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TMI Tax Updates - e-Newsletter
March 14, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Grant of Bail - non-payment of GST on consideration received - providing taxable services i.e., consultation services without raising invoices for the services rendered by them - Department is still conducting further investigation - this is not a fit case considered to grant anticipatory bail to the petitioners - HC
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Cancellation of registration of petitioner - allegation that the Registration has been obtained by means of fraud wilful misstatement or suppression of facts - adequate opportunity of hearing should have been granted to the writ petitioner - HC
Income Tax
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Deduction u/s 80IB(10) - Whether building was completed within the stipulated time? - When the completion / occupation certificate was handed over to the respondent-assessee, the same was produced before the Tribunal. We see no harm in the Tribunal taking cognizance of this certificate. In so far reference to Rules 29 and 30 of the Income Tax (Appellate Tribunal) Rules, 1963 is concerned, it is trite that rules and procedures are the handmaid of justice which are required to be applied to advance the cause of justice and not to frustrate the same. - HC
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Exemption u/s 11 - Charitable activity - running pharmacy store - income accrued there from was incidental to the dominant object of the respondent i.e., running of the hospital. - AO was not justified in treating the pharmacy store of the respondent as a separate business entity and to hold the surplus amount accrued there from as business income u/s 11(4A) - HC
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Income accrued in India - Permanent Establishment (PE) - the distribution income earned by the assessee cannot be taxed in India because Taj India does not constitute an agency Permanent Establishment under the terms of Article 5(4) of the DTAA - Order of ITAT confirmed - HC
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Validity of reopening of assessment u/s 147 - Had the revenue been aggrieved of the assessment order passed u/s 143(3) of the Act, it would had the recourse u/s 263 of the Act but the present short cut method cannot be allowed - HC
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Penalty levied u/s 105(a) of the Securities Transaction Tax (STT) (Finance (no.2) Act, 2004)- Though, as observed by the Supreme Court, the expression ‘penalty’ is a word of wide significance, but in substance penalty is in the nature of punishment. Therefore, before imposing penalty the Assessing Officer must come to the conclusion that there was deliberate defiance of the law or wilful contravention of the law by the assessee. - HC
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Assessment of partnership firm as AOP - compliance with the provisions of Section 184 - even though, in a registered partnership firm though names of five partners appear yet, in fact, there are nine partners - Provisions of section 184 do not apply - HC
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Undisclosed income from transaction of used empty bottles belonged to the Appellant firm - On the basis of the trial balance sheet seized during the search operation, the tribunal has recorded a finding that names of all nine partners including the five partners of the assessee firm appear therein, which goes to prove beyond any shadow of doubt that assessee firm has been indulging in two types of business in the same line and parallel business was being carried out clandestinely with the active participation of four other persons. - HC
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Exemption u/s 11 - Corpus donation receipt - the donations/voluntary contributions received by the appellant society are outside the taxations, even for the period prior to its registration u/sec. 12AA. - the donations/voluntary contributions received by the appellant society are of Corpus and Capital nature, same are to be treated as exempt from tax liability - AT
Customs
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Customs Cargo Service Provider (CCSP) - even by any stretch of imagination, HCCAR 2009 in respect of cost recovery charges is made applicable retrospectively, even than cost recovery charges cannot be recovered in terms of rule 5(2) read with Rule 6(o) unless separate officer is posted. Therefore, under any circumstances, in the facts of the present case, the demand of cost recovery charges is not sustainable. - AT
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Amendment of Shipping bills - it is at that time when the department has raised the demand of Anti Dumping Duty, the Appellant proposed to clear the goods under Advance licence, therefore firstly there is no delay in making request for amendment. Secondly no time limit has been prescribed under section 149 for such amendment. - AT
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Diamond of mixed origin - Prohibited item or not - The fact of KPC Certificates which holds that the goods were KPCC Compliant and the aforesaid documents unequivocally proves that the diamonds were procured by CD jewels before 17.11.2010. Unless and until such procurement was in process, there would not have been any KP certification and even the certificates show the buyer of goods as CD Jewels. - Consequentially the impugned goods cannot be termed as prohibited goods and will not fall into the category of smuggled goods. - AT
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Liability of carrier / shipper - Short landing of goods - evasion of Customs Duty - ‘Shipper’s Load Stow and Count’ is the term seen in the description of the Bill of Lading for the shipment. This term absolves steamer agent/carrier of any claim relating to damaged or missing cargo etc. - AT
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Import of Crude Palm Oil, meant for use in manufacture of soap - Violation of import condition - diversion of goods to open market instead of using the same for the given purpose - levy of penalty confirmed - where the act of Noticees is separately and distinctly liable for penal consequences, the co-Noticee are not to automatically get penalty set aside on the ground that the case of main Noticee has been settled by the Settlement Commission. - AT
IBC
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CIRP Process - apprehension is that "Telecom Licenses" and grant of "Spectrum" may be terminated during the 'Moratorium' Period because the Debtor Company had defaulted in payment of annual installments - admittedly the License/Spectrum is an asset of State over which the Corporate Debtor has no right of ownership, therefore, up to this extent the argument of the Government is hereby accepted. - But interruption in the CIRP proceedings not allowed - Tri
Central Excise
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CENVAT credit of CVD paid - even though as per the final assessment there was excess payment of CVD which was otherwise not payable, the Cenvat Credit on the said excess paid CVD cannot be denied. - AT
VAT
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Reversal of input tax credit (ITC) - A plain reading of the section 19(2)(v) as it stood during the period in dispute and thereafter shows that it applies only to the sale of the goods as such. In other words, intention was to restrict the credit only in the case of dealers who were purchasing goods at higher rate of tax and accumulating credit and selling final product under interstate sale at a lower rate of tax - Section 19(2)(v) was never intended apply to a manufacturer as the input tax credit availed by a manufacturer under section 19(1) of TNVAT Act, 2006 was allowed on such input used in the manufacture or process of goods in the State. - HC
Case Laws:
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GST
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2020 (3) TMI 513
Grant of Bail - non-payment of GST on consideration received - providing taxable services i.e., consultation services without raising invoices for the services rendered by them - HELD THAT:- In view of the fact that the Department is still conducting further investigation with regard to the offence committed by TEPL, in which the petitioners are Directors and that there is specific allegation that TEPL is providing taxable services without raising invoices for the services rendered by them to the various service recipients and is not paying appropriate GST on the consideration received towards provision of taxable services, resulting in loss of ₹ 11,80,95,716/- to the Government exchequer, this is not a fit case considered to grant anticipatory bail to the petitioners and that the prayer for grant of anticipatory bail is rejected. Petition dismissed.
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2020 (3) TMI 512
Profiteering - method adopted for computation of profiteered amount - HELD THAT:- On 18.02.2020, we had dealt with another order passed by the National Anti-Profiteering Authority-Respondent No.2 in relation to the same Petitioner but regarding different goods, namely sanitary napkins. The order impugned in the present case proceeds on the same basis for the purpose of computing the profiteered amount. Prima Facie, we are satisfied that the method adopted for computation of profiteered amount requires consideration. Accordingly, till the next date, we stay the operation of the impugned order. We also restrain the Respondents from initiating any penalty proceedings against the Petitioner. List on 24.09.2020 along with W.P.(C) 1780/2019.
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2020 (3) TMI 511
Cancellation of registration of petitioner - registration has been cancelled on the allegation that the Registration has been obtained by means of fraud wilful misstatement or suppression of facts - writ petitioner could not respond to the show cause notice, but later on produced letter, stating reasons for not responding alongwith the counter affidavit - HELD THAT:- When the writ petitioner s registration is sought to be cancelled, we are of the view that adequate opportunity of hearing should have been granted to the writ petitioner. For such purpose, we dispose of the writ petition with a direction upon the respondent no. 3, namely, Assistant Commissioner, Commercial Tax, Sector-3, Kanpur, to allow the writ petitioner an opportunity of hearing and decide the issue afresh, after considering the writ petitioner s reply which is already on record. The order of cancellation of registration dated 1st December, 2018, is liable to be set aside - Petition disposed off.
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Income Tax
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2020 (3) TMI 510
Determination of additional income - notional sales - value of the unaccounted purchases made by the assessee - HELD THAT:- Learned counsel for the petitioner, on instructions issued by the Department of Revenue, Ministry of Finance vide F.No.390/Misc./116/20l7-JC dated 22.08.2019, seeks permission to withdraw this special leave petition along with pending applications therein due to low tax effect. Permission granted, subject to just exceptions. The special leave petition and pending applications are dismissed as withdrawn, leaving question(s) of law open.
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2020 (3) TMI 509
ALP determination - determination of ALP of the alleged international transactions involving the Petitioner and its AE have been made without affording the Petitioner an opportunity of being heard - HELD THAT:- Leave granted.
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2020 (3) TMI 508
Nature of property sold - Whether the property which is subject matter of the sale deed was an agricultural property? - HELD THAT:- We set aside the impugned order made by the ITAT and the order dated 28th October, 2013 made by the Commissioner (Appeals) as well, and restore the Assessee's appeal before the Commissioner (Appeals) for fresh adjudication on all grounds. We make it clear that all contentions of all parties are left open to be adjudicated by the Commissioner (Appeals) in accordance with law and on their own merits. The substantial question of law framed in this appeal is not answered. Instead, the same is left for the determination of the Commissioner (Appeals) alongwith other two grounds which had in fact been raised before the Commissioner (Appeals) i.e. ground Nos.1 and 2.
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2020 (3) TMI 507
A ddition u/s 14A - computation of income of the Respondent assessee in terms of Section 44 - HELD THAT:- For computing the profits and gains of the business of insurance company, the AO had to resort to Section 44 and the prescribed rules, and could not have applied Section 28 to 43B, since the same were excluded from the purview of Section 44. This necessarily includes the exception provision enshrined under Section 14A of the Act. Therefore, in our view, the AO could not have travelled beyond Section 44 in the first schedule of the Act. Besides, the tribunal has also invoked the rule of consistency since the same view of the Tribunal has prevailed in respect of the earlier assessment years i.e. 2000-01, 2001-02 and 2005-06. No merit in the submission of Mr. Sharma that the Tribunal should have remanded back the matter to the Assessing Officer for computation of income of the Respondent-assessee in terms of first schedule of the Act, since that was not even a ground urged by the Revenue before the Tribunal. At this stage, it is too late in the day for the Revenue to argue that notwithstanding the grounds urged to challenge the order of the CIT (A), the Tribunal should have ventured into examining the merits of the computation of income of the Respondent assessee in terms of Section 44 read with the first schedule of the Act. No doubt, the Tribunal is a final factfinding body. However, when the Revenue confined its challenge only in respect of the applicability of Section 14A, we cannot find fault in the impugned order, on the basis of submissions not advanced before the Tribunal.
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2020 (3) TMI 506
Deduction u/s 80IB(10) - Whether building was completed within the stipulated time? - HELD THAT:- Tribunal noted that respondent-assessee had furnished the commencement certificate issued by the Bombay Municipal Corporation dated 10.09.2007 and, occupation certificate issued by the Municipal Corporation of Greater Mumbai dated 26.02.2013, besides other documents which clearly shows that there were approvals which cover full occupation / permission for all the blocks of the building project. In view of the above facts, Tribunal vide the order dated 03.11.2016, accepted the contention of the respondent-assessee that the building was completed on 31.03.2013 and occupation in respect of all the blocks of the project were obtained within the stipulated time limit on 31.03.2013. There being no violation of any of the conditions mentioned in Section 80IB(10)of the Act, the above claim of the respondent-assessee was allowed by the Tribunal. When the completion / occupation certificate was handed over to the respondent-assessee, the same was produced before the Tribunal. We see no harm in the Tribunal taking cognizance of this certificate. In so far reference to Rules 29 and 30 of the Income Tax (Appellate Tribunal) Rules, 1963 is concerned, it is trite that rules and procedures are the handmaid of justice which are required to be applied to advance the cause of justice and not to frustrate the same. Conclusion reached by the Tribunal that the building was completed within the stipulated time on 31.03.2013 is a finding of fact. Revenue has not questioned that this finding is incorrect or has not questioned the veracity of the completion / occupation certificate produced before the Tribunal. If that be so than it is merely an objection on procedure - No substantial question of law.
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2020 (3) TMI 505
Exemption u/s 11 - Charitable activity - running pharmacy store in the hospital and was selling drugs and medicines to the patients through this pharmacy store - HELD THAT:- Identical questions have been answered by this Court in favour of the assessee and against the revenue vide order passed in Pr. Commissioner of Income Tax (Exemption) vs. National Health and Education Society [2020 (3) TMI 178 - BOMBAY HIGH COURT] as held pharmacy store of the respondent was ancillary to the main object of running the hospital. Therefore, income accrued there from was incidental to the dominant object of the respondent i.e., running of the hospital. Thus, the assessing officer was not justified in treating the pharmacy store of the respondent as a separate business entity and to hold the surplus amount accrued there from as business income under Section 11(4A) of the Act. - Decided in favour of assessee.
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2020 (3) TMI 504
Capital gain u/s 45 - transfer of capital asset u/s 2(47) - whether assessee have not acquired any right to receive income under the JDA? - HELD THAT:- In the light of the ratio laid down in Balbir Singh Maini's case [ 2017 (10) TMI 323 - SUPREME COURT] as affirmed in the Judgment in Seshasayee Steels' case [ 2019 (12) TMI 702 - SUPREME COURT] the questions as to the transfer exigible to tax with reference to Section 2[47][v] of the Income Tax Act, 1961 read with Section 53-A of the Transfer of Property Act, 1882, is remanded to the Assessing Officer for fresh consideration and adjudication and the Assessing Officer shall complete the said exercise in accordance with law as expeditiously as possible.
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2020 (3) TMI 503
Unexplained investment for construction - construction of factory building at Noida - HELD THAT:- Today again learned counsel for the Revenue states that record is not available. He is not in a position to deny that in such a case the addition would have to be made for the period in which construction was carried out and could not be totaled at in the last year. Learned counsel for the appellant states that the appellant has certain material which may enable the authorities below to decide this issue. In these circumstances, the appeal is allowed. The impugned order qua addition is set aside and matter is remanded back to the assessing officer to work out the tax liability as per law after considering the material which the appellant may produce.
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2020 (3) TMI 502
Deduction under Section 80IB - as per revenue assessee is not the owner of the property and had executed a contract with the purchasers of undivided share in the land to construct the building - Tribunal held that the completion certificate is not necessary in view of the letter dated 14.12.2009, issued by the Assistant Commissioner, Corporation, when the assessee itself had stated that the project is 'under construction in the form submitted to the Assessing Officer- HELD THAT:- As decided in own case [2014 (11) TMI 610 - MADRAS HIGH COURT] which came to be decided in favour of the Assessee, holding that for the purpose of considering deduction, it is not necessary that the Assessee, engaged in developing and construction of housing project and the only point is that he should be the owner of the property. ITAT, on facts also found that the Assessee has obtained approvals of the plan for the proposed projects and also planned the entire project regarding number of floors, number of apartments in each floor, cost of each apartment based on the square foot area of the apartment and it was done as a composite project at the proposed site in S.Nos.486/1 and 482. In the light of the factual findings coupled with the fact that the Assessee's own case, on the earlier occasions in was allowed and though a ground was raised before the ITAT as to the location of the plots in two different streets, but no arguments have been advanced, this Court is of the considered view that there are no substantial questions of law arise for consideration in this appeal. - Decided against revenue.
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2020 (3) TMI 501
Exemption u/s 11 - Application for registration under Section 12A denied - registration was applied for almost after 34 years for coming into existence; there was no dissolution clause in the Memorandum of Association and the assessee-society had huge corpus as compared to the amount used - Tribunal allowed registration - HELD THAT:- It is evident that the assessee society is engaged in maintenance of Mandir. There is no allegation that the Corpus fund or the surplus accumulated funds are being used for the purpose other than the aims and objects of the assessee society. The corpus as well as accumulated surplus as is claimed is being used for maintenance and development of Shree Durga Mata Mandir which is a religious place visited by the devotees and open to all Learned counsel for the appellant is not able to dispute that there is nothing on record to show that the assessee was not working for achieving its aims and objects or that the accumulated funds were used for purposes other than aims and objects. He has not been able to show that the findings recorded by the Tribunal quoted above are erroneous much less perverse. In such circumstances, no question of law much less substantial question of law arises
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2020 (3) TMI 500
Income accrued in India - Permanent Establishment under the terms of Article 5(4) of the DTAA - assessee had given distribution rights to Taj India for promoting and distributing TV channel in India on principal to principal basis - Eligible reason why Taj India should be treated as agency Permanent Establishment for the purpose of distribution income as per Article 5(4) of the DTAA - HELD THAT:- Tribunal noted that the first appellate authority, after due deliberation, had returned a finding of fact that Taj India was not acting as agent of the assessee but it had obtained the right of distribution of the channel for itself and subsequently, it had entered into contracts with other parties in its own name in which the assessee was not a party. The distribution of the revenue between the assessee and Taj India was in the ratio of 60:40 and the entire relationship was on principal to principal basis. Tribunal noted that this finding by the first appellate authority is corroborated by the terms and conditions of the distribution agreement as well as the sub-distributor agreement. After examining the requirement of Article 5 of the DTAA to constitute agency Permanent Establishment, Tribunal as a matter of fact held that none of the conditions as stipulated in Article 5(4) was applicable because Taj India was acting independently qua its distribution rights and the entire agreement was on principal to principal basis. Therefore, it was held that the distribution income earned by the assessee cannot be taxed in India because Taj India does not constitute an agency Permanent Establishment under the terms of Article 5(4) of the DTAA. The order of the first appellate authority was accordingly upheld. On thorough consideration of the matter, we are in agreement with the views expressed by the Tribunal. In fact, there is concurrent finding of fact between both the appellate authorities on this point. Learned standing counsel Revenue has not been able to show any perversity in such finding returned by the appellate authorities. In the absence thereof, we see no good reason to interfere with the finding of the Tribunal affirming the order of the first appellate authority.
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2020 (3) TMI 499
Validity of reopening of assessment u/s 147 - Whether primary condition of Section 147 i.e. 'reason to believe' did not exist and it was merely a case of change of opinion at best? - HELD THAT:- In the present case we find that the powers under Section 147 of the Act have been now defined without any equivocation and without going to deep into it it is safe to say that a mere change of opinion cannot be considered within the ambit of phrase reason to believe. Petitioner has tried to take us to the merits of the case and to show how the deduction could not have been claimed but we are unable to into the merits of the case because she has not been able to deny that in the original order under Section 143(3) of the Act, the issue of deduction did arise and after discussing the same a particular finding was given. Had the revenue been aggrieved of the assessment order passed under Section 143(3) of the Act, it would had the recourse under Section 263 of the Act but the present short cut method cannot be allowed. Contention of the appellant is that the phrase 'conceptual difference' between power to review and power to reassess, some how changes the law. This argument is flawed because their Lordships' have merely reiterated that invocation of Section 147 of the Act can only be on the basis of tangible material which has come to the knowledge of the assessing officer after the assessment. The question of law does not arise.
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2020 (3) TMI 498
Penalty levied u/s 105(a) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004 - failure of the assessee to discharge its statutory liability to collect the STT at prescribed rates under section 100(4) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004 - HELD THAT:- A careful and conjoint reading of the two provisions i.e. Sections 105 and 108 would therefore make it clear that imposition of penalty is to be proceeded separately as a separate proceeding. Merely because in the assessment order the AO comes to a conclusion that the assessee had failed to collect the STT or had failed to pay such STT to the credit of the Central Government, it would not ipso-facto lead to imposition of penalty. Once such a conclusion is reached, the assessee is required to be provided reasonable opportunity of hearing and during the hearing if the assessee can prove that there was reasonable cause for such failure, no penalty shall be imposed. Though, as observed by the Supreme Court, the expression penalty is a word of wide significance, but in substance penalty is in the nature of punishment. Therefore, before imposing penalty the Assessing Officer must come to the conclusion that there was deliberate defiance of the law or wilful contravention of the law by the assessee. Reverting back to the facts of the present case, we find the Assessing Officer had passed a composite assessment order dated 30th March, 2011. In appellate proceedings, Tribunal had already held the respondent to be not liable for any alleged short deduction of STT which finding we have affirmed. Thus in the facts and circumstances of the case and having regard to the discussions made above, we are of the firm view that the Tribunal was justified in deleting the penalty imposed on the respondent by the Assessing Officer.
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2020 (3) TMI 497
Validity of assessment passed u/s 158BD r.w.s. 143(3) - absence of valid satisfaction recorded by the assessing officer after application of his mind on the materials gathered in the course of search of partner of the appellant firm - undisclosed income from transaction of used empty bottles belonged to the Appellant firm - HELD THAT:- From perusal of the aforesaid satisfaction note, it is evident that the satisfaction note has been recorded in respect of the appellant and the profit of G.T.Krishna Murthy as well as profit of M/s Sree Venkatesha Bottles has also been worked out. Therefore, we are satisfied that the requirement as laid down by the decision of the Supreme Court in case of Calcutta Knitwears [ 2014 (4) TMI 33 - SUPREME COURT] as well as the Circular dated 31.12.2015 issued by Central Board of Direct Taxes has been complied with. In result, substantial question of law No.(i) framed by this court is answered in favour of the revenue and against the assessee. Undisclosed income from transaction of used empty bottles belonged to the Appellant firm - Tribunal justification in surmising that the document found in the partner s premises refers to an entity with 9 shares belonged to the appellant firm which has only 5 partners to justify the impugned addition - demand notice under Section 154 of the Act amending the order of assessment under Section 143(3) read with Section 158BD being not in the name of the appellant - HELD THAT: From the perusal of the statement of G.T.Krishna Murthy, it is evident that he is a partner in M/s Venkateshwara Bottles and he has affirmed that he has a share of 9% out of 105%. From perusal of the statement of aforesaid G.T.Krishna Murthy, it is also evident that when he was confronted with the document seized during the course of search, he admitted that he is not aware as to why the shares are given to Mallikarjuna, H.V.S., Vijay Kumar Shetty and Kareem Sab. The aforesaid witness in his evidence has not stated that there is another partnership firm with nine partners, which deals in same business. From the trial balance sheets of the appellant s firm, it is evident that the aforesaid persons names have been reflected and their percentage of profit has also been shown. On the basis of the trial balance sheet seized during the search operation, the tribunal has recorded a finding that names of all nine partners including the five partners of the assessee firm appear therein, which goes to prove beyond any shadow of doubt that assessee firm has been indulging in two types of business in the same line and parallel business was being carried out clandestinely with the active participation of four other persons. The aforesaid finding is a finding of fact which has been recorded by the Income Tax Appellate Tribunal on the basis of meticulous appreciation of material on record. Therefore, the substantial question of law Nos.(ii), (iii) and (viii) are answered against the assessee and in favour of revenue. When the appellant having complied with the provisions of Section 184 can the appellant be assessed in the status of AOP - HELD THAT:- Section 184 of the Act deals with assessment as a firm. Section 184(1) provides that a firm shall be assessed as a firm for the purposes of this Act if the partnership is evidenced by an instrument and the individual shares of the partners are specified in that instrument. In the instant case, even though, in a registered partnership firm though names of five partners appear yet, in fact, there are nine partners. Therefore, in the fact situation of the case, the provisions of Section 184 of the Act do not apply. In result, the substantial question of law No.(iv) is answered against the assessee. Levy of interest under Section 158BFA(1) by passing an order under Section 154 - This court has upheld the validity of the order of assessment passed under Section 158BD read with Section143(3) of the Act, we hold that Assessing Officer was justified in levying interest under Section 158BFA(1) of the Act. Accordingly, substantial question of law No.(vi) is answered in the affirmative and against the assessee.
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2020 (3) TMI 496
Exemption u/s 11 - Corpus donation receipt - AO has noticed that assessee has received contributions but not submitted 12A certificate therefore the amounts received by the assessee as income as per section 2(24)(iia) of the Act and not exempt u/sec. 11(1)(d) - HELD THAT:- We find from the assessment order that when the assessee has submitted that the donations received are voluntarily for a specific purpose, then the Assessing Officer ought to have called the assessee for submission of details of donations received, but the Assessing Officer without examining the nature of the donations, simply rejected the explanation of the assessee and added to the total income of the assessee, in our opinion, the Assessing Officer is not correct in adding the income. That apart once the assessee has submitted that the donations received voluntarily for specific purpose, it is the duty of the Assessing Officer to examine who is the person donated and what purpose he has donated all the details has to be examined and thereafter has to decide the donations are in the nature of corpus donations or income of the assessee, without doing simply rejected the explanation. However, on appeal ld. CIT(A) by considering the explanation of the assessee and by following the decision of the Hon'ble Bombay High Court in the case of R.B. Shriram Religious and Charitable Trust [ 1987 (1) TMI 13 - BOMBAY HIGH COURT] and also the decision of the ITAT, Chennai Bench in the case of Indian Society of Anaesthesiologists [ 2014 (5) TMI 1031 - ITAT CHENNAI] and also Vokkaligara Sangha [ 2015 (8) TMI 920 - ITAT BANGALORE] gave a finding that the voluntary contributions received by the assessee for a specific purpose cannot be regarded as income u/sec. 2(24)(iia) A s the appellant got registered u/s.12AA of the Act and as the donations/voluntary contributions received by the appellant society are of Corpus and Capital nature, same are to be treated as exempt from tax liability, as the principles relating to judicial discipline assume significance and the priority. Accordingly, following the ratios of the judicial pronouncements mentioned supra, it is treated that the donations/voluntary contributions received by the appellant society are outside the taxations, even for the period prior to its registration u/sec. 12AA. Hence, the Assessing Officer is directed to delete the disallowance/addition - Decided in favour of assessee.
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2020 (3) TMI 495
Validity of proceedings u/s.153A - addition as unaccounted profit in respect of land transactions - whether in respect of unabated assessments (no pending proceedings) as on the date of search, the AO could frame the search assessment u/s 153A of the Act by making additions without any incriminating materials found during the course of search? - HELD THAT:- As decided in VATIKA LANDBASE PVT. LTD. [ 2016 (2) TMI 835 - DELHI HIGH COURT] addition made merely on the basis of unsigned and undated seized document has been held to be unsustainable in the eye of law. Thus, the proposition made by the revenue towards making addition on the basis of the figures mentioned on the said draft deed, thus, cannot be considered to be valid evidence in the absence of any enquiry made by the authorities which ought to have done from the parties involved. Suppressed purchase consideration -There was no material available with the revenue suggesting that there was any payment of cash made by the assessee to the concerned parties as discussed above. It is also pertinent to note that the AO during the assessment proceedings has not verified the veracity of the impugned draft deed from the parties namely Laxmanji Son, Bhagvatiji and Vikramji. As such the land in dispute was purchased by the assessee from the other parties namely Shri Sanjay Jayntilal Patel, Dhirajbhai Bharatkumar Patel and Urmilbhai Gandhibhai Patel. Thus in our considered view there cannot be any addition based on such draft deed in the hands of the assessee in the given facts and circumstances. In view of the above, we are not convinced with the finding of the authorities below. Accordingly, we set aside the finding of the learned CIT (A) and direct the AO to the addition made by him. Hence the ground of appeal of the assessee is allowed. Unexplained investment in jewellery - Assessee has declared sufficient income in her income tax return for the year under consideration. Therefore, the amount of investment in the jewellery, being a meager amount, can be easily explained from the disclosed income of the assessee. Accordingly, we are of the view that no separate addition can be made on account of the investment in the impugned jewellery in the given facts of circumstances. Accordingly, we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
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Customs
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2020 (3) TMI 494
Suspension of Customs Cargo Service Provider (CCSP) services - Allegation is that the CCSP have not paid the cost recovery charges for the Customs staff posted at their private jetty, during the period 17.03.2009 to 31.03.2015 - contravention of provisions/conditions of the Notification No. 09/2002 dated 23.04.2002 read with Regulation 6(1)(o) of HCCAR, 2009 - levy of penalty in terms of Regulation 12 (8) of HCCAR, 2009. Whether the appellant is required to pay cost recovery charges in terms of HCCAR 2009 or payment of MOT charges made by the appellant is correct? HELD THAT:- In the present case, the fact is not in dispute that the appellant was allowed to pay MOT charges as per Customs (Fee for Rendering Services of /Customs officers) Regulations, 1998 till separate posting of customs officials has been made for cost recovery basis by the office of the Assistant Commissioner, Customs Bhuj Division. This clearly shows that there was no posting of separate staff for the appellant s Jetty. This is because of this reason, the department accepting the fact that no separate posting was made, the appellant was allowed to pay MOT charges. From regulation 5 and 6 of HCCAR 2009, it is clearly provided that the cost of Customs Officer shall be borne by CCSP only when Custom Officer is posted for the Jetty of the appellant. In the present case, there is no evidence adduced by the department that any of separate officer was posted by an order of competent authority for supervising the operations at appellant s Jetty. Therefore, it is not under dispute as per the record that no separate officer was posted for the work at appellant s Jetty. Therefore Rule 5(2) and Rule 6(o) is not applicable in case of the appellant. Effect of CCAR, retrospective effect or prospective effect? - HELD THAT:- On careful reading of Rule 4 which gives retrospective effect, it is found that the said provision is only to regularize the appointment of Customs Cargo service providers which have been given license prior to issue of this Regulation HCCAR 2009. Therefore, this regulation cannot be applied retrospectively for cost recovery charges, particularly when no separate officer was posted. Moreover, even by any stretch of imagination, HCCAR 2009 in respect of cost recovery charges is made applicable retrospectively, even than cost recovery charges cannot be recovered in terms of rule 5(2) read with Rule 6(o) unless separate officer is posted. Therefore, under any circumstances, in the facts of the present case, the demand of cost recovery charges is not sustainable. In an identical case, in the case of GMR Hyderabad International Airport Limited [ 2014 (2) TMI 702 - ANDHRA PRADESH HIGH COURT ], the Hon ble Andhra Pradesh High Court dealing with Handling of Cargo Customs Areas Regulation, 2009, had not only set-aside the demand of Cost Recovery charges but even held that Regulation 5(2) of Regulation 2009 is illegal. The demand of Cost Recovery charges will not sustain - appeal allowed - decided in favor of appellant.
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2020 (3) TMI 493
Amendment of Shipping bills - appellant requested for amendment and reassessment of their Bill of Entry under section 149 and 17 of the Customs Act, 1962 and allow clearances of the imported goods under Advance licence - revenue neutrality - HELD THAT:- As per the facts of this case, there was no demand of ADD by the department at the time of filing of Bill of entry, therefore neither the department nor the Appellant was aware of levy of ADD. Had the ADD demanded at the time of filing of Bill of Entry, the Appellant could have cleared the goods under Advance licence which was very much existing on the date of filing of Bill of Entry. From the plain reading of section 149, the only requirement for amendment is that the document related to the amendment should be available on record at the relevant time. In the present case on the date of filing of bill of entry the Advance licence was very much in possession of the Appellant, therefore the criteria for amending the Bill of Entry u/s 149 stands fulfilled. The contention of the lower authority is that the proposal for option of clearances under Advance licence was made after 15 days, therefore the same is afterthought. This contention of Revenue cannot be accepted for the reason that it is at that time when the department has raised the demand of Anti Dumping Duty, the Appellant proposed to clear the goods under Advance licence, therefore firstly there is no delay in making request for amendment. Secondly no time limit has been prescribed under section 149 for such amendment. This is the fit case for allowing the amendment requested by the Appellant under section 149 - Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 492
Smuggling - Diamond of mixed origin - Prohibited item or not - allegation that the diamonds were from Marange mines of Zimbabwe and were not permitted to be imported in India as the KP Certificates accompanying the consignments were not issued in accordance with the restrictions imposed by the KP Committee from time to time - Confiscation - quantum of redemption fine and penalties. HELD THAT:- Though the revenue had disputed the various import documents and the KP Monitor Certificates, however the adjudicating authority upheld the validity of records and documents. He however held that since the diamonds has been procured by M/s C.D. Jewels from Zimbabwe after 17.11.2010, hence the goods are prohibited goods and thus liable for confiscation and not allowed as per the Office Memorandum dt. 19.08.2011 and subsequent OM issued by the Ministry of Commerce. We observe that none of the KPC Certification has been disputed by the adjudicating authority. From the records it is appearing that M/s C.D Jewels, UAE had placed orders on MBADA Mines, Zimbabwe for supply of rough diamonds prior to 17.11.2010 and in pursuance of same MBADA obtained KPC No. ZW 000114 dt. 12.11.2010. The KPC was duly issued by the Zimbabwean Authorities for diamond in question in support of C.D. Jewels. There is no reference of any date as to from which the diamonds from Marange area are to be allowed. It does not contain the date of excavation, sourcing or purchase date of diamonds by any intermediary or the first buyer from Marange. It simply states that if the goods are accompanied by KP Monitor certificate the goods of Marnage Origin are to be permitted for exports. The most important aspect to be observed that the intention of KPC Certification and the office memorandum issued by the Ministry of the commerce was to stop the trade of conflicting diamonds - Once the diamonds were KPC Certified and such certificates were not repudiated by the KPC organisation, in that case the goods cannot be prohibited for trade. Consequentially the impugned goods cannot be termed as prohibited goods and will not fall into the category of smuggled goods. The fact of KPC Certificates which holds that the goods were KPCC Compliant and the aforesaid documents unequivocally proves that the diamonds were procured by CD jewels before 17.11.2010. Unless and until such procurement was in process, there would not have been any KP certification and even the certificates show the buyer of goods as CD Jewels. Thus when the contracting parties and the authorities concerned with the certification process conclude that the procurement was prior to 17.11.2010, the same cannot be questioned as all these documents stands accepted by the adjudicating authority as far as their veracity is concerned. In such case only on the ground that the invoice was issued to M/s CD jewels after 17.11.2010, the same cannot be a ground to hold that the diamonds were banned from importation. In the present case though the KP certificates describes the diamonds as of mixed origin but since the diamonds are accompanied by required KP certificates, there is no reason to hold the diamonds as having been imported in contravention of import ban - As far as the authenticities of the documents are held to be undisputed by the adjudicating authority, the facts stated therein are also to be accepted. The Appellant in their appeal has also given detailed reply to the objections of the investigating authority regarding transport of goods and invoice and the same stands accepted by the adjudicating authority. In view of such facts, the impugned goods being held to be KPC Compliant and certified to be procured by M/S C.D. Jewels before 17.11.2010 cannot be confiscated - For the same reason the penalties imposed upon M/s SRDSIL and Shri Asit Mehta are also not sustainable - Since the confiscation of goods and penalties itself is held to be not sustainable, the appeal filed by the revenue for enhancement of redemption fine against release of impugned goods and penalties merits rejection. Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 491
Liability of carrier / shipper - import or goods - short landing of goods - evasion of Customs Duty - HELD THAT:- In the impugned Bill of Lading, the term Shippers Load Stow Count is mentioned in the description. As long as the seal has not been altered or tampered with, the carrier cannot be held liable for the shortage because the carrier was not present at the time of the packing of the container and carrier does not know what the shipper loaded, stowed or counted. Bill of Lading shows details that was provided by the shipper. Shipper s Load Stow and Count is the term seen in the description of the Bill of Lading for the shipment. This term absolves steamer agent/carrier of any claim relating to damaged or missing cargo etc. - The appellant has also submitted documents like enquiry report etc. which shows that they were not responsible for any shortage etc. Moreover, the department also could not produce any proof against the Steamer Agent and imposed penalty mechanically. Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 490
Immunity from penalty - co-noticee - Import of Crude Palm Oil, meant for use in manufacture of soap - Violation of import condition - diversion of goods to open market instead of using the same for the given purpose - benefit of concessional rate of duty denied - Sl. No. 30 of Notification no. 21/2002-Cus dated 1.3.2002 - Application to Settlement Commission - principles of natural justice. Immunity to the appellants due to the order of Settlement Commissioner in favour of the main noticee - HELD THAT:- The act committed by three of the present appellants is an act in addition to that as were committed by the remaining Noticees the appellants cannot be entitled for the blanket immunity. Otherwise also the immunity from prosecution has not been granted even to Mr. Lalit Goyal, the Proprietor of main Noticee M/s. Pioneer Soap and Chemicals. The penalty has simultaneously been imposed upon the remaining Noticees/ applicants of 127 B Customs Act. In addition, the Settlement Commissioner has granted liberty to the Revenue to take the appropriate action against the remaining Noticees i.e. the appellants herein. Hence, the benefit of KVS Scheme cannot suo moto be extended to the appellants. Reliance placed in the decision of Hon ble High Court of Gujarat in the case of M/S. SHREE NAKLANK LIMITED VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH, AHMEDABAD [ 2018 (11) TMI 81 - GUJARAT HIGH COURT] . It was held that it is the assessee who applies for settlement alone whose application would be considered and either granted or rejected in the terms of settlement, fulfilment of such terms by the applicant and the resultant grant of immunity would be only in relation to assessee, who applied for the settlement. There is no warrant under the statutory provision that upon one assessee applying for settlement, such settlement being granted and terms of settlement being fulfilled. Any other assessee even if he hopes to be co-noticee can avoid further adjudication of this case. It was clarified that Department can still proceed against co noticee who was facing only notice on penalty. Jurisdiction of Central Commissioner - Competent officer to issue invoices - HELD THAT:- All details indicated the quantity of goods to be imported the applicable notification the port of importation and giving an undertaking have to be furnished along with application before the Assistant Commissioner / Deputy Commissioner of excise only as is required under Rule 4 of Customs Rule. It is thereafter that the Assistant Commissioner or Deputy Commissioner of Customs can allow the benefit of exemption notification on the basis of the Certificate to be given by Assistant Commissioner / Deputy Commissioner Excise as stand clarified from Rule 5 of Customs Rule. Rule 7 thereof in addition require the importer to maintain the simple account of imported goods and consumption thereof for the information purpose for use as and when required by the officer of Central Excise. These Rules makes it abundantly clear that Commissioner Central Excise is a competent officer to issue invoices. Personal hearing / opportunity of cross examination - HELD THAT:- It is quite apparent from the order under challenge that despite ample effective opportunities of personal hearing being given, the appellants have not properly put forth their defence. They had rather adopted a strategy of seeking adjournments and therefore were noticed absolutely non cooperative by the adjudicating authority below. It is thereafter that the matter was decided based on the facts on record and the written reply received by the respective noticee. These observations are sufficient to hold that there is no denial of opportunity of being heard. The grievance of violation of principle of natural justice on this account is therefore not sustainable. The plea of denial for cross examining the witnesses is concerned as already observed there was rather non cooperation on part of the appellant. Irrespective that cross examination is the key for fair trial so as to dug out the actual truth but the same cannot be claimed as a matter of right or as a statutory mandate specifically when appellant were not even keen to submit their defence. Hence, their grievance on this aspect is also hereby rejected. Merits of the case - HELD THAT:- There were reports proving that M/s. Pioneer Soap and Chemicals, the main noticee / noticee no. 1 have issued fake invoices in the name of fictitious firms, such as M/s. Ashtuosh Traders, noticee no. 7, M/s. Kamakhya, noticee no. 9, M/s. N.K. Enterprises, noticee no. 11 showing manufacture and clearances of the soap from CPO imported by them illegally for taking exemption under impugned notification and diverting the impugned CPO to noticee no. 2 to 4 without using the said imported goods in manufacture of soap i.e. for the declared intended use. This evidence proves that the various tankers which arrived at the factory of noticee no. 1 at different dates during the relevant period had transported some or the other quantity of CPO under respective GRs and form ST 31 of M/s. Genex Foods. This receipts and ST 3 returns are corroborating the statement of Shr. Harjinder Singh of M/s. H.G. Oil Carries against 3 of the appeals. Despite this evidence, the Director of M/s. Genex Foods Pvt. Ltd., Sh. Rohit Agarwal (one of the appellant) opted to not to appear for rebutting the said evidence but to sent a simple letter alleging the show cause notice to be illegal - The statements on record are in due corroboration of the documents which sufficiently establishes that appellants were knowingly dealing with CPO imported by M/s. Pioneer Soap and Chemicals in a clandestine and illegal manner, thereby making the said imported CPO liable for confiscation. It was observed that for transporting CPO to Delhi the bills of M/s. Venkuth Sales Corporation, Trinagar Delhi as well as of GRS of M/s. Jaspreet Road Lines of Punjabi Bagh, New Delhi were used and that of M/s. NC Traders, Mayur Vihar, Delhi were used. The investigation revealed that no such firm was found existing at the given address. Except that address of M/s. Jaspreet Road Lines were found to be that of M/s. HG Oil carriers. This finding again when read in light of Sh. Harinder Singh that GR 3 were handed over to him by Sh. Lalit Goyal, proprietor of M/s. Pioneer Soap and Chemical establishes the clear nexus between all the co-noticees for the alleged violation of the impugned notification including the appellant herein. There is no infirmity in the order under challenge when a penalty has been imposed upon three of the appellants herein under section 112 B of the Customs Act - order under challenge is therefore upheld - appeal dismissed - decided against appellant.
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Insolvency & Bankruptcy
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2020 (3) TMI 489
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of debt - existence of debt and dispute or not - HELD THAT:- It is evident from the contents of the petition that the Corporate Debtor has defaulted in the repayment of loan of the Bank. It is also observed that despite the service of demand notice dated 06.12.2018 (Annexure A/8) calling upon the Corporate Debtor to discharge in full its liabilities due within a period of 15 days from the date of receipt of the notice, the payment was not received by the Bank - the demand notice dated 06.12.2018 was sent by the Bank after the date of 19.11.2018 of the OTS proposal. Therefore, the OTS proposal is to be taken to be rejected by the Bank. Moreover, the issue involved is whether a default has occurred and pendency, if any, of OTS proposal would be irrelevant. Similarly, the contention of the Corporate Debtor that the market value of the mortgaged immovable properties is more than the outstanding loan is not a bar to the initiation of proceedings under Section 7 of the Code, when occurrence of default is proved. Thus, this petition deserves to be admitted as it is clear that both 'debt' and 'default' are proved beyond doubt here. The application filed in the prescribed Form No. I is found to be complete. Application admitted - moratorium declared.
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2020 (3) TMI 488
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debta nd default or not - pledge of dematerialized shares - HELD THAT:- The said is due on the Corporate Debtor and there is a default in making the payment towards the liability to the Petitioner. This fact is even not denied by the Corporate Debtor which is also evident from the documents including the various e-mails. The Corporate Debtor contended that the petitioner sold the pledged shares at a lower price and therefore, this petition is not maintainable because the petitioner who is the pawnee in this case is not in a position to redeliver the security pledged and thus cannot obtain a decree - the petitioner was not under an obligation to inform the Corporate Debtor before selling the shares pledged. Also, the pledged shares were all in DEMAT form and not in physical form - It is well settled principle by the judgments of various High Courts, that the pledged of dematerialized shares is not possible under the provisions of the Contract Act and the pledgement of the dematerialized shares are only governed by Depositors and Regulations (58) (1) to (6) made thereunder and hence section 176 of the Contract Act will not apply in the present matter. The contention of the Corporate Debtor cannot be relied upon and it cannot be denied that they are liable to pay to the petitioner the amounts due upon them and here it is pertinent to note that the Corporate Debtor time and again requested the petitioner for restructuring of the loan amount. Therefore, it can be said that there was an acknowledgement of the debt by the Corporate Debtor. This Adjudicating Authority, on perusal of the documents filed by the Creditor, is of the view that the Corporate Debtor defaulted in repaying the loan availed. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the petitioner/Financial Creditor as a major constituent for admission of a petition under section 7 of the I B Code. Therefore, the Application under sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby admits this Petition - Petition admitted - moratorium declared.
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2020 (3) TMI 487
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor has not produced any single documents to prove his part other than simply making submissions that the Corporate Debtor is in connivance with some dismissed employees - The Corporate Debtor also failed to prove that they have disputed the claims of the Operational Creditor earlier except in their reply to the demand notice served by the Operational Creditor. This led us to believe that the claim by the Corporate Debtor of a pre-existing dispute is a frivolous one and made only to evade the claims made by the Operational Creditor. Moreover, the corporate debtor other than simply making submission that statement showing the pending final amount due by both the parties relied upon by the Operational Creditor, is a fraudulent one , could not produce any documents or correspondence to prove that the sign off statement is not issued from their office. This bench cannot go with mere statements made by parties but decide only based on the record before us. Therefore, we have no choice to except to believe in what was submitted to us. The amount of debt claimed is ₹ 93,24,741.46/- which exceeds ₹ 1,00,000/- as per the requirement under section 4 of the I B Code 2016 and the application is within the purview of Section 9 of the I B Code, 2016 - It can be concluded that the instant Application is complete in all respects, therefore, deserves to be admitted. Application admitted - moratorium declared.
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2020 (3) TMI 486
CIRP Process - apprehension is that Telecom Licenses and grant of Spectrum may be terminated during the 'Moratorium' Period because the Debtor Company had defaulted in payment of annual installments - HELD THAT:- As a fundamental principle, if a property is in possession of the Corporate Debtor the same cannot be demanded back by the Owner/Lessor/DoT of the property as long as the same is in use and in possession of the Corporate Debtor/ Licensee. To this extent there should not be any controversy that since the intangible asset is used for business purpose by the Corporate Debtor, the provisions of Moratorium must apply. The Licensor/DoT can be prohibited from taking any step which may be prejudicial to the interest of the Licensee/Aircel. An exception to this general rule is that if an asset is in possession of the Corporate Debtor under contractual arrangement the same can be demanded back by the owner of the asset, refer Section 18(1)(f) of the Code. As far as the apprehension of cancellation of license by DoT is concerned, on examination we have noticed that there is a clause of Force Majure which prescribes that in addition to any act of God even by an act of State or direction from Statutory Authority the licensor shall not be entitled to terminate the license. Since the signing parties have duly agreed upon the terms and conditions, therefore, it shall be unfair on the part of the DoT to suspend the license at this juncture. This Bench is of the view that, admittedly the License/Spectrum is an asset of State over which the Corporate Debtor has no right of ownership, therefore, up to this extent the argument of the Government is hereby accepted. The relief sought by the Corporate Debtor is that due to issuance of Demand Notice by DoT an apprehension is that the same may be suspended. We hereby direct that the clauses of Moratorium are squarely applicable on this Corporate Insolvency Resolution Process Proceedings, hence need not be interrupted or hampered by any authority - As far as the Insolvency Proceedings are concerned, we are governed by the object set out in the 'Preamble' of the Insolvency Code wherein it is prescribed to maximize the assets of the Company as well as to protect the value so as to get good Resolution Plan for the revival of the debtor company. Application disposed off.
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2020 (3) TMI 485
Maintainability of Application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and default or not - HELD THAT:- The consideration under Section 7 of Insolvency and Bankruptcy Code, 2016 is whether the Financial Creditor can start Corporate Insolvency Resolution Process of the Corporate Debtor. The applicant has established that the loan amount was given and availed by the Corporate Debtor and there is an outstanding of ₹ 13.41 Crores due and payable by the Corporate Debtor and the Corporate Debtor has committed default in repayment of the amount. The debt and the default are proved. The application is admitted - moratorium is declared.
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Service Tax
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2020 (3) TMI 484
Nature of activity - process amounting to manufacture or not - sale or service? - job-work for the manufacture of Hand-pumps, who were sending them semi-finished hand-pumps for the purpose of galvanization. After galvanization, the galvanized hand-pumps were being returned to the principal manufacturer - credit availed on various inputs used for their own manufacture as also for galvanization on job-work basis, they were reversing the credit in respect of the goods so used for galvanization - benefit of N/N. 10/2006-CE. - suppression of facts or not - time limitation. Revenue entertained a view that galvanization undertaken by the appellant is not a manufacturing process and same amounts to providing Business Auxiliary Service to principal manufacturer and as such the appellant should have paid the service tax on the same. HELD THAT:- The appeal can be disposed on the point of limitation itself. Admittedly, the entire demand is beyond the normal period of limitation. It is also a fact that the appellants were disclosing the reversal of Cenvat credit in respect of the items used in the job work activity, in their monthly returns. This fact is sufficient enough to establish the bonafide of the assessee that they were entertaining bonafide belief that the galvanization amounts to manufacture and since hand-pumps were exempted, there is no requirement to pay any duty of excise also. In the absence of any other evidence to attribute any malafide on the appellant, the extended period is not available to revenue - Appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (3) TMI 483
CENVAT credit of CVD paid - excess payment of CVD - credit was availed in respect of CVD paid on imported raw-material namely copper Concentrates based on provisionally assessed bills of entry - SCN proposed to deny the cenvat on the ground that the credit on the bill of entry can be taken only if it is finally assessed and credit cannot be taken on provisionally assessed bill of entry - case of the department is that the correct value of the goods is the value which was finally assessed, therefore, the respondent were not entitle for the cenvat credit paid in excess on the basis of provisionally assessed bills of entry. HELD THAT:- The provisional assessment is provided under a statute i.e. under Section 18 of the Customs Act, 1962, therefore, the duty paid on the provisional assessment of bills of entry is also with authority of law. Therefore, it cannot be said that the payment made under provisionally assessed bills of entry is a deposit and not a duty. The provisionally assessed bills of entry is also valid document for availing the cenvat credit, for the reason that under Rule 9 of Cenvat Credit Rules only bill of entry is prescribed on the basis of which the payment of customs duty was made, therefore, bill of entry whether it is provisional of finally assessed, the Cenvat Credit is admissible. There is no bar in the law to restrict the Cenvat Credit on the CVD paid on the basis of provisionally assessed bills of entry. Therefore, merely because the Cenvat Credit was taken on provisionally assessed bills of entry, there is no reason to deny the Cenvat Credit. It is a settled law that even if any duty or excess duty paid which is otherwise not payable, and the recipient and Cenvat Credit cannot be disputed. It is settled in various decisions that even though certain amount of Excise duty/service tax not payable as per law but the manufacturer/service provider paid the duty /service tax, at the recipient and Cenvat Credit cannot be denied only on the ground that the same was not payable by the Manufacturer/Service provider - On the same analogy in the present case also even though as per the final assessment there was excess payment of CVD which was otherwise not payable, the Cenvat Credit on the said excess paid CVD cannot be denied. Reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-III VERSUS NAHAR GRANITIES LTD.[ 2014 (5) TMI 57 - GUJARAT HIGH COURT ]. The adjudicating authority has given proper reasoning and correctly interpreted the various provision of Customs Valuation, provisional assessment and Cenvat Credit Rules - there are no infirmity in the finding given by the adjudicating authority - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2020 (3) TMI 482
Reversal of input tax credit - inter-state sales - case of Revenue is that the petitioner was eligible for ITC only in excess of 3% of Central Sales Tax under Section 8(1) of Central Sales Tax Act, 1956 on the inputs locally purchased by the petitioner whereas case of petitioner is that the petitioner was entitled to avail input tax credit (ITC) under Section 19(1) of the TNVAT Act, 2006 for the purposes enumerated in Section 19(2) of the said Act without any limitation - Section 19(5)(c) of the TNVAT Act. HELD THAT:- A plain reading of the section 19(2)(v) as it stood during the period in dispute and thereafter shows that it applies only to the sale of the goods as such. In other words, intention was to restrict the credit only in the case of dealers who were purchasing goods at higher rate of tax and accumulating credit and selling final product under interstate sale at a lower rate of tax - Section 19(2)(v) was never intended apply to a manufacturer as the input tax credit availed by a manufacturer under section 19(1) of TNVAT Act, 2006 was allowed on such input used in the manufacture or process of goods in the State. Since the proviso to Section 19(2) was confined to situations contemplated under Section 19(1)(v) alone, the restrictions contained therein could not apply to dealer engaged in the manufacture or process of goods in the state. The case is remitted back to the respondent to pass fresh order - The respondent shall pass a speaking order in terms of the observation in this order - petition allowed by way of remand.
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