction service ? - extended period of limitation - HELD THAT:- The service rendered by the appellant is taxable only and the category of works contract service in view of the law laid down by Hon ble Supreme Court in Larsen Toubro [ 2015 (8) TMI 749 - SUPREME COURT ]. Also, the work relating to road construction, even in the premises of NTPC, which may be termed as private road is exempt service as per the definition of works contract service which specifically exempts road service . There is no distinction made out by the legislature with respect to public road and private road. Further, admittedly, the appellant have paid the service tax under the works contract composition scheme along with the interest. The appellant is entitled to pay tax under the works contract composition scheme and once they have discharged the tax liability there is no further liability on them. Appeal dismissed - decided against Revenue. 2020 (2) TMI 292 Photography services - exemption towards value of goods - Benefit of N/N. 12/2003-ST dated 20.06.2003 - allegation is that invoices raised did not specifically indicate the value of the goods and materials sold by the assessee - HELD THAT:- The Adjudicating Authority has categorically found that the invoices furnished by the appellant were not sufficient enough to conclusively establish the value of the goods and materials and hence it was all the more relevant for the assessee to furnish the necessary documentary proof. Therefore, going by the judicial discipline it has to be examined whether the assessee-appellant has successfully discharged the primary burden, with the support of documentary proof. The appellant has also contended as to its eligibility to Cenvat Credit if service tax was demanded without extending the benefit of Notification No. 12/2003, but however, a perusal of the impugned orders does not reveal any such contentions urged by the appellant and therefore we deem it proper in the interest of justice to remit this issue of verifying the eligibility or otherwise of the appellant to the Cenvat Credit in question, to the file of the adjudicating authority who shall call for such documents as may be necessary in this regard. Appeal allowed by way of remand. 2020 (2) TMI 291 Non-payment of service tax - services of construction of residential units (police quarters to Tamil Nadu Police Housing Corporation) - HELD THAT:- The issue whether the construction of residential units for Tamil Nadu Police Housing Corporation would be subject to levy of service tax was considered by the Tribunal in the case of N. RANGASAMY CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM [ 2019 (2) TMI 690 - CESTAT CHENNAI] where it was held that construction of such quarters for police personnel will fall under exclusion category and would not be exigible to service tax. Appeal allowed - decided in favor of appellant. 2020 (2) TMI 285 Non-payment of service - demand alongwith interest and penalty - HELD THAT:- The appellant has not set out any ground explaining the reason for non-deposit of the service tax with the Government, even though collected from the customers, in providing the taxable service. Therefore, I do not find any reason to interfere with the orders of the authorities below. Appeal dismissed - decided against appellant. 2020 (2) TMI 282 Business Support services - activity of purchasing space on ocean going vessels from shipping companies and selling the same to various exporters for export of goods - HELD THAT:- There is no dispute about the activity being carried out by the appellant i.e. they are engaged in purchase and sale of space on ocean going vessels. In the transaction of purchase and sale of space, they earn some profit for the reason that in some cases, the sale price of the space to various exporters is more than the purchase price of the space paid to shipping companies. There is no service involved in such transaction as the purchase and sale of the space is an activity of sale and purchase and hence, not liable to service tax. This issue has been considered by various judgments time and again and this Tribunal held that since the activity of sale and purchase involves no service hence the profit earned on sale of space is not liable to service tax. The issue is no longer res-integra and in all the judgments it has been categorically held that any amount charged for space on ocean going vessels, over and above the purchase price is not liable to service tax - Appeal allowed - decided in favor of appellant. Central Excise 2020 (2) TMI 306 Liability of excise duty - job-workers for manufacture of goods - HELD THAT:- The distinction between a manufacturer and an agent of the manufacturer and the liability to pay excise duty has not been investigated - the impugned order of the tribunal is set aside and it is directed it to rehear and redetermine the issue upon hearing the parties and by passing a reasoned order, preferably within four months of communication of this order - appeal allowed by way of remand. 2020 (2) TMI 302 Recovery and demand of duty from the purchaser of goods in auction - auction by the official liquidator of the manufacturing company - Recovery u/s 11A(1) of the Central Excise Act, 1944 - provisions of Section 36A of the Central Excise Act, 1944 ignored - manufacturer of goods - time limitation - penalty - HELD THAT:- The Tribunal, after considering the submissions made on behalf of the respondent and considering the facts of the case, held that the assessee is neither a manufacturer of excisable goods nor purchased goods for purpose of manufacture of any product - In view of the finding of fact arrived at by the Tribunal holding that assessee is neither a manufacturer of excisable goods nor it has used purchased goods for manufacturing of other goods, no duty can be demanded under Section 11A(1) of the Act, 1994. Appeal dismissed - decided against appellant. 2020 (2) TMI 293 CENVAT credit - duty paying invoices - denial of credit on the ground that the invoices in respect of input services on which Cenvat Credit was availed, are bearing hand written numbers and in some of the invoices either Registration Number was not mentioned or the registration number was over written - HELD THAT:- The invoice should bear serial numbers, however, there is no mention in the rules that the invoice should bear Pre-printed Serial Numbers. Therefore, the invoice should be Serially Numbered irrespective, whether, it is hand written or Pre-printed. Therefore, the Learned Commissioners finding that the invoice should bear Pre-Printed Serial Numbers is not flowing - As regard non-mention of service tax registration or it is over written on the invoice the same is only procedural lapse, so long, there is no dispute regarding payment of service tax by the service provider. At the most, if the department has any doubt about the authenticity of the invoices due to the said discrepancies the department is free to carry out the verification of invoices at the service providers end to ensure that with reference to the invoices on which credit was availed, proper service tax was paid. The Learned Commissioner proceeded to disallow the credit solely on the ground that the invoices do not bear the Pre-printed Serial Number and the Registration Number is not mention in the invoice or it is over written - merely for the for the said discrepancies cenvat credit cannot be denied as held in catena of judgments, some of which cited by the Learned Counsel, so long it is not under dispute that the service tax was paid by the service provider. Since, Learned Commissioner has not given any finding on the submission of the appellant made in para (v) and (viii) of the impugned order, the matter needs to be re-considered only on the aspect that on the disputed invoices, the service providers have paid the service tax. Appeal allowed by way of remand. 2020 (2) TMI 290 CENVAT Credit - iron ore fines - Exempt goods or not - Whether the iron ore fines as cleared by the appellants can be considered as a separate excisable but exempted commodity? HELD THAT:- In the present case, the finer iron ore/ the input as inevitably generated in the process of segregation is admittedly not usable in the klin for the purpose of manufacture of the final product i.e. the sponge iron. However, it is still the part of the input. The iron ore fines are therefore, held not to be the excisable commodity. The findings of original adjudicating authority are found to be correct. The findings of impugned order under challenge being contradictory to this effect are held liable to be set aside. The Department has brought nothing on record to show that the iron ore fines can be considered as exempted goods. Apparently and admittedly, there is no Notification of the Revenue granting exemption to this product. Thus, the embargo created in Rule 6 (3) (b) of CCR will not apply for removal of iron ore fines from the appellant s factory. Confirmation of demand by Commissioner (Appeals) is therefore, held to be not proper and justified. Appeal allowed - decided in favor of appellant. 2020 (2) TMI 288 Classification of goods - Nimbooz - fruit pulp or fruit juice based drink - packaged nimbu pani - whether classifiable under Chapter Sub-heading No. 2202 9020 of Central Excise Tariff Act, 1985 or under 2202 1020 of CETA - benefit of exemption under Sl. No. 24 of Notification No. 1/2011-CE dated 01.03.2011 - HELD THAT:- An identical issue has been decided by the Hon ble Larger Bench in M/S BRINDAVAN BEVERAGES PRIVATE LIMITED, KRANTI KUMAR CHANDRAKAR, M/S PEPSICO INDIA HOLDINGS PRIVATE LIMITED VERSUS COMMISSIONER CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, HAPUR AND BAREILLY [ 2019 (10) TMI 762 - CESTAT ALLAHABAD (LB)] and in view thereof, the classification declared by the appellant under the Chapter sub-heading 2202 9020 is held to be correct and hence the Revenue is not justified in reclassifying Nimbooz as Lemonade under Chapter sub-Heading 2202 1020 . Appeal allowed - decided in favor of appellant. 2020 (2) TMI 283 Classification of goods - LIC forms, Inland Letter for LIC, Premium intimation letter of LIC, Bank Statement forms stationeries for other purposes for LIC, Insurance, Banks, Government organization and other continuous stationary for various Government department - whether classified under Chapter Sub Heading No 4820 40 00 of the Central Excise Tariff Act, 1985 or otherwise? - circular No 1052/1/2017-CX dated 23rd February 2017. HELD THAT:- In view of the clarification issued by CBEC, we do not find any merits in the impugned order holding the classification of the impugned goods under Chapter Heading 4820. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2020 (2) TMI 305 Interpretation of statute - Base Production Volume and the Base Sales Volume as eligibility for claiming the sales tax - Interest Free Sales Tax Deferral Scheme - HELD THAT:- While no valid exception can be taken to the Clause 5.3 of the Eligibility Certificate issued in terms of the G.O.Ms.No.119 dated 13.04.1994 read with original notification G.O.Ms.No.500 dated 14.05.1990, but they seems to have genuine confusion which is arising on the computation of the Base Production Volume/Base Sales Volume on availing taxable turnover in the present case. Whether the Base Sales Volume comprises only local sales taxable under the TNGST Act or would include the Global Sales made by the Assessee viz., Branch transfers, interstate sales and even Export Sales. Since there was no clarity with regard to the same, in the Eligibility Certificate issued to the petitioner, the Revenue has taken a different stand in the Notice dated 29.09.2009 and which resulted in this litigation. The clarity about the inclusion of the sales which are not taxable under the provisions of the TNGST Act to be taken as Base Sales Volume or not, it ought to have been discussed even before issuance of the Eligibility Certificate itself, so that any confusion with regard to availment of the benefit of deferral in terms of the EC could have been removed at that time itself. We should relegate the Appellant/Assessee back to the stage where the confusion about determination of the Base Production Volume/Base Turnover arose and the respondents/SIPCOT as well as the Commercial Tax Department should take a joint decision in the matter with regard to the said terms definite in the Scheme itself after giving an opportunity of hearing to the Appellant/Assessee. The respondents/SIPCOT and Commercial Taxes Department are directed to constitute a Joint Committee of the two Senior Officials of the respective Departments to re-decide the issue of the Base Turnover in the light of the contentions raised by the Appellant/Assessee in this Court - appeal disposed off. 2020 (2) TMI 303 Imposition of penalty u/s 54(1)(14) of the U.P. Value Added Tax Act, 2008 - it is alleged that on inspection of the vehicle no papers were produced despite the fact that goods were being imported from outside the State and that the goods were destined for Lucknow were found to be on a different location from the route from Jamshedpur (Jharkhand) to Lucknow (U.P.) - HELD THAT:- There is always apprehension that in absence of relevant documents the goods can be sold to unregistered dealers and thereby transaction would not be recorded in the books of account and the tax due would also be evaded. As per provisions contained in Section 50 of the Act, 2008, provides for penalty to stem the evasion of tax and to see that all the transactions are duly recorded in the books of account of the assessee which can subsequently be looked into by the taxing authorities. In the present case, the Tribunal being last fact finding authority has considered the submissions made by the revisionist as well the documents produced before them. The Tribunal after considering the entire facts and circumstances of the case has given cogent reasons for not accepting the version of the revisionist. The Tribunal has rejected the revision after duly considering all the relevant facts and pleas raised by the assessee. No ground exist for interference with the order of the Tribunal and no question of law arises for determination by this Court - Revision dismissed. 2020 (2) TMI 301 Attachment of Bank Accounts - appeal and stay petition for extention were pending- whether the respondent no.4 could be said to be justified in ordering attachment of the bank accounts of the writ -applicant and in directing the respondent no.5 bank to withdraw the amount and credit the same in the government treasury? HELD THAT:- We fail to understand that although this Court clarified vide order dated 01.05.2019 that the pendency of this petition shall not preclude the appellate authority from deciding the application for extension of stay made by the writ -applicant, yet why no such order has been passed till this date. In fact, by this period of time, the appeal itself could have been heard and disposed of - It is not in dispute that the stay order is of the year 2013. It was extended last up to June 2017. Thereafter, there does not seem to be any extension. The action on the part of the respondent no.4 in attaching the bank accounts of the writ -applicant pending the appeals before the appellate authority is not justified. The Department has a bank guarantee as on date of ₹ 1 crore - the appellate authority should proceed immediately with the hearing of the appeals with an understanding that till the final disposal of the appeals, there shall be no coercive recovery of the amount demanded. Application disposed off. 2020 (2) TMI 298 Restoration of lump sum cancellation order - permission of composition of tax - Section 14D read with Rule 28(C)(7) of Gujarat VAT Act - HELD THAT:- The Tribunal has rightly come to the conclusion by quashing and setting aside the order of cancellation of the permission of composition of tax and restoring the matter to the Cancelling Officer with a liberty to take appropriate decision as per law regarding permission for composition after the appellant authority finally decide the liability and the case of the assement for the year 2016-2017-2018 under the VAT Act, 2003. No question of law much less any substantial question of law arise out of the impugned judgment and order passed by the Tribunal - Appeal disposed off. 2020 (2) TMI 297 Withholding the refund of excess amount - time limitation for completion of assessment is expired - Section 39 of the VAT Act, 2003 - HELD THAT:- In the absence of any assessment for the year 2011-2012 and more particularly, when the time period for completion of assessment is over as prescribed under the provisions of Section 34(9) and 34(10) of the Act, 2003, the respondents are not entitled to withhold the refund. Reliance placed by the respondents on subsection (8A) of Section 34 is also misplaced in the facts of the case as sub-section 8A of section 34 is applicable only when, if the prescribed authority is satisfied that the tax has been evaded etc. In the facts of the case, no notice has been issued till date by the respondent authority invoking provisions of Section 8(A)(a) of Section 34 of the VAT Act, 2003 - Therefore, in contemplation of invoking such provision for assessment without there being any satisfaction of the prescribed authority that the tax has been evaded etc. by the petitioner, the refund cannot be withheld. The respondents are directed to pay to the petitioner amount of ₹ 63,843/- together with 6% interest forthwith and latest by 31st January 2020 - petition allowed. 2020 (2) TMI 296 Input tax credit - levy of purchase tax - Section 12(1) of the TNVAT Act, 2006 - HELD THAT:- Value Added Tax (tax) is payable on the sale of goods under Section 3 of the Act. Section 12(1) of the Act is an exception. As per Section 12(1) of the Act purchase tax is payable by a recipient-dealer who in the course of his business, purchases any goods (the sale or purchase of which is liable to purchase tax under the Act) under the circumstances prescribed therein. This provision is subject to the charging provisions of section 3(1) of the Act - These two taxes are available as an input tax credit under Section 19 and Section 12(2) of the Act respectively. As per section 12(2) of the Act, such dealer is also entitled to input tax credit (ITC) on the tax paid on the goods specified in the 1st schedule. In other words, purchase tax payable under section 12(1) of the Act is available as an input tax credit. This provision is also exception to Section 19 of the Act. Input tax credit that is made available under Section 12(2) and under Section 19 of the Act can be adjusted under Section 3(3) of the said Act. As per Section 3(3) of the Act, tax payable under Section 3(2) by a registered dealer is to be reduced in the manner prescribed to the extent of tax paid on the purchase of goods specified in Part B or Part C of the 1st schedule, inside the State, to the registered dealer, who sold the goods to him - there is no scope for ambiguity. Input tax credit can be adjusted only for payment of tax under Section 3(2) and not under Section 12(1) of the Act. Purchase tax payable under Section 12(1) of the Act has to be paid in cash. Such purchase tax can be adjusted on the output tax in terms of section 3(3) of the Act. The impugned order passed by the 1st respondent is sustainable - the above writ petition is liable to be dismissed and it is hereby dismissed. Indian Laws 2020 (2) TMI 308 Dishonor of Cheque - amount outstanding against defendants - Section 138 Negotiable Instruments Act, 1881 - delay in filing review application - HELD THAT:- The dismissal of cases under Section 138 NI Act by the learned Magistrate on the basis of non-filing of Annexures I II without examining the MoU and import of dishonoured cheques, would even otherwise be not binding upon this Court. Oral submissions of any alleged loss without an iota of written record allegedly placed by defendants, cannot be entertained, the impugned order having being merged in orders of LPAs . Also, there is much delay in filing of review application. The review application and delay condonation application are bereft of any merit and are rejected with costs of ₹ 10,000/- to be deposited with Lawyers Welfare Fund, Delhi High Court, New Delhi - application dismissed.
← Older Newer →

Quick Updates:

What's New:
Latest Case Laws

What's New:
Latest Notifications

What's New:
Latest Circulars

F: Stock damaged in recent floods

F: GST on Solar Plant

A: PENALTY ON DIRECTORS CONTRAVENING EXPORT REGULATIONS UNDER FOREIGN EXC...

A: Difference between “License” and “Royalty”

A: Penalty proceedings under Section 130 of the CGST Act cannot be initia...

N: Inland Container Depots for loading and unloading of goods - Seeks to ...

C: Guidelines to Stock Exchanges, Clearing Corporations and Depositories

T: Supreme Court Upholds Validity of Re-Assessment Notices Issued During ...

F: Transfer of ITC without filing ITC-02

F: assessment order

F: INTERMEDIARY SERVICES OR EXPORT SERVICES

H: Revision: Hospital receipts verified, partial refunds & fees paid subs...

F: ITC Issue in case of Acqusition of Company in Insolvency

H: Goods matched documents like e-way bill and invoices; detention order ...

H: Goods Inspection Matches E-Way Bill, Lack of Tax Evasion Intent Quashe...

H: Income tax reassessment validity: AO initiated proceedings u/s 147 ins...

H: Reassessment Rules Interpretation: Taxpayer Wins Over Accommodation En...

H: Sale-purchase loss disallowed unreasonably by tax officer, commercial ...

H: Building sale value can't determine depreciation; actual consideration...

H: Loan to equity conversion attracts income tax on excess share premium ...

H: Property purchase: Joint owners pay via banking channels before regist...

H: Tax exemption limit for leave encashment: Local authorities' employees...

H: Tax assessments beyond 6-year limit quashed, satisfaction note lacked ...

H: Cash found in lockers linked to temple trust and educational foundatio...

H: Microphone Tech Classification: Functionality Over Technology.

H: Exemption from Social Welfare Surcharge on duty-free imports via scrips.

H: Claim for performance pay not an operational debt under IBC; Multiple ...

A: Director Identification Number

A: No GST is applicable for the services provided by the Director under p...

A: Income Tax Act Revamp (Comprehensive Review): Status and Suggestion on...