Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 19, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Validity of order passed against a deceased - Section 93 of CGST Act not followed - - series of assessment orders rendered as late as in March 2019 has been passed as against an assessee who is already dead by then and therefore, the impugned assessment orders is a nullity in the eye of law. - HC
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Reopening of portal for filing of Form Tran-1 - transitional credit - transition to GST regime - GST is in a nascent stage - the time lines set out for transition of credit cannot be very firmly enforced in so far as they are not mandatory - HC
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Levy of Interest on belated payments - Section 50 of CGST Act - Proviso to Section 50(1), as per which interest shall be levied only on that part of the tax which is paid in cash, has been inserted with effect from 01.08.2019, but clearly seeks to correct an anomaly in the provision as it existed prior to such insertion. It should thus be read as clarificatory and operative retrospectively. - HC
Income Tax
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Seeking withdrawal of the Look Out Circular (LOC) - Income tax inquiry proceedings against the Chartered Accountant (CA) in the matter of Punj Lloyd Group - The issuance of the LOC is a serious matter as it contains full particular of the individual which are sent throughout the world. - To be recalled - HC
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Late payment of employee's contribution towards PF, ESIC - additions by invoking provisions of Section 36(1)(va) read with Section 2(24)(x) - Finding recorded by the Tribunal that if such wages are paid for the following month, the liability to deposit the employee's contribution to the fund gets deferred by another month is not the correct statement of law. - HC
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FTS in the given case would be taxed at the beneficial rate of 15% on gross receipts as provided in Article 13(2) of the India-UK DTAA. - the tax liability borne by GRSE will also need to be grossed up for arriving at gross receipts of the Assessee and after such grossing up such receipts have to be taxed @ 15%. - AT
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Validity of making a reference to the DVO u/s 142A - unexplained expenditure u/s 69C - ejection of books of accounts is a pre-condition for making a reference to DVO and there was admittedly no such rejection of books of accounts - the reference to DVO in the present case is illegal - AT
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Addition with respect to interest on FD with banks on account of difference of amount reflected in form 26AS and amount disclosed in the return - Merely because the extra amount is reflected in form 26AS, the assessee cannot be asked to explain the difference. - AT
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Levy of penalty u/s 271(1)(c) - suo moto disclosure of income before detection by the AO - It is the settled law that the belated return cannot be revised under the provisions of section 139(5) of the Act. In view of the above we hold that there was no possibility for the assessee to revise the return of income - No penalty - AT
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Non-collection of TCS - since the assessee does not have any manufacturing or mechanical working processes, the scrap as defined in the said section cannot be generated. Therefore, the assessee is not covered by Section 206C. - AT
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Deduction u/s 80O - any income received by the assessee from the Government of a foreign State or foreign enterprise in consideration for the useoutside India of any patent, invention, design or registered trade mark - no addition would be sustainable in law merely on the basis of suspicion, conjectures or surmises. - AT
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Nature of land sold - capital asset u/s 2(14) or agricultural land - If the previous owner did not carry out agricultural activity on an agricultural land, however did not alter or change its nature and character, but the subsequent owner of land starts the agricultural activity on the said land, under the circumstances, it can be safely held that the land remains the agricultural land and has not lost its original characteristic. - AT
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Disallowance u/s 40A(3) - cash payment made for purchase of land to farmers situated in rural area exceeding the prescribed threshold - the transaction and it being free from vice of any device of evasion of tax is relevant consideration for which section 40A(3) has been brought on the statute books - Additions deleted - AT
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Characterization of income - Transfer of Carbon Credits - the receipt on the sale of carbon credits is liable to be treated as capital receipts, admittedly, the expenditure incurred by the assessee in respect of the sale of the carbon credits cannot be treated as Revenue expenditure at all. - AT
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LTCG - exemption u/s 54EC - terminology of “Month” in the context of provisions of section 54EC - the term “Month” means calendar month (and not period of thirty days), which should be applied for the purpose of section 54EC of the Act. - AT
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Assessment u/s 153C - addition u/s 68 - Merely because regular books, of other persons are found with searched persons assumption of jurisdiction by AO of Other persons may be justified but since these are generally the regular books of account on the basis of which returns are prepared, there cannot be any undisclosed income arising from them. - AT
Customs
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Interpretation of Statute - imposition of interest - The retrospective levy is not intended and the amendment in Law is a substantive provision for making a provision for levy of interest in the present case - Therefore, for a period prior to 13.07.2006, such levy of interest cannot be imposed on the Assessee. - HC
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Illegal attempt for exportation - It appears that the investigation agency could not prove beyond doubt that the goods were actually attempted to export illegally to Nepal. The activities of the appellants may be suspicious but not enough to hold charge of attempted to export in the absence of positive evidence - AT
Corporate Law
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Filing of forms in the Registry (MCA-21) by the Insolvency Professional (Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016) - Circular
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Principal of casus omissus - Amalgamation of the Limited Liability Partnership firm into Private Limited company - The principal of casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself. There is no such occasion to apply the principal of casus omissus. - AT
Indian Laws
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Ministry Of Finance declares GST Database & infrastructure installed at GSTN as protected - Notification
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Dishonor of Cheque - the defence as raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law. - HC
Service Tax
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Whether provisions of hostel facility and sale of books are to be combined with provisions of commercial training or coaching service as bundled service? - it is not possible to bundle service of provisions of hostel facility with commercial training or coaching in the present case - AT
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Refund of accumulated credit - export of services - With the numerator and denominator being identical, the eligible accumulated credit would have to be sanctioned in entirety. Once eligibility is articulated in the Rules as a formula, an interpretation of the formula is beyond the authority of law. - AT
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Imposition of penalties - service tax alongwith interest was paid before issuance of SCN - provisions under Sub-section (3) to said Section 73 are not applicable where non-payment of service tax is on account of suppression of facts - levy of penalty confirmed - AT
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Nature of activity - manufacture or service - re-treading of old tyres - ince the activity of appellant is amount to manufacture, it is a subject matter of Central Excise and will not leviable to service tax - AT
Central Excise
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Interest on delayed refund - area based exemption - there was no distinction between refund under Area Based Exemption Notification and other refunds u/s 11B and interest u/s 11BB is payable on such refunds - AT
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Power to review of the refund order - Period of limitation - there are no merits in the contentions of the appellant (revenue) that the review could not be completed within the time limit prescribed as the order was not received and that the same could be taken up only after the receipt of duly attested photocopy of the Order-in-Original. In view of the above we hold that the review is undertaken much after the stipulated time limit prescribed therein. - AT
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Exemption to specified goods of chapters 50 to 63 - Textile and garments - fixation of Brand Name - the markings on jute bags were under compulsion of law and meant for identification, monitoring and control by Government Agencies and such markings cannot be considered as brand name. - AT
Case Laws:
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GST
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2020 (2) TMI 797
Detention of goods alongwith vehicle - only reason for detention is that the vehicle number in Part B of the e-way bill mismatches with the actual vehicle number - HELD THAT:- It is ordered that the goods and vehicle detained pursuant to Ext.P4 series of orders, shall be released by the 1st respondent to the petitioner on the petitioner furnishing bank guarantee for the value of the amounts shown in those orders. Petition disposed off.
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2020 (2) TMI 796
Validity of order passed against a deceased - Section 93 of CGST Act not followed - service of SCN - HELD THAT:- It appears that the respondent does not raise any serious dispute as to the factual assertion made by the petitioner that the assessee concerned (who appears to be the paternal grandfather of the petitioner herein) is said to be one of the legal hairs of the deceased assessee as the petitioner's father who is the son of the assessee has died as early as on 27.03.2018 as evident from Ext.P3 death certificate issued by the Registrar of Births and Deaths, which is much before the rendering of the impugned Ext.P3 series of the assessment orders issued in March 2019 - Since, that appears to be the undisputed position, it is only to be held that Ext.P3 series of assessment orders rendered as late as in March 2019 has been passed as against an assessee who is already dead by then and therefore, the impugned assessment orders is a nullity in the eye of law. The 1st respondent will be at liberty to take fresh action in the said assessment proceedings, after ascertaining from the competent Revenue Officials as to who all are the legal representatives or legal heirs of the said deceased assessee and then the respondent will be at liberty to render reasonable opportunity of being heard to such legal representatives and then finalise the assessment proceedings in the manner known to law. Petition disposed off.
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2020 (2) TMI 795
Reopening of portal for filing of Form Tran-1 - transitional credit - transition to GST regime - HELD THAT:- A Division Bench of the Gujarat High Court in M/S SIDDHARTH ENTERPRISES THROUGH PARTNER MAHESH LILADHAR TIBDEWAL VERSUS THE NODAL OFFICER [ 2019 (9) TMI 1320 - GUJARAT HIGH COURT] has considered the question as to whether a claim for transition of credit is only a procedural requirement or a mandatory one. After an exhaustive discussion of the matter, the prayer of the petitioner therein was acceded to, the Bench holding that Cenvat credit earned under the erstwhile Central Excise Law is the property of the writ-applicants and it cannot be appropriated for merely failing to file a declaration in the absence of Law in this respect. It could have been appropriated by the government by providing for the same in the CGST Act but it cannot be taken away by virtue of merely framing Rules in this regard. (i) the era of GST is in a nascent stage and both the Department as well as assessees are still learning the ropes (ii) a rigid view should thus not be taken in matters involving procedural requirements such as availment of credit; (iii) it is common knowledge that assessees pan India are facing difficulties in accessing the system and uploading Forms to seek transition of credit, and (iv) three Division Benches have taken the view that the time lines set out for transition of credit cannot be very firmly enforced in so far as they are not mandatory. The respondents were directed to permit the petitioner to file the Declaration in Form Tran-1 so as to enable them to claim transitional credit of eligible duties as prayed for - writ petition is disposed directing the respondent to permit the petitioner to access the portal for uploading of Tran-I, forthwith.
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2020 (2) TMI 794
Levy of Interest on belated payments - Section 50 of CGST Act - whether in a case, where credit is due to an assessee, payment by way of adjustment can still be termed 'belated' or 'delayed'? - HELD THAT:- The use of the word 'delayed' connotes a situation of deprival, where the State has been deprived of the funds representing tax component till such time the Return is filed accompanied by the remittance of tax. The availability of ITC runs counter to this, as it connotes the enrichment of the State, to this extent. Thus, Section 50 which is specifically intended to apply to a state of deprival cannot apply in a situation where the State is possessed of sufficient funds to the credit of the assessee. The proper application of Section 50 is one where interest is levied on a belated cash payment but not on ITC available all the while with the Department to the credit of the assessee. The latter being available with the Department is, thus, neither belated nor delayed. Proviso to Section 50(1), as per which interest shall be levied only on that part of the tax which is paid in cash, has been inserted with effect from 01.08.2019, but clearly seeks to correct an anomaly in the provision as it existed prior to such insertion. It should thus be read as clarificatory and operative retrospectively. Petition allowed - decided in favor of petitooner.
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Income Tax
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2020 (2) TMI 793
Seeking withdrawal of the Look Out Circular (LOC) - Income tax inquiry proceedings against the Chartered Accountant (CA) in the matter of Punj Lloyd Group - the allegation is that, it is the petitioner who had arranged the entities that raised bogus bills for M/s Punj Lloyd Limited in the middle east - HELD THAT:- The petitioner is not an employee of M/s Punj Lloyd Limited as stated by the petitioner and not denied by the respondents. It is also not the case that the petitioner is not joining the investigation or that he has not co-operated during the investigation, rather according to the respondents he has even made some admissions during the course of the investigation and recording of his statements. The issuance of the LOC is a serious matter as it contains full particular of the individual which are sent throughout the world. Therefore, keeping in view the above said facts and circumstances, there is no justification in keeping the present LOC alive. The same is, therefore, directed to be recalled by the issuing authority. The following conditions are imposed on the petitioner : (a) That he shall join the investigation as and when called by the investigating officer. However, the investigating officer shall give him atleast 7 days prior notice. (b) That he shall co-operate in the investigation. (c) That in case the petitioner is proposes to travel beyond Dubai, he shall furnish details of the country (ies) with his complete itinerary to the investigating officer. In case of violation of the above conditions imposed on the petitioner, the respondents will have the liberty to approach this Court.
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2020 (2) TMI 792
Late payment of employee's contribution towards PF, ESIC - additions by invoking provisions of Section 36(1)(va) read with Section 2(24)(x) - HELD THAT:- Section 38 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 makes it obligatory for the employer before paying him his wages to deduct the employee's contribution along with the employer's own contribution as fixed by Government. The employer is further obliged to pay the same within fifteen days of the close of every month pay i.e. such contribution and administrative charges. The reference to fifteen days of the close of the month must be in relation to month during which the payment of wages is to be made and corresponding liability to deduct employee's contribution to the fund arises. This Court held that the expression within fifteen days of the close of every month therefore, must be interpreted as having reference to the close of the month, for which, the wages are required to be paid with corresponding duty to deduct employee's contribution and to deposit the same in the fund. Finding recorded by the Tribunal that if such wages are paid for the following month, the liability to deposit the employee's contribution to the fund gets deferred by another month is not the correct statement of law. -Decided in favour of the Revenue and against the assessee.
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2020 (2) TMI 791
Income accrued in India - permanent establishment in India - India-UK DTAA - FTS income - income of non-resident - HELD THAT:- There was no PE of the Assessee in India during the relevant previous year, the question that would now require consideration is with regard to taxability of the FTS. Considering the fats of the case, as per Article 13(2) of the India-UK DTAA, FTS income of non-resident is taxable @ 15% on gross receipts. Whereas as per section 115A of the Act, FTS is taxable @ 20% on gross receipts. Since, the provisions of the India-UK DTAA is more beneficial, the Assessee is entitled to the benefit of the provisions of section 90(2) of the Act. Accordingly, FTS in the given case would be taxed at the beneficial rate of 15% on gross receipts as provided in Article 13(2) of the India-UK DTAA. We also hold that the tax liability borne by GRSE will also need to be grossed up for arriving at gross receipts of the Assessee and after such grossing up such receipts have to be taxed @ 15%. Whether the assessee ought to be subjected to sec. 234B and 234C interest or not? - Suffice to say, learned co-ordinate bench s order in assessment year 2009-10 holds that the above interest provisions do not apply in case of the assessee being a non-resident company. We therefore adopt the very reasoning mutatis mutandis to decline the Revenue s instant substantive grievance as well. TDS u/s 195 - payments made to M/s Appledore International Ltd. in lieu of rendering technical services in UK forming subject-matter of 40(a)(ia) - HELD THAT:- Any disallowance stood rendered infructuous in view of the fact that it did not have any permanent establishment in India. We notice herein as well the tribunal s earlier order has already concluded that this sec. 40(a)(ia) disallowance issue stood rendered infructuous in view of the fact the sum in question has already been assessed as fee for technical services. The Revenue fails in its identical additional substantive grievance as well. All of the three identical substantive grounds raised at Revenue s behest fail therefore.
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2020 (2) TMI 790
Validity of making a reference to the DVO u/s 142A - unexplained expenditure u/s 69C - Non rejection of books of accounts - HELD THAT:- Reference to DVO in the present case is invalid because as held by the Hon ble Supreme Court in the case of Sargam Cinemas Vs. CIT [ 2009 (10) TMI 569 - SC ORDER ] rejection of books of accounts is a pre-condition for making a reference to DVO and there was admittedly no such rejection of books of accounts. It is clear from the aforesaid exposition of law on the issue that the reference to DVO in the present case is illegal and any addition made on the basis of such report cannot be sustained. Unvouched expenditure - HELD THAT:- contentions are general in nature and are without any particular reference and therefore, are not acceptable. Considering the facts and circumstances of the case we are of the view the addition sustained by the CIT(A) deserves to be upheld. - Decided against assessee.
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2020 (2) TMI 789
Unexplained unsecured loan and interest - Addition u/s 68 - HELD THAT:- Lenders of assessee are income-tax assessees whose PAN have been disclosed, AO cannot ask assessee to further prove genuineness of transactions without first verifying such fact from income-tax returns of lenders. In view of the foregoing, we are of the considered opinion, that addition sustained by the CIT (A) were not justified. Hence these grounds of appeal of the assessee are allowed. Unexplained investment / expenditure - HELD THAT:- We find that the assessee has filed copy of acknowledgement of return of income, contra confirmation for Kalpesh K Gosalina incurred for compound wall, copy of bills and proof of payment made though cash book. The payment has been shown in balance sheet as capital expenditure. This expenditure is not claimed in Profit Loss Account. Therefore, disallowance of it is not justified. The assessee has filed copy of Adinath Textile AND cashbook of Adinath Textile. Hence, source of expenditure is explained and expenditure being capital in nature cannot be disallowed. Accordingly, this addition is deleted.
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2020 (2) TMI 788
Levy of Penalty u/s. 271(1)(c) - non specifying the precise charge for imposition of penalty - addition u/s 68 treating long term capital gain as unexplained cash credit - HELD THAT:- In the case of furnishing inaccurate particulars of income, the onus is on the Revenue to, prove that the assessee had furnished the inaccurate particulars, while in the case of concealment of particulars of income, where the Explanation 1 is applicable; the onus is on the assessee to prove that he has not concealed the particulars of income. It is apparent from the Explanation-1, this Explanation clearly states where in respect of any facts material to the computation of total income of any person such person fails to offer an explanation or offers explanation which is found by the AO to be false or such person offers an explanation which he is not able to substantiate or fails to prove that such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been disclosed by him. We noted that the AO, failed to discharge his onus as he was not sure at the initiation of penalty under section 271(1)(c) for which specific charge of penalty has been initiated by the AO. Even while levying the penalty also, the AO simply relied on the Explanation 1 to s. 271(1)(c), though he levied the penalty for inaccurate particulars of income . Therefore, in our opinion, the basis of levy of penalty itself is not correct. As apparent from the provisions of s. 271(1)(c) that Explanation-1 of section 271(1)(c) is not applicable in case inaccurate particulars are furnished. Therefore, in our opinion, the basis of levy of penalty itself is not correct. Thus, we direct the assessing officer to delete the penalty. - Decided in favour of assessee.
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2020 (2) TMI 787
Exemption u/s 11 - cancellation/ withdrawal of registration u/s 12A(1)(a) - Charitable activity u/s 2(15) - Exemption denied on the ground that the purchase and sale of milk, milk product, cattle feed etc. does not come under the object of the assessee trust - HELD THAT:- There is no dispute about the activities being carried out by the assessee trust and it has maintained 11 Gaushalas and 14 Famine Relief Centres which is the main and pre-dominant object of the assessee trust. Hence, the impugned order passed by the ld. CIT(E) is based on the presumption of incorrect facts that the activities of the assessee trust are not in accordance with the object of the assessee trust. CIT(E) has even not taken into consideration the fact that the assessee is maintaining various Gaushalas and Famine Relief Centres and also carrying out various activities of imparting education and training. The assessee trust is also engaged in the activities of research and development of medicines by the use of cow products. Therefore, the findings of the CIT(E) is contrary to the undisputed facts regarding the objects of the assessee trust and the activities of the trust are being carried out for attainment of main objects of the trust. Hence impugned order of the CIT(E) is set aside and grant of registration u/s 12A is restored. Thus the appeal of the assessee is allowed.
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2020 (2) TMI 786
Assessment u/s 153A - proof of incriminating material found in search - addition u/s 68 - A.O. on the basis of statement of accommodation entry provider - HELD THAT:- As no incriminating material was found during the course of search, we, are of the view that the facts of the present case are identical to the facts involved in the case of Shri Brij Bhushan Singal Others [ 2018 (10) TMI 1635 - ITAT DELHI] wherein the similar issue has been decided stating that CIT(A) enhanced the income in the absence of any incriminating material found during the course of search and considered a new source of income which was outside the subject matter of the assessment framed by the AO or the grounds agitated by the assessee in its appeal before the ld. CIT(A). Therefore, the enhancement made u/s 153A r.w.s. 251 of the Act was not justified and accordingly the same is deleted. - Decided in favour of assessee.
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2020 (2) TMI 785
Mesne profit - receipt of compensation - Correct head of income - CIT-A treated it as revenue receipt and assessing the same under the head income from house property‟ - HELD THAT:- It is not in dispute that the assessee had received the sum of ₹ 2 Crores as compensation for wrongful possession of the erstwhile tenant in the property belonging to the assessee, though the same had been characterized by the revenue as arrears of rent taxable u/s.25B r.w.s. 25AA of the Act. We find that the other decisions relied upon by the ld. DR and the ld. AR need not be gone into in view of the fact that the aforesaid decision of this Tribunal in the case of Goodwill Theaters [ 2013 (6) TMI 781 - ITAT MUMBAI] has already been decided in favour of the assessee and the matter is pending at present before the Hon‟ble Jurisdictional High Court pursuant to the restoration of the appeal by the Hon‟ble Supreme Court to the Hon‟ble Bombay High Court. Hence, as on date, there is a decision of this Tribunal on the impugned issue which is in favour of the assessee and any reliance placed on any other decision would be premature at this stage in the aforesaid circumstances. Hence, we proceed to follow the decision of the Co-ordinate Bench of this Tribunal in the case of Goodwill Theaters referred to supra by holding receipt of compensation (i.e. mesne profit) of ₹ 2 Crores as capital receipt. Disallowance of professional fees u/s.40(a)(ia) - HELD THAT:- We find that the ld. AR fairly stated that let this issue be factually valued by the ld. AO as to whether the recipient had already disclosed the subject mentioned receipt in its returns and had paid due taxes thereon. We find lot of force in the said argument as it is a statutory claim made by the assessee in terms of second proviso to Section 40(a)(ia) of the Act which says that once the recipient has already paid the taxes on a particular payment made by the assessee to the said recipient, then the disallowance u/s.40(a)(ia) of the Act cannot be invoked in the hands of the payer i.e. assessee herein. The ld AO is directed accordingly. Hence the ground No.2 raised by the assessee is allowed for statistical purposes. Addition with respect to interest on fixed deposit with banks on account of difference of amount reflected in form 26AS and amount disclosed by the assessee in the return - HELD THAT:- Assessee had offered the interest income of ₹ 61,41,915/- towards interest on fixed deposits with banks based on the certificate issued by The National Co-operative Bank Ltd., which is enclosed. Merely because the extra amount is reflected in form 26AS, the assessee cannot be asked to explain the difference. The assessee herein had placed reliance on the external evidence i.e., the certificate given by the bank for offering interest income on deposits to tax. If the said bank had disclosed some other figure while filing its TDS returns by mentioning the PAN of the assessee, then assessee cannot be called upon to reconcile the difference. There is no dispute that it is the very same bank which had also given the certificate to the assessee certifying that only a sum of ₹ 61,41,915/- has been paid as interest to the assessee during the year under consideration. Hence, the addition made by the AO and sustained by the ld. CIT(A) does not survive. Accordingly, the ground raised by the assessee is allowed. Correct head of income - treatment of interest income on fixed deposits - income from other sources or profits and gains of business or profession - HELD THAT:- As relying on M/S. DALMIA PROMOTERS DEVELS. (P) LTD. [ 2015 (9) TMI 1247 - SUPREME COURT] we hold that the interest income on fixed deposits in the peculiar facts of the instant case should be assessed only under the head business income‟. Accordingly, ground raised by the assessee is allowed.
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2020 (2) TMI 784
Levy of penalty u/s 271(1)(c) - suo moto disclosure of income - income offered in the revised computation has been accepted - HELD THAT:- In the absence of any incriminating document found during the search proceedings at M/s DhanjiMama Group suggesting undisclosed income, it is transpired that the assessee has admitted the impugned income in his hands voluntarily in the statement furnished under section 131 of the Act. There was no communication by the Investigation office of the Income Tax Baroda who recorded the statement under section 131 of the Act of the assessee in connection with the search proceedings at M/s DhanjiMama Group about the fact that the assessee has disclosed such income which was not offered in the income tax return. We are holding so based on the order of the authorities below as this fact/information was not emanating from the respective orders There was questionnaire issued by the AO having jurisdiction over the assessee under section 142(1) of the Act which were filed before us. But, in none of the questionnaire the question regarding the undisclosed income admitted by the assessee in the statement furnished under section 131 of the Act was made. Accordingly, we are not impressed with the argument of the learned DR that there was a question raised about the reasons which has affected the income of the assessee. In our view, such question raised by the AO is a general question and has nothing to do with the income of the assessee admitted by him in the statement furnished under section 131 of the Act. Accordingly we can safely assume that the assessee has disclosed the impugned income voluntarily prior to the detection by the Income Tax Office. Assessee filed his original return of income dated 30- 03-2012 which is belated income tax return under section 139(4) of the Act. It is the settled law that the belated return cannot be revised under the provisions of section 139(5) of the Act. In view of the above we hold that there was no possibility for the assessee to revise the return of income under the provisions of the Act. Accordingly, the assessee had no option except to revise the computation of income. Accordingly, we conclude that the assessee has made suo moto disclosure of income as discussed above. Hence, the penalty in the instant case cannot be attracted under the provisions of section 271(1)(c) - Decided in favour of assessee.
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2020 (2) TMI 783
Penalty u/s 271(1)(c) - defective notice - as alleged irrelevant default in the Show cause notice was not struck off by the A.O - addition on account of Unexplained investment in the hands of the assessee and addition of perquisite of rent free accommodation made in the hands of the assessee - HELD THAT:- Failure on the part of the A.O to clearly put the assessee to notice as regards the default for which penalty under Sec. 271(1)(c) was sought to be imposed on him by failing to strike off the irrelevant default in the SCN , dated 28.12.2010, had left the assessee guessing of the default for which he was being proceeded against for. We thus in the backdrop of our aforesaid observations are of a strong conviction that as the A.O had clearly failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default for which he was being proceeded against, therefore, the penalty under Sec. 271(1)(c) imposed is clear violation of the mandate of Sec. 274(1) of the Act cannot be sustained. - Decided in favour of assessee.
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2020 (2) TMI 782
TDS u/s 194J - payment made to M/s. BSNL and M/s. Bharti Airtel Ltd. towards internet charges - HELD THAT:- Issue decided in favour of assessee as relying on M/S. SHRIRAM INSIGHT SHARE BROKERS VERSUS JCIT, RANGE-59 (TDS) , KOLKATA [ 2018 (2) TMI 744 - ITAT KOLKATA] wherein as held no TDS is required to be made on payments made towards internet and communication charges. - Decided in favour of assessee. Non-collection of TCS and interest thereon - applicability of section 206C - HELD THAT:- As submitted by the assessee before ld. CIT(A) that the assessee being a Hotel is not capable of generating waste and scrap from the manufacturer or mechanical working of materials. The scraps generated by the assessee are products purchased by it and which are no longer usable either on account of breakage or on account of being obsolete. However, since the assessee does not have any manufacturing or mechanical working processes, the scrap as defined in the said section cannot be generated. Therefore, the assessee is not covered by Section 206C. We find that in case of Navine Fluorine International Ltd. [ 2011 (2) TMI 1110 - ITAT, AHMEDABAD] has held that section 206C will apply only to those sellers who are engaged in the business of manufacturing or mechanical working of materials. Thus, on consideration of these facts, we direct the Assessing Officer to delete the demand made on account of non-collection of TCS and interest thereon. Accordingly ground No. 2 is also allowed.
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2020 (2) TMI 781
Reopening of assessment u/s 147 - whether the reassessment proceedings initiated by the Assessing Officer by recording the reasons u/s. 147/148 of the Act and the satisfaction recorded by the JCIT u/s.151(2)? - reason to believe and not reason to suspect - HELD THAT:- AO recorded the reasons and after getting approval from the JCIT, issued notice u/s.148 to the assessee. Accordingly, the AO completed reassessment proceeding holding that the assessee could not substantiate the source of investment made by the assessee. We have also gone through the reasons recorded by the AO/ITO, Ward-3(2), Ferozepur for reopening and the approval thereof by the Ld. Jt. CIT, Range-III, Ferozepur and found that the AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped assessment during the year under appeal. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the assessment year under consideration is bad in law and deserves to be quashed. In the instant case, we find from the perusal of the order sheets Jt. CIT has simply put yes satisfied and signed the report thereby giving sanction to the AO. JCIT has nowhere recorded his satisfaction note nor any brief of the satisfaction has been given therein. Therefore, it cannot be said that the Jt. CIT has accorded sanction after applying his mind and after recording his satisfaction. To support our view, reliance can be placed on the decision in the case of Pr.CIT Vs. N.C.Cables Ltd., [ 2017 (1) TMI 1036 - DELHI HIGH COURT] wherein has observed that the satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. - Decided in favour of assessee.
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2020 (2) TMI 780
Revision u/s 263 - as per CIT errors in the adjustment of brought forward losses with the book profits while computing the income u/s.115 JB - HELD THAT:- In the instant case, there is no dispute that the ld AO had specifically dealt with the issue of set off of least of brought forward business loss and depreciation loss as per books of accounts while computing book profits u/s 115JB of the Act in the assessment order by taking a possible view. Hence the same cannot be the subject matter of revision proceedings u/s 263 of the Act by the ld CIT merely because, he is of a different view with regard to the manner of set off of brought forward losses. Reliance in this regard is also placed on the decision of Hon ble Jurisdictional High Court in the case of Gabriel India Ltd [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] No hesitation in holding that there was no error in the order of the ld. AO in set off of brought forward business loss and depreciation loss as per books of accounts and hence, the invocation of revisionary jurisdiction u/s.263 of the Act by the ld. CIT deserves to be quashed and is hereby quashed. Accordingly, the grounds raised by the assessee are allowed.
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2020 (2) TMI 779
Cash found and seized during the course of search - search u/s 132 - HELD THAT:- Assessee had offered the sum of ₹ 2,94,17,500/- as income for the A.Y.2009-10 representing the profit on sale of lands. The assessee also explained that he kept the said sum in lockers and did not carry on any business activity during the year. As per section 69A of the Act the cash found in the possession of the assessee for which the assessee fails to offer any explanation required to be taxed. In the instant case the assessee had explained the source of cash found in his possession and also offered the same for taxation in the A.Y.2009-10. The AO made the addition of same amount which was already taxed by the AO for the A.Y.2009-10 and taxing the same amount in 2010-11 is nothing but double taxation which is not permitted by the law. The department also did not place any evidence to show that the cash seized does not represent the income offered for the A.Y.2009-10. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. - Decided against revenue Addition u/s 40A(3) - advances paid for purchase of lands - HELD THAT:- Mere payment of advances for purchase of land cannot be treated as the purchase unless the transaction is complete. As per the presumption, the notings made in the seized documents are true and correct. The assessee did not maintain the diary for the sake of the department and he maintained the diary for personal use. Therefore whatever notings made in the diary required to be considered as true and correct unless there is material to establish otherwise. In the instant case, the department did not place any evidence to show that the notings made in the diary were incorrect or partially correct. Therefore, we hold that the transactions recorded in the notings are nothing, but the token advances given for purchase of land and received back along with profit, thus, the same cannot be treated as purchase and sale transactions. Section 40A(3) is not applicable in the case of advances given for purchase of land. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue on this ground is dismissed. Assessment u/s 153A - Addition u/s 68 - HELD THAT:- In the instant case, as seen from the order of the AO as well as the CIT(A), the AO made the addition disbelieving the agricultural income as well as the unexplained cash deposits from the bank account. No evidence was brought on record with regard to incriminating material found during the course of search to support the additions made by the AO in the assessment order. Therefore the appeals are covered by the decision of this Tribunal in the case of Sri Rayapati Venkata Koteswara Prasad [ 2017 (9) TMI 1866 - ITAT VISAKHAPATNAM] , hence, we hold that the addition made by the AO is bad in law accordingly the same are deleted. The appeals of the assessee for the A.Y. 2004-05 to 2007-08 are allowed. Income from other sources - assessee has not carried out any agricultural operations - HELD THAT:- Assessee has stated that he has taken the land on lease from Agnikula Kshatriya Sangam, Jupudi Village, Ibrahimpatnam Mandal and cultivated paddy, maize etc. There were no lease agreements, no bills, no vouchers produced by the assessee before the AO or CIT(A). The President of Agnikula Kshatriya Sangam also denied having given the lands on lease. No other evidence was brought on record by the assessee to hold that the assessee had in fact cultivated the agricultural land. The Ld.CIT(A) in his order observed that the assessee failed to establish the onus regarding genuineness of the claim before the Income Tax department. During the appeal hearing also, the assessee failed to place any material to show that he had carried out the agricultural operations. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. In the result, appeal of the assessee is dismissed.
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2020 (2) TMI 778
Deduction u/s 80O - any income received by the assessee from the Government of a foreign State or foreign enterprise in consideration for the useoutside India of any patent, invention, design or registered trade mark - HELD THAT:- We are of the considered opinion that no addition would be sustainable in law merely on the basis of suspicion, conjectures or surmises. The assessee had placed on record sufficient documentary evidences to substantiate its claim u/s 80-O with respect to services rendered to MLINT. The claim was duly supported by the confirmatory letter of MLINT as well as RBI approval letter which specifically prohibited devolvement of foreign exchange to the assessee. On the contrary, except for mere suspicion allegation, nothing was brought on record by AO to counter the assessee s claim. It is beyond doubt that the assessee was acting as co-lead manager in the aforesaid issues but the allegations of AO that the fee was received in that capacity through MLINT is without any corroborative evidences. Therefore, the conclusion of CIT(A) could not be faulted with and hence concurring with the same, we dismiss the appeal filed by the revenue.
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2020 (2) TMI 777
Reopening of assessment u/s 147 - bogus purchases - CIT(A) restricting the addition @ 2% of alleged bogus purchase - HELD THAT:- As relying on N.K. Industries Ltd. v. DCIT [ 2016 (6) TMI 1139 - GUJARAT HIGH COURT ] we set aside the order of the Ld. CIT(A) and direct the AO to restrict the additions in respect of purchases from Emkey Engineers and S.B.Industries, limited to the extent of bringing the G.P. rate on disputed purchases at the same rate of other genuine purchases. We direct the assessee to file the relevant documents/evidence before the AO. Needless to say, the AO would give reasonable opportunity of being heard to the assessee before finalizing the order. - Decided i favour of revenue partly for statistical purposes. Reopening of assessment u/s 147 - distinction between the acceptance of a return u/s 143(1) and an assessment which is framed u/s 143(3) - HELD THAT:- AO has rightly issued notice u/s 148 for reopening the return of income processed u/s 143(1) of the Act. Accordingly, the cross objection filed by the assessee dismissed
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2020 (2) TMI 776
Reopening of assessment u/s 147 - nature of land sold - capital asset under section 2(14) or agricultural land - HELD THAT:- AO had information coming into his possession that the assessee had sold the property in question but had not returned / paid the capital gains tax, however, he was also aware that the necessary enquiries were made in this respect not only by his office but also by the Investigation Wing that too not only during the survey action at the premises of the assessee carried out u/s 133A of the Act but also thereafter. The assessee duly explained about the transaction and explained that the land being agricultural and not falling within the definition of capital asset under section 2(14) of the Act, hence, was not exigible to capital gains Tax. AO without having met with the reply and explanations given by the assessee and even not mentioning a word about reports thereof of the concerned officers, proceeded to reopen the assessment on the same premise. The Assessing Officer, fully knowing that if he will rely upon those proceedings, he will have to meet and discard the reply and explanations of the assessee and also the reports, if any, given by his predecessor and by the concerned investigation authorities and under the circumstances his action of reopening might not pass the test of reasons to believe , hence, he skipped the entire episode of earlier proceedings, based his reasons for reopening of the assessment on the alleged information received from DCIT, central circle, Panaji, which even does not support the reasoning given by the AO. When the very reasons on the basis of which the reopening, allegedly could not form the basis of forming the belief by the AO that the income of the assessee had escaped assessment, the consequential reassessment order formed by the AO u/s 147 of the Act is illegal and the same is accordingly quashed. Nature of land sold - The assessee furnished the evidence before the lower authorities that it had employed two employees and further developed the orchard by putting efforts i.e. by weeding undesired growth of wild plants, by clearing bushes grown between the food bearing trees, pruning the food bearing trees and to further develop and enhance the yield of fruit crops such as cashew, mangoes, jackfruit and coconut. AO has denied relief on the ground that the assessee could not produce the evidence of tilling and ploughing of the fields and harvesting of crop etc. The Assessing officer, in our view, could not differentiate between traditional agriculture and horticulture. The case of the assessee specifically is that it has been developing and maintaining an orchard. The assessee in this case has placed certificates from Gram Panchayat and Land Revenue officials, apart from the report and affidavit of Regd. Land Valuer cum Engineer to the effect that the land in question is situated at a distance of about 10.5 Km from the Panaji Municipal limits, whereas, the Department has relied upon the vague and uncertain statements of Income tax inspector and that of assessing Officer, which as discussed above can not be relied upon. Moreover, the certificate procured by the assessing officer during appellate proceedings from the office of Municipal Council, Mapusa Goa states the distance of village Reis Magos from Municipal Corporation Goa and not of the land of the assessee. Even the Ld. CIT(A) has also not given any finding that the evidence furnished or relied upon by the AO inspires any confidence. Rather, he has opined from the appraisal of the evidence on the file that it is a disputed issue and has chosen to base his findings on the first issue holding that the land in question is not an agricultural land. However, in the light of reliable evidences furnished by the assessee, it can be safely concluded that the land is situated beyond 8 KMs from the Municipal Limits of Panaji. So far as the observation of the lower authorities that the earlier purchaser has not claimed the said land as agricultural land not falling in the definition of capital asset is concerned, it is to be noted that Reis Magos Estate Pvt. Ltd. has not paid any capital gains tax on the sale of the said land to the assessee. The said seller has returned the income from the above sale of land as business income, which means that the said company has treated the land as stock in trade and not as an investment or a capital asset. The question of exemption from capital gains tax would have arisen, if the previous owner would have treated the said land as an investment asset and not as stock in trade. Further, even though the said company did not continue to maintain and develop the land as orchard for the purpose of earning agricultural income, yet, the fact on the file is that it even did not alter its character. If the previous owner did not carry out agricultural activity on an agricultural land, however did not alter or change its nature and character, but the subsequent owner of land starts the agricultural activity on the said land, under the circumstances, it can be safely held that the land remains the agricultural land and has not lost its original characteristic. In view of the above discussion of the matter, the issue on factual matrix is also decided in favour of the assessee.
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2020 (2) TMI 775
Disallowance u/s 40A(3) - cash payment made for purchase of land to farmers situated in rural area exceeding the prescribed threshold - HELD THAT:- In the instant case, where the assessee decided to pay token money to the sellers who are rural agriculturist to make them agree to sell their land, it is clearly a business decision taken by the assessee and the test of business expediency has been established. As held by the Hon ble Supreme Court in case of Attar Singh Gurmukh Singh [ 1991 (8) TMI 5 - SUPREME COURT] that the terms of section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. The genuine and bonafide transactions are not taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the Assessing Officer the circumstances under which the payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. As held in case of Smt. Harshila Chordia [ 2006 (11) TMI 117 - RAJASTHAN HIGH COURT] the consequences, which were to befall on account of non-observation of sub-section (3) of section 40A must have nexus to the failure of object for which the provisions have been enacted. Therefore the genuineness of the transaction and it being free from vice of any device of evasion of tax is relevant consideration for which section 40A(3) has been brought on the statute books and which has been satisfied in the instant case - no disallowance is called under section 40A(3) of the Act and the same is directed to be deleted. - Decided in favour of assessee.
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2020 (2) TMI 774
Characterization of income - Transfer of Carbon Credits CER (Certified Emission Reductions) - Revenue or capital receipt - HELD THAT:- We are inclined to follow the decision of the Co-ordinate Bench of the Tribunal, Hyderabad Bench in the case of My Home Power Limited (supra) to hold that the receipts from the sale of the carbon credits is liable to be held as capital receipts only. This view of ours is also supported by the decision of the Co-ordinate Bench of this Tribunal in the case of Assistant Commissioner of Income Tax Vs. M/s. Chemplast Sanmar Limited [ 2019 (12) TMI 1272 - ITAT CHENNAI] Consequently, the additional ground filed by the assessee stands allowed. Computation of deduction u/s.80IA - CIT(A) in confirming the method of computation of the eligible profits done by the Assessing Officer in respect of the steam generated and re-transmitted in respect of the production of the electricity through steam generators, for the purpose of computation of deduction u/s.80IA - HELD THAT:- The learned Authorized Representative though submitted a Chartered Engineer s certificate but was unable to substantiate the claim as made the said certificate. DR left the court room after the argument on the additional grounds and did not return. In reply, there was no answer from the learned CIT-DR As the AR has been unable to substantiate the Chartered Engineer s Certificate and has been unable to show us as to how the order of the CIT(A) is erroneous, we find no reason to interfere in the findings of the CIT(A). Consequently the order of the learned CIT(A) on this issue stands confirmed. Commission paid to a person outside India in respect of arranging the sale of the carbon credits - HELD THAT:- As we have already held that the receipt on the sale of carbon credits is liable to be treated as capital receipts, admittedly, the expenditure incurred by the assessee in respect of the sale of the carbon credits cannot be treated as Revenue expenditure at all. However, the Assessing Officer is also directed to see to it that when the capital receipt is computed, the said expenditure is reduced from the said capital receipts for determining the net capital receipts.
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2020 (2) TMI 773
Revision u/s 263 - exemption under section 54EC - terminology of Month in the context of provisions of section 54EC - HELD THAT:- the term Month means calendar month (and not period of thirty days), which should be applied for the purpose of section 54EC of the Act. It is not in dispute that assessee had deposited the capital gain amount arising from sale of two properties in Rural Electrification Corporation Ltd, Bond as per the scheme of the Government. The investment in the REC Bond was made by assessee on 30.08.2011. The sale deed was entered into by the assessee on 15.2.2011. The six calendar months from the date of sale deed would complete on 31.08.2011. The assessee made investment under section 54EC of the Act on 30.08.2011 which is within the completion of six months. Therefore, we note that there is no violation of the provisions of section 54 EC of the Act, as the assessing officer has rightly allowed the benefit of section 54EC of the Act to the assessee. Hence, order passed by assessing officer is not erroneous. Therefore, we quash the order under section 263 of the Act, passed by ld PCIT. We note that ld PCIT further observed from the record that exemption u/s 54EC of the Act was allowed twice for an amount of ₹ 3,90,000/- so, the total amount to be disallowed will be ₹ 25,80,000/- (₹ 21,90,000 + ₹ 3,90,000). We note that this may be a mistake apparent from record, and therefore the same can be rectified under section 154 of the Act. Therefore, we direct the assessing officer to examine the amount of ₹ 3,90,000/- and if it was allowed twice, the same may be disallowed and exemption should be granted under section 54EC of the Act in accordance to law. Appeal of the assessee is allowed.
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2020 (2) TMI 772
Reopening of assessment u/s 147 OR assessment u/s 153C - addition u/s 68 - addition based on statement of accommodation entry providers - HELD THAT:- It is important that the documents found during the course of search from 1/3 person or any other material should belong to the assessee (pertinent to the assessee after amendment) and the AO must be satisfied that such books of accounts et cetera have a bearing on the determination of the total income of such other person. If 1 of the condition fails, the provisions of section 153C cannot be applied. Therefore, the material available with the assessing officer would be a tangible material based on which the proceedings u/s 147 of the income tax act, if it stands the test of the provisions of that section, can be initiated. Thus, it is not necessary that if books of accounts of these assessee are found during the course of search on third person, necessarily the case of the assessee must be completed by invoking the provisions of section 153C of the act. Merely because regular books, of other persons are found with searched persons assumption of jurisdiction by AO of Other persons may be justified but since these are generally the regular books of account on the basis of which returns are prepared, there cannot be any undisclosed income arising from them. In view of expression, books of account/documents/assets seized have a bearing on the determination of total income appearing in section 153C(1), proceedings u/s. 153C will not be valid. In view of this, we are of the opinion that assessing officer did not have any jurisdiction to invoke the provisions of section 153C of the income tax act and therefore it has not been rightly invoked by him. Thus, action of AO for reopening of the assessment u/s 147 of the act is upheld. Validity of reopening of assessment - reopening has been challenged as proceedings u/s 147 is solely on the basis of the unverified, on rectified, unsubstantiated and unconfirmed statement of Mr Malu - HELD THAT:- AO merely on the basis of the statement of the entry operators, who did not name the share deposit as 1 of the companies operated by them, the inspector report saying that share deposit and did not exist by inquiring at the incorrect address and failure to give cross-examination of those entry operators, which are the only statement against the assessee, the addition made by the learned assessing officer cannot be sustained. Honourable Supreme Court in M/S ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE,KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] has held that when except the statement of the 3rd party is the only evidence available with the revenue authorities, addition cannot be made on that solitary evidence without granting the cross-examination of such 3rd party to the assessee when asked for. In the present case the assessee asked for cross-examination before the assessing officer and as well as before the learned CIT A, the assessee did not give the cross-examination of those accommodation entry providers. Further, the copies of the statement given by the assessing officer during the course of remand proceedings, none of the statement of the entry provider implicated the company, which deposited the share capital with the assessee. Addition made by the learned assessing officer and sustained by the learned CIT A cannot be upheld. We direct the learned AO to delete the addition.
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Customs
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2020 (2) TMI 771
Direction to clear the consignment Yellow Peas/Green Peas - restriction on import of Yellow Peas - HELD THAT:- Clandestinely, the petitioner without mentioning anything about the dismissal of W.P.Nos.11677 and 11681 of 2019 on 16.04.2019 filed this writ petition before the Madurai Bench of this Court during May 2019 - It is to be stated that if the petitioner is aggrieved over the action/inaction of the respondents, they could have very well filed appropriate petition before this Court. But the petitioner, having invited an dismissal order on 16.04.2019 superseding the earlier order dated 18.03.2019, has chosen to file the instant writ petition suppressing the dismissal of the earlier writ petition for the very same relief. Hence, now they cannot blame the respondents that they have not cleared the consignment or disobeyed the orders of this Court. Petition dismissed.
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2020 (2) TMI 770
Interpretation of Statute - imposition of interest on the difference of duty upon final assessment made by the Assessing Authority, for the period prior to the amendment in law, viz., w.e.f. 13 July 2006 - insertion of the provisions in Section 18(3) of the Customs Act, 1962, w.e.f. 13 July 2006 - HELD THAT:- Prior to amendment of law, by insertion of Section 18(3) of the Act in the Customs Act, the Revenue could not demand any interest on the differential duty assessed upon final assessment where the goods have been cleared on provisional assessment under Section 18(1) of the Act. The retrospective levy is not intended and the amendment in Law is a substantive provision for making a provision for levy of interest in the present case - Therefore, for a period prior to 13.07.2006, such levy of interest cannot be imposed on the Assessee. Appeal dismissed - decided against appellant.
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2020 (2) TMI 769
Stay of recovery notice - Release of Bank Guarantee executed by the petitioner - HELD THAT:- It is for the 2nd respondent-Commissioner of Central Excise (Appeals) to deal with the appeal, which is the subject matter of remit now made by the Appellate Tribunal, after affording reasonable opportunity of being heard to all the parties concerned. A copy of the final order dated 08.01.2020 rendered by the Central Excise, Customs Service Tax Appellate Tribunal, Bangalore has been made available, along with a memo dated 28.12.2019 filed by the counsel for the petitioner in this case, with a bench mark today. Both sides should ensure that the bank guarantee in question shall be kept alive and shall be renewed from time to time, until the disposal of the matter by the 2nd respondent-Commissioner of Central Excise (Appeals) in the matter that is now remitted to that authority by the Appellate Tribunal - Petition disposed off.
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2020 (2) TMI 768
Recovery of dues - time limitation for filing appeal - Section 128(1) of the Customs Act, 1962 - HELD THAT:- It is ordered that the respondents concerned will permit the petitioner to clear the dues covered by Exts.P-1 P-2 by paying off the same in 6 equal monthly instalments, the first of which shall be payable on or before 29.2.2020 and the subsequent 5 instalments shall be payable on or before the last day of the respective months concerned. In case the petitioner defaults with any one of the abovesaid instalments, then the respondents concerned will be at liberty to proceed further for the enforcement of impugned demand, in the manner known to law. Petition disposed off.
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2020 (2) TMI 767
Maintainability of petition - alternative remedy of appeal - period of limitation prescribed for preferring an appeal - Section 128 of the Customs Act - HELD THAT:- It is urged that the documents enlisted in Annexure-A to show cause notice were not supplied. The Petitioners were not permitted to cross-examine the persons whose statements are relied upon and no separate penalty can be imposed upon the Proprietor and the Firm. In order to test the argument so advanced, we have gone through the findings recorded by the adjudicating authority. We find that all the points consisting of disputed question of facts are dealt with in the order. If the findings recorded are wrong, the jurisdiction of the appellate authority is wider than the jurisdiction under Article 226 of the Constitution of India to appreciate or re-appreciate even the evidence on record. We, therefore, do not find any reason to entertain this Writ Petition. Petition dismissed.
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2020 (2) TMI 766
Classification of imported goods - LMS Bundles and Heavy Melting Scrap - whether classifiable under CTH 72044900 or under CTH 72044100 of the Customs Tariff Act, 1975? - Benefit of Notification No. 21/2002-Cus dated 01.03.2002 - HELD THAT:- The appellant is a manufacturing unit and using the imported material for melting thereof and use in the manufacture of ingots therefore, as per the use there is no doubt that the goods is melting scrape. Even though there can be a dispute to whether it is falling under Custom Tariff Heading No. 72044100 or 72044900 but as per the entry No. 200 for the purpose of exemption under notification No. 21/2002-CUS all the waste and scrape of 7204 if it is a melting scrap are exempted. Therefore, as per the facts of the present case the chapter sub heading of the goods is not very significant. According to the nature of the goods there is no doubt that even though it is in the nature of HR Side Cutting but the same has no other use except for melting and all the melting scrap is covered under exemption notification No. 21/2002-CUS under serial No. 200 - It is not the case of the department that the goods so imported is not scrap but classifiable as HR Coil or Sheet. It cannot be said that the appellant has mis-declared the goods and consequently the goods are not liable for confiscation - Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 765
Confiscation - penalty - Illegal attempt for exportation - Export of pesticides without any valid Bill of Export - HELD THAT:- It is observed that the Department could not justify the reason for not chasing the persons alleged to have carried the boxes in their hands or on head load on foot to Nepal though at 07.00 hrs. though they had the motor vehicle and manpower - It was also not clear as to how the Driver and Khalasi allowed unknown persons to unload cartons without their permission as no third person was available in that truck/vehicle. It appears that the investigation agency could not prove beyond doubt that the goods were actually attempted to export illegally to Nepal. The activities of the appellants may be suspicious but not enough to hold charge of attempted to export in the absence of positive evidence - Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 764
Imposition of penalty - Smuggling - Red Sanders - positive act or omission or abatement on the part of the Appellant - whether in the facts and circumstances of the case there is sufficient reasoning has been given by this bench while imposing penalty of ₹ 15, 00,000 on the appellant? - HELD THAT:- In order to be liable for penalty, in terms of Section 114 of Customs Act, 1962, a person has to do or omit to do any act which act or omission would render such goods liable to confiscation under Section 113, or abet the doing or omission of such an act. Going by the wordings of the Section, it is apparent that there should be positive act or omission or abatement on the part of the Appellant so as to render him liable for penalty - Ld. Commissioner (Appeals) has observed that while the Show Cause Notice seeks to impose penalty for connivance, the Adjudicating Authority has imposed penalty for abatement. Accepting the documents from Shri Sujan Sharma and receiving payment in cash do not in themselves constitute an offence punishable under Customs Act, 1962. No case has been made by the department that there was some positive act or abetment of the smuggling by the appellant. In fact as a Customs Broker, his role has not even begun as the said goods have been apprehended well before they reached the port. There is no whisper leave alone evidence that the appellant was aware of the fact that Red Sanders logs were stuffed in the container and were to be exported in the consignment for which they have received authorization. The appellant has not rendered himself liable for penalty under Section 114 of Customs Act, 1962 - Appeal dismissed - decided against appellant.
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2020 (2) TMI 763
Absolute Confiscation - penalty - mis-declaration of imported goods - the container was found containing lead scrap, instead of zinc scrap declared by them - appellant took a ground that they have infact ordered for zinc scrap and the supplier has mistakenly sent the lead scrap - Rule 17 (2) of Hazardous Wastes (Management, Handling and Transboundary Movement) Rules - HELD THAT:- The Rule itself provide for re-export of the goods in case the same stands illegally imported into India. As such without going into the facts as to whether such import was intentional or by mistake, we are of the view that the ends of justice would meet, if the said goods are allowed to be re-exported - the authorities are directed to allow the re-export of the goods. Penalty - HELD THAT:- M/s Ruby Impex admittedly the goods found in the containers were other than the goods declared by them. The appellants have also not been able to show any evidence that the same was a mistake on the part of the supplier. As such, the said appellant is liable for penalty. Inasmuch as, the duty involved in respect of the Bill of Entry filed by them was only to the extent of ₹ 81,000/-, though the other imports made by them were also of different goods i.e. the one declared by them in the first Bill of Entry, we deem it fit to reduce the penalty to ₹ 3 lakhs. Further, as the penalty stands imposed on M/s Ruby Impex, the imposition of separate penalty on the Proprietor is not called for as the proprietor and the proprietary concern are to be considered as one and the same. Accordingly, penalty imposed upon Shri Kishan Lal Chawla, Proprietor of M/s Ruby Impex stands set aside. Appeal disposed off.
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Corporate Laws
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2020 (2) TMI 762
Financial mismanagement - manipulation of annual financial statements - siphoning off of funds - HELD THAT:- Smt Shashi Gupta wife of appellant No.2 was appointed and was paid salary of ₹ 50000/- per month and before her appointment no prior approval was obtained. Appellants are unable to convince why her name is not mentioned in the list of employees of the appellant company. NCLT has rightly held that there is deadlock in the company and there is no possibility that the deadlock can be resolved and the business can be operated with the shareholder agreement, MOA and AOA of the appellant company. As the NCLT has allowed the company petition and directed that the increase in authorised capital from ₹ 5 lacs to ₹ 40 lacs by Resolution dated 27.9.2013 is illegal and void. Consequently, Form II filed with the Registrar of Companies is cancelled. NCLT has further directed that there are instances regarding manipulation of annual financial statements and siphoning of funds from the appellant company, therefore, direct to appoint an independent auditor who can perform audit of the financial mismanagement and siphoning of the funds of the appellant company. Appeal dismissed.
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2020 (2) TMI 761
Principal of casus omissus - Amalgamation of the Limited Liability Partnership firm into Private Limited company - Section 421 of the Companies Act, 2013 - whether by applying the principal of casus omissus a Indian LLP incorporated under the LLP Act 2008 can be allowed to merge into a Indian Company incorporated under the Act, 2013? HELD THAT:- It is apparent that as per Section 232 of Act, 2013 a company or companies can be merged or amalgamated into another company or companies. The Act, 2013 has taken care of merger of LLP into company. In this regard Section 366 of the Act, 2013 provides that for the purpose of Part I of Chapter XXI the word company includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity which can apply for registration under this part. It means that under this part LLP will be treated as company and it can apply for registration and once the LLP is registered as company then the company can be merged in another company as per Section 232 of the Act, 2013 - Section 55 to Section 57 of Chapter X of Limited Liability Partnership Act,2008 provides conversion from firms, private company and unlisted public company into limited liability partnership. NCLT rightly held that Act 1956 provides that any body corporate can merge into a company. However Act 2013 provides that foreign company or body corporate incorporated outside India can be merged into a Indian company. Applicability of principal of casius omissus - HELD THAT:- On reading of the provisions of Act 2013 as a whole in reference of conversion of Indian LLP into Indian company there is no ambiguity or absurdity or anomalous results which could not have been intended by the legislature. The principal of casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself. There is no such occasion to apply the principal of casus omissus. Thus we are unable to convince with the interpretation of NCLT. The legislature has enacted provision in the Companies Act, 2013 for conversion of Indian LLP into Indian Company and vice versa in the Limited Liability Partnership Act, 2008. Thus there is no question infringement of any constitutional right of the Respondent - impugned order is not sustainable in law - Appeal allowed.
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Insolvency & Bankruptcy
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2020 (2) TMI 760
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - debt due and payable or not - HELD THAT:- There is no privity of contract between the applicant and the Corporate Debtor. The Corporate Debtor has given this project to M/s. RITES Ltd. Hence, there is no liability directly from the Corporate Debtor to the Operational Creditor. Hence, on this ground the application ought to be dismissed - However, in the rejoinder filed by the Operational Creditor, they have not answered the question as to how the Corporate Debtor is liable to pay money to the Operational Creditor, when the contract was between the Corporate Debtor and M/s. RITES Ltd. Further, the Operational Creditor are only sub-contractor under the said M/s. RITES Ltd. Reliance placed in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [ 2017 (9) TMI 1270 - SUPREME COURT ] where it was held that So long as a dispute truly exists in fact or is not spurious, hypothetical or illusory, the Adjudicating Authority has to reject the application. Application dismissed.
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Service Tax
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2020 (2) TMI 759
Commercial training or coaching service - Nature of activity - sale or service - sale of books - provisions of hostel facility and sale of books - naturally bundled services or not - exemption on hostel facility. Whether sale of books is service? - HELD THAT:- It was not compulsory that books cannot be sold to any other person than the one who was receiving the commercial training or coaching service. The books were published by M/s MKC Publication and were available on flipkart for purchase by anybody. The separate invoice were issued for sale of books and cash receipts out of sale on books were separately maintained in the book of account - the value of the books cannot be ascertained on the basis of the cost of paper used and cost of printing - sale of books was not taxable activity and therefore, there was no service tax leviable on the sales value of books. Whether provisions of hostel facility and sale of books are to be combined with provisions of commercial training or coaching service as bundled service? - HELD THAT:- Revenue has not brought forward any evidence that majority of service providers in the field of commercial coaching or training service provided hostel facility. In terms of the criteria stated in the manner of determining if the services are bundled as clarified by Central Board of Excise Customs it is not possible to bundle service of provisions of hostel facility with commercial training or coaching in the present case - the provisions of commercial training or coaching service and provisions of hostel cannot be bundled under the provisions of Section 66F of the Finance Act, 1994. Whether service tax was exempted on hostel facility? - HELD THAT:- The hostel facility is provided for less than ₹ 100/- per day and therefore, it is entitled for exemption under Notification No.31/2011 dated 25 April, 2011 and Serial No.18 of Notification No.25/2012-ST - confirmation of service tax on hostel charges set aside. Penalties - HELD THAT:- Since the demand on service provider do not sustain, the penalty on the other appellant does not sustain. We set aside penalties imposed on Shri Saurabh Singh, the appellant. Except for the service tax, interest and penalty paid by the appellant before issue of show cause notice, the impugned order is set aside - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 758
Refund of service tax paid - Jurisdiction - refund claim stands filed by the branch office whereas the service tax has been paid by their head office - Works Contract service provided to various departments of the Government of Uttar Pradeshterritorial Jurisdiction - Notification No.06/2016-ST dated 01.03.2015 effective from 01.04.2015, Sl. No. (a), (c) (f) of the entry 12 of the Notification No.25/2012-ST dated 20.06.2012 (Mega Exemption) - Section 11B of the Central Excise Act, 1944 as made applicable to the Service Tax matters vide Section 83 of Finance Act - HELD THAT:- During examination of the refund claims, it was noticed that (i) the appellants did not provide any documents to correlate their refund claims with the conditions specified in Section 102 of the Act, (ii) they failed to produce any documentary evidence to show that they had not passed on the incidence of Service Tax and (iii) the payments for which refund claims were filed, had been deposited through challans under Service Tax Code/Registration Number of their Head Office at Lucknow. Accordingly, Show Cause Notices were issued to them for rejecting their refund claims. The Original Adjudicating Authority as also Appellate Authority rejected the refund claims on the ground that the same stands filed by the branch office whereas the service tax has been paid by their head office. As such the Original Adjudicating Authority does not have any jurisdiction to pass said refund claims. Matter remanded for taking appropriate action - appeal allowed by way of remand.
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2020 (2) TMI 757
CENVAT Credit - whether the appellant are required to reverse the Cenvat credit availed during the period when output services (construction) was taxable up to the date of Building Completion Certificate (BCC), since the input services were availed to construct the entire property but after the BCC, the portion of such property did not attract Service Tax? - HELD THAT:- The issue involved is mixed question of law and facts - Since the question is mixed question of law and facts and after evolution of law on the subject matter, the matter needs to be reconsidered. Matter remanded to the Adjudicating Authority for passing a fresh order - appeal allowed by way of remand.
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2020 (2) TMI 756
Refund of accumulated credit - proportionate credit of receipts attributable to exports of the quarter bore to the total turnover - rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- There is no dispute on the receipts from export of services during the quarter. The rival contentions centered around the total turnover. In the review order, it was opined to be the total of the receipts and not related to the exports made while, according to the respondent, the total turnover, in the absence of any other activity, is the same as the computed receipts for the quarter. On perusal of definition of total turnover, it is receipts in relation to the export of services during the quarter added to consideration for any other services rendered. In the context of the sole activity of respondent, the receipts attributable to exports of the quarter with nil addition would be the denominator. With the numerator and denominator being identical, the eligible accumulated credit would have to be sanctioned in entirety. Once eligibility is articulated in the Rules as a formula, an interpretation of the formula is beyond the authority of law. Appeal dismissed - decided against Revenue.
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2020 (2) TMI 755
Imposition of penalties in terms of provisions of Sub-section (3) of Section 73 of Finance Act, 1994 - service tax alongwith interest was paid before issuance of SCN - HELD THAT:- Under Sub-section (4) of Section 73 of Finance Act, 1994 it is provided that the provisions under Sub-section (3) to said Section 73 are not applicable where non-payment of service tax is on account of suppression of facts. The appellant had not filed ST-3 returns for the impugned period till 20/01/2012 nor paid service tax of ₹ 1.85 crores and the said short payment was detected through an enquiry by Revenue. Therefore, Sub-section 3 of Section 73 of Finance Act, 1994 which empowers conclusion of proceedings of payment of service tax alongwith interest before issuance of show cause notice are not applicable in the present case. There are no infirmity with the impugned order - appeal dismissed - decided against appellant.
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2020 (2) TMI 754
Nature of activity - manufacture or service - Activity amounting to manufacture or not - process of re-treading of old tyres supplied by the principal on the job work basis - demand of service tax on process of re-trading under the head of Maintenance or Repairs - HELD THAT:- The appellant have raised the issue that they are manufacturing re-treaded tyres falling under Heading 4012 of Central Excise Tariff Act 1985 - it can be seen that the Commissioner (Appeals) contended that they were providing service of re-treaded tyres and not manufacturing re-treaded tyres - this contention for the reason that there cannot be any other process for manufacture of re-treaded tyres except re-treading of old and used tyres which the appellant has carried out, therefore, there is absolutely no dispute that the appellant have manufactured re-treaded tyres filing under Chapter heading 4012 of Central Excise Tariff Act, 1985. Since the activity of appellant is amount to manufacture, it is a subject matter of Central Excise and will not leviable to service tax - appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (2) TMI 753
CENVAT Credit - receipt of inputs from other units - job-worker or not - Rule 4(5)(a) of the Cenvat Credit Rules, 2004 - allegation that the Unit No.I and Unit No.II being under the same management, Unit No.I cannot be treated as a job-worker of Unit No.II - HELD THAT:- The appellant company had received certain inputs from their Unit No.II for further processing and after the inputs were processed, the same were removed from Unit No.I to Unit No.II. The movement of inputs of the processed goods were carried out under Annexure-II Challans by following the procedure laid down under Rule 4(5)(a) of the Cenvat Credit Rules, 2002 - Undisputedly, the excise duty involved on the finished goods viz. transmission towers etc. had been discharged at their Unit No.II at the time of its clearance from the said unit to their respective customers. The judgement of the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS JK. UDAIPUR UDYOG LTD. [ 2004 (9) TMI 101 - SUPREME COURT] relied upon by the adjudicating authority is not relevant, inasmuch as the Hon ble Apex Court in the said case was confronted with the issue whether explosives used in mines at a distance away from the factory was to be considered as inputs. Penalty imposed on the Managing Director is also set aside - Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 752
Interest on delayed refund - area based exemption - section 11BB of CEA - Board s Circular 682/73/2002-CX dated 19.12.2002, as amended vide 842/19/2006-CX dated 08.12.2006 - It is the case of the Revenue that in view of the explicit instruction of the CBIC that the refunds under exemption Notification are different from the Refunds under Section 11B, interest under Section 11BB is not payable. HELD THAT:- The circular No. 842/19/2006-CX dt. 08/12/2006, indeed clarifies that no interest under Section 11BB is payable on any refund arising out of Area Based Exemption Notification. However, we find that the Hon ble High Court of Gauhati in the case of AMALGAMATED PLANTATIONS (P) LTD. VERSUS UNION OF INDIA [ 2013 (11) TMI 589 - GAUHATI HIGH COURT] has held that there was no distinction between refund under Area Based Exemption Notification and other refunds under Section 11B and interest under 11BB is payable on such refunds. The settled legal position as on today is that interest is payable under Section 11BB in respect of refunds sanctioned as per Area Based Exemption Notification - the impugned Order has correctly sanctioned interest on the refunds and there is no infirmity in the same - Appeal dismissed - decided against Revenue.
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2020 (2) TMI 751
Statutory period for review - benefit of N/N. 33/99 dated 08.07.1999 - whether in respect of Excise Appeal, the Review Order dated 08.09.2009 is beyond the period statutorily allowed for review? - HELD THAT:- Though the Commissioner may claim that the issue was not brought to his notice by way of proposing a review, it is very difficult to comprehend as to how such a huge refund involving amount of ₹ 25.00 Crores was not brought to the notice of the Commissioner formally or informally. Therefore there are no merits in the contentions of the appellants that the review could not be completed within the time limit prescribed as the order was not received and that the same could be taken up only after the receipt of duly attested photocopy of the Order-in-Original. In view of the above we hold that the review is undertaken much after the stipulated time limit prescribed therein. Whether in the facts and circumstances of the case, the appellants are eligible for the exemption under the said Notification No.33/99 dated 08.07.1999? - HELD THAT:- Notification No.33/99 provides for exemption to goods specified in the schedule appended to the Notification and cleared from a unit located in the state of Assam or Tripura or Meghalaya or Mizoram or Nagaland or Arunachal Pradesh as the case may be. From so much of the duty of excise, leviable thereon under any of the said acts as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under Rule 9 read with Rule 173 G of the Central Excise Rules, 1944 - it is apparent that the exemption is available to the gas based intermediate products. Sub-Sl. No. 13(i) of the schedule relates to gas exploration and production. Whereas Sl.No.13 mentions about gas based inter-mediate products. Sub-Sl. No.(i) refers to gas exploration and production. It is evident that the schedule not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exemption. The products mentioned at Sub-Sl. Nos. of Sl.No.13 to the schedule to the Notification are not gases. If one takes the view that the exemption is only applicable to products occurring in gaseous state are alone eligible for exemption to the items like plastics, fertilizers. Ammonium Nitrate etc. would not have formed a place in the list of the products made to be eligible for the Notification. Therefore an appropriate reading of the Notification would give an understanding that the main activity referred to therein is gas exploration and products which emerge as finally or intermediately in the process are eligible for exemption. As the wordings of the Notification are very clear no two interpretations are available and as such the case law cited by the learned Authorized Representative are of no avail. The Notification squarely covers the impugned product and the benefit of the same is available to the respondents - the issue relating to whether or not R/45 was reviewed within the time limit becomes inconsequential - appeal dismissed.
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2020 (2) TMI 750
Classification of goods - Nimbooz Masala Soda - whether the product merit classification under Central Excise Tariff heading 2202 1020 as Lemonade as claimed by the department or under Central Excise Tariff heading 2202 9020 as Fruit pulp or Fruit juice based drink, as claimed by the appellant? - HELD THAT:- The very same issue has been referred to the Larger Bench and the Larger Bench in the case of 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)] including the present appellant's case, the Larger Bench answered the question vide that the 'Nimbooz Masala Soda' is classifiable under Central Excise Tariff heading 2202 90 20 under the category of Fruit pulp or Fruit juice. Issue decided in favor of assessee - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 749
CENVAT Credit - inputs/capital goods - Welding Electrodes - Welding filler wire - Materials used for railway line - M.S. Gratings/G.I Coated Gratings - Construction chemicals - demand alongwith interest and penalty. Welding electrode - welding filler wire - HELD THAT:- All the items were used exclusively in relation to manufacture of final product in the appellants manufacturing unit. The welding electrode and welding filler wire were used for repair and maintenance of plant and machinery which is necessity to run the production of excisable goods. Therefore, the same is used even if not directly but indirectly indeed in relation to manufacture of final product - Credit allowed. Materials used for railway line - HELD THAT:- In the present case railway line installed partly within the factory and outside the factory is exclusively used for handing of material which is used in the manufacture of final product - Hon ble Supreme Court in the case of VIKRAM CEMENT VERSUS CCE, INDORE [ 2006 (2) TMI 1 - SUPREME COURT] ), are of the view that credit on material used for laying rail line is admissible - credit allowed. M.S. Gratings/G.I Coated Gratings - HELD THAT:- The same is used as accessory for supporting and holding for approaching how to plant/ processing units of refinery. The platforms for approaching or reaching out the plant is part and parcel of the entire plant and machinery particularly in large scale manufacturing unit without which the operation of plant is not possible. Therefore, the M.S. Gratings used as accessory in such structure is used in relation to the manufacture of final product - Credit allowed. Construction chemical - HELD THAT:- The construction chemical was used for the maintenance of cooling towers, pumps, compressors and machine base plates etc. is used for maintenance and operation of the plant, therefore, the same can be classified as accessory for plant and machinery. Hence, being essential chemicals for running plant is admissible inputs and eligible for Cenvat Credit - credit allowed. The appellants are entitled for Cenvat Credit in respect of the inputs/ capital goods in question - credit allowed - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 748
Exemption to specified goods of chapters 50 to 63 - Textile and garments - fixation of Brand Name - whether affixing name, logo and particulars of the buyers such as FCI and State Governments on Hessian Bags/Sacks to comply with the requirement of Jute Control Orders would be treated as affixing of brand name within the meaning of N/N. 12/2011-CE dated 01.03.2011 and N/N. 30/2011-CE dated 24.03.2011? HELD THAT:- The dispute involved in all the present appeals stands decided by the Hon ble Supreme Court in the case of M/S. RDB TEXTILES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, KOLKATA-IV COMMISSIONERATE [ 2018 (2) TMI 825 - SUPREME COURT] . The Hon ble Apex Court had examined the wordings of the Notification as it stood during the disputed period and decided that the printing of the name, logo and other particulars of buyer, like FCI and State Governments, were made by the manufacturers to comply with the requirements of Jute Control Order. The Hon ble Supreme Court further held that the markings on jute bags were under compulsion of law and meant for identification, monitoring and control by Government Agencies and such markings cannot be considered as brand name. Accordingly, the Apex Court held that the benefit of N/N. 30/2004-CE will be available during the disputed period. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (2) TMI 747
Works Contract or not - job of printing of Bill books, receipt books, name pads e.t.c., of the particular institution viz., Arokiya Matha Higher Secondary School - Section 3 (2) of the TNGST Act - HELD THAT:- The Impugned Order passed by the Joint Commissioner (SMR) of Commercial Taxes under revisional jurisdiction is not sustainable. The works carried out by the Assessee, which is a charitable organisation for Women promoting vocational training to Rural youth and women in various discipline is in the nature of the works contract as the goods are supplied to a particular institution on specific orders and as such are not utilised in the course of business of the Assessee for sale otherwise and the property in question stands transferred to the customer as per the specification of the customer and that the specific works contract has been carried out by the Assesee complying with the specific orders and, therefore, the same clearly falls under the Section 3(B) of the TNGST Act, 1959, falling within the charging provision of Section 3 of the Act. The order of the Revisional authority is liable to be set aside - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 746
Revision of assessment - exemption on turnover - inter-state sales or not sales - Assessing Authority has taken a view that the Sale that had taken place at Pondicherry is Inter-State Sales based on the alleged admission made by the Assessee - HELD THAT:- Since the factual finding has been arrived at by the first Appellate Authority which includes the observation that the Stock Books has been initialed and sealed by the Assessing Authority, there can be no further proof to be filed by the Revenue against such entries made therein. Those factual findings reveal that the Branch at Pondy had sufficient stock of the goods and whenever orders come to Pondicherry Branch, sales has taken place. The finding given by the Tribunal that the sales effected at Pondicherry were only pursuant to the transfer of stocks made then and there by the Tamil Nadu Branch/Dealer has no basis. The Tribunal, being final fact finding Authority, ought to have gone into those factual aspects in detail - We do not feel that the reason given by the Tribunal for taking a different stand for reversing the factual findings of the first Appellate Authority has got any basis and sustainability. Tribunal has erred in giving such a finding for making a reversal of the order passed by the first Appellate Authority - the order passed by the first Appellate Authority is restored - Petition allowed.
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2020 (2) TMI 745
Service of SCN - Reversal of input tax credit - case of petitioners is that when said notice was issued, the petitioner had already closed down on its business and therefore the said notice remained unserved on the petitioner - TNVAT Act - Principles of Natural Justice - HELD THAT:- Since, the impugned order has been passed without hearing the petitioner there is a manifest violation of principles of natural justice - the impugned order deserves to be quashed on this ground alone. The case is remitted back to the respondent to pass a speaking order in accordance with law - Petition allowed by way of remand.
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Indian Laws
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2020 (2) TMI 744
Dishonor of Cheque - non-payment against one dishonoured cheque for the amount of ₹ 65,00,000/- issued by petitioner in favour of the respondent company - section 138 Negotiable Instruments Act 1881 read with Section 420 IPC - HELD THAT:- Upon analyzing the provisions of the NI Act, it is clear that Section 138 of the Act spells out the ingredients of the offence as well as the conditions required to be fulfilled before initiating the prosecution - These ingredients and conditions are to be satisfied mainly on the basis of documentary evidence, keeping in mind the presumptions under Sections 118 and 139 of the NI Act and Section 27 of the General Clauses Act, 1897 as well as the provisions of Section 146 of the Act. This Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence as raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law. There are no no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defence of the petitioner in accordance with law - petition dismissed - decided against petitioner.
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