TMI Tax Updates - e-Newsletter
March 13, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

News

1. GSTN Webinar on e-invoicing for taxpayers

2. Government working on Atmanirbhar Niveshak Mitra portal to digitally facilitate investors

3. 1st Meeting of the BRICS Contact Group on Economic and Trade Issues held

Notifications

Customs

1. 13/2021 - dated 11-3-2021 - ADD

Seeks to impose definitive anti-dumping duty on imports of Ciprofloxacin Hydrochloride originating in or exported from China PR for a period of five years from the date of levy of provisional anti-dumping duty, i.e. 2nd September, 2020.

DGFT

2. 59/2015-2020 - dated 11-3-2021 - FTP

Export of Red Sanders wood by Government of Andhra Pradesh-Extension of time

GST - States

3. 07/ ST-1/H.A. 6/2003/S.59/2021 - dated 10-3-2021 - Haryana SGST

Notification to Extend timelines under the Haryana Goods and Services Act 2017, Section 174 (2)

Income Tax

4. 15/2021 - dated 11-3-2021 - IT

Income-tax (3rd Amendment) Rules, 2021 - Form No 12BA replaced - Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof 

5. 14/2021 - dated 11-3-2021 - IT

Amendment in Notification No. 70 / 2014 dated the 13th November, 2014

Circulars / Instructions / Orders

GST

1. 147/03//2021 - dated 12-3-2021

Clarification on refund related issues

Highlights / Catch Notes

GST

• Nizam Pakku classified as Betel Nut by Customs; Judicial decisions confirm 5% tax rate applies.

  Case-Laws - AAAR : Classification of goods - rate of tax - Nizam Pakku - it is seen that the product of the appellant is known as Betel nut (Areca nut) and assessed accordingly by the Customs. Considering this and going by the decisions of the judicial fora cited by the appellant as mentioned in para 4 supra to claim the terms ‘betel nut’ and ‘areca nut’ are the same and used interchangeably, we hold that the applicable tax rate for the product is @ 5% only - AAAR
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• Appellate Authority confirms printing on PVC banners as composite supply; service is primary element, not goods.

  Case-Laws - AAAR : Classification of supply - supply of services or supply of goods - composite supply or not - principal supply or not - transaction of printing of content provided by the customer on PVC banners and supply of such printed trade advertisement - trade advertisement material - the order of AAR sustained wherein it was held that, The printing of content provided by the recipient on the PVC materials of the appellant and supply of printed trade advertising material to the recipient is a composite supply, and ‘Supply of service of printing’ is the principal supply. - AAAR
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• GST Implications on Water Sales, Sewerage, Consultancy, and Service Charges by Tirupur Area Development Corporation Explained by AAR.

  Case-Laws - AAR : Taxability of various activities under GST - Tirupur Area Developement Corporation - Sale of water - Sewerage treatent services - Consultancy services extended by the applicant to TCMC - Interest on receivable on delayed payments - Disconnection Charges - Reconnection charges and collection of charges for various other activities - Individual questions answered - AAR
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• Court Rules Only Taxable Person's Bank Account Can Be Attached Under GST Act Section 83; Family Accounts Protected.

  Case-Laws - HC : Provisional attachment of property of petitioner as well as of his family members u/s 83 of GST - bank account of only the taxable person can be provisionally attached under section 83 of the CGST Act and therefore the provisional attachment of bank account of the family members was set aside. - HC
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• Court Permits Amendment of Form GSTR-3B for May 2019 to Correct Filing Errors.

  Case-Laws - HC : Seeking rectification of Form GSTR-3B for the month of May, 2019 - the rectification of the return for that very month to which it relates is imperative - Thus, the writ applicant should be permitted to rectify the Form GSTR-3B in respect of the relevant period - HC
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Income Tax

• Court Invalidates Reassessment Order Issued in Name of Defunct Company Post-Merger, Citing Improper Amalgamation Use.

  Case-Laws - HC : Validity of reassessment order made in the name of defunct company which has since merged with the petitioner - it would be absurd to hold that the order has been passed in the name of a defunct company to scuttle the re-assessment proceeding. Amalgamation cannot be used as a tool to defeat assessment and re-assessment proceedings as the sanctioned scheme of amalgamation itself takes care of such eventualities. It cannot be used to subvert assessment proceedings. - HC
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• High Court Quashes Assessment Reopening u/s 147 Due to Lack of New Tangible Material Indicating Income Escapement.

  Case-Laws - HC : Reopening of assessment u/s 147 - Reasons to believe - It is not the case of the revenue that, subsequently i.e. after the order of scrutiny assessment, the assessing officer has received “tangible material” to come to the conclusion that, there is escapement of income. We have also examined the aspect whether any tangible material exists or not. We do not find any tangible material in the hands of the assessing officer to form a prima facie opinion that, the income has escaped assessment. - Notice quashed - HC
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• Payments for Hiring Lorries Not Subject to Section 194I of Income Tax Act, Rules Commissioner of Income Tax (Appeals.

  Case-Laws - AT : TDS u/s 194I - CIT(A) has recorded categorical finding that the impugned payments does not come under the provisions of section 194I of the Act, because the assessee has simply hired lorries from the owners and the cost of running the vehicles including salary and diesel expenses were borne by the owners of the vehicles - Revenue failed to prove that the impugned payments come under the provisions of section 194I - AT
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• Income Tax Act Section 263: AO must verify financial surcharge adjustments; mere submission of financials isn't enough.

  Case-Laws - AT : Revision u/s 263 - Merely because the balance sheet and P&L account are placed before the AO at the time of assessment, it cannot be construed that the AO had verified the entire issues unless specific information is called by the AO. Therefore, there was an error which is prejudicial to the interest of revenue with regard to non-verification of financial surcharge adjustment in the assessment made u/s 143(3). - AT
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• Interest Liability u/ss 234B and 234C Not Applicable Due to Retrospective Amendment in Section 115JB of Income Tax Act.

  Case-Laws - AT : Interest liability u/s 234B and C on retrospective amendment under section 115 JB - Since the clause (i) was not on statute book during the relevant assessment year, the assessee did not increase the book profits while estimating the payment of advance tax. Thus no interest shall be chargeable under section 234B and C of the Act on tax liability arising on assessee by virtue of retrospective amendment under section 115JB - AT
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• CIT(A) Overturns AO's 0.25% Accommodation Entry Estimate in Section 153A Assessment Due to Lack of Evidence.

  Case-Laws - AT : Assessment u/s 153A - estimation of value of accommodation entries - The AO has computed the accommodation entries amount at the rate of 0.25% on hypothetical manner without any basis - CIT(A) is justified in stating that Assessing Officer has neither made any independent enquiry from the suppliers nor allowed any cross-examination of the third party though specifically demanded by the assessee-company and made the additions based on hypothesis, conjectures and suspicion - AT
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• Tax Authorities' Presumptive Additions Challenged Under IT Act Section 56(2)(viib) Despite Fair Market Valuation per Rule 11UA(a.

  Case-Laws - AT : Addition u/s 68 or 56- Bogus share premium and share capital - as assessee has issued the shares at fair market value computed in accordance with Rule 11UA(a) of the IT Rules 1962 and no fault has been found in the method applied by the assessee and the lower authorities have made the addition u/s. 56(2)(viib) purely on presumptions and surmises. - AT
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• Penalty Imposed for Non-Compliance with Notice u/s 142(1); Case Remanded for Reconsideration by CIT(A).

  Case-Laws - AT : Penalty levied u/s. 271(1)(b) - non compliance of notice issued u/s. 142(1) - addition on account of cash deposits - where all the bank accounts are in the joint name and the Ld. CIT(A) has passed the impugned ex parte order without deciding the quantum appeals the matter is set aside to the record of the CIT(A) for deciding the same afresh after adjudication of the quantum appeals and giving more opportunity of hearing to the assessee. - AT
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• No Penalty for Assessee: Revised Return Filed Before Section 148 Notice u/ss 271(1)(C) and 147 of Income Tax Act.

  Case-Laws - AT : Penalty u/s 271(1)(C) - reopening of assessment u/s 147 after filing of revised return - Revised return was not filed in response to notice issued u/s.148 and therefore, the assessee cannot be held liable for furnishing in accurate particulars of income or for concealment of income as the income stands offered to tax in the revised return of income - AT
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• Section 68 Addition Deleted: AO Failed to Verify Creditor's Authenticity u/s 133(6) for Unsecured Loans.

  Case-Laws - AT : Addition u/s 68 - unsecured loan & sundry creditors - bank statements were furnished but the AO has not issued notice to the creditor u/s. 133(6) of the Act to know the truth and added the same to the income of the assessee. Hence, we also find no justification to confirm the said amount and delete the same - AT
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IBC

• Supreme Court Upholds CoC Autonomy in Resolution Plans; Limited Interference Allowed u/ss 30 and 31 of IBC.

  Case-Laws - SC : Power of Coc for accepting / approval of resolution plant - The legislative scheme, as interpreted by various decisions of this Court, is unambiguous. The commercial wisdom of CoC is not to be interfered with, excepting the limited scope as provided under Sections 30 and 31 of the I&B Code. - SC
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• High Court of Karnataka Rules NCLT Lacked Authority in Mining Lease Extension Case Against State Government.

  Case-Laws - SC : NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute Supplemental Lease Deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice - SC
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• Financial Creditor Can Pursue Both Principal Borrower and Corporate Guarantor in Concurrent CIRPs or File Claims in Both.

  Case-Laws - AT : CIRP has been initiated against the principal borrower - There is no bar for the Financial Creditor to proceed against the principal borrower as well as Corporate Guarantor at the same time, either in CIRPs or file claims in both CIRPs - AT
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Central Excise

• CENVAT Credit Allowed for Freight Reimbursement to Goods Transport Operators; Excluded from 'Business Activities'.

  Case-Laws - AT : CENVAT Credit - freight amount reimbursed to goods transport operators - transportation charges were included in the phrase ‘clearance from the place of removal’ upto the date of the said substitution and it cannot be included within the phrase ‘activities relating to business’ - credit allowed - AT
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Case Laws:

• GST

• 2021 (3) TMI 500
  Classification of goods - rate of tax - Nizam Pakku - classifiable under Chapter heading 0802 8030 of the Customs Tariff or otherwise? - appellant has claimed that while they agree the classification upto 4 digit level, they do not agree to the classification at 8 digit level but they do not press the same - HELD THAT:- It is found from the Commercial Invoice No. E006/2017-2018 dated 08.03.2018 and the related Shipping Bill for Export, the product is described as Nizam Betel Nut (Arecanut) . Thus, it is seen that the product of the appellant is known as Betel nut (Areca nut) and assessed accordingly by the Customs. The terms betel nut and areca nut are the same and used interchangeably, The product of the appellant Nizam Pakku classifiable under CTH 0802 8090 is leviable to 2.5% CGST as per Sl.No.28 of Annexure-I of Notification No. 01/2017C.T. (Rate) dated 28.06.2017 and 2.5% SGST under Sl.No. 28 of Annexure -I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended.

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• 2021 (3) TMI 499
  Classification of supply - supply of services or supply of goods - composite supply or not - principal supply or not - transaction of printing of content provided by the customer on PVC banners and supply of such printed trade advertisement - trade advertisement material - Classification and applicable rate of GST on the supply of such trade advertisement material if the transaction is that of a supply of Services - challenge to AAR decision - it was held by AAR, Tamil Nadu that the supply of printing services by the applicant are classifiable under SAC 998912. The applicable rates are CGST @ 9% and SGST C9% from 01.07.2017 to 22.08.2017 and 22.08.2017 to 13.10.2017 vide entry at Sl.No. 27 27(ii) respectively and effective from 13.10.2017, the applicable tax rate is CGST cu 6% and SGST 4 6% as per the substituted entry at Sl.No. 27 (i). HELD THAT:- The Purchase Order is made for Printing of content on a particular media and the Tax Invoice describes the item as Printing and Supply of Trade Advertisement Material . From the write-up on business activities and process-Scope of Macromedia furnished by the appellant, it is seen that their Scope in the supply is to get the ready- to- print design from customer, check quality of design and printability on the specified sizes and applications like outdoor print, indoor print or signage print and printing the finalized drafts and delivering the same either to the corporates/agencies or the vendors. Thus, it is seen that the appellant owns the media(material) in which the digital content received by them for printing is printed and the supply of such printed goods is made to the client. Reliance has been placed in the case of STATE OF TAMIL NADU VERSUS ANANDAM VISWANATHAN [ 1989 (1) TMI 359 - SUPREME COURT] - the decision has been pronounced to decide whether the printing of the content received from the clients on the material Of the respondents and supply of such printed material is sale of goods under the sales tax provisions. The definition of Goods remains the same in the Sale Tax provisions and the GST Law and therefore the ratio of the above decision can be applied to the case at hand. It is evident that the Purchase Order is issued for Printing the Copyrighted Digital Content of the client in the desired material. The material blanks owned by the appellant are transferred to the client as Trade Advertisement material after undertaking Printing of the Content of the client on the blanks. The appellant is vested with and undertakes the printing of the content, the copyright of which rests with the recipient and the copyright always rests only with the client and the appellant do not have any propriety rights to the content - Once it is held that the activity is a contract for work or service wherein there is also transfer of property in goods incidentally then it is a composite supply as per Section 8 of the GST Act. Ongoing through the Purchase Order, write-up giving the scope of the appellant, it is evident that the client desires the print of the content in a particular media and the contract with the appellant is not for the materials they own - the activity of Printing of the content is the principal supply during which the property held by the appellant in the media of such print gets transferred to their client incidentally. The decision of Advance Ruling Authority upheld.

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• 2021 (3) TMI 498
  Taxability of various activities under GST - Tirupur Area Developement Corporation - charges received in respect of the various activities/supplies made by the applicant by virtue of the concession agreement entered into by them with Government of Tarnilnadu (GOTN), Tiruppur Municipal Corporation (TCMC) - Pure services or not - Sale of water - Sewage treatment charges - Consultancy Services such Detailed Project Report (DPR), Project Management Consultancy (PMC) and any other infrastructure related consultancy to TCMC / GoTN - Interest on receivable on delayed payments - Disconnection Charges - Reconnection charges - Permanent disconnection charges - Cheque Bouncing charges - Non-Revenue, Service provided to Customer on New Connection works Concept of No Loss No Gain, New Connection Shifting and other works etc. Sale of water - HELD THAT:- The applicant is not involved in the distribution of the water supply to the common public. The distribution system is transferred to TCMC and other stake holders on completion of construction as per the CA and the sale of water is to the Off-take points at Water Distribution Systems(WDS) metered therein. Thus, this activity of treatment of water on own account and supply of water is sale simpliciter and therefore this notification which provides exemption to services do not have any application with regard to supply of water. Sewerage treatent services - HELD THAT:- In this instant the supply made by the applicant is a pure service of an activity listed as Item 6 of 12th Schedule (Article 243W) of the Constitution, i.e., an activity entrusted to a Municipality and the supply is made to TCMC, a local authority by the applicant and therefore the exemption at SI.No. 3 of the Notification No. 12/2017-C.T.(Rate) is applicable to the case at hand and we hold the applicant is eligible for the exemption in respect of the sewerage treatment services provided to TCMC. Consultancy services extended by the applicant to TCMC - HELD THAT:- On perusal of the agreement it is seen that TCMC intends to provide Water Supply and Underground sewerage schemes under the Tamilnadu Urban Flagship Investment Program(TNUFIP) and has employed the applicant as a Contract Management and Supervision Consultant . The applicant is to assist and support TCMC in contract Management and Construction Supervision of works covered under the said Water Supply and Underground Sewerage Project - The applicant extends Pure Services of Project Management to TCMC in respect of this proposal and therefore the supply of the applicant is Service eligible for exemption under SI.No. 3 of Notification No. 12/2017-C.T.(Rate) in as much as the said entry exempts any service, i.e., SAC 99 when provided to a local authority in relation to the constitutional function entrusted under Article 243W. The process for treatment of water for municipal water supply involves Pre-chlorination, disinfection, sedimentation, filtration, flocculation, electrolysis, slow sand filtration, etc and Water purification also involves the process of removing undesirable chemicals, biological contaminants, suspended solids which are achieved by the process such as filtration, sedimentation, distillation, flocculation, slow sand filtration and chlorination. In the case at hand, the water supplied by the applicant is stated to have undergone the process of filtration, sedimentation, flocculation, distillation, slow-sand filteration and therefore, they are purified water sold to TCMC/Industrial consumers. The entry in the invoice to TCMC requiring them to add chlorine before supplying to public do not imply that the water supplied by the applicant is not purified water and only on addition Of Chlorine, the water becomes Purified Water - the treated water supplied by the applicant is Purified water supplied to TCMC, who as per the CA is entitled to use the same for both Domestic and Non-domestic purposes and to other designated receivers and in that account also is not exempted under Sl.No. 99 of Notification No. 02/2017-C.T.(Rate) dated 28.06.2017. Rather, the applicable rate of tax is under Sl.No. 24 of Schedule III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 attracting 9% CGST and 9% SGST. Interest receivable on delayed payments - Held that:- even when Interest on Delayed Charges is raised against their supply to TCMC in respect of delayed payment of Sewage Treatment Charges , the exemption under Sl.No. 3 of the Notification No. 12/2017-C.T.(Rate) is not available to the applicant. Cheque Bouncing Charges - Held that:- these charges will not form a part of the Water Charges and are Miscellaneous Charges for tolerating the dishonor and again these do not merit exemption. Connection services on no profit and no loss cost recovery basis - Held that:- In as much as the activity rendered is in relation to setting of new distribution lines in the current project as per the CA, and such lines are held as their assets in their book of accounts, we agree to their contention that the incidence of provisioning of services at that instant do not arise, the activity being self-service. Connection/ Reconnection/ Disconnection/ Permanent Disconnection Charges - Held that:- it is seen that these are charges collected by the applicant from the Industrial Units in relation to Water Distribution Services undertaken by them for Sale of Water to such units. Water Distribution Services are identical Services with SAC 9969 and is taxable@ 9% CGST and 9% SGST

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• 2021 (3) TMI 495
  Provisional attachment of property of petitioner as well as of his family members - section 83 of Central Goods and Services Tax Act, 2017 - HELD THAT:- Out of the nine bank accounts that have been attached by respondent No.1, only the accounts at Sr. Nos.2, 3 and 4 belong to the petitioner whereas the other accounts belong to the family members. In Siddhart Mandavia Vs. Union of India, [ 2020 (11) TMI 111 - BOMBAY HIGH COURT ], this Court had examined a similar issue relating to attachment of bank account of not only the taxable person but also of his family members. In that context, this Court held that bank account of only the taxable person can be provisionally attached under section 83 of the CGST Act and therefore the provisional attachment of bank account of the family members was set aside. Some bank accounts were released - for others, petitioner may file objection before the Commissioner i.e. respondent No.2 within a period of seven days from today - petition disposed off.

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• 2021 (3) TMI 494
  Seeking rectification of Form GSTR-3B for the month of May, 2019 - HELD THAT:- The aforesaid issue is no longer res-integra in view of the decision of the Delhi High Court in the case of BHARTI AIRTEL LIMITED VERSUS UNION OF INDIA AND ORS. [ 2020 (5) TMI 169 - DELHI HIGH COURT] where it was held that the rectification of the return for that very month to which it relates is imperative and, accordingly, we read down para 4 of the impugned Circular No. 26/26/2017-GST dated 29.12.2017 to the extent that it restricts the rectification of Form GSTR-3B in respect of the period in which the error has occurred. Thus, the writ applicant should be permitted to rectify the Form GSTR-3B in respect of the relevant period - the respondent No.4 is directed that on filing of the rectified Form GSTR-3B, it shall, within a period of two weeks, verify the claim made therein and give effect to the same once verified. Application disposed off.

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• 2021 (3) TMI 491
  Condonation of delay in filing appeal - appeal is belated by a period of eight months - Cancellation of registration of the petitioner - TNGST Act - HELD THAT:- The period of limitation for filing of the first appeal, which is 90 days, expires in this case on 03.03.2020 and further period of 30 days, provided for condonation of delay in filing of the first appeal, expires of 02.04.2020, falling during the period of COVID-19 pandemic. The Supreme Court in a series of judgments, viz., In Re: Cognizance for Extension of Limitation [ 2021 (1) TMI 261 - SC ORDER ] and M/S. SS GROUP PVT. LTD. VERSUS AADITIYA J. GARG ANR. [ 2021 (1) TMI 804 - SUPREME COURT ] has extended time for filing of appeal till 31.01.2021. As such, it is appropriate that the petitioner may re-present its appeal before the third respondent. Petition disposed off.

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• 2021 (3) TMI 452
  Revocation of cancellation of registration - rejection due to non-submission of reply to the show cause notice dated 23-1-2020 within the time specified therein - HELD THAT:- The adjudicating authority has cancelled the registration of the appellant due to non-payment of GST and also rejected the application for revocation of cancellation of registration due to non-submission of reply to the show cause notice dated 23-1-2020 within the specified period. The appellant has submitted that they could not attend the hearing due to personal circumstances before the adjudicating authority. The adjudicating authority has reported that the present status of GSTIN is active. Central Board of Indirect Taxes Customs, New Delhi has clarified the issue vide Circular No. 99/18/2019-GST, dated 23-4-2019 that in terms of the second proviso to sub-rule (1) of rule 23 of the said Rules, all returns required to be furnished in respect of the period from the date of order of cancellation till the date of order of revocation of cancellation of registration have to be furnished within a period of thirty days from the date of the order of revocation. The appellant was required to follow the procedure as prescribed under Rule 23 of the CGST Rules, 2017 as clarified vide Circular No. No. 99/18/2019-GST, dated 23-4-2019 - Since, the jurisdictional authority has revoked the said registration and is active, the appeal has becomes infructuous and accordingly rejected.

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• Income Tax

• 2021 (3) TMI 493
  Computation of deduction u/s 10A - Internet expenditure incurred by the assessee are excluded from export turnover should also be excluded from total turnover - HELD THAT:- If the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. Even in the common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well. On the issue of expenses on technical services provided outside, we have to follow the same principle of interpretation as followed in the case of expenses of freight, telecommunication etc., otherwise the formula of calculation would be futile. Hence, in the same way, expenses incurred in foreign exchange for providing the technical services outside shall be allowed to exclude from the total turnover - See HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT ]

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• 2021 (3) TMI 489
  Validity of reassessment order made in the name of defunct company which has since merged with the petitioner - Scheme of amalgamation conducted - HELD THAT:- In the assessment proceeding, the petitioner replied to the notice issued under Section 142(1) in the name of Doosan International India Private Limited though on its letter head. The petitioner participated in the proceedings before the jurisdictional Asst. Commissioner of Income Tax, Bangalore and made submissions on 21.09.2012 and on 07.01.2013 without any demur. The assessment order dated 01.03.2013 also came to be passed in the name of the said Doosan International India Private Limited even the said company ceased to exist and stood merged/amalgamated with the petitioner. If the petitioner felt that the assessment order was made in the wrong name of the merged transferred company which had ceased to exist, it should have filed a suitable application for rectification of mistake before the Asst Commissioner of Income Tax Bangalore for effecting the name change in the assessment order dated 01.03.2013. It was incumbent on the part of the petitioner to have informed the Asst. Commissioner of Income Tax at Bangalore about the merger/amalgamation. In any event, it was for the petitioner to have taken step to correct the name in the assessment order or in the alternative file a composite return for the Assessment Year 2009-10 with the petitioner s PAN Number for both the petitioner and Doosan International India Private Limited and regularized the changes in accordance with the Act. Mere intimation under Section 127 of the Income Tax Act, 1961 for transfer the file to the jurisdictional Income Tax Office at Chennai was not sufficient. In the communication addressed to the Deputy Commissioner of Income Tax, Bangalore on 08.08.2013, the petitioner merely asked for transfer of the file to the respondents but did not take any steps for rectifying the mistake. Even during the re-assessment proceeding, the petitioner actively participated in the said proceedings on the understanding that the assets and liabilities of Doosan International India Private Limited stood vested with the petitioner and that the petitioner was representing its interest by defending the proceedings seeking to reopening of the assessment vide notice dated 30.03.2016 issued under Section 148 of the Income Tax Act, 1961. Therefore, it would be absurd to hold that the order has been passed in the name of a defunct company to scuttle the re-assessment proceeding. Amalgamation cannot be used as a tool to defeat assessment and re-assessment proceedings as the sanctioned scheme of amalgamation itself takes care of such eventualities. It cannot be used to subvert assessment proceedings. The definition in Section 2(1B) of the Income Tax Act, 1961 makes it clear that all the liabilities of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation. Facts also do not indicate that the petitioner had questioned the jurisdiction of the respondent when the notice dated 31.03.2016 was issued in the name of transferor company Doosan international Private Limited. Therefore, the preliminary objection of the petitioner regarding the jurisdiction of the respondent to reopen the assessment stands overruled. Depreciation on the amount claimed and allocated towards the purported Customers/Dealer and Vendor List - There was no explanation offered for claiming depreciation on the amount claimed and allocated towards the purported Customers/Dealer and Vendor List. In the reply to notice dated 11.7.2012 issue under Section 142(1) of the Income Tax Act, 1961, the petitioner has merely given a breakup. It did not give any document to substantiate the depreciation on the Customer/Dealer and Vendor lists. Thus, it cannot be said that the petitioner had truly and fully disclosed all material that was required for assessment. Therefore, there can be no interference at this stage of re-assessment. Claim for depreciation on the Customer/Dealer and Vendor lists goes to the very root of the assessment inasmuch as not only there was no valuation but also it is also questionable whether depreciation can be allowed towards Customer/Dealer and Vendor lists based on an internal allocation made by the said company. It is therefore for the petitioner to explain before the respondent that it was indeed entitled to claim depreciation on the Customer/Dealer and Vendor lists. No merits in quashing the impugned order in the light of the above reasoning. Therefore, the second respondent is directed to complete the re-assessment in accordance with law.

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• 2021 (3) TMI 487
  Reopening of assessment u/s 147 - Reasons to believe - whether the revenue is justified in reopening the assessment for the year A.Y. 2014-15 ? - HELD THAT:- It is a settled principle of law that, a mere fresh application of mind to the same set of facts or mere a change of opinion does not confer jurisdiction upon the Assessing Officer to issue notice under Section 148 of the Act. A perusal of the reasons recorded, it reveals that, the assessment is sought to be reopened mainly on the ground that, the assessee was failed to disclose the VAT refund in his return of income which has resulted into under assessment of income . Considering the scrutiny assessment order, it appears that, the assessee had disclosed fully and truly all primary material facts with regard to VAT amount and accordingly, the then assessing officer had framed the assessment. When there was no any failure on the part of the assessee to disclose fully and truly material facts for the purpose of relevant assessment, now it is not open to change that opinion on the very same set of facts which were available at the time of original assessment. Therefore, in the present case, the reasons recorded by the assessing officer led to belief about the escapement of assessment is nothing, but mere a change of opinion, which cannot sustainable in law. It is not the case of the revenue that, subsequently i.e. after the order of scrutiny assessment, the assessing officer has received tangible material to come to the conclusion that, there is escapement of income. We have also examined the aspect whether any tangible material exists or not. We do not find any tangible material in the hands of the assessing officer to form a prima facie opinion that, the income has escaped assessment. Therefore, in the present case, in the absence of element of non-disclosure of relevant materials fully and truly necessary for assessment, the assessing officer has no right to reopen the assessment. - Decided in favour of assessee.

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• 2021 (3) TMI 482
  TDS u/s 194C or 194I - Lorry hire charges paid for vehicles for non-deduction of tax at source - Addition invoking provisions of section 40(a) (ia) - HELD THAT:- Admittedly, in the first round of litigation, the ld.CIT(A) has recorded categorical finding that provisions of section 194C of the Act has no application to the impugned payment towards lorry hire charges and said finding was based on the fact that the assessee has simply hired lorry from the agents and the same cannot be considered as formal contract between the assessee and the lorry owners to invoke the provisions of section 194C - when further appeal was filed by the Revenue before the Tribunal, the said finding was not challenged, which is evident from the fact that the Tribunal has set aside the appeal to the file of the AO on the issue of applicability of provisions of section 40(a)(ia) of the Act on amounts paid and payable at the end of financial year. Tribunal while remanding the issue had further directed the AO to examine the applicability of provisions of section 194I of the Act. Therefore, when the issue of applicability of provisions of section 194C of the Act, has become final at the first appellate level and the said finding was not challenged before the Tribunal, then reconsidering the issue in the light of provisions of section 194C of the Act by the AO is beyond the scope of his powers, which is not permissible under law. Therefore on this count, the finding of the ld.AO cannot be accepted. Applicability of section 194I - CIT(A) has recorded categorical finding that the impugned payments does not come under the provisions of section 194I of the Act, because the assessee has simply hired lorries from the owners and the cost of running the vehicles including salary and diesel expenses were borne by the owners of the vehicles - Revenue has failed to bring on record any evidences to prove that the impugned payments come under the provisions of section 194I of the Act. Therefore, we are of the considered view that there is no error in the finding recorded by the CIT(A) to delete additions towards disallowance of hire charges u/s.40(a)(ia) of the Act, for failure to deduct tax at source. Hence, were are inclined to upheld the findings of the CIT(A) and dismiss appeal filed by the Revenue.

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• 2021 (3) TMI 479
  Levy of penalty u/s 271(1)(c) - Defective notice - non specification of charge -HELD THAT:- In this case, AO passed the assessment order u/s 143(3) dated 21.03.2006 making certain additions to the returned income. The AO at the end of the order has mentioned I am satisfied that the assessee has concealed his income and furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the Act. Accordingly, penalty proceedings u/s 274 read with section 271(1)(c) of the Act are initiated . The AO on the same day issued penalty notice dated 21.03.2006 in which the AO has mentioned the same facts (supra). It would, therefore, show that AO has mentioned both the limbs of section 271(1)(c) of the Act in the assessment order as well as in the notice issued for levy of the penalty. See M/S SSA S EMERALD MEADOWS [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] wherein held notice issued by the AO u/s 274 read with section 271(1)(c) of the Act to be bad in law as it did not specify which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. We set aside the order of the authorities below and cancel the penalty. - Decided in favour of assessee.

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• 2021 (3) TMI 478
  Revision u/s 263 - AO has not caused any enquiries with regard to financial adjustment charges though the same was reduced from the profit in the P L account - HELD THAT:- As per explanation (1 )of Clause (c) of the provisions of 115JB, the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities required to be increased by such amount for MAT purpose. In the instant case, the AO has neither verified the liability nor the expenditure under MAT provisions u/s 115JB of the Act. Merely because the balance sheet and P L account are placed before the AO at the time of assessment, it cannot be construed that the AO had verified the entire issues unless specific information is called by the AO. Therefore, there was an error which is prejudicial to the interest of revenue with regard to non-verification of financial surcharge adjustment in the assessment made u/s 143(3). Hon ble Bombay High court in Sesa Starlite Ltd.v .Commissioner of Income Tax, Panaji, Goa [ 2020 (11) TMI 102 - BOMBAY HIGH COURT ] flowing the order of Apex court in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] held that where Assessing Officer sought information from assessee regarding its claim of deduction under section 10B, however, without considering such information produced by assessee and without application of mind to same, allowed such claim for deduction, it was a case of inadequate inquiries and, therefore, exercise of revision jurisdiction by Commissioner under section 263 was justified. This view is supported by the decision of Hon ble Supreme court in Malabar Industrial Co. Ltd(Supra). Therefore we are inclined to hold that the Ld.CIT(A) has rightly invoked the provisions of section 263 of the Act. Expenditure debited to P L account or reduced from the profit before tax as exceptional item needs to be verified on the facts and merits and also in view of the judicial precedents relied upon by the assessee. Therefore, we set aside the order of the Ld.Pr.CIT and remit the matter back to the file of the AO to examine the issue in the light of the submissions made by the Ld.AR and the case laws relied upon by the Ld.AR during the appeal proceedings and decide the issue afresh on merits. The order of the Ld.Pr.CIT passed u/s 263 is modified accordingly. Appeal of the assessee is allowed for statistical purpose.

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• 2021 (3) TMI 477
  Penalty u/s 271(1)(c) - Inaccurate particulars of income on account of treating the purchases as non genuine - HELD THAT:- Because the assessee has accepted the assessment order and for buying peace if the assessee agrees to face the disallowance so made by the Assessing Officer, it does not mean the assessee has concealed inaccurate particulars of income which is resulted in imposition of levying penalty under section 271(1)(c). AO has failed to meet the conditions of imposing penalty under section 271(1)(c) of the Act and hence, the penalty levied, in our opinion, is not sustainable in the case when the income enhanced based on estimation. We find that the assessee had furnished all the details of purchases as well as the income accrued was shown in the return of income. Even the payments made were by way of issuing cheques which were not considered by the Assessing Officer. Merely because the assessee has claimed the expenditure which was not acceptable to the Revenue that by itself does not mean that the assessee has concealed its particulars of income. With these observations, we hold that the learned Commissioner (Appeals) has properly held that the addition made on account of disallowance of a percentage of expenditure as bogus automatically cannot justify the penalty levied under section 271(1)(c) - Decided against revenue.

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• 2021 (3) TMI 476
  Setting off of Interest income with interest paid - assessee had claimed that it was setting up power project during the year under consideration and commercial production has not started till the end of ay, and hence the said interest income earned by assessee is to be set off against the interest paid by the assessee on term loan availed by it for setting up of power generation plant, which will go on to reduce cost of project - HELD THAT:- Tribunal has vide adjudicating Revenues appeal for ay: 2013-14 and 2014-15 [ 2021 (2) TMI 69 - ITAT ALLAHABAD] set aside and restored the matter to the file of ld. CIT(A) for fresh determination of the issue with certain directions . Thus, Respectfully following aforesaid decision of tribunal, we are setting aside the appellate order passed by ld. CIT(A) on this issue and remitting the matter back to the file of ld. CIT(A) to decide this issue afresh on merits, with the same directions as were given by us while adjudicating appeal for ay: 2013-14 and 2014-15. The ld. CIT(A) will also look into specific additional contention of ld. CIT-DR that the bank is creating bank deposits because it is assessee who has itself given standing instructions to the bank, shall also be looked into by ld. CIT(A) while adjudicating appeal denovo. Interest earned by assessee from IVRCL and M.G. Contractors for advances paid for execution of certain work - HELD THAT:- We are also restoring the matter back to the file of ld. CIT(A) with a similar direction as above to look into the terms and conditions of the contract and the deposit made by the assessee with the contractors to see that whether the said deposits were made by assessee to contractors as part of the terms and condition of the contract for construction of the assessee project and if that be so then in that case it is to be held that the interest earned by assessee from said advances to contractors for carrying on said deposits is inextricably linked with the construction activity of the assessee for setting up of the project and hence it will go on to reduce the project. Reference is made to ratio of decision of Hon ble Supreme Court in the case of CIT v. Bokaro Steel Ltd [ 1998 (12) TMI 4 - SUPR EME COURT] which shall than be applicable but, If however, ld. CIT(A) after investigation of the fact is of the view that the aforesaid interest income is earned by assessee on surplus funds deployed by the assessee to earn interest income, then in that situation ratio of decision of Hon ble Supreme Court in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. v. CIT [ 1997 (7) TMI 4 - SUPREME COURT] shall be applicable.This issue is also allowed for statistical purposes. Nature of receipt - Forfeiture of EMD received from the contractors on account of non performance of the contract - assessee has not yet commenced commercial operations and its power plant is under construction, during the year under consideration - HELD THAT:- As decided in own case [ 2021 (2) TMI 69 - ITAT ALLAHABAD] we are deciding this issue in favour of the assessee and the said receipt on account of forefeiture of EMD which were given by contractors to assessee, on account of non performance of contract during the construction period of the project, are held to be capital receipt which will go on to reduce the project cost.

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• 2021 (3) TMI 475
  Validity of the assessment framed by AO against the assessee u/s 153A - HELD THAT:- As in view of the assessee no incriminating material or any undisclosed income was found during the course of search operations conducted by Revenue against the assessee on 27.08.2009 u/s 132(1) but however, before us no contention were raised by assessee challenging the validity and illegality of the assessment framed pursuant to search on the ground that no incriminating material or undisclosed income was found during the course of search operations. We have observed from assessment order passed by AO that several additions were made based on material /documents seized by Revenue during the course of search and seizure operations conducted by Revenue, u/s 132(1) of the 1961 Act on 27.08.2009. Thus, we dismiss Grounds No. 1 and 2 raised by assessee in memo of appeal filed with the tribunal. We order accordingly. Provision for expenses towards scheme for sale promotion carried on by the assessee - HELD THAT- It is for the businessman to arrange their affairs and not for tax authorities to decide the manner in which businesses are run, unless malice is at writ large on the part of the tax-payer to defraud revenue with an intent to evade taxes . Thus, the expenses which are genuine and bonafide expenses incurred wholly and exclusively in connection with the business of the tax-payer are to be allowed as business deduction while computing income chargeable to tax, keeping in view mandate of provision of Section 37(1) - The authorities below have not verified the claim of the assessee as to the genuineness and bonafide of the claim of sale promotion expenses as the AO disallowed the same on the grounds that these are bogus expenses while ld. CIT(A) held the same to be contingent and also that the provision is not properly made in terms of scheme of sales promotion of the assessee. The assessee has not brought on record working of sales promotion expenses payable to various buyers, meeting of targets by buyers and liability crystalized as per scheme run by assessee. The assessee has also not brought on record sales promotion scheme conducted by it before the AO, nor ld. CIT(A) remanded the matter to the file of the AO for seeking remand report from AO as the sale promotion scheme was filed for the first time before ld. CIT(A) as additional evidences. In our considered view keeping in view totality of facts and circumstances of the case and in the interest of justice and fair play, the matter needs to be restored back to the file of the Assessing Officer for fresh/denovo consideration of the issue on merit in accordance with law. The assessee has claimed these expenses in its book of accounts as business expenses, and deduction of these sales promotion expenses from the income is claimed and hence primary onus is on the assessee to prove that they are genuine and bonafide expenses which are incurred wholly and exclusively for the purpose of business of the assessee, thus satisfying the mandate of Section 37(1). Difference in the amounts reflected in the material seized during the course of search and seizure operation carried out by Revenue against the assessee u/s 132(1) of the 1961 Act on 27.08.2009, with that of the audited financial statements prepared by the assessee for the financial year ended 31.03.2009 - HELD THAT:- Once the assessee has Head office, branches and units at different locations, the assessee s audited financial statements shall be prepared in consolidated form after taking into financials of all the units and offices, and it is not permissible for AO to solely depend upon Kanpur Branch account to ascertain income chargeable to tax, unless it is proven that either no expenses were incurred at other locations or no income were earned at other location, or they consisted bogus entries to defraud Revenue. The onus is on the assessee to prove that the expenses incurred at various locations were incurred wholly and exclusively for the purposes of the business of the assessee and that they satisfy the mandate of Section 37(1) of the 1961 Act and, on the other hand the onus is on the AO to prove that these expenses are incurred with malice to defraud the Revenue . Same is the case with income. However, we have observed that the assessee has not produced stock register before the authorities below. The assessee is claiming the expenses while computing income chargeable to tax and the onus is on the assessee to prove that these are genuine and bona fide expenses incurred wholly and exclusively for the purposes of the business of the assessee. We have also observed that the assessee is registered with Central Excise Department and is also covered under VAT. In our considered view keeping in view totality of facts and circumstances of the case and in the interest of justice and fair play, the matter needs to be restored back to the file of the Assessing Officer for fresh/denovo consideration of the issue on merit in accordance with law. The assessee has claimed these expenses towards raw material, consumables, packing material etc. in its book of accounts as business expenses, and deduction of these expenses from the income is claimed and hence primary onus is on the assessee to prove that they are genuine and bonafide expenses which are incurred wholly and exclusively for the purpose of business of the assessee, thus satisfying the mandate of Section 37(1) of the 1961 Act, and the closing stock truly reflected the stock actually held by assessee at the year end. The assessee is directed to submit all relevant details/documents including unit wise accounts and also consolidated accounts to reconcile the differentials, stock records, excise records, VAT records etc. before the AO during the course of denovo assessment proceedings for determination of this issue on merit in accordance with law and for computing income chargeable to tax in accordance with provisions of the 1961 Act. Thus, we are remitting this matter back to file of the Assessing Officer with a direction to assessee to produce all the relevant records including unit wise accounts reconciling with consolidated accounts, stock records, excise records, VAT records etc. before the Assessing Officer to prove that the expenses were incurred wholly and exclusively for the purpose of business of the assessee and they are bona fide and genuine expenses incurred for the business of the assessee and the stock truly reflected the stock held by assessee at a given point of time . The assessee is required to prove consumption of raw material, packing material, consumables etc. viz.-a-viz. production/manufacturing and also keeping in view its past track record in the earlier year of consumption of material viz.-a-viz. production/ manufacturing carried on by it in the earlier years. Appeal of the assessee on this issue is allowed for statistical purposes.

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• 2021 (3) TMI 472
  Depreciation on goodwill - main reason for disallowance of depreciation is that the assessee has not shown or established any such intangible assets or intellectual assets re-cognised in the books of accounts of the transferor - assessee has failed to establish its claim of the parameters - HELD THAT:- At the very outset, we have to state that this is not the initial year of claim of depreciation. In our considered opinion, unless the claim is disturbed in the initial year of claim, subsequent years cannot be disturbed. Disallowance made u/s 14A r.w.r 8D of the Rules - HELD THAT:- A perusal of the assessment order shows that no satisfaction was recorded by the Assessing Officer with respect to the examination of the books of account. While making disallowance, the Assessing Officer observed that It is unbelievable that for earning income of Rs. 3.70 crores, no expenditure was made by the assessee . AO has failed to record any satisfaction with regard to the correctness of the claim of the assessee that it has not incurred any expenditure. The learned assessing officer did not cite any of the expenditure in the profit and loss account of the assessee, which is incurred by the assessee for earning of the exempt income. There is not even a whisper of examination of books of account of the assessee to verify the correctness of the claim of the assessee that no expenditure was incurred for earning exempt income. Therefore, in absence of any satisfaction recorded by the learned AO with respect to the examination of the books of account of the assessee to verify the correctness of the claim of the assessee, the disallowance u/s 14A cannot be sustained. Since we have already deleted the disallowance u/s 14A of the Act in normal computation of total income, we direct the Assessing Officer to delete the above addition while calculating the book profit u/s 115JB of the Act. This common grievance in all the appeals is allowed. Levy of interest u/s 234C - HELD THAT:- In so far as levy of interest u/s 234C is concerned, we direct the Assessing Officer to levy interest on the returned income of the assessee. Deductibility of education cess - HELD THAT:- As relying on CHAMBAL FERTILISERS AND CHEMICALS LTD [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT] we direct the Assessing Officer to allow claim of deductibility of cess from the income in the captioned A.Ys. Additional ground in all the appeals is allowed. TP Adjustment - enhancement of income of the assessee holding that the international transaction pertaining to the provision of corporate guaranteed to the bank on behalf of the AE does not satisfy the Arm s length principle - HELD THAT:- The said guarantee was issued by HDFC for and on behalf of the AE and no corporate guarantee was issued by the assessee company. The said guarantee was issued by HDFC on the basis of Fixed Deposits of the assessee company on which the assessee continued to receive interest from the bank and hence there was no cost/expenses incurred by the assessee company. Cost charged by the bank at the time of issuing the guarantee in F.Y. 2009 10 was charged by the assessee from its AE with mark up of 14%. Most importantly, as mentioned elsewhere, the said guarantee was issued by HDFC bank to the Income Tax department against the tax liability of the AE only. Therefore, in case if any demand is raised upon conclusion of MAP proceedings, liability to pay the said tax demand will only be on AE of the assessee and not on the assessee company. Considering the facts in totality, we are of the considered view that the TPO/DRP erred in imputing notional income equivalent to commission charged by banks. We, accordingly, direct the Assessing Officer to delete the addition - Decided in favour of assessee.

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• 2021 (3) TMI 471
  Interest charged u/s.234B and 234C - Book profit u/s 115JB - HELD THAT:- Interest u/s.234B and 234C of the Act, cannot be levied on the tax payable on the additional book profit. Hence, the Assessing Office is directed to compute interest under Section 234B 234C by excluding the said additional income brought to tax based on the amended provision which came into Statute subsequently. Thus, the Ground No.2 raised by the appellant is hereby allowed. Levy of interest u/s 234B and C on retrospective amendment under section 115 JB - Admittedly, additional income under section 115 JB of the Act came to be computed on account of retrospective amendment made to section 115 JB by Finance Act (No. 2), 2009, with retrospective effect from 01/04/2001, wherein clause (i) was introduced to provide for increase in book profit by the amount set aside for provision in diminution in the value of asset. Since the clause (i) was not on statute book during the relevant assessment year, the assessee did not increase the book profits while estimating the payment of advance tax. Thus no interest shall be chargeable under section 234B and C of the Act on tax liability arising on assessee by virtue of retrospective amendment under section 115 JB. See M/S. NHPC LTD.[ 2016 (2) TMI 676 - ITAT DELHI]

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• 2021 (3) TMI 469
  Assessment u/s 153A - estimation of value of accommodation entries and then 15% disallowance thereof resulting into addition - HELD THAT:- The assessee-company has submitted that it has never had any business with the companies named by Shri Rami As in his statement Shri Jaymesh Rami has stated that he was Director of the five companies which were engaged in the business of providing entry and the assessee has not any transaction with those companies. Detailed finding given by the Ld.CIT(A) that Shri Jaymesh R.Rami had also given the list of entities to whom he has provided accommodation entries and noticed that he has not mentioned the name of the assessee-company anywhere for providing accommodation entries. During the course of assessment proceedings, assessee has also provided the list of parties from whom it has made major purchases to the amount of Rs. 21,62,78,302/- during the year under consideration and none of the party contained in the list which was mentioned by Shri Jaymesh Rami as accommodation provided entities. In respect of payment of Rs. 6,43,406/-, the assessee has filed a copy of bill issued by M/s.Rami Brothers (Labour Contractors) of Rs. 7,91,406/- being the labour charges from soil filling at site and the payment was made by A/c. Payee Cheque for this work. It is noticed that the ld.CIT(A) has correctly mentioned in his finding that Assessing Officer has not established by any cross-verification that the aforesaid bill was bogus. The Assessing Officer has computed the accommodation entries amount at the rate of 0.25% on hypothetical manner without any basis and relevant evidences.CIT(A) has further held that Assessing Officer in the case of entry provider had considered that amount credited in his bank account as value of accommodation entries including one pertaining to the assessee of Rs. 6,43,406/-. The Ld.CIT(A) is also justified in stating that Assessing Officer has neither made any independent enquiry from the suppliers nor allowed any cross-examination of the third party though specifically demanded by the assessee-company and made the additions based on hypothesis, conjectures and suspicion. - Decided against revenue. Disallowance of labour charges for soil filling from M/s.Rami Brothers - HELD THAT:- On perusal of the bill, it is noticed that this bill was raised on 07/03/2011 pertaining to FY 2010-11 which clearly demonstrates that this expenditure was not claimed during the year under consideration. However, it is noticed that in his finding the Ld.CIT(A) has concluded that AO of the Central Circle-2(4), Ahmedabad has considered the amount credited in the bank account of Shri Rami as value of accommodation entries. Since in the case of the assessee the payment of Rs. 6,43,406/- was considered as accommodation entries and it is noticed that assessee has not reconciled this payment with outstanding amount of Rs. 7,91,406/- as per invoice raised for labour charges, therefore we restrict the disallowance to the extent of Rs. 6,43,406/-. Thus, this ground of appeal of the assessee is partly allowed.

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• 2021 (3) TMI 466
  Disallowance of expenses u/s 14A read with Rule 8D - HELD THAT:- Interest disallowance u/s 14A r.w.r. 8D(2)(ii) would not be sustainable subject to verification by Ld. AO that assessee s own funds far exceed the investments made by the assessee. The issue of expense disallowance in terms of Rule 8D(2)(iii) would stand restored back to the file of Ld. AO with similar directions. The ground, thus raised before us, stands allowed for statistical purposes. Since this is the only issue in assessee s appeal, the appeal stand allowed for statistical purposes. Broken period interest - Accounting policy to be followed - HELD THAT:- We find that this issue is contained in paras-115 to 119 of Tribunal s order in assessee s own case for AY 2008-09,[ 2020 (2) TMI 1350 - ITAT MUMBAI] wherein a finding was rendered that similar issue stood covered in assessee s own case for AYs 1991-92 to 1994-95 which was followed by Tribunal in subsequent years. Further, Hon ble Bombay High Court upheld decision of Tribunal by dismissing revenue s appeal for AY 1996-97 [ 2016 (8) TMI 963 - BOMBAY HIGH COURT] . Another fact as noted by Ld. CIT(A) is that the assessee was following same accounting policy, in this regard, for last more than 20 years. Therefore, we find no infirmity in the impugned order in deleting this disallowance. The ground raised by revenue stand dismissed. Interest on Govt. Other Securities on accrual basis instead of due basis - HELD THAT:- Tribunal s order in assessee s own case for AY 2008-09,[ 2020 (2) TMI 1350 - ITAT MUMBAI] held this ground of appeal is covered in favour of the assessee vide the aforementioned orders of the Tribunal and Bombay High Court. The right to receive interest on securities arises on due date only, which falls after the accounting year and, accordingly, it cannot be taxed in the accounting year itself. Hence, in view of the above discussion, we decided this issue in favor of assessee. Amortization on securities held under HTM category - HELD THAT:- Deduction for amortization of premium paid on purchase of securities under HTM category would be an allowable deduction in assessee own case for AY 2008-09,[ 2020 (2) TMI 1350 - ITAT MUMBAI] . Depreciation on securities under Available for sale (AFS) and Held for Trading (HFT) category - HELD THAT:- Assessee did not account for in the financial statement the anticipated/contingent profits from the contracts to the extent not settled as on the last day of the accounting year whereas any loss on such contracts was provided for by a charge in the profit and loss account on the best estimates. The Department brought to tax the profit on such forward exchange contracts and stated that one method for valuation of the entire stock of securities should be followed. This resulted in a situation of taxing appreciation of stock, which goes against the general and settled principle of non-taxation of notional income, as laid by the Supreme Court in the case of Sanjeev Wollen Mills [ 2005 (11) TMI 26 - SUPREME COURT] . Hence, we are of the view that this disallowance of depreciation/ reducing of depreciation on appreciation in the value of securities held as available for sale and held for trading category are allowable. - Decided against revenue.

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• 2021 (3) TMI 463
  Capital gain computation - application u/s 50C - valuation done by the DVO - FMV determination - assessee earned capital gain from sale of inherited properties - contention advanced by the assessee that the property was sold at a price lower than the market value as the property was occupied by some illegal persons and which is a precise reason for referring the matter to the DVO - HELD THAT:- Various evidences were filed before the ld CIT(A) in the form of copies of civil suits, copies of electricity bills, copies of sale deed, power of attorney etc in support of his contention that the property was sold along with occupancy of certain persons and it was submitted that said evidences were also filed before DVO which have not been considered by him while determining the fair market value. DVO has recorded a finding that at the time of inspection, the building stood demolished by the buyer and thus, he is unable to determine the value of the building. Therefore, the fact that the building was demolished at the time of inspection is a finding of fact which is not disputed by either authorities and in fact, the AO has thereafter carried out the valuation of the building on his own which goes to show that as far as physical presence of the assessee at the time of inspection is concerned, the same should not have come in the way of the DVO in determining the value of the building as per the built up area and other specification so given in the sale deed. Secondly, regarding the response to the DVO s letter No.93 dated 19.01.2015, we find that the assessee did respond to the said notice vide its submission dated Nil sent vide speed post on 31.01.2015. We therefore find that various contentions advanced by the assessee regarding determination of fair market value and evidences already brought on record have not been properly addressed by the DVO and even though, the DVO report is binding on the AO and when the matter was brought to the notice of ld CIT(A), the later is well within her jurisdiction to consider those contentions and where so required, the matter could have been referred to the DVO to seek his comments. Therefore, considering the entirety of facts and circumstances of the case, we are of the considered opinion that being a matter involving technical expertise and where the assessee has contested the valuation on multiple grounds and has brought on record various evidences in support of his contention, the matter deserve to be set-aside to the file of the AO to call for fresh report from the DVO and decides the same a fresh as per law. In the result, the grounds of appeal are allowed for statistical purposes. Estimated the fair market value of the property sold as on 01.04.1981 - DVO estimated the fair market value of the property being land as on 01-04-1981 at Rs. 84,078/- (Rs. 49,063/- + Rs. 35,015/-) on the basis of comparable sale instance of the area - AO has completed his assessment by considering the fair market value of the property being land as estimated by the DVO - HELD THAT:- Given that we have set-aside the matter to the file of AO for determination of fair market value as on the date of transfer, the matter relating to cost of acquisition is also remitted to the file of the AO to call for a report from the DVO seeking valuation of land and building both and decide the same afresh as per law. In the result, the ground of appeal is allowed for statistical purposes. Disallowance of expenses claimed against the professional receipts of the assessee - HELD THAT:- We have gone through the order of the lower authorities and donot find any infirmity therein and hence, the said ground of appeal is dismissed.

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• 2021 (3) TMI 462
  Nature of land sold - CIT(A) upholding the finding of A.O. that the agricultural land sold by the assessee is a capital asset within the meaning of Section 2(14)(iii) - claim of appellant that the land sold was ancestral - During the course of hearing assessee has filed additional evidence with regard to distance to distance of land sold from the municipal area and the affidavit of the assessee affirming the fact that the agricultural land is situated beyond 8 KM of local limit of Jaipur municipality on Sikar Road - HELD THAT:- Considering the certificate of Sub-Tehsildar mentioning the fact that village Burthal, khata Nos. 824, 825, 831, 832, 833, 834, 824/1263, 834/1266 and 853, in the year 1994, are situated at 9 KM of gram Nindar as well as affidavit filed by the assessee mentioning that fact that the road distance of the village Bhurthal i.e. area in which land is situated in nearly 10.9 KMs from the local limit of Jaipur municipality on Sikar Road i.e. Nindar Mod as was existing on 06/01/1994 i.e. date of publication of notification No. 9447 in the official gazette. We admit the documents placed on record by the assessee as additional evidences. Once, we have admitted the additional evidence, therefore, the matter is remanded back to the A.O. for the deciding the issue afresh after verifying the documents so placed before us as additional evidences. Appeal of the assessee is allowed for statistical purposes.

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• 2021 (3) TMI 459
  Addition u/s 68 or 56- Bogus share premium and share capital - assessee could not substantiate with evidence to his satisfaction regarding the credit worthiness of the share applicants and the genuineness of the transaction is doubtful - CIT(A) deleted the addition made u/s. 68 on the ground that such share capital was not received by the assessee during the year, but, was received in F.Y. 2013-14 relevant to assessment year 2014-15 and the assessee has only allotted the shares during the year however, confirmed the addition made by the AO u/s. 56(2)(viib) - HELD THAT:- As assessee has valued its shares at Rs. 82.07 as per the valuation certificate issued by the chartered accountant. Although the said valuation report was submitted before the AO to justify that the shares issued by the assessee was at fair market value, it was computed in accordance with Rule 11UA(a) of IT Rules, 1962, however, I find, the AO rejected the same holding that the assessee is not having any worth of receiving any share premium. He has ignored the various assets shown by the assessee in the balance sheet such as cash and cash equivalent of Rs. 6,18,035/-, -short-term loans and advances of Rs. 2,38,07,381/- and other current assets of Rs. 1,16,534/-. The AO did not apply the formula provided in Rule 11UA and did not make any attempt to compute the value of shares of the assessee in accordance with Rule 11UA of IT Rules, 1962 which has been upheld by the ld. CIT(A). When the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. See A.K. ROY VERSUS STATE OF PUNJAB [ 1986 (9) TMI 412 - SUPREME COURT] Thus as assessee has issued the shares at fair market value computed in accordance with Rule 11UA(a) of the IT Rules 1962 and no fault has been found in the method applied by the assessee and the lower authorities have made the addition u/s. 56(2)(viib) purely on presumptions and surmises. Therefore such action of the lower authorities being not in accordance with law is unsustainable - set aside the order of the CIT(A) and direct the AO to delete the addition - Decided in favour of assessee.

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• 2021 (3) TMI 458
  Penalty levied u/s. 271(1)(b) - non compliance of notice issued u/s. 142(1) - addition on account of cash deposits in two bank accounts where the assessee is the first account holderwhile passing the assessment u/s. 144 - HELD THAT:- In response to the notices issued u/s. 142(1), the representative of the assessee has appeared and filed reply and stated that the similar notice regarding cash deposit in case of her husband has also been issued. In the said reply, the assessee sought time to file her return of income however there was no further response on the part of the assessee. Accordingly, the Assessing Officer issued another notice dated 10.12.2018 giving final opportunity to assessee to explain the cash deposit in the bank account but there was no compliance, consequently Assessing Officer framed the assessment u/s. 144 and also initiated the penalty proceedings u/s. 271(1)(b) of the Act. All the bank accounts are in the joint name of the assessee and her husband. The explanation and addition made in the hand of the husband of the assessee would be relevant and shall have a bearing in the case of the assessee. The quantum appeals are still pending before the CIT(A) and the penalty appeals have been dismissed by the CIT(A) by ex parte order. Therefore, in the facts and circumstances of the case, where all the bank accounts are in the joint name and the Ld. CIT(A) has passed the impugned ex parte order without deciding the quantum appeals the matter is set aside to the record of the CIT(A) for deciding the same afresh after adjudication of the quantum appeals and giving more opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.

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• 2021 (3) TMI 457
  Penalty u/s 271(1)(C) - reopening of assessment u/s 147 - CIT(A) affirmed the order of the AO by holding that assessee has furnished inaccurate particulars of income by not disclosing the income from sale of shop in the original return of income and assessee has only disclosed the income in the revised return of income after the survey was conducted on the purchaser M/s. Gold Finch Jewelers Ltd. - HELD THAT:- No notice was issued u/s.148 prior to the filing of the revised return and thus, we note that assessee has voluntarily suo-motto filed the revised return of income and offered to tax whatever was left from being disclosed in the original return of income. Revised return was not filed in response to notice issued u/s.148 and therefore, the assessee cannot be held liable for furnishing in accurate particulars of income or for concealment of income as the income stands offered to tax in the revised return of income - We are not in agreement with the conclusion drawn by the ld. CIT(A) on this issue as assessee cannot be penalized where assessee suo-motto came forward and paid tax on the income which was omitted to disclose in the original return of income and was offered to tax in the revised return of income and especially the fact that notice u/s.148 by issue after filing of revised return. In view of these facts we set aside the order of the ld. CIT(A) and direct the ld. AO to delete the penalty. - Decided in favour of assessee.

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• 2021 (3) TMI 456
  Validity of ex-parte order passed by AO without serving the notice u/s. 148 of the Act on the assessee - HELD THAT:- When the notice u/s. 148 of the Act was issued by the Assessing Officer at the address available with the Assessing Officer as well as the same address has given by the assessee in Form No. 36 and further when the assessee has made a statement before the Ld. CIT(A) not to press this issue of validity of notice, the assessee cannot be allowed to agitate this issue in the present appeal at this stage. Hence, the Ground Nos. 1 and 2 of the assessee appeal are dismissed. Addition on account of entire deposits made in the bank account of the assessee - HELD THAT:- While passing the ex-parte reassessment order, made the addition of the entire deposits in the bank account of the assessee without even considering the corresponding withdrawal by the assessee. It is apparent from the bank statement of the assessee that there are frequent deposits and withdrawal by the assessee and therefore, even, if any, addition is made on account of deposits the corresponding withdrawal which can be a source of subsequent deposits is required to be considered. Further, the assessee has also required to explain the deposits in the bank account at different places apart from parent branch where the assessee is having the saving bank account. Therefore, matter is set aside to the record of the Assessing Officer to readjudicate the issue of assessment of income of assessee on account of deposit made in the bank account after considering the explanation of the assessee

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• 2021 (3) TMI 455
  Addition u/s 68 - unsecured loan sundry creditors - addition made as assessee failed to discharge the onus of proving the genuineness of the said liabilities - HELD THAT:- It is admitted position that the loan from Sinclair Builders Pvt. Ltd., has been obtained by account payee cheque. Confirmation, copy of account as well as the bank statement of the creditor has also been furnished. The assessee has also deducted TDS on the interest amount and the tax has also been deducted at source. The creditor is also assessed to tax - AO found the difference between the account of the assessee and information obtained through invoking section 133(6) of the Act without considering the reconciliation statement produced by the assessee in regard to TDS. Hence, the issue is squarely covered by the decision of the Supreme Court in the case of Orissa Corporation P. Ltd.[ 1986 (3) TMI 3 - SUPREME COURT] As regards to the disputed amount showing in the name of Subarban Industries Ltd. since the confirmation from the said party is furnished, no addition is called for on this account. In the case of loan from MAKs and from Pratap Chandra jena we find that the loan has been brought in cheque and repayment was also made in cheque through banking channel. In this regard, bank statements were furnished but the AO has not issued notice to the creditor u/s. 133(6) of the Act to know the truth and added the same to the income of the assessee. Hence, we also find no justification to confirm the said amount and delete the same. - Decided in favour of assesee.

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• Customs

• 2021 (3) TMI 481
  Application for Early Hearing - Seeking early hearing of the appeal on the ground that the appellant s Customs Broker License No. 11/362 has been suspended on 03.02.2021 by the Principal Commissioner of Customs, Mumbai rendering 32 to 35 employees jobless - HELD THAT:- Non-appearing before the Principal Commissioner and advancing their grievance of non-supply of documents requested is a serious lapse on part of the appellant as the learned Principal Commissioner has duly and reasonably exercised her authority conferred under CBLR, 2018. Further, the argument that absence of a prima facie case for suspension of the license had forced the appellant to rush to this Tribunal, without appearing before the Principal Commissioner seems to be ill founded. There are no valid reason as to why the Tribunal at this stage should interfere with the suspension order passed by the Principal Commissioner when post decisional hearing was extended to the appellant. There are no irregularity in passing the order by the Principal Commissioner suspending the license and extending post decisional hearing to the appellant thereafter. In these circumstances, it is appropriate to direct the appellant to cooperate by attending the hearing before the Principal Commissioner in compliance with the procedure laid down under CBLR, 2018 and forward their argument/defense. Revenue is directed to supply all relevant documents as requested so far or that would be requested in future and complete the process of hearing as far as practicable within 10 days from the date of communication of this order - appeal disposed off.

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• Corporate Laws

• 2021 (3) TMI 484
  Maintainability of petition - Determination of Contractual agreement - it is contended that the 2 nd respondent-Company neither being a Government Company nor being an instrumentality of the State, the Writ Petition is otherwise also not maintainable - HELD THAT:- The answering respondent is a Private Limited Company incorporated under the law relating to Companies; there is no material placed on record to show that it answers the description of Government Company as defined u/s 617 of the erstwhile Companies Act, 1956 or the corresponding provision of the Companies Act, 2013; this apart, no prima facie evidence is placed to substantiate the contention that the said Company fills the character of State or its instrumentality fitting into the definition given under Article 12 of the Constitution of India - the Writ Petition is misconceived. The contents of the letter of appointment keep beyond the pale of any doubt that appointment of the petitioner was purely contractual in substance; where the determination of services is occasioned by the terms of the contract or anything done under the terms, it does not become actionable in law, subject to all just exceptions into which the argued case of the petitioner does not fit - there is no choate cause of action for maintaining an action in law and more particularly, for invoking extraordinary jurisdiction of this Court, as rightly contended by the other side. The vehement argument of the learned counsel for the petitioner that the removal is stigmatic in character and therefore, an enquiry ought to have been held before issuing the impugned removal order, is bit difficult to countenance; arguably, had the answering respondent been an instrumentality of the State, perhaps different factors would have entered the fray of consideration; even otherwise, it is open to the answering respondent- Company, assuming that it is an instrumentality of the State, to have the services of managerial personnel purely on contract basis, when it is admitted that there are no Recruitment Rules having binding effect - there is some material which suggests that the impugned termination of the contract for service is preceded by some allegations, is arguably true; but that per se does not exclude the respondent-Company from invoking the conditions of contract entered into by the petitioner; as already mentioned, had the contract in question graduated to a legal status as it happens in Public Service Jurisprudence, the matter would have been different, since the infraction of the conditions of service are treated under the Service Rules which usually have abundant public law character; it is needless to mention that if the impugned action or anything done preceding the same, amounts to some other cause of action, it is open to the petitioner to litigate on it. Petition dismissed.

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• 2021 (3) TMI 474
  Seeking directions to BOD to obtain approval of its shareholders pursuant to Section 188 of the Companies Act, 2013, before leasing or otherwise disposing of its assets or properties of any kind in favour of Respondent No 6 or Respondent No.2 or any other persons - seeking directions to BOD to pass necessary resolution pursuant to provisions of Section 180 of the Companies Act, 2013 before leasing or otherwise disposing of the whole or substantially the whole of the undertaking of the Respondent - seeking to freeze the removal, transfer or disposal of funds, assets, properties of the Respondent - seeking direction to submit the details of the bank account(s) in which the sale proceeds of the entry tickets issued - seeking to appoint an inspector to identify and list out the assets of Respondent No 1 installed at the Jatayu Project and report the variation of the same with the list of assets reflecting in the latest audited financial statements to this Hon ble Bench. HELD THAT:- This Tribunal directs Respondent 2,3,4,5 and 6 to submit before this Tribunal the details of the bank accounts in which the sale proceeds of the entry tickets issued on 13th 14th and 15th October 2020 were credited, within two weeks from the date of receipt of this order. In order to appoint an Inspector to identify and list out the assets of Respondent No.1 installed at Jatayupara Project and report the variation of the same with the list of assets reflecting in the latest Audited Financial Statements, the Petitioner is directed to file a memo suggesting the names of three reliable persons, with mutual consent from the opposite side, from whom one of them can be appointed as Inspector to carry out the aforesaid activities, before this Tribunal within two weeks. Application disposed off.

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• Insolvency & Bankruptcy

• 2021 (3) TMI 496
  Power of NCLT - Corporate insolence resolution proceedings - Direction to the Government for extension of mining lease - time limitation - whether the provisions of Section 14 of the Limitation Act or the principles laid down therein would be available to KIAL for exclusion of the period during which it was prosecuting the writ petition before the Division Bench of the Bombay High Court? - HELD THAT:- When a certain period is excluded by applying the principles contained in Section 14, there is no delay to be attributed to the appellant and the limitation period provided by the statute concerned, continues to be the stated period and not more than the stated period. It was therefore held, that the principle of section 14, which is a principle based on advancing the cause of justice would certainly apply to exclude time taken in prosecuting proceedings which are bona fide and pursued with due diligence but which end without a decision on the merits of the case - Coming to the facts of the present case, immediately after NCLT pronounced its judgment on 28.11.2019 and even before the certified copy was made available on 18.12.2019, KIAL had filed writ petition before the Division Bench of the Bombay High Court on 11.12.2019 on the principal ground, that the procedure followed by NCLT was in breach of principles of natural justice. Such a ground could be legitimately pursued before a writ court. In that sense, it was not a proceeding before a wrong court, as such. Perusal of the judgment and order dated 28.1.2020, passed by the Division Bench of the Bombay High Court, which dismissed the writ petition on the ground of availability of alternate and equally efficacious remedy would reveal, that the said writ petition was hotly contested between the parties and by an order running into 32 pages, the Division Bench of the Bombay High Court dismissed the petition relegating the petitioner therein (i.e. KIAL) to avail of an alternate remedy available in law. This Court found, that the petitioner therein had adopted tactics of taking chances by approaching High Court of Delhi, which had no territorial jurisdiction. As such, it was found, that neither the writ petition nor the appeal before the Delhi High Court could be construed to be a bona fide. It was further noticed, that there was an inordinate delay of 697 days. It is thus apparent, that the petitioner therein had not satisfied the necessary conditions for applicability of Section 14 - the petitioner was bona fide prosecuting his remedy before the High Court and that too with due diligence. NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute Supplemental Lease Deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice - thus, KIAL was entitled to extension of the period during which it was bona fide prosecuting a remedy before the High Court with due diligence. Whether there was waiver and acquiescence by KIAL, so as to estop it from challenging the participation of Kalpraj? - HELD THAT:- For constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him. Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege. It is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. It is in dispute, as to whether RP had again directed KIAL and Kalpraj vide email dated 11.2.2019 to submit revised plan. It is asserted on behalf of the KIAL, that such email was received by it, whereas it is denied by RP. In any event, it is not in dispute, that both KIAL and Kalpraj submitted their revised plans on 12.2.2019 - On 13/14.2.2019, the resolution plan of Kalpraj was accepted by CoC. On 18.2.2019, RP filed M.A. No.691 of 2019 before NCLT for approval of the resolution plan of Kalpraj. KIAL filed its M.A. No. 1039 of 2019 on 14.3.2019 before the Adjudicating Authority objecting to the approval of resolution plan of Kalpraj. KIAL had objected to participation of any other applicant submitting plan after the due date as per the last Form G and also reiterated its objection, we are of the considered view, that it cannot be held, that having participated by submitting the revised plans, KIAL is estopped from challenging the process on the ground of acquiescence and waiver. Merely because, the revised plans are not submitted with the words without prejudice , in our view, would not make any difference - KIAL had no other option than to submit its revised plans in view of clause 11.2 of the Process Memorandum. Inasmuch as, had it not responded, it had to run the risk of being out of fray - thus, the conduct of the party is relevant for considering, whether it can be held, that a case is made out of waiver or acquiescence. Whether NCLAT was right in law in interfering with the decision of CoC of accepting the resolution plan of Kalpraj? - HELD THAT:- The Committee was of the view, that for deciding key economic question in the bankruptcy process, the only one correct forum for evaluating such possibilities, and making a decision was, a creditors committee, wherein all financial creditors have votes in proportion to the magnitude of debt that they hold. The BLRC has observed, that laws in India in the past have brought arms of the Government (legislature, executive or judiciary) into the question of bankruptcy process. This has been strictly avoided by the Committee and it has been provided, that the decision with regard to appropriate disposition of a defaulting firm, which is a business decision, should only be made by the creditors - The Committee also expressed the opinion, that there should be freedom permitted to the overall market, to propose solutions on keeping the entity as a going concern. The Committee opined, that the details as to how the insolvency is to be resolved or as to how the entity is to be revived, or the debt is to be restructured will not be provided in the I B Code but such a decision will come from the deliberations of CoC in response to the solutions proposed by the market. This Court has held, that it is not open to the Adjudicating Authority or Appellate Authority to reckon any other factor other than specified in Sections 30(2) or 61(3) of the I B Code. It has further been held, that the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timelines prescribed by the I B Code. This Court thus, in unequivocal terms, held, that there is an intrinsic assumption, that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan - It has been held, that the legislature has consciously not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the Adjudicating Authority and that the decision of CoC s commercial wisdom is made nonjusticiable. The legislative scheme, as interpreted by various decisions of this Court, is unambiguous. The commercial wisdom of CoC is not to be interfered with, excepting the limited scope as provided under Sections 30 and 31 of the I B Code. Appeal disposed off.

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• 2021 (3) TMI 473
  Maintainability of application - initiation of CIRP - Corporate Debtor is unable to pay its debt - existence of debt and dispute or not - application is filed by the competent person or not - documents filed by the Financial Creditor is having the common seal or not - Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor or not. Whether the application is filed by the competent person? - HELD THAT:- Smt. Maya C. is the Assistant Vice President/ Branch Head of the Financial Creditor has the proper authority to file the present application, and the objection raised by the counsel for the Corporate Debtor is merely incongruous, and therefore, holds no water - the contention will not stand now, and it is only to be rejected. Whether the documents filed by the Financial Creditor is having the common seal? - HELD THAT:- This Tribunal verified original documents produced by the Financial Creditor in compliance with the order passed by this Tribunal dated 16.02.2021 and made sure that the documents alleged by the Corporate Debtor having the impressed seal of the Financial Creditor. Whether there is a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor herein? - HELD THAT:- There is Creditor- Debtor relationship between them, since the Financial Creditor admitted that they received money from the Financial Creditor and the Corporate Debtor has no case that he has repaid the money received from the Financial Creditor - As there is a default in the payment of the financial debt, which has been confirmed by them in the counter affidavit that the Financial Creditor paid the money to the Corporate Debtor. This Tribunal is of the view that, the present application filed by the Financial Creditor is satisfies all the definitions of Financial Creditor , Default and Financial Debt and qualifies for filing an application under Insolvency and Bankruptcy Code. By making various technical snags the Corporate Debtor cannot wash its hands in repaying the amount borrowed which is a financial debt owed by them. Hence, there is a Creditor-Debtor relationship with them. This Tribunal is on the view that the application is filed in the capacity of a Financial Creditor for a Financial Debt of Rs. 6,39,13042/-, recoverable from the Corporate Debtor viz Platino Classic Motors (India) Pvt Ltd is a fit case for admission and initiation of CIRP against the Corporate Debtor. The documents produced on record prove the disbursement of various loan facilities granted by the Financial Creditor to the Corporate Debtor - Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor, and hence its Loan account was declared as NPA. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Financial Creditor as a major constituent for admission of an application under Section 7(4) of the I B Code - Application under Sub-Section (4) of Section 7 of I B Code, 2016 is complete in all respects. Application admitted - moratorium declared.

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• 2021 (3) TMI 470
  Maintainability of appeal - CIRP has been initiated against the principal borrower - Whether the Appellant have filed claim in CIRP initiated against the Corporate Guarantor? - HELD THAT:- Similar issue had come up before us in the matter of State Bank of India vs. Athena Energy STATE BANK OF INDIA, STRESSED ASSET MANAGEMENT BRANCH VERSUS ATHENA ENERGY VENTURES PRIVATE LIMITED [ 2020 (11) TMI 800 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI] where it was held that We are unable to agree with the arguments of Learned Counsel for Respondent that when for same debt claim is made in CIRP against Borrower, in the CIRP against Guarantor the amount must be said to be not due or not payable in law. Under the Contract of Guarantee, it is only when the Creditor would receive amount, the question of no more due or adjustment would arise. It would be a matter of adjustment when the Creditor receives debt due from the Borrower/Guarantor in the respective CIRP that the same should be taken note of and adjusted in the other CIRP. There is no bar for the Financial Creditor to proceed against the principal borrower as well as Corporate Guarantor at the same time, either in CIRPs or file claims in both CIRPs - The matter is remitted back to the Adjudicating Authority and the Adjudicating Authority is requested to pass further Orders with regard to the claim made by the Appellant which was required to be considered by the IRP/RP - Appeal allowed by way of remand.

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• 2021 (3) TMI 468
  Liquidation of Corporate Debtor - seeking to liquidate the Corporate Debtor as a going concern as per Regulation 39(C) of IBBI (Corporate Insolvency Resolution Process) Regulations, 2016 - Section 33(1) of IBC, 2016 - HELD THAT:- The consent of the Resolution Professional in Form 2 accepting appointment as the Liquidator of the Corporate Debtor has been produced - The Committee notes that no Resolution Plan was approved by the Committee of Creditors during the period of CIRP of India Techs Limited. The Corporate Debtor M/s. India Techs Limited is hereby put under liquidation with immediate effect under Section 33(1) of IBC, 2016 - the Corporate Debtor be liquidated in the manner as laid down in Chapter III by issuing a Public Notice stating that the Corporate Debtor is in liquidation. It is also directed that the Applicant shall send this order to ROC under which this Company has been registered - application disposed off.

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• 2021 (3) TMI 467
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - time limitation - date of declaring the NPA is date of default or not - existence of debt and dispute or not - HELD THAT:- The date of default is 30th April 2013 and the Application filed before the Learned Adjudicating Authority under Section 7 of the I B Code on 12th September 2018 which is beyond three years and we agree with the finding(s) given by the Learned Adjudicating Authority, that the Application is barred by limitation. The Application filed by the Appellant, is hit by Article 137 of the Limitation Act, 1963, since for filing the Application, the period of limitation is three years. Taking into account and in following the judgment of the Hon ble Supreme Court in B.K. Educational Services Pvt. Ltd. [ 2018 (10) TMI 777 - SUPREME COURT ] the date of NPA is the date of default. In the present case as stated above, the date of default as mentioned by the Appellant in Form-I is 30th April 2013 and the Application filed by them on 12th September 2018 is beyond three years. It is an admitted fact that the Respondent exited from the MRA on 31st January 2015. Therefore, the Appellant cannot rely upon the acknowledgement in the Master Restructuring Agreement. Even otherwise, taking into consideration the Master Restructuring Agreement it is well beyond three years, therefore, the Appellant cannot take a stand with regard to the acknowledgement. Further even taking into consideration, the OTS proposal given by the Respondent dated 19th June 2015 as contended by the Learned Counsel for the Appellant that at page 147 of the Appeal paper book. It is stated as under Proposing for One Time Settlement with banks with a payment in 6 quarters . The Learned Counsel for the Appellant strongly relied upon, the above statement of the Respondent, that since the Respondent had given a One Time Settlement Proposal on 19th June 2015. Therefore, it is a clear acknowledgement by the Respondent regarding debt. Appeal dismissed.

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• 2021 (3) TMI 464
  Preferential, undervalued and fraudulent transactions by Respondent - survival of application filed under Section 43 for avoidance of preferential transactions beyond the conclusion of the resolution process - role of the RP in pursuing such applications - HELD THAT:- On a perusal of Section 43 of the I B Code, it is clear that to adjudicate the applicability of Section 43, one must look back two years from the date of commencement of CIRP, for a transaction with a related party and one year from the date of commencement of CIRP, for a transaction with a person other than a related party. Here, the application was admitted and CIRP initiated on 15.01.2018, the Resolution Plan was approved by the CoC on 28.12.2018 and approved by the Adjudicating Authority on 23.01.2019. This application was first heard before the Tribunal on 03.10.2018 and NCLT, Chennai Bench had posted it for making final submissions. But from the proceedings, it is seen that the applicant as well as Respondents sought several adjournments and which is beyond the approval of Resolution Plan approval on 28.12.2018. A perusal of the chronology of events would show that the avoidance application in this case was filed before the CoC had approved the Resolution Plan and almost end of the submissions on the Resolution Plan being heard by the NCLT. The NCLT did not pass any orders on the avoidance application before or at the time of approval of the Resolution Plan - This Tribunal is of an opinion that an avoidance application for any preferential transaction is meant to give some benefit to the creditors of the Corporate Debtor. The benefit is not meant for the Corporate Debtor in its new form, after the approval of the Resolution Plan. This is clear from a perusal of Section 44 of the IBC, which sets out the kind of orders which can be passed by the NCLT in case of preferential transactions. The benefit of these orders would be for the Corporate Debtor, prior to approval of the Resolution Plan. Any property transferred or sum acquired in an order passed in respect of a preferential transaction would have to form part of the final Resolution Plan. The Resolution Plan would have to take into consideration such amounts and benefits which can be given to the Corporate Debtor for the benefit of the CoC. The benefit of an avoidance application is not meant for the company, after the Resolution Plan is considered by the CoC and approved by the NCLT. The benefit of orders passed in respect of such transactions may be passed on to the Corporate Debtor which may assist in liquidating the company at the final stage. However, that is not the case in the present application. The NCLT ought not to be permitted to now adjudicate the preferential nature of the transaction, after the approval of the Resolution Plan. This Tribunal is of the view that after the approval of Resolution Plan, this Tribunal has no jurisdiction to entertain and decide avoidance applications, in respect of a Corporate Debtor, which is now under a new management. i.e., M/s Acme Chem Limited. - Application dismissed.

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• 2021 (3) TMI 461
  Liquidation of Corporate Debtor - no Resolution Plan was received - HELD THAT:- Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor - In the present case, the CoC has resolved by 93.21% voting share to liquidate the Corporate Debtor. In the present case, the RP wanted to continue as the liquidator. This fact finds its support first from the Resolution No.1 under Agenda Item No. 2 of the twelfth CoC meeting for appointment of the RP as the Liquidator which was voted against by 93.21% votes of the members of the CoC.1 Resolution No. 2 which was for the appointment of Mr. Pratim Bayal as the Liquidator was approved by 93.21% votes. Second, from the submission made by the Ld. Counsel appearing for the Applicant during the hearing of this Petition that if there is any objection to the appointment of the proposed professional as Liquidator then the present Applicant, i.e., the RP, may be appointed as the Liquidator. However, instead of filing his written consent to be appointed as the Liquidator of the Corporate Debtor with this Adjudicating Authority, the RP chose to seek approval from the CoC that has no authority to appoint the Liquidator in the first place. Therefore, under the said circumstances, neither Mr. Pratim Bayal, whose appointment has been approved by the CoC by drawing authority from a source that is certainly not the Code, nor Mr. Pankaj Kumar Tibrewal, who has failed to submit his written consent under sub-section (1) of section 34 of the Code, can be appointed as the Liquidator of the corporate debtor in the present case. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - Application allowed.

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• 2021 (3) TMI 460
  Seeking directions to be passed upon Respondents to jointly and severally to repay the sum due to the Corporate Debtor - Section 44 of the Insolvency and Bankruptcy Code, 2016 - Maintainability of application after the Resolution Plan is approved. Whether the Resolution Professional has filed the application is in consonance with the Code and Regulations governing Corporate Insolvency Process? - HELD THAT:- It is important to examine whether the RP has adhered to the timeframe in bringing the application for avoidance of preferential transactions under section 44 of the Code. From the table produced, it is clear that the timeline as provided in regulation 35A CIRP Regulations have not been adhered to. That RP has filed the application on the 389th day of the CIRP period. Moreover, the most vital essence of regulation 35A(3) of the CIRP Regulations is missing in the present case, i.e., the determination to be made by the RP that there are preferential transactions. The fact cannot be avoided that the RP had filed an application for approval of the Resolution Plan on 14.07.2020 and thereafter filed an application under Section 43 of the Code on 24.07.2020. The Resolution Plan was approved on 12.08.2020. On perusal of the order dated 12.08.2020, it is apparent that the RP had prayed for urgent hearing of the application for approval of the Resolution Plan. The RP was duty bound to file the application for preferential transaction within time and also seek for urgent hearing of the application before the plan is approved. Once the Resolution Plan is approved, the Corporate Debtor is managed by a new management and the RP becomes functus officio. An application for avoidance of preferential transaction cannot be carried on by the Resolution Professional on behalf of the Corporate Debtor. Whether this application can survive after the Resolution Plan is approved? - HELD THAT:- The feeling is inescapable that the RP has filed the application under section 43 read with section 44 of the Code only to avoid adverse scrutiny on the part of the IBBI and not with any real intention to pursue the alleged preferential transactions to their logical end. That may be the only plausible reason for filing the section 43 application after filing the application for approval of resolution plan. Application dismissed.

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• 2021 (3) TMI 454
  Bills for fee of Interim Resolution Professional - typographical error in the invoice - violation of section 208(2)(a), (b) and (e) of the Code, regulation 33(3) of CIRP Regulations, 2016, regulation 7(2)(h) of the IP Regulations, read with clauses 25, 25A, 26 and 27 of the Code of Conduct under the First Schedule of the IP Regulations, Circular No. IP/004/2018 dated 16th January, 2018 and Circular No. IBBI/IP/013/2018 dated 12th June, 2018 - HELD THAT:- DC finds from the material available on record that the bills raised by Ms. Jain dated 4-4-2019, 15-4-2019, 26-4-2019 and 29-7-2019 were addressed to the CD. Ms. Jain has submitted that the IRP appointment was not proposed by the operational creditor, FLSmidth Private Limited instead, it was the AA that appointed Ms. Jain as IRP. On perusal of the Order dated 27-3-2019 of the AA it is observed that the Applicant, FLSmidth Private Limited had not suggested any name for IRP and the AA directly appointed Ms. Jain as IRP, with the further direction to Applicant to pay sum of Rs. 50,000/- to IRP as advance fees - DC finds that there does not appear to be any contravention by Ms. Jain as the applicant refused to bear the cost and the CoC had ratified the fees of IRP and informed her to issue the bills in the name of the CD. Cost Disclosure by IRP - HELD THAT:- As valuers appointment was also the part of CIRP cost, it was expected from RP and CoC to communicate and the CoC vide e-mail dated 12-7-2019 had requested IRP to wait till such approval from CoC. Therefore, Ms. Jain filed the cost disclosure on 30-10-2019 with IPA on the information available, assuming that any subsequent revision will be dealt with later on. The submission of the IRP is found to be satisfactory and no contravention could be made out. Appointment of valuers by Resolutional Professional (RP) who are not Registered Valuers (RV) - violation of Section 208(2)(a) and (e) of the Code, regulation 27 of CIRP Regulations 2016 and Regulation 7(2)(a), (h) and (i) of the IP Regulations, read with clause(s) 10 and 14 of the Code of Conduct as given in the First Schedule of the IP Regulations and Circular No. IBBI/RV/019/2018 dated 17th October, 2018 - HELD THAT:- From a bare perusal of the provisions of the regulations and circular made thereunder, it is clear that it is the duty of the IRP to appoint registered valuers within 7 days of his appointment, but not later than 47th day from the insolvency commencement date to determine the fair value and liquidation value of the CD. The IBBI further clarified in explicit terms through the aforesaid circular that no IP shall appoint a person other than a registered valuer to conduct any valuation under the Code or any of the regulations made thereunder. In the present case, DC notes that Ms. Jain had appointed LSI Engineering Consultants Ltd. and AAA Valuation Professionals LLP on 12th July 2019, who were not registered with the IBBI. However, Ms. Jain contended that there is no contravention as the valuer appointment letters that she had sent were subsequently cancelled by CoC later on and the RP has presently appointed a different set of valuer. The date when the valuers were appointed she was no longer part of CIRP - the DC notes that the Ms. Jain had appointed LSI Engineering Consultants Ltd and AAA Valuation Professionals LLP in contravention of the regulation and circular. However, the appointment of valuer was later cancelled by CoC and registered valuers were appointed by the RP, Mr. Abhilash Lal as per the regulations. Hence, DC is of the view that lenient view may be taken. Relationship Disclosure by IRP - HELD THAT:- Ms. Jain, the DC is of the opinion that IRP can take assistance from the back office support in managing the day to day operation of CD and no specific disclosure is required for the same. However, if the fees of the support staff are paid from CIRP Cost on ratification of the CoC the same has to be duly disclosed but in the present instance the personnel were employed directly by IRP and their fees were not charged from CIRP cost. Hence, there is no requirement of informing the CoC of the relationship as related party of the support staff. Thus, there is no contravention in this regard. Public Announcement by IRP - HELD THAT:- The public announcement is made by the IRP immediately after the appointment, to inform the public that a CD is undergoing CIRP. It is the vital first step after initiation of CIRP as it provides an opportunity to the creditors submit their claims of liability against the CD which are to be considered while resolving insolvency - the public announcement was made within stipulated time and five claims were also received subsequently and mere rearrangement of link on the website does not amount to delay in publishing. Thus, the DC is of the view there is no contravention with regard to publication of public announcement. SCN disposed off.

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• 2021 (3) TMI 453
  Validity of accepting the assignment as the Resolution Professional (RP) in the Corporate Insolvency Resolution Process (CIRP) of Housing Development and Infrastructure Limited (CD) without holding a valid Authorisation for Assignment (AFA) from his IPA - contraventions of sections 208(2)(a) (e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulations 7(2)(a) (h) and 7A of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) read with clauses 1, 2, 11, 12 and 14 of the Code of Conduct contained in the First Schedule of the IP Regulations - HELD THAT:- It is clear from Regulation 7A of IP regulations that one of the essential condition for undertaking any assignment by an IP is that he should have a valid AFA which is issued by the IPA with which he is enrolled. In other words, without AFA, an IP is not eligible to undertake any assignments or conduct various processes thereof. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July 2019 - The bye-laws of Indian Institute of Insolvency Professionals of ICAI defines in para 4(1)(aa) the expression authorisation for assignment as an authorisation to undertake an assignment, issued by an insolvency professional agency to an insolvency professional, who is its professional member, in accordance with its bye-laws regulation. An application for grant of AFA can be made by the IPs to the IPA under para 12A of said bye-laws. An IP who is more than 70 years of age is ineligible to make an application for AFA under para 12A (2)(e) of the said bye-laws. In the present matter it is observed that, Mr. Manudhane had provided his consent to accept the assignment as IRP in Form-2 on 10th December, 2018 in the CIRP of the CD and the date of commencement of the CIRP is 20th August, 2019. However, it is also observed that Mr. Manudhane was ratified as RP in the CIRP of the CD in the 1st meeting of the CoC held on 8th January, 2020, i.e., after the threshold date of 31st December, 2019 without having a valid AFA - The DC finds that an order has been passed against Mr. Manudhane on 1st December, 2020 by the Disciplinary Committee of IPA for accepting assignment as Resolution Professional after 31st December, 2019 without holding a valid AFA in the CIRP of the CD and it has been decided that Mr. Manudhane is guilty of Professional Misconduct and a penalty of Rs. 10,000/- has been imposed. The Disciplinary Committee of the Indian Institute of Insolvency Professional of ICAI has already passed order in this matter, the DC, in exercise of the powers conferred under Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016, disposes of the SCN without any direction.

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• Service Tax

• 2021 (3) TMI 465
  Manpower supply service - amounts paid as salaries to the employees of the parent company working with the appellant - staff and experts are sent by the parent overseas company to the Indian subsidiary on secondment - salaries paid by the Indian company to the employees after deducting the statutory amounts, such as, Provident Fund, TDS etc.- whether such an arrangement amounts to the parent company supplying manpower supply services to the Indian subsidiary or not? - Extended period of limitation - HELD THAT:- This issue has been decided by various benches of this Tribunal in the case of M/S VOLKSWAGEN INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2013 (11) TMI 298 - CESTAT MUMBAI] , M/S NISSIN BRAKE INDIA PVT. LTD. VERSUS CCE, JAIPUR I [ 2018 (5) TMI 1223 - CESTAT NEW DELHI] , SPIRAX MARSHALL P. LTD., FORBES MARSHALL P. LTD. J.N. MARSHALL P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE I [ 2015 (11) TMI 978 - CESTAT MUMBAI] and COMPUTER SCIENCES CORPORATION INDIA PVT LTD. VERSUS COMMISSIONER OF SERVICE TAX, NOIDA [ 2014 (4) TMI 252 - CESTAT NEW DELHI] . Thus, it is now a settled legal position that in an arrangement like this, the deputed employees will be working as employees of the Indian company. The parent company is not supplying manpower to Indian company. Therefore, no service tax is payable under Reverse Charge Mechanism by the Indian company on the salaries, etc. paid to the deputed employees. No reason to hold that this arrangement is supply of manpower by the parent company to the appellant - the demand, interest and penalty imposed and the impugned order cannot be sustained - Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (3) TMI 492
  Maintainability of appeal - Extended period of limitation - petitioner-Company did not prefer an appeal within the period of limitation prescribed under the Act and approached this Court under Article 226 of Constitution of India - HELD THAT:- It is not in dispute that the writ petition has been preferred bypassing the alternative remedy of appeal available under the Central Excise Act, 1944 by the petitioner. Even after receipt of the detention order dated 22.03.2015 assuming that the petitioner had no knowledge of service of Order-in-Original, no effort was made on its part to prefer an appeal. Writ petition was preferred after expiry of the statutory period of limitation without any cogent explanation. This Court does not find any grounds made out to entertain the writ petition - Petition dismissed.

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• 2021 (3) TMI 488
  Classification of goods - rate of tax - Orbit White Chewing Gum - taxable at 4% or 12.5%? - HELD THAT:- This Court in HIMALAYA DRUG COMPANY VERSUS STATE OF KERALA [ 2020 (3) TMI 1317 - KERALA HIGH COURT] has taken the view that importing of the definition in a statute in the regulatory regime into a fiscal statute would not be warranted in view of the fact that the exemptions or concessions granted in a fiscal statute are to be strictly construed. The entitlement to concessional rate is first established by demonstrating the nature of the product, applicable rate of tax, and the comparative study of acceptance of same product under other enactments, such as Customs Act, Central Excise Act, etc, could be undertaken. The Tribunal committed an error of jurisdiction by solely relying on Invoice and treating the chewing gum as a product falling under Ayurvedic, Unani, etc. In the case on hand, for the view we have taken in the preceding paras, we do not want to dwell further into the matter and we are convinced that the common order under revision is untenable, suffers from too much of brevity, and the relevant aspects, either way, which have bearing on determining the applicable rate of tax, are not considered by the Tribunal and reconsideration of issue is warranted. The matter remitted to Tribunal for disposal afresh, in accordance with law, within three months from the date of receipt of a copy of this order - Petition allowed by way of remand.

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• 2021 (3) TMI 483
  Default in the payment of Central Excise Duty - applicability of Rule 8 (3A) of the Central Excise Rule, 2002 - citing Rule 8(3A), the SCN was issued proposing to demand payment of Central Excise duty in cash, which was already debited from the Cenvat Credit account - HELD THAT:- The provisions of Rule 8 (3A) of the Central Excise Rules, 2002, based on which the demand for duty has been raised by the Department has been struck down by the various High Courts as ultra vires. Reliance can be placed in the case of M/S SANDLEY INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [ 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT] and it can be held that there is no bar in making use of the accumulated Cenvat Credit for making payment of Central Excise Duty even during default period - also, the Jurisdictional High Court at Calcutta, in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA OTHERS [ 2017 (8) TMI 1515 - CALCUTTA HIGH COURT] has followed the decision of the Gujarat High Court in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 [ 2014 (12) TMI 585 - GUJARAT HIGH COURT] and has held the portion of rule 8 (3A) as ultra vires. There is no bar in making use of the accumulated Cenvat Credit in making payment of Central Excise Duty even during the default period - Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 480
  CENVAT Credit - freight amount reimbursed to goods transport operators - services used in relation to the outward transportation - place of removal - HELD THAT:- The present issue is no more res-integra in view of the recent decision of the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BELGAUM VERSUS M/S. VASAVADATTA CEMENTS LTD. [ 2018 (3) TMI 993 - SUPREME COURT] where it was held that clearance of final products from the place of removal and the subsequent amendment by Notification 10/2008-C.E. (N.T.), dated 1-3-2008 substituting the word from in the said phrase in place of upto makes it clear that transportation charges were included in the phrase clearance from the place of removal upto the date of the said substitution and it cannot be included within the phrase activities relating to business . The credit is allowed - Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2021 (3) TMI 486
  Incentive scheme for industries and more particularly the IFST deferral scheme - Benefit of Notification G.O.Ms.No.500 Industries (MIG II) Department dated 14.5.1990 - Whether the Notification issued in G.O.Ms.No.119 Commercial Taxes and Religious Endowments Department dated 13.4.1994, which stipulated a benchmark for enjoying the benefit of IFST deferral scheme can be made applicable to the petitioner? HELD THAT:- The industries, which were granted eligibility certificate in terms of G.O.Ms.No.500 dated 14.5.1990 cannot be imposed with the benchmark condition introduced for the first time in G.O.Ms.No.119 dated 13.4.1994. The Assessing Officer as well as the Tribunal appeared to have been guided by the rescheduled date of eligibility as mentioned in the eligibility certificate dated 31.1.1995, by which, the period was rescheduled from 01.12.1994 to 30.11.1999 - Admittedly, this period falls much after the Notification in G.O.Ms.No.119 dated 13.4.1994. What is interesting to note is that in G.O.Ms.No.119 dated 13.4.1994, a specific direction was issued to the State Government and the District Industries Centre to work out BPV and BSV and incorporate the same in the eligibility certificate at the time of issuance by the SIPCOT and the District Industries Centre. The wordings in paragraph 3(v) of the Government Order in G.O.Ms.No. 119 dated 13.4.1994 were that the BPV and the BSV would have to be worked out and incorporated in the eligibility certificates at the time of issue by the SIPCOT and the District Industries Centre. If such is the position and the date of eligibility certificate of the petitioner being 17.6.1993, G.O.Ms.No.119 dated 13.4.1994 could not have been applied to the petitioner. Therefore, even though the rescheduled period was from 01.12.1994 to 30.11.1999, the eligibility for the deferral scheme would date back to the date of the original eligibility certificate dated 17.6.1993, as in that certificate, conditions have been imposed and the reschedulement dated 31.1.1995 was only reschedulement of dates and nothing else - the respondent Department initially understood the position clearly and therefore, they did not amend the eligibility certificate by incorporating the BPV and the BSV in the eligibility certificate. This Court in the case of SULOCHANA COTTON SPINNING MILLS (P) LTD. VERSUS STATE OF TAMIL NADU AND OTHERS (AND OTHER CASES) [ 1994 (12) TMI 302 - MADHYA PRADESH HIGH COURT] wherein the Hon ble First Bench of this Court framed three questions for consideration, the first of which was with regard to scope and ambit of G.O.Ms.No.500 dated 14.5.1990 and the second question was as to what was the effect of another Government Order in G.O.Ms.No.92 dated 22.2.1991 on G.O.Ms.No.500 dated 14.5.1990, as G.O.Ms.No.92 dated 22.2.1991 brought in certain conditions. Thus, the respondent Department does not dispute the fact that the Inspecting Officer gave a clean chit to the petitioner and in no uncertain terms stated that the IFST deferral availed by the petitioner in A unit was found to be in order and that no deviation or wrong availment was noticed. The Tribunal committed a serious error in not granting relief to the petitioner - Petition allowed.

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• Indian Laws

• 2021 (3) TMI 497
  Requirement of continuation of extension of limitation - HELD THAT:- The order dated 15.03.2020 was extended from time to time. Though, we have not seen the end of the pandemic, there is considerable improvement. The lockdown has been lifted and the country is returning to normalcy. Almost all the Courts and Tribunals are functioning either physically or by virtual mode - We are of the opinion that the order dated 15.03.2020 has served its purpose and in view of the changing scenario relating to the pandemic, the extension of limitation should come to an end. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded - Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021. The Suo Motu Writ Petition is disposed off accordingly.

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• 2021 (3) TMI 490
  Dishonor of Cheque - rejection of application for discarding evidence of accused and for directions to the accused to lead oral evidence - Section 138 of the N.I. Act - HELD THAT:- The question, whether an accused in proceedings under Section 138 of the N.I. Act is entitled to file an Affidavit in-lieu of Examination-inChief or not, is no more res-integra. The Hon ble Supreme Court in the case of Mandvi Co-op. Bank Ltd. Vs. Nimesh B. Thakore [ 2010 (1) TMI 570 - SUPREME COURT ] where it was held that In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood the defence would lead other kinds of evidences to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the nature of the complainant s evidence and the evidence of the accused in a case of dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant s evidence and to extend the same option to the accused as well. In view of the elucidation of law by the Hon ble Supreme Court in the case of Mandvi Co-op. Bank Ltd., it is clear that, an accused in a proceedings under Section 138 of the Negotiable Instruments Act cannot be permitted to file an Affidavit-of-Evidence in lieu of Examination-in-Chief. The respondent Nos.2 and 4 herein cannot be permitted to file an Affidavit-of-Evidence in-lieu of Examination-in-Chief - Petition allowed.

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• 2021 (3) TMI 485
  Private financial institution - petitioner s grievance is against M/s. Citi Bank which is a private financial institution and it would not fall under definition of article 12 of Constitution - HELD THAT:- The hon ble apex court hold that the writ petition is not maintainable in so far as remedy under the SARFAESI Act, 2002, in the case of UNITED BANK OF INDIA VERSUS SATYAWATI TONDON AND OTHERS [ 2010 (7) TMI 829 - SUPREME COURT] where it was held that It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc., and the particular legislation contains a detailed mechanism for redressal of his grievance. The apex court in the case of RADHEY SHYAM ANR JAGDISH PRASAD VERSUS CHHABI NATH ORS IQBAL KAUR ORS [ 2015 (7) TMI 376 - SUPREME COURT] held writ does not lie against a private person not discharging any public duty. Even on this principle writ is not maintainable. The writ petition stands dismissed reserving liberty to the petitioner to approach appropriate forum - petition dismissed.

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