TMI Tax Updates - e-Newsletter
March 11, 2021

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. PROVISIONS RELATING TO INDEPENDENT DIRECTOR UNDER SEBI (LODR) REGULATIONS, 2015

   By: DR.MARIAPPAN GOVINDARAJAN

2. TOO MUCH REGULATION IN ALCO-BEVERAGES INDUSTRY

   By: Dr. Sanjiv Agarwal

News

1. Module wise new functionalities deployed on the GST Portal for taxpayers

2. Income Tax Department conducts searches in Kolkata

3. Major reforms implemented to boost domestic manufacturing

4. Consultation Paper on Proposed International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021

5. 378 SEZs are presently notified, out of which 265 are operational

6. Major reforms implemented to boost domestic manufacturing

7. Steel Import Monitoring System

8. Make in India and Startup India

9. Production Linked Incentive Scheme

10. Revenue Deficit Grant of ₹ 6,194.09 crore released to 14 States

Notifications

Customs

1. 28/2021 - dated 9-3-2021 - Cus (NT)

Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

2. 23/2021-Customs (N.T./CAA/DRI) - dated 5-3-2021 - Cus (NT)

Appointment of Common Adjudicating Authority

3. 3/2021-Customs (CVD) - dated 9-3-2021 - CVD

Seeks to impose definitive Countervailing/anti-subsidy duty on imports of “Textured Tempered Glass” originating in or exported from Malaysia

Income Tax

4. 13/2021 - dated 9-3-2021 - IT

Income-tax (2nd Amendment) Rules, 2021 - Amends Rule 10V. Guidelines for application of section 9A

5. 12/2021 - dated 9-3-2021 - IT

U/s 35(1) (ii) / (iii) of IT Act 1961 Central Government approved M/s Bennett University, Greater Noida, Uttar Pradesh

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/DF4/CIR/P/2021/032 - dated 10-3-2021

Review of norms regarding investment in debt instruments with special features, and the valuation of perpetual bonds.

2. SEBI/HO/MIRSD/DOP/CIR/P/2021/31 - dated 10-3-2021

Rollout of Legal Entity Template

Customs

3. Instruction No. 03/2021 - dated 10-3-2021

Testing of imported food products at FSSAI notified laboratories

Highlights / Catch Notes

GST

• High Court Clarifies: Bond for Goods Release Doesn't Require Bank Guarantee; GST Officer's Misunderstanding Noted.

  Case-Laws - HC : Requirement of furnishing "Bond" as directed by the HC earlier - whether the Bond should be accompanied by bank guarantee/security - seeking release of goods/vehicle on the basis of challan and bond - It is very sad to note that, the respondent No.2 being an officer of the GST Department has no idea as to what is a “bond” and what is a “bank guarantee”. - HC
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• Court Quashes GST Assessment Order, Cites Violation of Natural Justice; Allows Late Monthly Return Filing with Conditions.

  Case-Laws - HC : Best judgment assessment made u/s 62(1) of GST - ex-parte order - Principles of Natural Justice - permission of filing of a monthly return after due date, subject to deposit of GST as admitted - The order quashed - Matter restored back - HC
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Income Tax

• Tax Paid Since 1995-96 Not Refundable, Not Taxable as Profit Under Income Tax Act Section 41(1.

  Case-Laws - HC : Addition u/s 41(1) - amount ceased to be a liability - The amounts paid as tax has not been obtained in 1995- 96 as the same had not been refunded. Until the amount of TDS is refunded, that amount cannot be treated as amount obtained by the assessee. The amount of TDS and interest can be deemed to be profits and gains and chargeable to tax only on refund. - HC
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• Invalid Penalty Notices Under Income Tax Act Sections 271(1)(c) and 274 Must Be Clear; Ambiguity Leads to Deletion.

  Case-Laws - AT : Penalty u/s 271(1)(c) - Assessee is required to be specifically made aware of the charges to be leveled against him/her. - Initiating penalty on the basis of invalid satisfaction and on the basis of vague and ambiguous notice issued u/s 271(1)(c) read with section 274 is not sustainable in the eyes of law, hence liable to be deleted. - AT
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• Reassessment Proceedings Quashed: AO Failed to Independently Verify Inaccurate AIR Information u/s 147.

  Case-Laws - AT : Reopening of assessment u/s 147 - As reopening of the assessment has been made on the basis of AIR information which is not based on correct facts and the AO has not made independent application of his mind before recording reasons for reopening of the assessment and has simply proceeded on the basis of AIR information, therefore, the reassessment proceedings initiated by the AO being not in accordance with law has to be quashed - AT
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Customs

• Jurisdiction of DRI to Issue Show Cause Notices Challenged; Notification Deemed Invalid Due to Lack of Authority u/s 6.

  Case-Laws - SC : Jurisdiction of DRI to issue Show Cause Notice (SCN) - Proper Officer - If it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. - The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. - SC
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• Importer Transparency Prevents Five-Year Reopening u/s 28(4) Due to No Intentional Misstatement of Facts.

  Case-Laws - SC : Extended period of limitation - It is pertinent to note that the importer had asked for a first check and had shown the cameras and the cameras were offered on 20.3.2012 along with Bill of Entry and literature detailing specifications of models. - It is difficult in such circumstances to infer that there was any wilful misstatement of facts. In these circumstances, it must, therefore, follow that the extended period of limitation of five years was not available to any authority to re-open under Section 28(4). - SC
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• Appeal Filed 21 Days Late Deemed Unintentional; Courts Favor Liberal Approach to Decide Cases on Merits.

  Case-Laws - AT : Condonation of delay of 21 days in filing appeal - The delay of 21 days in filing the appeal before Commissioner (Appeals) is not an inordinate delay and is not intentional and the appellant does not stand to gain anything by filing the appeal with the delay and the approach of the various Courts is that the delay should be liberally condoned and matters should be decided on merits - AT
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• Refund of SAD Can't Be Denied If Goods Sold Before Customs Out of Charge Order Issued.

  Case-Laws - AT : Refund of SAD - goods were sold prior to issuance of out of charge order by the Customs - merely the goods were sold prior to issuance of out of charge order by the Customs, the refund cannot be rejected - AT
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Direct Taxes

• Supreme Court Dismisses Petitioner's Claim on Joint Family Property Ownership under Benami Transactions Act Section 4(3)(b.

  Case-Laws - SC : Prohibition of Benami Property Transactions - Petitioner contends that the Petitioner as the head of a joint family representing him and his brothers are absolute owners of the suit properties.contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act - Petition dismissed - SC
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• Spousal and parental property purchases exempt from benami classification under legislative framework. Transactions between spouses recognized as non-benami.

  Case-Laws - HC : Benami Property - Transaction entered into between spouses - while enacting the Act, the legislatures have kept in mind the practical scenario of the society where a spouse can purchase a property in the name of another spouse and also in the name of their child and consciously have exempted those individuals who were/are the participants of such transactions and such transactions were kept outside the purview of the Act and the Act is not intended to give banami colour to the transactions entered into between spouses. - HC
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Indian Laws

• Cheque Dishonor Case: Accused Claims Innocence but Fails to Rebut Presumption u/s 139 Despite Complainant's Evidence.

  Case-Laws - SC : Dishonor of Cheque - appellant accused claimed innocence - when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available u/s 139 - SC
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• Dispute Over Sole Arbitrator Appointment: No Concluded Contract or Arbitration Clause Found Between Parties.

  Case-Laws - SC : Seeking for appointment of a Sole Arbitrator for adjudication of disputes between the parties - The emails dated 22nd July, 2014 and 25th July, 2014 produced here for the first time as well as certain correspondence between SBPDCL and the Respondent do show that there is some dealing between the Appellant and the Respondent qua a tender floated by SBPDCL, but that is not sufficient to conclude that there is a concluded contract between the parties, which contains an arbitration clause. - SC
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• Supreme Court: Two Private Individuals Not an "Association" u/s 141 of Negotiable Instruments Act for Cheque Dishonor.

  Case-Laws - SC : Dishonor of Cheque - scope of the term "other association of individuals" in case of a joint liability of two or more persons - Two private individuals cannot be said to be “other association of individuals”. Therefore, there is no question of invoking Section 141 of the NI Act against the appellant, as the liability is the individual liability (may be a joint liabilities), but cannot be said to be the offence committed by a company or by it corporate or firm or other associations of individuals. - SC
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Central Excise

• Court Orders Refund of Rs. 45,60,438 to Petitioner Under SVLDRS Scheme, Section 124(1)(a) for Excess Duty Payment.

  Case-Laws - HC : SVLDRS - re-determination of the 'amount payable' under the scheme - The deposit towards duty paid during investigation and during pendency of appeal proceedings in the form of pre-deposit in the present case may be appropriated and deducted from the tax dues after grant of relief under section 124(1)(a) of the said. - However, Respondents directed to refund ₹ 45,60,438/- to the Petitioner out of the amount of ₹ 55,56,045/- paid by the Petitioner as per Order dated 30.06.2020 of this Hon'ble Court. - HC
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Case Laws:

• GST

• 2021 (3) TMI 376
  Release of seized conveyance alongwith the goods - section 130 of CGST Act - HELD THAT:- By way of an ad-interim relief, the conveyance has already been ordered to be released on paying the amount of Rs. 58,576/- towards fine in lieu of confiscation of the conveyance, the writ applicant should prefer an appeal against such order of confiscation under Section 107 of the Act in accordance with law. The writ applicant is permitted to prefer an appropriate appeal within four weeks from today. If any appeal is preferred, the appellate authority shall adjudicate the same on its own merits in accordance with law - application disposed off.

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• 2021 (3) TMI 375
  Maintainability of petition - availability of statutory remedy of appeal - Release of seized goods alongwith the truck - section 130 of the CGST Act - HELD THAT:- It appears that pursuant to the order passed by this Court referred to above, the truck as well as the goods were ordered to be released subject to the final outcome of the present writ application. As the final order of confiscation in Form GST MOV 11 has already been passed, we would not like to examine the legality and validity of the same as a statutory remedy of appeal under Section 107 of the Act is available to the writ applicant. This writ application is disposed off with liberty to the writ applicant to prefer an appeal under Section 107 of the Act in accordance with law.

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• 2021 (3) TMI 374
  Release of seized goods - Section 129(1)(a) of the Central Goods and Service Tax Act, 2017 - HELD THAT:- Pursuant to the interim order passed by this Court referred to above, the goods have been released. The matter is at the stage of MOV 10 i.e. at the stage of show cause notice for the purpose of confiscation of the goods. The learned counsel appearing for the writ applicant has no idea whether any final order of confiscation in Form GST MOV 11 under Section 130 of the Act has been passed or not. We may only say that if, final order of confiscation has been passed, then such final order may be challenged before the appellate authority by way of filing an appeal under Section 107 of the Act. There is nothing further to be adjudicated in the present matter - Application disposed off.

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• 2021 (3) TMI 372
  Release of detained goods - goods in question were not accompanied by an invoice or e way bill during the course of transport - HELD THAT:- The matter is at the stage of MOV 10 i.e. the show cause notice as to why the goods should not be confiscated under Section 130 of the GST Act, 2017. As the goods have already been released pursuant to the interim order passed by this Court and the matter is at the stage of MOV 10, then we would not like to go into this matter any further. It is clarified that if, ultimately, any final order of confiscation is passed in Form GST MOV 11 under Section 130 of the Act, then it shall be open for the writ applicant to challenge such order by way of an appeal under Section 107 of the Act. Application disposed off.

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• 2021 (3) TMI 371
  Requirement of furnishing Bond as directed by the HC earlier - Whether the Bond should be accompanied by bank guarantee/security - seeking release of goods/vehicle on the basis of challan and bond - HELD THAT:- It is very sad to note that, the respondent No.2 being an officer of the GST Department has no idea as to what is a bond and what is a bank guarantee . There is no good reason for the respondent No.2 to be wiser than what the Court - It is made clear that the goods shall be released on deposit of an amount of Rs. 18 Lakh and so far the balance amount of Rs. 52 Lakh towards fine is concerned, the writ applicant shall execute a bond to the satisfaction of the respondent No.2. There is a fine distinction between the bond and bank guarantee. Our order in the main matter is dated 08.02.2021. Almost one month has passed, but the respondent No.2 has not given effect to our order only because of his misconception of law. It is once against directed that the respondent No.2 to release the goods once the writ applicant deposits an amount of Rs. 18 Lakh towards the tax and penalty and executes a bond for the balance amount of Rs. 52 Lakh - application disposed off.

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• 2021 (3) TMI 370
  Profiteering - the investigation with regard to the input tax credit was not carried out by respondent no. 3/DGAP - HELD THAT:- Issue notice. Mr. G. Tushar Rao accepts service on behalf of respondent no. 1/UOI while Mr. Zoheb Hossain accepts service on behalf of respondent no. 2/NAPA. On steps being taken, notice shall issue to the respondent no. 3/DGAP via all means including e-mail. List the matter on 12.07.2021.

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• 2021 (3) TMI 369
  Principles of Natural Justice - ex-parte order - validity of statutory return in form GSTR 3B - primacy over the figures determined by the respondent number 4 in terms of the best judgment assessment made under Section 62(1) of the Goods And Services Tax Act, 2017 - permission of filing of a monthly return after due date - nature of jurisdiction conferred under Section 62(1) of the act to make a best judgment assessment of an assessee having defaulted in filing a monthly return - declaration sought that Section 62(2) of the act is directory and not mandatory. HELD THAT:- The impugned order dated 14.09.2019 passed by the Respondent No. 3, the Assistant Commissioner of Sate Taxes, Bhagalpur Circle, Bhagalpur, needs to be quashed and set aside, for the same to have been passed without following the principles of natural justice. In terms of the impugned order, financial liability stands fastened. Thus, it entails civil consequences, seriously prejudicing the petitioner inasmuch as, without affording any adequate opportunity of hearing or assigning any reason. Petitioner, states that without prejudice to the respective rights and contentions of the parties, petitioner is ready and willing to deposit a sum of Rs. 1,50,000/- with the appropriate authority on or before 09.03.2021 - The petitioner shall deposit a sum of Rs. 1,50,000/- with the authority on or before 09.03.2021 - the petitioner shall appear before the authority on 09.03.2021 in his office at 10:30 A.M., on which date he shall place on record additional material, if so required and desired. Petition disposed off.

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• 2021 (3) TMI 346
  Seeking grant of Regular Bail - availment of fraudulent ITC - section 132 of GST Act 2017 - HELD THAT:- There has not been any allegation that he has been habitual evader of the GST, adjudication in the present case is yet to be carried out in order to fix the exact liability of the accused. He is already in custody since 13.02.2021, accused is stated to be an old aged person of 60 years suffering from several ailments, who is also having the responsibility of taking care of his old parents. The reversal deposit of the amount which has not been disputed by the Ld. SPP for the department. Determination of the exact liability as well as the loss to the exchequer is not averred, no reasonable apprehension of tampering with the evidence or hampering the investigation has been shown, accused is no more required for any custodial investigation, therefore, no purpose would be served to keep the accused behind bar. Considering all the facts and circumstances accused Mohinder Kumar be released on bail on furnishing personal bond in the sum of Rs. 5 lacs with one surety in the like amount to the satisfaction of Ld. MM/Duty MM concerned subject to the conditions imposed - application disposed off.

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• Income Tax

• 2021 (3) TMI 368
  Exemption u/s 11 - assessee advanced interest-free loans to the sister concerns - whether grant of loan by assessee trust to its group trust cannot be treated as deposit or investment made in violation of Section 13(1)(d) r/w 11(5)? - HELD THAT:- ollowing the ratio laid down in the Judgments reported ACME EDUCATIONAL SOCIETY [ 2010 (7) TMI 159 - DELHI HIGH COURT] and WORKING WOMEN S FORUM [ 2014 (8) TMI 681 - MADRAS HIGH COURT] the question of law is decided against the Revenue and in favour of the assessee.

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• 2021 (3) TMI 365
  Addition u/s 41(1) - amount ceased to be a liability - Debatable issue - amount paid by the assessee towards tax and interest due to the department against the deduction claimed towards royalty payable to the foreign collaborator - HELD THAT:- The amount deducted in 1990-91 as an expenditure consisted of an element of tax being TDS. The words employed in Section 41(1)(a) are amount obtained by such person or the value of benefits accruing to him . The amount obtained can only mean the actual amount obtained. The fiction created under the provision cannot be expanded to even include amounts that may be obtained in the future. The legal fiction is intended to deem the actual amount obtained as profits and gains from business and to tax the said actual amount. Section 41(1) employs, on the one hand, words such as allowance or deduction and on the other hand loss , expenditure , or trading liability - Tax liability should be commensurate to the actual amount received or the value of benefit accrued to the assessee in that financial year and not on the unrecovered amount or unacknowledged benefit by the assessee. The unrecovered amount becomes taxable only in the previous year when it is recovered or actually obtained. The amounts paid as tax has not been obtained in 1995- 96 as the same had not been refunded. Until the amount of TDS is refunded, that amount cannot be treated as amount obtained by the assessee. The amount of TDS and interest can be deemed to be profits and gains and chargeable to tax only on refund. Until actual receipt, it is not amount obtained and cannot be deemed to be profits and gains from business. In other words, if it is assumed that the TDS paid by the assessee, for the royalty payable, is ordered to be refunded due to the cessation of liability and the refund is received by the assessee, the actual amount of refund when received will have to be treated as the amount obtained in the previous year of receipt and not prior to that. The amount paid by the assessee as TDS comes back to the assessee only when the TDS is refunded. The amount obtained by the assessee under Section 41(1) (a) is thus the actual amount obtained. Since we have held that the amount obtained under Section 41(1) shall be the actual amount obtained by the assessee exclusive of the tax paid and not refunded, the contention regarding whether the issue is a debatable one or not, does not strictly arise. However, for the purpose of complete appreciation, it is necessary to deal with the said contention also. Interpretation of the words employed in Section 41(1) required a deeper analysis and whether the section contemplates the net amount or the gross amount, was certainly a matter of debate. It cannot be held that the question raised by the assessee was a non-debatable issue. In the said circumstances, we are of the view that the First Appellate Authority was correct while the Tribunal erred in coming to the conclusion that the issue was not a debatable one. - Decided in favour of assessee.

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• 2021 (3) TMI 363
  Deduction under Section 80IA - whether the Tribunal was right in allowing the claim of deduction under Section 80IA ? - HELD THAT:- The point, now canvassed before us by the Revenue stating that the condition stipulated in sub-Section (7) of Section 80IA of the Act has not been fulfilled by the assessee, is a point, which was never taken by the Revenue at any earlier point of time. That apart, the benamidar of the assessee, viz., Francis Joseph had availed the benefit of the KVSS Scheme by filing a declaration and certificate was also issued. Subsequently, the assessee addressed the Department on 27.09.1999, stating the factual position. This has led to the issuance of a notice/order dated 01.11.1999 by the Commissioner of Income Tax (Central), Chennai stating that Mr.Francis Joseph has obtained the certificate under Section 90(2) of the Finance (No.2) Act, 1998 by making a false declaration. In the said notice/order, it was also mentioned that Mr.Francis Joseph, by letter dated 21.10.1999, has expressed his consent for the adjustment of tax of Rs. 8,69,338/- paid by him under KVSS Scheme towards the tax payable by the assessee before us under the KVSS in view of the inclusion of Francis Joseph s income for the relevant year 1994-95 in the hands of the assessee before us. All the above facts will clearly show that there is no error in the order passed by the Tribunal. - Decided against the Revenue.

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• 2021 (3) TMI 361
  Non filling of appeal electronically within the period of limitation - prayer made by the assessee to reckoned the date of filing as on date on which the appeal was actually filed - HELD THAT:- As decided in A.A. ANTONY, SHRI K.G. SRINIVASAN, SHRI RAVI PRABAKAR [ 2021 (1) TMI 170 - MADRAS HIGH COURT] taking into consideration the Circular issued by CBDT, which in our opinion, appears to be a one time measure, the substantive right of appeal should not be denied to the assessee on hand on a technical ground. We make it clear that this observation cannot be taken advantage by the assessee, as of now, when the procedure has been in vogue ever since the year 2016 and stood the test of time and in all probabilities, as of now, all teaching problems would have been solved. Therefore, bearing in mind the fact situation in the year 2016, we are of the view that the appeals need not have been rejected by the CITA on the ground that they were not e-filed within the period of limitation.

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• 2021 (3) TMI 360
  Unexplained cash deposits in the bank account - as pointed by assessee that there are withdrawals and deposits in the cash book and the source of deposits can be explained by the Assessee with supporting evidence. It was submitted that it is an accepted rule that a withdrawal from the cash book would be a source for deposit of cash in the bank account at a later date.HELD THAT:- We are of the view that when there are deposits and withdrawals from the cash book and the source of cash deposits in the cash account is explained, the earlier withdrawal of cash can be explained as source for the subsequent deposit of cash, provided there are no evidence or circumstances to show that the earlier withdrawals could not be available to the Assessee as a source for subsequent deposit. In such circumstance one has to see the peak credit balance in the cash account and add only peak credit. The peak credit alone would have to be treated as unexplained. The peak credit theory has to take into consideration before treating the cash deposit as unexplained cash credits. Since the statement showing the withdrawals and deposits of cash in the cash account in the statement is now filed as additional evidence has not been examined by the AO, we deem it fit and proper to remand the issue to the AO for consideration afresh after affording Assessee opportunity of being heard. The Assessee will have to explain the source of cash deposit in the cash account with supporting evidence to enable the AO to accept the source of cash deposit in the cash account. Appeal of assessee is allowed for statistical purposes.

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• 2021 (3) TMI 359
  Revision u/s 263 - HELD THAT:- Since the revision order u/s.263 of the Act for A.Y.2015-16 was passed on identical facts and circumstances prevailing for A.Y.2014-15 in all the three trusts, the decision rendered by this Tribunal for A.Y.2014-15 [ 2020 (12) TMI 1121 - ITAT MUMBAI] for all the three appeals referred to supra shall apply mutatis mutandis to this assessment year also. The operative portion of the said order of the Tribunal is not reproduced herein for the sake of brevity. Accordingly, the grounds raised by the assessee are allowed.

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• 2021 (3) TMI 354
  Penalty u/s 271(1)(c) - Defective notice - furnishing inaccurate particulars of income by not offering the receipts as fee for technical services by filing the return of income - HELD THAT:- Bare perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for concealment of particulars of income or furnishing of inaccurate particulars of such income by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. Following the decisions rendered in the cases of CIT vs. SSA s Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] and Pr. CIT vs. Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act the same has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Initiating penalty on the basis of invalid satisfaction and on the basis of vague and ambiguous notice issued u/s 271(1)(c) read with section 274 is not sustainable in the eyes of law, hence liable to be deleted. Accordingly, question framed is answered in the negative and penalty levied by the AO and sustained by the ld.CIT (A) is ordered to be deleted

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• 2021 (3) TMI 353
  Reopening of assessment u/s 147 - unexplained cash credit u/s 68 - reopening of the assessment was solely on the basis of AIR information - HELD THAT:- There is no independent application of mind by the AO to form the reason to believe that there is escapement of income. The AO has not made any independent inquiry to find out the veracity of the AIR information that in fact so much cash was deposited in the bank account. Therefore, find merit in the arguments of the Ld. Counsel for the assessee that the reopening of the assessment on wrong and incorrect facts makes the reopening null and void. In the case of PCIT vs. Meenakshi Overseas (P) Ltd. [ 2017 (5) TMI 1428 - DELHI HIGH COURT] has held that where reassessment was resorted to on basis of information from DIT (Investigation) that assessee had received accommodation entry but there was no independent application of mind by Assessing Officer to tangible material and reasons failed to demonstrate link between tangible material and formation of reason to believe that income had escaped assessment, reassessment was not justified. As reopening of the assessment has been made on the basis of AIR information which is not based on correct facts and the AO has not made independent application of his mind before recording reasons for reopening of the assessment and has simply proceeded on the basis of AIR information, therefore, the reassessment proceedings initiated by the AO being not in accordance with law has to be quashed - Decided in favour of assessee.

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• 2021 (3) TMI 352
  Disallowance of premium paid to not Approved gratuity fund - premium paid to LIC of India to cover the payment of gratuity liability to its employees on death or retirement on the pretext that the Group Gratuity Scheme framed by LIC of India is not an Approved gratuity fund - assessee has not created any approved gratuity fund by forming a trust on its own but merely paying the amount to LIC of India as premium, which is treated as expenses to the assessee - CIT(A) was of the opinion that, the claim is not an allowable expenditure under section 36(1)(v) of the Act, since the scope of section 40A(7) relates to provisions and not the case of actual payment - HELD THAT:- Assessee paid to LIC sum of Rs. 1 lakh as premium to cover the obligation towards the gratuity payment to employees. The balance Rs. 16,585/- is only a provision. In assessment year 2015-16 contribution to LIC premium was deleted by holding that section 40A(3) cannot be invoked in respect of actual payments made by assessee to LIC. We also perused the decisions relied by the Ld.AR of coordinate benches of this Tribunal, wherein it is held that, payment made to get gratuity fund maintained with life insurance Corporation created exclusively for the benefit of its employees had to be allowed as deduction. Admittedly, during the year under consideration, assessee paid sum of Rs. 1 lakh to LIC. We agree with the submissions of the Ld.AR that, the disallowance could be at the most restricted to Rs. 16,585/- which is shown as provision during the year. Considering order passed by the Ld.CIT(A) in the subsequent year accepting the payment as an allowable expenditure actually made to LIC, we hold that assessee is to be granted relief to the extent of Rs. 1 lakh being actually made to LIC - Appeal filed by assessee stands partly allowed.

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• 2021 (3) TMI 351
  Disallowing security expenses incurred on factory - non capitalization of security expenses to Factory building - HELD THAT:- Assessee was in the business of manufacturing and trading of mosaic and stone tiles. On its factory premises (unit-2) which was part of its business asset and business activity, it had debited expenditure of security expenses and electricity expenses for sums aggregating to Rs. 10,00,264/-. This expenditure has been claimed in the Financial Year 2011-12. The AO and ld. CIT (A) have disallowed the said claim of expenses on the ground that the factory was sold on 07.05.2012 and assessee had received certain advances in the month of January and February, 2012. The sale deed was executed in the Financial Year 2012-13 and hence, it cannot be said that these expenditure were not incurred in F.Y. 2011 12. Even though assessee may not have full-fledged operations from the said factory, but if the factory was under the control of the assessee and certain stocks were lying, then electricity and security expenses cannot be held to be for non-business purpose, because during the year the factory premises was with the assessee. Accordingly, the security expenditure of Rs. 3,86,549/- and electricity expenses of Rs. 6,13,715/- which are duly supported by relevant bills and vouchers are allowed. Appeal of the assessee is allowed.

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• 2021 (3) TMI 350
  Disallowance on account of cash payment towards purchase of land at Ghaziabad, UP under the provisions of Section 40A(3) - HELD THAT:- From the perusal of the assessment order as well as the CIT(A) both the Revenue Authorities have not given any reason as to why Section 40A(3) will be applicable along with Rule 6D (J). In-fact, both the Revenue Authorities have not disputed the identity of the sellers as well as the purchase /sale deed between the parties and the assessee, but whether the payments were bonafide and the consideration of a genuine transaction was properly disclose by the assessee during the assessment proceedings as well as the appellate proceedings is also not specified in both the Revenue Authorities orders. The submissions of the Ld. AR that the cash payments were made on Sunday s which is a non-banking day but the assessee from the records has not shown as to what was the necessity to make payment on Sundays. Revenue Authorities as well as the assessee has not clearly stated their respective cases u/s 40A(3) read with Rule 6DD(J), it will be appropriate to remand back this matter to the file of the AO for allowing the assessee to establish as to why the payments were made on Sundays and why the applicability of Section 40A(3) does not arise in assessee s case when land shown in non current investment in the audited financial statements which is not claimed as expenditure in P L account. Appeal of the assessee is partly allowed for statistical purpose.

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• Benami Property

• 2021 (3) TMI 380
  Prohibition of Benami Property Transactions - Petitioner contends that the Petitioner as the head of a joint family representing him and his brothers are absolute owners of the suit properties.contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act - HELD THAT:- On a perusal of the plaint, it is patently clear that the Petitioner has, in the plaint, pleaded that the suit properties belonged exclusively to the Petitioner as the head of the joint family, but the same had been purchased in the name of the Defendants. It is nowhere stated that the suit properties were purchased out of any joint family funds. The suit is barred by law and /or in other words barred by Section 4 of the Act of 1988. The contention of the Petitioner that the Respondent No.1 was holding the property as a trustee, in fiduciary capacity, and the property held by him could not, therefore, be treated as Benami, in view of Section 4(3)(b) of the Benami Act, is inconsistent with the pleadings in the plaint. The argument that, from a plain reading of the plaint, it is clearly inferable that the plaintiff had asserted the properties as joint family properties is not correct. That was not the case, made out in the plaint. It is true, as argued by Colonel Balasubramanian, that a plaint can be rejected on consideration of the averments in the plaint, but not the allegations made by the Defendant in defence. The plaintiff claims to have made investments in the suit properties purchased in the name of the Defendants. As observed by the High Court, it is not even the case of the plaintiff that joint family funds have been invested in the property. Rather it is the case of the plaintiff that the property was purchased from the funds of the plaintiff. As held by this Court in Popat and Kotecha Property v. State Bank of India Staff Association [ 2005 (8) TMI 691 - SUPREME COURT ], clause (d) of Rule 11 of Order VII CPC applies only in those cases where the statement made by the plaintiff in the plaint, without any doubt or dispute, shows that the suit is barred by any law in force. In our considered view, there is no infirmity in the order of the Trial Court and impugned judgment of the High Court rejecting the plaint under Order VII Rule 11 of the CPC for the reasons discussed above. Substantial justice has been done by nipping in the bud, a suit which is ex facie barred by law, thereby saving precious judicial time as also expenditure and inconvenience to the parties to the suit. The impugned judgment does not call for interference under Article 136 of the Constitution of India.

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• 2021 (3) TMI 367
  Benami Transaction entered into between spouses - plaintiff being the wife of the appellant-husband - acquasition of substantive right - payment of consideration money to effectuate the sale transaction - HELD THAT:- This Court in exercise of its jurisdiction under Article-100 of the CPC 1908, should not disturb the concurrent finding decreeing the suit in favour of the plaintiff as passed by both the courts below - This submission of the learned counsel appearing for the plaintiff merits no consideration, since both the courts below have misinterpreted and misconstrued the legal issues involved in the facts and circumstances of the present case. It is well- settled that when the courts below had returned a finding which is contrary to law and arrived at a perverse finding both on points of law and facts, this Court in exercise of its powers under Section-100 of CPC would have the solemn duty to set the law in its proper perspective. Plaintiff being the wife of the appellant-husband has not acquired any substantive right, and as a de facto owner, she has not accrued any substantive right. She cannot claim any right over the suit property against the title of the de jure owner/husband/defendant. Defendant has not taken the plea of fiduciary relationship in his written statement which debars the defendant-appellant to take the advantage of Section-4(3)(b) of the old Act. In my opinion, this finding of the learned First Appellate Court suffers from misinterpretation of the provision for the reason that the question involving fiduciary relationship in the context of the present case constitutes a substantial question of law and being the same is a legal question, it is immaterial whether any plea was taken in his pleadings in the written statement. It is settled proposition of law that a statute has to be read in whole. On conjoint reading of both the old and new Act, the object and intent of the legislature is manifestly clear and unambiguous where it prohibits benami transactions and the right to such property held benami with penal provisions for such benami transactions. However, while enacting the Act, the legislatures have kept in mind the practical scenario of the society where a spouse can purchase a property in the name of another spouse and also in the name of their child and consciously have exempted those individuals who were/are the participants of such transactions and such transactions were kept outside the purview of the Act and the Act is not intended to give banami colour to the transactions entered into between spouses. The instant appeal filed by the husband-defendant/appellant must succeed and accordingly, the present second appeal stands allowed.

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• Customs

• 2021 (3) TMI 384
  Benefit of exemption - Import of Camera - Extended period of limitation - Jurisdiction of DRI to issue Show Cause Notice (SCN) - Proper Officer - Validity of proceeding initiated for Recovery of duty not paid - clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012 - Section 28(4) of the Customs Act, 1962 - whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. HELD THAT:- It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts and confers the power of recovery on the proper officer . The obvious intention is to confer the power to recover such duties not on any proper officer but only on the proper officer . There are only two articles a (or an) and the . `A (or an) is known as the Indefinite Article because it does not specifically refer to a particular person or thing. On the other hand, the is called the Definite Article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28 (4), it could have used the word any - Parliament has employed the article the not accidently but with the intention to designate the proper officer who had assessed the goods at the time of clearance. It must be clarified that the proper officer need not be the very officer who cleared the goods but may be his successor in office or any other officer authorised to exercise the powers within the same office. In this case, anyone authorised from the Appraisal Group. If it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government - The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. The entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in all the matters are invalid without any authority of law and liable to be set-aside - Demands also set aside. Time Limitation - wilful mis-statement or suppression of facts or not - HELD THAT:- The show cause notice was issued on 19.8.2014. Under Section 28(4), such a show cause notice must be issued within five years from the relevant date which means the date on which the goods were assessed and cleared, in case the duty was not paid or short paid or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts - It is pertinent to note that the importer had asked for a first check and had shown the cameras and the cameras were offered on 20.3.2012 along with Bill of Entry and literature detailing specifications of models. The camera could have been operated to see the length of time of the single sequence and whether recording of the single sequence exhausts the total memory of the camera (including extended memory) and whether the cameras were eligible for exemption. It is difficult in such circumstances to infer that there was any wilful misstatement of facts. In these circumstances, it must, therefore, follow that the extended period of limitation of five years was not available to any authority to re-open under Section 28(4). Whether the cameras that were cleared on the basis that they were exempted from customs duty under Exemption Notification No.15/2012 were in fact eligible for the exemption or not? - HELD THAT:- The goods must be taken to have been validly cleared by the Customs officer - cameras with similar specifications have been treated as exempted under the Explanatory Note to the Combined Nomenclature of the European communities. It is important to add that the same cameras have been considered to be eligible for exemption before 17.03.2012 and after 30.04.2015 under the exemption Notifications issued under the Customs Act read with Chapter 84 85 (First Schedule) of Customs Tariff Act, 1975. Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 373
  Absolute Confiscation - Foreign Currency Notes - imposition of penalty as well under Section 114 of the Customs Act, 1962 read with Section 13(1) of Foreign Exchange Management Act, 1999 - HELD THAT:- The appeal at Ext.P3 is undisputedly a joint appeal filed by both petitioners feeling aggrieved by the order passed by the adjudicating authority which is a common order. Rule 3(1) of the Customs (Appeals) Rules, 1982 provides that the appeal under Section 128 is required to be filed in Form No.CA-1 provided under Chapter V of the said Rules. Form No.CA-1 contains seven particulars to be incorporated. Some of such particulars are date of communication of the decision or order appealed against, whether duty or penalty or both is deposited and if not, whether any application dispensing with such deposit is moved. It is thus clear that separate information can be there if the appeals are filed by different aggrieved persons. It will not be proper to entertain join appeal particularly when the consequence suffered by aggrieved persons are different. Similarly, statement of facts as well as relief claimed in appeal as stated in the prescribed form can be different for each aggrieved person - though the adjudicating authority can pass a common order affecting more than one person, the affected persons are supposed to file separate appeals so as to enable the Appellate Authority to deal with the same conveniently. Petition dismissed.

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• 2021 (3) TMI 364
  Confiscation - imposition of redemption fine - DEEC Scheme - respondents had not utilized the duty free materials for manufacturing of Aluminium Extrusions that were sold in domestic market, in violation of the conditions of the exemption notification - interest and penalty imposed on the 2nd respondent - respondent no. 2 on the role of the Managing Director in the misuse of DEEC Scheme committed by the firm was well established by the Department. HELD THAT:- The Tribunal, by the impugned order, had remanded the matter back to the Assessing Officer to verify the claim made by the assessee that they exported over 14 tonnes of goods with the imported aluminium ingots, which were cleared by the respondent through the customs, without payment of duty under the DEEC Scheme - there was no material available with the Department at the relevant point of time to rebut the plea raised by the assessee that they exported over 14 tonnes utilizing the imported material, which were cleared without payment of duty under the DEEC Scheme. Therefore, the Tribunal thought fit to remand the matter to the Assessing Officer for a fresh consideration. We find no error in such direction being issued by the Tribunal. Since the Tribunal thought fit to remand the matter back to the Assessing Officer, it has to necessarily interfere with the order of the Assessing Officer - Appeal dismissed.

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• 2021 (3) TMI 357
  Condonation of delay of 21 days in filing appeal - power of Commissioner (Appeals) to condone delay - Section 128 (1) of the Customs Act, 1962 - Interest on delayed refund of SAD - Section 27A of the Customs Act, 1962 - HELD THAT:- Tribunal in CHAKRAPANI VYAPAR PVT LTD, SARAF FINCOM PVT LTD VERSUS COMMISSIONER OF CUSTOMS BANGALORE-CUS [ 2018 (11) TMI 1399 - CESTAT BANGALORE] allowed the appeal of the appellant with consequential relief and by following the said order, the Original Authority granted the refund but did not grant the interest and when the appeal against the refusal to grant the interest was filed before the Commissioner, the learned Commissioner did not decide the appeal on merits and rejected the appeal of the appellant on time bar - the reasons given by the appellant is quite convincing and moreover there was a delay of only 21 days which was within the condonable power of the Commissioner (Appeals) and the Commissioner (Appeals) should have exercise his power by condoning the delay and decided the appeal on merits. The delay of 21 days in filing the appeal before Commissioner (Appeals) is not an inordinate delay and is not intentional and the appellant does not stand to gain anything by filing the appeal with the delay and the approach of the various Courts is that the delay should be liberally condoned and matters should be decided on merits - the delay is condoned - matters remanded to the learned Commissioner with a direction to decide the same on merit within a period of one month from the date of receipt of this order after following the principles of natural justice. Appeal allowed by way of remand.

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• 2021 (3) TMI 355
  Refund of SAD - refund rejected on the ground that the imported goods were sold prior to issuance of out of charge order by the Customs - benefit of N/N. 102/2007-Cus dated 14.9.2007 - HELD THAT:- The said issue has been settled in the case of M/S ASHWIN CORPORATION VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD [ 2017 (8) TMI 980 - CESTAT AHMEDABAD ] wherein this Tribunal has held that the refund cannot be rejected merely on the ground that the imported goods were sold prior to issuance of out of charge order by the Customs. Thus, merely the goods were sold prior to issuance of out of charge order by the Customs, the refund cannot be rejected - appeal allowed - refund allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (3) TMI 377
  Seeking provision of open or virtual links for attending hearings in the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) - case of the Petitioner is that the NCLT and NCLAT ought to have an open link where parties who are interested can join the proceedings - HELD THAT:- It is directed that the NCLT and NCLAT may regulate their own procedure for virtual hearing platforms so long as it is ensured that if any particular party requests for a link, the same is considered in a fair, transparent and non-arbitrary manner. To the extent possible, parties would be permitted to view the proceedings. Those parties who join the proceedings are expected to maintain the discipline of virtual hearing and not cause unnecessary disturbance during the same. The affidavit filed, in any case states that very soon, the NCLAT would also start physical hearing of matters. Since virtual hearings are a measure adopted to ensure that Tribunals and Courts are functioning during the COVID-19 pandemic, the Petitioner, if he wishes to join any particular hearing, may write an e-mail at least 24 hours in advance to the Deputy Registrar of the NCLT and NCLAT. The same shall be considered in accordance with the NCLT and NCLAT s own procedure, in a fair, transparent and non-arbitrary manner. Petition disposed off.

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• 2021 (3) TMI 347
  Sanction of Scheme of Arrangement - Sections 230-232 read with Section 66 of the Companies Act, 2013 - HELD THAT:- The authorized representative has placed on record the summary of Composite Scheme of Arrangement (Annexure A), Diagrammatic Representation of Pre and Post shareholding pattern of Petitioner Companies after Composite Scheme of Arrangement is effective (Annexure B) and Provisional Financials of Petitioner Companies as on 30.06.2020. These annexures have been filed vide Diary No. 00868/1 dated 29.09.2020. There are no objections to the Scheme and hence there is no impediment in the sanction of the Scheme. Therefore, the Scheme (Annexure-4) is hereby approved. While approving the Scheme, it is clarified that this order should not be construed as an order in any way granting exemption from payment of any stamp duty, taxes, or any other charges, if any, and payment in accordance with law or granting permission in respect of any compliance with any other requirement which may be specifically required under any law. With the sanction of the Scheme, the Transferor Company shall be transferred to and vested in the Transferee Company and the Demerged Undertaking 1 of the Demerged Company 1 and Demerged Undertaking 2 of Demerged Company 2 stand demerged and transferred to, and vested in, the Resulting Company. Application disposed off.

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• Securities / SEBI

• 2021 (3) TMI 349
  Compensatory interest on increased offer price - valuation of the shares to be done in accordance with Regulation 8(2)(e) of the SAST Regulations - Application for payment of interest rejected - appellant has prayed for compensatory interest at the rate of 10% per annum on increased offer price to be paid from April 10, 2018 to October 9, 2018 and 18% compensatory interest from January 31, 2020 till date of payment - HELD THAT:- Interest starts running from the date when respondent No. 2 entered into an agreement to acquire 100% ownership of FML which is April 10, 2018. The period of interest stops when respondent No. 2 submitted the draft letter of offer which was published on October 9, 2018. For this period, namely, April 10, 2018 to October 9, 2018 interest has been paid. After SEBI finalized the price of the shareholders on July 4, 2019 interest becomes payable and which has been paid in accordance with the provisions of the Regulations from August 21, 2019 to January 30, 2020 when the amount was eventually paid. Reason for not paying the interest by respondent No. 2 for the intervening period i.e. from the date when the draft letter of offer was published on October 9, 2018 till the date of finalizing the price by SEBI on July 4, 2019 is, that this period was not in the hands of the respondent No. 2. We are of the opinion that the respondent No. 2 cannot be saddled with payment of interest for the period when the price was required to be finalized by SEBI under Regulation 8(16) of the SAST Regulations. It would be unfair on the part of SEBI as well as on the part of the Tribunal to saddle payment of interest upon the acquirer respondent No. 2 for the period when the price was being determined by SEBI. The contention that the shareholders should not suffer due to long pending litigation initiated by the acquirer and, therefore, the acquirer should be directed to pay to the shareholders the interest is erroneous. When SEBI had directed the acquirer to raise the share price from Rs. 400/- to Rs. 608.46 on March 20, 2019, the appellant himself filed appeal No. 182 of 2019 and again filed appeal No. 359 of 2019 when SEBI passed a fresh order fixing the price on July 4, 2019. Thus, in our view no interest is payable from the date of filing of the publication of the draft letter of offer, i.e., from October 10, 2018 to July 4, 2019 when SEBI eventually fixed the price of the shares. We do not find any error in the order of SEBI rejecting the application for grant of interest.

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• Insolvency & Bankruptcy

• 2021 (3) TMI 385
  Setting aside of order of NCLT by NCLAT - pre-existing disputes between the Respondent and the Appellant or not - HELD THAT:- The direction is in the nature of costs of the proceedings under Section 7 of the IBC, which have been found to be unsustainable in law. The Respondent having succeeded, cannot be saddled with the costs of the Corporate Insolvency Resolution Process (CIRP) initiated at the behest of the Appellant or with the fees of the Interim Resolution Professional (IRP). The direction does not warrant interference in appeal. There are no grounds to interfere with the order dated 10th August, 2020 passed by the National Company Law Appellate Tribunal - appeal dismissed.

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• 2021 (3) TMI 356
  Company under liquidation - Providing of information sought by the Information Utilities - Seeking direction to Liquidator to deduct costs incurred for supplying the same from the amounts already paid to him for the same - Section 38 of IBBI (Information Utilities) Regulation, 2017 - HELD THAT:- On perusal of Section 38 of IBBI (Information Utilities) Regulation, 2017, it is clear that the information utility shall not provide access to the reports, registers and minutes submitted under sub-regulation (1) to any person other than the concerned insolvency professional, the Board or the Adjudicating Authority. Payment of balance amount - HELD THAT:- The learned counsel for the respondent stated that he is not aware of the quotation received by the applicants from M/s Suraj Stationary and xerox, Mumbai stating that the photostat costs of A/4 Black and while per print will be Rs. 1.50 per piece plus 18% GST. However, the respondent relied on another invoice produced by the same organisation stating that the photo copy charges of A/4 black and white printing charges per sheet is Rs. 3/-. Since the very same organisation has issued the quotation, the Respondent is directed to reduce the photocopying charges as Rs. 1.50 per piece and calculate the amount collected accordingly and inform the applicants, if any, further amount to be paid by them for providing the documents sought by them in this application, which the learned counsel for respondent had agreed to provide. Supply of the Minutes of meetings with the Committee of Creditors - HELD THAT:- As rightly stated by the respondents in case the same is provided to the applicants, that will consequently affect the bidding process of the Corporate Debtor properties. Moreover, this Tribunal is of the opinion that minutes of the meetings of Committee of Creditors has nothing to do with the claims preferred by the applicants, being the former employees of the Corporate Debtor Excel Glasses Limited. Hence that prayer to supply the minutes of meetings with the Committee of Creditors is rejected. Respondent Liquidator is directed to provide all other documents sought by the applicants in these I.As, by collecting excess fee, if any, after adjusting the amount which they have already remitted ie., Rs. 31500/-, within a week from the date of this order. Application disposed off.

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• 2021 (3) TMI 348
  Seeking liquidation of the corporate debtor - section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The CoC in its second meeting held on September 16, 2019 unanimously passed a resolution for liquidating the company. Accordingly, the resolution professional filed this application for liquidation of the company as provided under section 33 of the Insolvency and Bankruptcy Code, 2016 (Code). Upon hearing the submissions of the applicant and on reading the application and the documents enclosed therein it is found, the RP has complied with the procedure laid down under the Code ; Regulations made thereunder. On verification, this case is considered fit case to pass liquidation order under sub-section (1) of section 33 of the Code for liquidation in the absence of any resolution plan. Application allowed.

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• Service Tax

• 2021 (3) TMI 378
  Validity of SCN - impugned show cause notice was issued on the basis of information retrieved from the Income Tax Department - taxable service provided or not - HELD THAT:- The impugned show cause-cum-demand notice issued to the petitioner by respondent No.3, clarifying that respondents would be at liberty to pursue with the verification as to income of the petitioner received from other sources and may issue fresh show cause notice in accordance with law if the circumstances so warrant. Petition disposed off.

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• 2021 (3) TMI 358
  Scope of SCN - advertising agency service - classification of service at the end of recipient of service - CENVAT Credit - HELD THAT:- The show cause notice is wholly misconceived as the Department is trying to classify the service at the end of the recipient of service. CENVAT Credit - input service or not - advertising agency service - HELD THAT:- Admittedly appellant have received the input service and utilised in providing the output service. Further, in terms of Rule 2(l), it is found that the appellant is entitled to take cenvat credit of any input service which is received, by any name called, which are utilised in providing output service. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (3) TMI 379
  SVLDRS - re-determination of the amount payable under the scheme - Claim of refund of amount deposited as per the Court order - levy of personal penalty on Director - the declaration was rejected on the ground that Applicant has not discharged the amount estimated in SVLDRS-3 in the case of M/s Eureka Fabricators, which is the main notice in this case - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- Section 123(a) of the said Act states that for the purposes of the scheme, tax dues means the total amount of duty which is being disputed in a single appeal arising out of an order and pending as on 30.06.2019 or in the case of more than one appeal arising out of an order which are pending as on 30.06.2019 before the appellate forum - The impugned order dated 11.09.2020 passed by the respondent No.3 i.e. the Designated Committee proceeds on the premise that under the provisions of section 123(a) of the said Act, since the petitioner has categorically admitted its tax liability of Rs. 88,16,598.00 in the memorandum of appeal, the tax liability of the petitioner under the scheme is to be computed on the balance amount and the relief of 50% of tax dues under the scheme is required to be given to the petitioner only on the said balance amount which is Rs. 78,10,369.00. Respondent No.3 has arrived at the total tax payable at Rs. 1,27,21,782.50 and has therefore called upon the petitioner to pay the net amount payable of Rs. 16,47,860.50 after giving the petitioner the benefit of the deposit of Rs. 1,10,73,922.00. The principal reason for denial of the benefit to the petitioner is due to the alleged admission by the petitioner of its admitted duty liability in the memorandum of appeal filed before the Commissioner (Appeals) which has been relied upon by the Designated Committee. We have perused the memorandum of appeal filed by the petitioner before the Commissioner (Appeals). The finding in the impugned order dated 11.09.2020 that the petitioner has admitted its tax liability of Rs. 88,16,598.00 before the Commissioner (Appeals) and the Settlement Commission against the total confirmed tax of Rs. 1,66,26,967.00 which therefore needs to be excluded from computation is therefore not sustainable - That apart, under section 124(1)(a)(ii) of the said Act, the relief available to the petitioner under the scheme would be 50% of the entire duty liability of Rs. 1,66,26,967.00 i.e. Rs. 83,13,484.00. Reliance placed on para 2 (iv) of the Circular No.1072/05/2019-CX dated 25.09.2019 to the effect that under Section 123 tax dues is the amount of duty which is the outstanding amount against the declarant and this is the net amount after deducting the dues that he has already paid in the form of pre-deposit, is not sustainable and deserves to be rejected. The petitioner therefore has deposited the total sum of Rs. 1,29,12,090.00 with the respondents, though petitioner s deposit of Rs. 55,56,045.00 on orders of the Court cannot be construed as a pre-deposit or a deposit under the scheme; therefore the proviso to sub-section (2) of section 124 would not be applicable or attracted to the said deposit. It is also settled preposition that an order of the Court can cause prejudice to none. It is evident that the amount payable by the petitioner under the scheme would be 50% of the tax dues less the deposits and pre-deposits which is 50% of Rs. 1,66,26,967.00, Rs. 83,13,484.00 less the pre-deposits and deposits i.e., Rs. 73,17,877.00 (Rs,50,00,000.00 plus Rs. 5,17,877.00 plus Rs. 18,00,000.00). The figure comes to Rs. 9,95,607.00. Since petitioner has paid Rs. 55,56,045.00 as per Court s order, petitioner would be entitled to a refund of Rs. 55,56,045.00 less Rs. 9,95,607.00 which is Rs. 45,60,438.00 - Petition allowed.

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• 2021 (3) TMI 362
  Seeking rectification of the error in the petitioner s registration certificate - Power to rectify the mistake - HELD THAT:- It is true that the authorities have not been approached immediately. It is also true that this writ petition has not been filed immediately after it became clear that the representation was not being considered. When the power to rectify the mistake is available, as and when the error is pointed out, the rectification ought to be done. The registration certificate pertaining to Saga Steels Private Limited is containing an error. Of course, the petitioner is responsible for the error. But that is not a ground to deny relief sought for by them. Since M/s.Sabari TMT King Private Limited/the writ petitioner herein has taken over Saga Steels Private Limited, M/s.Sabari TMT King Private Limited is very much having locus standi to maintain the writ petition. Therefore, the second respondent, who is said to be the nodal officer is directed to rectify the petition mentioned error and issue a revised registration certificate for Saga Steels Private Limited. This exercise shall be carried out within a period of six weeks from the date of receipt of a copy of this order. Petition allowed.

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• CST, VAT & Sales Tax

• 2021 (3) TMI 366
  Movement of goods, taking place or not - Form XXA (under Rule 35A of the TNGST Rules) - Discharge of burden to prove - whether the production of Form XXA would suffice to establish the plea taken by the petitioner-dealer that there was movement of goods from Chennai to Bangalore? - HELD THAT:- The Tribunal, being the last fact finding authority, should have made an endeavor to consider the grounds raised by the petitioner, more particularly, the ground that the petitioner had produced a copy of Form XXA containing the seal of the Check Post Officer. Unfortunately, the Tribunal did no such endeavor. So far as the First Appellate Authority is concerned, he would state that the copies of the documents produced by the petitioner do not contain the seal of the check post. Before us, the copy of Form XXA, one of the duplicate of which is retained by the petitioner, has been produced and a colour photostat copy of the same reveals that there is a round seal indicating it to be a seal of the check post. The date and time of the check post, where the seal was affixed, is not clear from the photostat copy - It is not in dispute that the petitioner, at the first instance, by their reply dated 02.08.2006, had relied upon Form XXA to state that the goods moved from Chennai to Bangalore. The initial burden cast upon the petitioner in terms of Rule 35A of the TNGST Rules was discharged and the onus shifts on the Revenue to establish that the stand taken by the petitioner stating that Form XXA contained the seal of the Check Post Officer was incorrect. This exercise has not been done - while completing the assessment, the Assessing Officer conveniently did not touch upon the said issue but levied tax on the transaction only on the ground that the petitioner was not a registered dealer in the State of Tamil Nadu. The Tribunal could have examined as to veracity of the stand taken by the dealer. The benefit should enure in favour of the petitioner-dealer as the Revenue failed to discharge the onus cast upon them - Tax Case Revision is allowed.

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• Indian Laws

• 2021 (3) TMI 383
  Dishonor of Cheque - acquittal of the accused - appellant accused claimed innocence and pleaded false implication in the case however, did not lead any evidence in defence - HELD THAT:- In the instant case, the appellant has only recorded her statement under Section 313 of the Code, and has not adduced any evidence to rebut the presumption that the cheques were issued for consideration. Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court. The object of introducing Section 138 and other provisions of Chapter XVII in the Act appears to be to enhance the acceptability of cheques in the settlement of liabilities. The drawer of the cheque be held liable to prosecution on dishonour of cheque with safeguards provided to prevent harassment of honest drawers. Section 138 primarily relates to a civil wrong and the amendment made in the year 2000 specifically made it compoundable. The burden of proof was on the accused in view of presumption under Section 139 of the Act and the standard of proof was of preponderance of probabilities - There is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act. It is well settled that the proceedings under Section 138 of the Act are quasi criminal in nature, and the principles which apply to acquittal in other criminal cases are not applicable in the cases instituted under the Act. There was no response by the appellant at any stage either when the cheques were issued, or after the presentation to its banker, or when the same were dishonoured, or after the legal notices were served informing the appellant that both the cheques on being presented to its banker were returned with a note that it could not be honoured because of insufficient funds - That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration. The High Court has not committed any error in recording the finding of guilt of the appellant and convicting her for an offence being committed under Section 138 of the Act under its impugned judgment, which in our considered view, needs no further interference. Consequently, the appeals are without any substance, and are accordingly dismissed.

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• 2021 (3) TMI 382
  Seeking for appointment of a Sole Arbitrator for adjudication of disputes between the parties - Section 11(6) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Since, the CFSL did not express an opinion either way, it became incumbent upon the learned Single Judge to determine as to whether the Agreement dated 7th July, 2014 could have been entered into given the surrounding circumstances of the case. As Shri Divan rightly points out, there are no negotiations which lead upto the 7th July, 2014 Agreement that are on record. Secondly, negotiations that take place take place only after 7th July, 2014 in which a draft agreement is deliberated upon between the same parties. It would stretch incredulity to state that on the same subject matter negotiations and a draft agreement would be spoken about after a final signed agreement has been agreed upon between the parties. Secondly, he rightly points out that the Agreement is notarized in Faridabad, Haryana, with no explanation worth the name when a contract is to be executed in Bihar by one of the parties whose registered office is in Bihar and the other party whose registered office is in Mumbai. Thirdly, the Notary who is said to have notarized the Agreement was not licensed to do so the same, his license having expired earlier, a fact that is accepted even by the Respondents. The allegation that the Consultancy Agreement of 7th July, 2014 had a signature that may not be that of Mr. M.G. Stephen was brushed aside stating that an arbitration agreement need not be signed by the parties. That is entirely besides the point. Mr. M.G. Stephen has sworn to an affidavit filed before the High Court that the signatures appearing on the 7th July, 2014 agreement are not his signatures, as a result of which the Appellant cannot be said to have entered into an agreement at all on 7th July, 2014 - The draft agreement sent by email was exchanged on 15th July, 2014 and not on 7th July, 2014. Secondly, the email in reply to the email of 15th July, 2014 shows that there was no concluded contract between the parties. Also, the pleading with which the parties went to Court was that there was a concluded contract between the parties on 7th July, 2014. There was no pleading worthy of the name that on 15th July, 2014, a draft agreement was exchanged between the parties, as a result of which a concluded contract emanated therefrom. The facts of this case remind one of Alice in Wonderland. In Chapter II of Lewis Caroll s classic, after little Alice had gone down the Rabbit hole, she exclaims Curiouser and curiouser! and Lewis Caroll states (she was so much surprised, that for the moment she quite forgot how to speak good English) . This is a case which eminently cries for the truth to out between the parties through documentary evidence and cross-examination. Large pieces of the jigsaw puzzle that forms the documentary evidence between the parties in this case remained unfilled. The emails dated 22nd July, 2014 and 25th July, 2014 produced here for the first time as well as certain correspondence between SBPDCL and the Respondent do show that there is some dealing between the Appellant and the Respondent qua a tender floated by SBPDCL, but that is not sufficient to conclude that there is a concluded contract between the parties, which contains an arbitration clause. The impugned judgment of the Delhi High Court is set aside in so far as it conclusively finds that there is an Arbitration Agreement between the parties - appeal allowed.

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• 2021 (3) TMI 381
  Dishonor of Cheque - scope of the term other association of individuals in case of a joint liability of two or more persons - applicability of Section 141 of the NI Act - discharge of legal liability or not - whether the appellant herein, original accused No. 2 can be prosecuted for the offence punishable under Section 138 r/w Section 141 of the NI Act? - HELD THAT:- A person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque. Section 141 of the NI Act is relating to the offence by companies and it cannot be made applicable to the individuals. Learned counsel appearing on behalf of the original complainant has submitted that Company means any body corporate and includes, a firm or other association of individuals and therefore in case of a joint liability of two or more persons it will fall within other association of individuals and therefore with the aid of Section 141 of the NI Act, the appellant who is jointly liable to pay the debt, can be prosecuted. The aforesaid cannot be accepted. Two private individuals cannot be said to be other association of individuals . Therefore, there is no question of invoking Section 141 of the NI Act against the appellant, as the liability is the individual liability (may be a joint liabilities), but cannot be said to be the offence committed by a company or by it corporate or firm or other associations of individuals. The criminal complaint against the appellant for the offence punishable under Section 138 read with Section 141 of the NI Act is hereby quashed and set aside - Appeal allowed - decided in favor of appellant.

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