Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 7, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seeking restoration of the appellant’s certificate of registration - the order dated 06.10.2021 does not state as to why the reply given by the appellant to the show cause notice cannot be considered. The order dated 06.10.2021 is devoid of reasons and, therefore, has to be held to be unreasonable, arbitrary and liable to be set aside. - HC
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Provisional attachment - Validity of circular dated 23rd February, 2021 - In our view the safeguard as provided in clause 3.1.5 in the said circular by providing that the power of provisional attachment must not be exercised in a routine/mechanical manner and careful examination of all the facts of the case is important to determine whether the case is fit for exercising power under section 83. - In our view, none of those safeguards setout in the said circular dated 23rd February, 2021 would affect the rights of the petitioner as the said circular though grants power to the Commissioner to record reasons in file, however with a caution that the power must not be exercised in the routine or mechanical manner and shall be exercised only after careful examination of the facts of the case. - HC
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Liability of GST on tender bid and other successful bidders - it is submitted that instead of paying the tax by themselves, the respondents were demanding it from the petitioner, which is contrary to the provisions of the respective Goods and Services Tax Act, 2017 - Having participated in the tender, it is not open for the bidder to say that the condition of the tender cannot be imposed - There is no merits in the present writ petition. Only remedy available to the petitioner is to approach the authority concerned under Section 54 of the respective GST enactments for refund of the GST collected from the petitioner in accordance with law. - HC
Income Tax
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Computation of interest under Section 220(2) - Payment of tax on the undisclosed income relating to the block period - Whether surcharge at 15% under Section 113 of the Act was payable? - Respondent no.3 is directed to issue a fresh assessment order recalculating the tax and interest payable, within four weeks from the date of this order being uploaded/a copy of the order is submitted by petitioner, by not including surcharge at 15% and limiting the interest payable from 5th January 1997 - HC
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Entitled to deduction of lease equalization charge - There is no force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act. - To sum up, we are of the view that the Respondent is entitled for bifurcation of lease rental as per the accounting standards prescribed by the ICAI. - HC
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Reopening of assessment u/s 147 - Scope of Section 148A as newly inserted - In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid - HC
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Denial of exemption u/s 11 - Assessee is claimed to be a trust carrying on activities of providing swimming pool facilities for aquatic events and training and facilities for other sports and squash, billiards and table tennis - the assessee trust is a charitable trust within the meaning of section 2(15) of the Income-tax Act, 1961 - The income derived from the activity of providing facilities for providing bar facility, etc. except the income derived from the activity of providing facilities for playing cards at stake, all other activities are incidental to the main object of the assessee; hence, not covered by Proviso to section 2(15) of the Act - AT
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Capital gain - real owners of property/asst - 13 members of this society are the owners of the capital asset - Capital gain shall always be chargeable to tax only in the hands of the person who transferred their capital asset. In the present case, this society did not transfer anything, as it did not have ownership of the flat, owners of the flat were members of the society, the learned CIT(A) has correctly deleted the addition in the hands of the assessee- society. - AT
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Disallowance of deduction u/s. 80JJAA - In the course of assessment the said claim cannot be rejected on the ground that the same is not made in the return filed under Section 139(1) and on the ground that no revised return is filed under Section 139(5) - the assessee's claim for 80JJAA need to be considered by the AO subject to the allowability of the claim on merits - AT
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Allowability of expenditure u/s. 43B - Expenditure incurred under the head customs duty, excise duty, interest and penalty on payment basis - the payment has been made by the assessee under protest. Therefore, the amount is definitely a disputed liability and cannot be said that the liability has crystallized/accrued to the assessee during the relevant assessment year - AT
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Reopening of assessment u/s 147 - Addition of on-money received by the assessee on sale of land - the sale consideration qua the transaction of sale of land in question, as disclosed in the registered sale deed, could not have been dislodged by the A.O on the basis of the contents of an uncertified copy of an “agreement to sell”, which on the basis of our aforesaid observations would not even be in the nature of a secondary evidence within the meaning of Sec. 63 of the Indian Evidence Act, 1872. - AT
Customs
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Seizure of seized vehicle - fraudulent availment of benefit of the exemption - The Petitioner is unable to render any justification for claiming the release of the vehicle and as aforementioned has not been able to explain as to how he came in possession of the vehicle. In view of the allegations in the Seizure Memo and in the absence of the justification or grounds for release of the vehicle as well as considering the fact that as per the Seizure Memo, the Bills of Entry were forged and benefit of the exemption Notification was wrongly availed, we see no reason to interfere and set aside the Seizure Memo, at this stage. - HC
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Import of gold bars - Other than Nominated agency - utilization of imported gold in manufacture and export the same - the appellant has imported goods as a Normal importer and filed Bill of Entry as a Normal importer in terms of RBI Guidelines, therefore the provisions of Notification No. 34/2017 dated 18/10/2017 are not applicable to a Normal importer of gold and the said notification is came to be issued after the date of import - Notification No. 34/2017 dated 18/10/2017 is not applicable to the facts of this case. - AT
IBC
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Validity of possession notice - guarantee given by the Corporate Debtor - As a consequence of such default, the status of the guarantor metamorphoses into a debtor or a corporate debtor if it happens to be a corporate person, within the meaning of Section 3(8) of the Code - It was categorically held that there is no reason to limit the width of Section 7 of the Code despite law permitting initiation of CIRP against the corporate debtor, if and when default is committed by the principal borrower. - There need not be any further demur to hold that the CIRP can be initiated in respect of the guarantee given by the Corporate Debtor to the principal Borrower which is a Joint Venture Company. - Tri
Service Tax
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Liability of service tax - appellants are partners of partnership firm and they received certain renumeration from the firm - The partner of a partnership firm is none other than the same, therefore, one would cannot provide service to oneself. As there is no recipient of service in this case, no service has been provided by the appellant. In the income tax returns, the figures shown by the appellants as sale of service is just a portion of the profit earned by them from the partnership firm. In that circumstance, on merits itself, the appellants are not liable to pay service tax. - AT
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Levy of service tax - management, maintenance or repair services - Electric motor winding job - The Revenue does not dispute that it is a composite contract. However, there is a break up in the contract and 20% of the total amount received is attributed by the Delhi Jal Board towards services and 80% towards material. The appellant has paid service tax on 20% and VAT on the 80% of the amount - the demand of service tax on the 80% of the value of the contract attributed towards the goods cannot be sustained. - AT
Central Excise
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Process amounting to manufacture or not - Since it is found that the assessee has not packed from bulk to retail and there is no evidence, apart from the differences in the invoices, that the assessee actually carried out the process of sieving, the material to the required grade, the assessee is not covered by Chapter Notice 9 to Chapter 38. The processes carried out by the assessee of repacking from retail to bulk and labelling do not amount to manufacture - AT
Case Laws:
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GST
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2022 (3) TMI 264
Evasion of service tax - willful suppression of material facts - seeking production of all the relevant materials before the Court - HELD THAT:- It would be inappropriate for the Court under Article 226 to go into such question requiring the petitioner to produce all the relevant materials before the Court and then embark upon the question as to whether the tax was paid or not. The said exercise would be further inappropriate from the point of view of the submission of Mr. S C Keyal, learned counsel for the GST department that the petitioner had not produced all the relevant materials before the authorities and nor had cooperated with the authorities. The Joint Commissioner of Central Goods and Service Tax, Dibrugarh is directed to give a fresh hearing to the petitioner and allow them to produce all the relevant materials as may be desired to substantiate that the tax involved in the demand-cum-show-cause notice was duly paid by them. Accordingly, the petitioner to appear before the Joint Commissioner, Central Goods and Service Tax, Dibrugarh on 28.03.2022 at 10:30 AM. Upon the appearance of the petitioner, the Joint Commissioner shall give a fresh hearing to the petitioner and allow them to produce all the relevant materials and also to raise any other issue that the petitioner may desire to raise. Upon conducting such hearing, a reasoned order be passed and the order to be passed shall supersede the demand- cum-show-cause notice dated 29.09.2020 impugned before this court. Petition allowed.
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2022 (3) TMI 263
Seeking restoration of the appellant s certificate of registration - cancellation of certificate of registration of the appellant for the reason that they have not filed their returns for a continuous period of six months - HELD THAT:- The cancellation of the registration dated 08.02.2021 passed by the central authorities is in violation of principles of natural justice and liable to be set aside. So far as the show cause notice issued by the state authorities dated 06.06.2018 the appellant having filed the returns paid taxes as well as the late fee and interest according to their computation filed an application for revocation of the order for canceling appellant s registration. The state authorities issued show cause notice dated 11.09.2021 calling upon the appellant to explain as to why the application for revocation should not be rejected on the ground that the appellant has not paid late fee for late filing of the returns for the period from 2017-2018, 2018-2019, 2019-2020, 2020-2021 and interest liability for late filing of the returns and called upon the appellant to file their reply within seven days - the order dated 06.10.2021 does not state as to why the reply given by the appellant to the show cause notice cannot be considered. The order dated 06.10.2021 is devoid of reasons and, therefore, has to be held to be unreasonable, arbitrary and liable to be set aside. The order of cancellation of the registration made by the state authorities as well as central authorities are unsustainable and the order rejecting the application for revocation dated 06.10.2021 is also not tenable - petition allowed - decided in favor of petitioner.
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2022 (3) TMI 262
Provisional attachment - Validity of circular dated 23rd February, 2021 - ultra vires the provisions of the Central Goods and Services Tax Act, 2017 or not - reading down of the Circular to make the recording of reasons or grounds of attachment mandatory in the attachment order or Form DRC-22 issued in terms of Rule 159(1) of the CGST Rules - whether the remedy of the petitioner to lodge his objection to the order of provisional attachment under section 83 read with Rule 159(1) of the CGST Rules can be effectively exercised without communication of the opinion of the Commissioner atleast at that stage or not? HELD THAT:- In our view the safeguard as provided in clause 3.1.5 in the said circular by providing that the power of provisional attachment must not be exercised in a routine/mechanical manner and careful examination of all the facts of the case is important to determine whether the case is fit for exercising power under section 83. - In our view, none of those safeguards setout in the said circular dated 23rd February, 2021 would affect the rights of the petitioner as the said circular though grants power to the Commissioner to record reasons in file, however with a caution that the power must not be exercised in the routine or mechanical manner and shall be exercised only after careful examination of the facts of the case. Whether the remedy of the petitioner to lodge his objection to the order of provisional attachment under section 83 read with Rule 159(1) of the CGST Rules can be effectively exercised without communication of the opinion of the Commissioner atleast at that stage or not? A perusal of the scheme of section 83 of CGST Act and Rule 159 clearly indicate that the remedy provided to an assessee to lodge the objection can be exercised effectively only if the petitioner knows the reasons or opinion prima facie formed by the Commissioner before exercising the power under section 83 of the CGST Act read with Rule 159(1) to enable the petitioner to record the objections to the prima facie opinion formed by the Commissioner. Unless such prima facie opinion atleast at this stage is communicated to the petitioner, the petitioner would not be able to lodge the objection and to canvass that the prima facie opinion formed by the Commissioner was not in accordance with section 83 read with Rule 159(1) and there was no threat of loss of revenue to the respondents. Insofar as the judgment of the Supreme Court in case of BACHHITTAR SINGH VERSUS STATE OF PUNJAB [ 1962 (3) TMI 84 - SUPREME COURT] relied upon by the learned counsel for the petitioner is concerned, a perusal of the said judgment indicates that the order passed in the said judgment has dealt with the order passed by the Commissioner in file and was not communicated to the petitioner. The question arose in that matter whether such order which remained in file and not having been communicated to the petitioner could be termed as an enforceable order or not - The said judgment would not advance the case of the petitioner. On perusal of provisions of section 83 read with Rule 159(1), it can be said that the petitioner would be entitled to the copy of the opinion formed by the Commissioner before filing an objection. In view of the fact that the petitioner has impugned the validity of the circular issued by the respondents, the same cannot be challenged before the Appellate Authority - Petition dismissed.
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2022 (3) TMI 261
Grant of anticipatory bail - conclusion of investigation / inquiry under the complaint - offences punishable under Sections 8(c), 21(c) and 25 of the Narcotics Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- The writ applicant is here before this Court with a prayer that the Commissioner, CGST, Vadodara should look into the representation / complaint lodged by him referred to above, undertake an inquiry and complete the same at the earliest in accordance with law. Mr. Sharma would submit upon instructions that the inquiry shall be completed within a period of three months from today and in the course of the inquiry, the complaint lodged by the writ applicant will also be looked into in accordance with law. This writ application is disposed off directing the Commissioner, CGST, Vadodara to look into the complaint lodged by the writ applicant dated 31st August 2020 and complete the inquiry within a period of three months from today.
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2022 (3) TMI 260
Liability of GST on tender bid and other successful bidders - it is submitted that instead of paying the tax by themselves, the respondents were demanding it from the petitioner, which is contrary to the provisions of the respective Goods and Services Tax Act, 2017 - HELD THAT:- The tender conditions stipulate that applicable tax has to be paid by the petitioner. Whether the respondents 3 and 4 were exempted from payment of tax in terms of Notification No.12/17 and Central Tax (Rate) dated 28.06.2017 or not cannot be decided in a writ proceeding. Though prima facie it appears that the demand of service tax from the petitioner was correct, it would however require a proper adjudication by the authorities under the respective GST enactments. As a matter of fact, if the petitioner is of the view that the petitioner was not liable to pay tax, it is open for the petitioner to file appropriate application for refund of the incidence of tax paid under Section 54 of the respective enactments. Having participated in the tender, it is not open for the petitioner to state that the petitioner cannot be asked to pay tax, if indeed GST was payable by the 3rd and 4th respondent. In State of Punjab and another Vs. Devan Modern Brewaries Limited and another [2003 (11) TMI 558 - SUPREME COURT] , the Hon'ble Supreme Court has further held that having participated in the tender, it is not open for the bidder to say that the condition of the tender cannot be imposed. The above ratio will apply to the facts of the present case. Therefore, there is no merits in the present writ petition. Only remedy available to the petitioner is to approach the authority concerned under Section 54 of the respective GST enactments for refund of the GST collected from the petitioner in accordance with law. The writ petition is dismissed with liberty to the petitioner to approach the appropriate authorities under the respective GST enactments to workout the remedy.
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2022 (3) TMI 259
Seeking grant of bail - petitioner has cheated the Department to the tune of ₹ 11.72 Crore by producing fake invoices - petitioner would submit that the petitioner is unable to secure any government surety and in the alternative, the petitioner is prepared to deposit a cash security of ₹ 10,00,000/- and also ready to execute a bond for a sum of ₹ 50,00,000/- and to deposit documents of property worth ₹ 50,00,000/- - HELD THAT:- Taking into consideration that fact that the petitioner is in custody from 07.12.2021 and he is prepared to deposit a sum of ₹ 10,00,000/- in cash and execute a bond for a sum of ₹ 50,00,000/- by depositing documents for property worth ₹ 50,00,000/-, the condition imposed by this court by order dated 07.02.2022 is set aside. Petition allowed.
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Income Tax
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2022 (3) TMI 258
Revision u/s 263 by CIT - Unaccounted Income - AO had passed the original assessment order without making the required enquiry for verifying the claims made by the assessee - as per ITAT exercise of jurisdiction by the CIT (Exemptions) under Section 263 of the Act was not warranted in the present case - HELD THAT:- This Court is in agreement with the findings recorded by the ITAT that since the total receipts of fees had been disclosed in the income and expenditure account, the same cannot be considered as unaccounted income in the hands of the assessee. This Court is further of the view that the ITAT has correctly held that the Assessing Officer did not make any addition against the assessee on account of interest as well as cost of acquisition because the same were considered and added in the original assessment. In any event, it is settled law that an appeal u/s 260A of the Act is to be entertained only when it directly and substantially affects the rights of the parties or is not free from difficulty or call for discussion of alternative views or the factual finding is perverse. It is further settled law that any interference with the finding of the fact is not warranted if it involves re-appreciation of evidence. Thus the factual findings of the ITAT are clear and cogent.
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2022 (3) TMI 257
Computation of interest under Section 220(2) - what period interest under Section 220(2) of the Act is applicable? - HELD THAT:- As decided in DAMANI BROTHERS [ 2002 (12) TMI 11 - SUPREME COURT] interest under Section 220(2) of the Act has to be charged upto the date of the order under Section 245D(1) of the Act. This was also followed by a Division Bench of this Court in Commissioner of Income Tax V/s. Smt. Leonie M. Almeida [ 2015 (3) TMI 13 - BOMBAY HIGH COURT] where the Court held that interest can be charged pursuant to proceedings in normal course up to the date of decision under Section 245D(1) of the Act to proceed with the application. Payment of tax on the undisclosed income relating to the block period - Whether surcharge at 15% under Section 113 of the Act was payable? - In this case, since the search was carried out on 23rd November 1995 and the proviso to Section 113 of the Act, which provides for levy of surcharge, was introduced only with effect from 1st June 2002, as held by the Apex Court in Vatika Township (P.) Ltd.[ 2014 (9) TMI 576 - SUPREME COURT] the levy of surcharge cannot be made applicable retrospectively to search conducted in petitioner s case. Respondent no.3 is directed to issue a fresh assessment order recalculating the tax and interest payable, within four weeks from the date of this order being uploaded/a copy of the order is submitted by petitioner, by not including surcharge at 15% and limiting the interest payable from 5th January 1997, which is the 36th day after the impugned assessment order dated 27th November 1996 was passed, upto 9th April 1997 when petitioner s application came to be accepted under Section 245D(1) of the Act. Petitioner shall pay the amount, if any, payable within seven days of receiving a copy of the fresh demand.
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2022 (3) TMI 256
Revision u/s 264 - Fresh claim in Revision Application - denial of claim of deduction u/s 80IA(4) read with Section 80A(5) - HELD THAT:- As decided in EBR ENTERPRISES ANR. VERSUS UNION OF INDIA AND ANR. [ 2019 (6) TMI 484 - BOMBAY HIGH COURT] in plain terms, this Sub Section (5) of Section 80A of the Act imposes an additional condition for claim of deduction in relation to income under any of the provisions mentioned therein. Apart from the requirement of fulfillment of individual set of respective conditions for the purpose of claiming the concerned deduction, this plenary condition requires that the claim ought to have made in the return of income by the assessee and if the assessee fails to make such claim in the return of income, such deduction shall not allowed to him under the relevant provision. Admittedly, in the present case, the Petitioners had not raised any such claim in the return of income. In plain terms, the claim of the Petitioners under Section 80-IB (10) of the Act would be hit by Sub Section (5) of Section 80A of the act. We are conscious that in absence of the provision contained in Section 80A (5) of the Act, the Petitioners could have maintained the claim of deduction even before the CIT for the first time in Revision Application, though no such claim was made before the Assessing Officer, if from the facts on record, the Petitioners could sustain the said claim in law. This is very clear from the series of Judgments of various High Courts. No error of law in the impugned order passed by the Principal Commissioner of Income Tax-3, Ahmedabad.
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2022 (3) TMI 255
Entitled to deduction of lease equalization charge - bifurcation of lease rental as per the accounting standards / Guidance Note prescribed by the ICAI - amount equal to the diminution in the value of depreciable lease assets, over and above the depreciation allowed under the Income Tax Act, 1961 - HELD THAT:- The first substantial question of law involved in this appeal has already been considered and decided in favour of the assessee by judgment [ 2019 (1) TMI 1961 - MADRAS HIGH COURT] as held that the rule of interpretation says that when internal aid is not available then for the proper interpretation of the Statute, the court may take the help of external aid. If a term is not defined in a Statute then its meaning can be taken as is prevalent in ordinary or commercial parlance. Hence, we do not find any force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act. To sum up, we are of the view that the Respondent is entitled for bifurcation of lease rental as per the accounting standards prescribed by the ICAI. Moreover, there is no express bar in the IT Act regarding the application of such accounting standards - Decided against revenue.
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2022 (3) TMI 254
Reopening of assessment u/s 147 - Scope of Section 148A as newly inserted - Comparison between old and new provisions for reassessment - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - Whether after introduction of new provisions for reassessment of income by virtue of the Finance Act, 2021 with effect from 01.04.2021, substituting the then existing provisions, would the substituted provisions survive and could be used for issuing notices for reassessment for the past period? - HELD THAT:- As decided in SUDESH TANEJA WIFE OF SHRI CP TANEJA [ 2022 (1) TMI 1212 - RAJASTHAN HIGH COURT ] the first proviso to Section 149(1) provides that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 as they stood immediately before the commencement of the Finance Act, 2021. As per this proviso thus no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1). This would indicate that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted. This aspect has also been highlighted in the memorandum explaining the proposed provisions in the Finance Bill. If according to the revenue for past period provisions of section 149 before amendment were applicable, this first proviso to section 149(1) was wholly unnecessary. Looked from both angles, namely, no indication of surviving the past provisions after the substitution and in fact an active indication to the contrary, inescapable conclusion that we must arrive at is that for any action of issuance of notice under Section 148 after 01.04.2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice under section 148 would not change this position that obtains in law. Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid. Whether the explanations contained in the CBDT circulars dated 31.03.2021 and 27.04.2021 are legal and valid? - Subordinate legislation does not enjoy same level of immunity as the law framed by the Parliament or the State Legislature. The law framed by the Parliament or the State Legislature can be challenged only on the grounds of being beyond the legislative competence or being contrary to the fundamental rights or any other constitutional provisions. Third ground of challenge which is now recognized in the judgment in case of Shayara Bano Vs Union of India [ 2017 (9) TMI 1302 - SUPREME COURT] is of legislation being manifestly arbitrary. A subordinate legislation can be challenged on all these grounds as well as on the grounds that it does not conform to the statute under which it is made or that it is inconsistent with the provisions of the Act or it is contrary to some of the statutes applicable on the subject matter. In our understanding by virtue of notifications dated 31.03.2021 and 01.04.2021 issued by CBDT substitution of reassessment provisions framed under the Finance Act, 2021 were not deferred nor could they have been deferred. The date of such amendments coming into effect remained 01.04.2021. The notices impugned in the respective petitions are invalid and bad in law. The same are quashed and set aside. The learned Single Judge committed no error in quashing these notices. All the writ petitions are allowed. Appeals of the revenue are dismissed.
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2022 (3) TMI 253
Reopening of assessment u/s 147 - mandation of passing speaking order - HELD THAT:- All proceedings post writ petitioner's /assessee's objections dated 23.11.2021 are set aside solely on the ground that GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT] principle has not been strictly adhered to. The first respondent Assessing Officer shall proceed from this 23.11.2021 objection stage, pass a speaking order, complete the re-assessment as expeditiously as his business would permit and in any event within 12 weeks from today i.e., on or before 28.04.2022.
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2022 (3) TMI 252
TP Adjustment - comparable selection - inclusion of M/s. CG VAK Software and Exports Ltd. as a comparable for benchmarking the international transactions entered into by the assessee with its associated enterprises - HELD THAT:- Upon examination of the annual reports for financial years 2007-08, 2008-09 and 2009-10 of M/s CG VAK Software Exports Ltd., which are forming part of the paper book, we find that the company had earned profit of 3.81% in financial year 2008-09 and profit of 0.29% in financial year 2009-10 in the BPO segment. Thus, M/s CG VAK Software Exports Ltd. (segmental) does not satisfy the criteria of being a persistent loss making company, as in 2 out of 3 past consecutive financial years the company was earning profit. Accordingly, we are of the view that the DRP has rightly directed inclusion of M/s CG VAK Software Exports Ltd. (segmental) as a comparable for benchmarking the international transactions pertaining to Provision of ITeS Services and Provision of Research Support Services . As a result, ground no. 1 raised in Revenue s appeal is dismissed. M/s CG VAK Software Exports Ltd. cannot be held to be incomparable simply on the ground of low turnover, unless it is demonstrated that the functions, assets and risk are completely different and are incomparable. Accordingly, the additional grounds raised by the Revenue are dismissed.
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2022 (3) TMI 251
Suppressed receipts of alleged on-money based on comparison of rate of sale price per square feet of two different shops sold at two different times - HELD THAT:- There is a time gap of almost 9 months in the sale of both the shops. Naturally, most probably, shop sold in the month of March, 2013 have the higher price compared to shop sold earlier and it depends mostly on the position of the shop in the structure of market. AO has neither enquired from the buyers of the shops nor enquired from the stamp value authorities that whether the transactions made by the assessee are at market rate or not. Further, during the year the assessee has shown sales of approximately ₹ 4,21,00,000/- and has earned profit of ₹ 52 crores, the Assessing Officer could not find any defect in the books of account or any other evidence about on-money earned on sale of units . Therefore, the addition made by the learned Authorised Representative was without any basis. Merely because of the reason of difference in the sale price of two different properties on two different times having differing locational advantages, in absence of any incriminating evidence cannot be compared and then result into the hands of the assessee as addition on account of on-money . - Decided in favour of assessee.
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2022 (3) TMI 250
Denial of exemption u/s 11 - Assessee is claimed to be a trust carrying on activities of providing swimming pool facilities for aquatic events and training and facilities for other sports and squash, billiards and table tennis - AO denied the claim of exemption to the assessee on the ground that the exemption granted by the DIT(E) was subsequently withdrawn by him - CIT-A held that the activities of the assessee have been found to be hit by the newly inserted Proviso to section 2(15) of the Act - HELD THAT:- As from the objects of the assessee trust it would be clear to us that the assessee trust was created with the charitable object to provide facilities for indoor and outdoor games. In addition to the aforesaid objects, the trust deed also provided for providing recreational activities. The charitable nature of the assessee can be appreciated from the fact that not only it is registered with Charity Commissioner, Mumbai, but was also granted registration as a Charitable Institution under section 12A of the Act immediately after its creation in the year 12A of the Act, the assessee started claiming exemption under section 11 of the Act. The assessing officer denied the exemption under section 11 of the Act primarily for the reason that the activities of the assessee included facility of permit room, which, according to him, cannot be considered to be for charitable purpose. Therefore, applying the Proviso to section 2(15), the assessing officer held that the activity of providing bar room cannot be considered to be objects of general public utility. Tribunal in Breach Candy Swimming Bath Trust v/s ITO[ 1986 (3) TMI 106 - ITAT BOMBAY-A] concluded that except the income derived from the activity of providing facilities for playing Cards at stake, all other income from Swimming Pool and other sport activities, Bar and Restaurants, etc., will be from the activities of carrying out the object of general public utility, hence, entitled to exemption under section 11 Thus the assessee trust is a charitable trust within the meaning of section 2(15) of the Income-tax Act, 1961 - The income derived from the activity of providing facilities for providing bar facility, etc. except the income derived from the activity of providing facilities for playing cards at stake, all other activities are incidental to the main object of the assessee; hence, not covered by Proviso to section 2(15) of the Act - Decided in favour of assessee.
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2022 (3) TMI 249
Capital gain - Computation of capital gain including Section 50C - transfer of capital asset u/s 2(47) - real owners of property/asst - CIT-A deleted the addition - HELD THAT:- The assessee did not show any capital gain in its hand as it did not transfer any property. The assessee taxed the capital gain in the hands of the assessee society, who is not the owner of capital asset. CIT(A) therefore, deleted the addition made by the Assessing Officer in the hands of the assessee and gave a direction to the learned Assessing Officer that 13 members of this society are the owners of the capital asset and therefore, all the issues with respect to capital gain including Section 50C of the Act is required to be examined in the hands of those persons. Capital gain shall always be chargeable to tax only in the hands of the person who transferred their capital asset. In the present case, this society did not transfer anything, as it did not have ownership of the flat, owners of the flat were members of the society, the learned CIT(A) has correctly deleted the addition in the hands of the assessee- society. Revenue could not be aggrieved as learned CIT(A) gave the direction to the learned Assessing Officer for examination of the chargeability of capital gains in the hands of the correct persons. To safeguard interest of revenue, it was for the ld. AO to take call at relevant time. In view of this, we do not find any infirmity in order of the learned CIT(A) and uphold the same - Decided against revenue..
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2022 (3) TMI 248
Claim of exemption u/s. 54EC - Time limit for investment of long-term capital asset - HELD THAT:- Time limit for investment of long-term capital asset, is six months from the date of transfer and even if such investment falls under two financial years the benefit of investment of ₹ 50 Lakhs individually in each financial year as claimed by the Assessee herein, cannot be denied. Consequently, the order under challenge is liable to be set aside while allowing appeal of the Assessee, hence ordered accordingly.
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2022 (3) TMI 247
Unexplained expenditure u/s. 69C - Addition confirmed on non-traceability of the suppliers - CIT-A deleted the addition - HELD THAT:- We find from the impugned order that the Ld. Commissioner thoroughly examined the issue and rightly held that merely because the party was not traceable could not in itself be a reason sufficient enough to draw and adverse inference, when the transaction was visible in the books. The matter needed further enquiry on part of the A.O when the counsel had given all the details in this regard particularly when the amounts are already applied for charitable purpose. The A.O neither in assessment nor in remand report has never doubted the charitable purpose and application of funds. Hence, the contention of the revenue/department is untenable. Non-submission of the valuation report before the AO - It was duly explained by the Assessee before the ld. Commissioner that during the assessment proceedings the said valuation report was not available, therefore, the Assessee filed the same along with application u/s. 46A of the IT Rules. Even otherwise said valuation report was forwarded to the AO for remand report and had duly been considered by the AO while conducting remand proceedings. Hence, the said contention also is untenable. Resultantly, ground Nos. 1 and 2 raised in the appeal by the revenue department stands dismissed. Addition on account of loan repayment u/s. 69 - HELD THAT:- We find that the ld. Commissioner while considering the issue in hand, thoroughly considered the factual position to the effect that actually the loans was received in the AYs 2009-10 and 2010-11, however, the same were repaid in the assessment year under appeal - There is no justification to invoke the provisions of section 69 of the act of repayment of loans taken earlier and the loans were duly recorded in the books of account and repayment was made through banking channel and also duly recorded in the books of account therefore, AO had wrongly applied the provisions of section 69 of the Act to the case of the Assessee. Addition of unsecured loan u/s. 68 - Assessee could not prove creditworthiness of the lenders during the assessment proceedings - HELD THAT:- If the ITR was not filed by the persons who had advanced money to the Assessee then the Assessee cannot be held responsible as it was for the AO to make further inquiry and confront the Assessee. It was further observed by the ld. Commissioner, when the lenders had confirmed the nature of transactions and if the AO was not satisfied then he could have made further inquiry or ensured that action is taken in the hands of the lenders but not in the hands of the Assessee. Assessee trust had fully discharged its onus, however, the AO without making further inquiry made the addition arbitrarily in the case of the Assessee trust which is illegal. The ld. Commissioner further held that the Assessee has provided correct PAN and copy of PAN card qua Shuvam Yadav from whom the loan was received by the Assessee. Thus commissioner ultimately correctly deleted the addition by considering the facts and circumstances and evidences produced on record. -Decided against revenue.
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2022 (3) TMI 246
Assessment of income from construction and sale of residential apartments of Victoria Towers under the head 'business income' - Whether CIT(A) has admitted the additional evidence like Memorandum of Association and aims objects of the company in violation of provisions of Rule 46A of the Income Tax Rules, 1962? - HELD THAT:- We noted that the CIT(A) has gone through the provisions of section 23 of the Act and noted that while determining the ALV of the assets held as stock-in-trade, the provisions of section 23 will not apply because assessee is engaged in the business of real estate and further having treated the said asset as 'stock-in-trade'. We noted that the proviso added to section 23(5) of the Act, as introduced by Finance Act, 2017 w.e.f. 01.04.2018, wherein the scope of applying annual letting value has been extended to stock-in-trade and according to us, this is a prospective amendment and being a prospective amendment, the same would further fortify the plea of the assessee on the non-applicability of provisions relating to ALV to the unsold apartments kept by assessee as stock-in-trade during the assessment year under consideration i.e., 2012-13. Further, we are in agreement with the arguments of ld. Senior DR that the CIT(A) has no power to set aside the assessment but he has referred back the issue for limited purpose of verification of Memorandum of Association and Article of Association i.e., aims and objects of the assessee company. With regard to the ground raised by Revenue on violation of Rule 46A of the Rules, we are of the view that these are vital documents and CIT(A) after admitting those and going through the same has held the income derived from unsold stock kept as stock- in-trade as 'business income'. We find no infirmity in directing the AO to verify these documents. Hence, these issues raised in regard to income assessed on account of residential apartment of unsold stock in the project of 'Victoria Towers', of the Revenue's appeal is dismissed. Assessment of notional ALV of shopping mall i.e., Coromandal Plaza - disallowance of depreciation - HELD THAT:- We are of the view that once the income of shopping mall Coromandal Plaza is assessed as business income, the consequential expenses and depreciation relating to the operation of shopping mall is to be allowed. But the AO will verify and also go into the genuineness of expenses and then will decide the issue. Hence, this issue is set aside to the file of the AO.
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2022 (3) TMI 245
Addition u/s 68 - assessee has taken unsecured loans from Jayesh K. Sheth and no confirmations in respect of the unsecured loans were submitted in respect of the certain parties - HELD THAT:- We observe that as per the Balance Sheet submitted before us in the form of Paper Book clearly indicate that assessee has received ₹.30 lakhs from Jayesh K. Sheth and there is no other entry in the name of Jayesh K. Sheth anywhere in the Balance Sheet. We do not see the amount mentioned by the Assessing Officer as outstanding nowhere in the balance sheet. Therefore, we presume that Assessing Officer must have considered the interest also along with the outstanding advance. Since assessee has brought to our notice that it is only a flat advance received by the assessee not as unsecured loans - there is no independent finding or material available on record to show that the above said party has lent the money to the assessee as unsecured loans and since AO has issued show cause notice u/s.133(6) of the Act for which no response or any confirmations submitted by the assessee before the AO, therefore, we direct the assessee to file the confirmations from Jayesh K. Sheth for receipt as advance for the flat - we direct the AO on receipt of confirmation of the above said advance, we direct the Assessing Officer to delete the addition since it is not an unsecured loan and on submission of the above confirmation it proves that assessee has proved the genuineness of the receipt of the above said advance. Accordingly, Ground raised by the assessee is allowed for statistical purpose. Set off of unabsorbed business loss of earlier year - AO denied the profit declared by the assessee in the return of income filed u/s. 139 of the Act and while filing the return u/s. 153A of the Act, assessee has adjusted the profit declared u/s. 139(1) of the Act against in the unclaimed business loss and unabsorbed depreciation - HELD THAT:- We noticed that Hon'ble Bombay High Court in the case of CIT v. B.G. Shrike Construction Technology Pvt. Ltd. [ 2017 (3) TMI 879 - BOMBAY HIGH COURT ] has held that the return filed u/s. 153A is a return furnished u/s. 139 and therefore the provisions of the Act which apply in case of return filed in regular course u/s. 139(1), would also continue to apply in case of return filed u/s. 153A - Thus claim not made in the return of income, the Court may lead to non entertainment of claim by the Assessing Officer. However, this restriction in the power of the Assessing Officer will not affect the power of the appellate Tribunal to entertain a fresh claim. - Decided in favour of assessee.
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2022 (3) TMI 244
Disallowance of deduction u/s. 80JJAA - Assessee did not file a revised return to claim deduction under section 80JJAA of the Act and any claim made can be allowed only by way of a revised return and not otherwise - whether the assessee can claim for a lawful deduction which was not claimed in the return of income filed u/s. 139(1) ? - HELD THAT:- As decided in M/S. WIPRO LIMITED VERSUS THE ADDITIONAL COMMISSIONER OF INCOME-TAX, CIRCLE 12 (5) BANGALORE [ 2020 (12) TMI 687 - KARNATAKA HIGH COURT] as the tax liability is fastened on the assessee on the basis of the statutory provisions, if any statutory provision gives the assessee the tax benefit, the assessing authority is legally bound to consider the same and grant him relief. In the course of assessment the said claim cannot be rejected on the ground that the same is not made in the return filed under Section 139(1) and on the ground that no revised return is filed under Section 139(5) - assessing authority was not justified in rejecting the said claim on the ground that no revised return is filed under Section 139(5) - Thus we hold that the assessee's claim for 80JJAA need to be considered by the AO subject to the allowability of the claim on merits Non filing for Form 10DA - The proviso to Rule 12(2) was inserted effective from 01.04.2013, whereby the assessee was required to file the report electronically and prior to the amendment, there was not any provision to file the form electronically and hence the same could not be filed along with the return of income. The courts have consistently held that requirement of filing the auditors report is a directory requirement and that hence would stand satisfied if the accountant's report is furnished during the course of the assessment.We place reliance on the judicial pronouncements and hold that the assessee should be allowed the deduction u/s. 80JJAA since the Form 10DA was filed during the course of the assessment. DR during the course of the hearing brought to our attention that the amount mentioned in Form 10DA for the asst. year 2012-13 does not match with the amount actually claimed by the assessee for the said asst. year. To this the Ld. AR clarified that the amount mentioned in Form 10DA i.e., ₹ 3,78,70,242 is the eligible deduction with respect to new workmen employed during the year relevant to AY 2012-13 only. The provisions of section 80JJAA allows for deduction over a period of 3 years and hence the amount claimed u/s. 80JJAA i.e. ₹ 7,99,50,457 is the aggregate claim including workmen employed in AY 2010-11 and 2011-12. Since the Ld. DR did not have any further objection there is no requirement for any adjudication on this matter. Undertaking of the assessee was formed by way of splitting up or reconstruction - We respectfully follow the binding decision of the coordinate bench of the Tribunal in assessee's own case upheld by the Hon'ble Karnataka High Court and the SLP filed by Revenue as dismissed by the Supreme Court [ 2021 (7) TMI 476 - SC ORDER] to confirm that the assessee is not formed by splitting up or reconstruction and eligible for deduction u/s. 80JJAA. Exclusion of 100 employees for the purpose of computing eligible deduction u/s. 80JJAA - As per the case of CIT Vs. Texas Instruments India Pvt. Ltd. [ 2021 (4) TMI 1049 - KARNATAKA HIGH COURT] assessee is right in computing the eligibility criteria. 100 employees need not be excluded for the purpose of computing the deduction u/s. 80JJAA where the employees are more than 100. Additions made to book profits u/s. 115JB - AO during the course of asst. proceedings has added back the provisions created towards gratuity, leave encashment and bonus while computing the book profits of the assessee holding that the same to be an unascertained and contingent liabilities. The order of the AO was upheld by the CIT who relied on sec. 43B of the Act - HELD THAT:- We are of the considered view that the AO is not right in adding back the provisions made by the assessee towards gratuity, leave encashment and bonus for computation of book profits u/s. 115JB on the ground that they are unascertained liability. Hence, we allow the appeal in favour of the assessee and direct the AO to give effect to the same in the computation of book profits u/s. 115JB of the Act.
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2022 (3) TMI 243
Allowability of expenditure u/s. 43B - Expenditure incurred under the head customs duty, excise duty, interest and penalty on payment basis - HELD THAT:- In the instant case, it is a case of import of a capital asset and that too not by the assessee, hence, the impugned expenditure cannot be claimed as a revenue expenditure. Therefore, the provisions of section 43B of the I.T. Act cannot be applied to the claim of deduction of an amount which otherwise is not allowable as deduction in the hands of the assessee. Further, the impugned amount includes a sum as paid as penalty for infraction of customs duty and central excise duty. This amount being penalty, cannot be allowed as a deduction. Moreover, the payment has been made by the assessee under protest. Therefore, the amount is definitely a disputed liability and cannot be said that the liability has crystallized/accrued to the assessee during the relevant assessment year In the instant case, the import is of capital asset and that too not by the assessee, hence, the impugned expenditure cannot be equated with the expenditure incurred for improvement of a leasehold property. Therefore, the claim of the assessee has been rightly rejected by the CIT(A). - Decided against assessee.
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2022 (3) TMI 242
Estimated income on conversion of stock in trade into investment - would it make any difference whether for its accounting purpose the assessee transferred such stocks at cost instead of prevailing market value? - HELD THAT:- Assessee has converted the stock in trade into investment but no doubt there is a gain to the assessee on the difference of conversion. But the assessee cannot make any profit on its own merely because it is converted certain shares from stock in trade to investment. As far as the Income-tax is concerned the taxable event occurs when the assessee actually transfers the shares to other persons, other than himself. Therefore, when the capital gain is calculated the assessee will consider actual sale consideration and deduct the actual cost of shares acquired. Therefore, on the date of such actual transfer the profit earned by the assessee at the time of transfer is relevant and any conversion taken place earlier by the assessee shall be ignored. It is clear from the decision of Sir Kikabhai Premchand [ 1953 (10) TMI 5 - SUPREME COURT] that mere conversion of stock in trade into investment will not generate any taxable profit to the assessee. Therefore, we are in agreement that one cannot make profit of its own by converting stock in trade into investment or investment into stock in trade - Decided in favour of the assessee.
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2022 (3) TMI 241
Reopening of assessment u/s 147 - Addition of on-money received by the assessee on sale of land - whether or not the lower authorities are right in law and the facts of the case in acting upon the copy of the agreement to sell , dated 25.02.2008, for concluding, that the assessee had sold the land in question for a consideration of ₹ 7.19 crore (approx.), as therein stated, and not for the consideration as stated in the registered sale deed, dated 08.10.2008, and thus, had received an earnest money of ₹ 1.50 crore on 25.02.2008 i.e during the year under consideration? - HELD THAT:- We are unable to subscribe to the standalone reliance placed by the lower authorities on the contents of the uncertified copy of the agreement to sell , dated 25.02.2008. At this stage, we may herein observe, that the sale consideration disclosed in a registered sale deed has to be accepted to have been received by the seller, and once the said registered document contains all the terms and conditions, then, no oral evidence is permissible to be given in an attempt to prove that the consideration disclosed in the said registered document had not changed hands. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Punjab Haryana in the case of Paramjit Singh [ 2010 (2) TMI 262 - PUNJAB HARYANA HIGH COURT] - We, thus, in terms of our aforesaid observations are of the considered view, that the sale consideration qua the transaction of sale of land in question, as disclosed in the registered sale deed, dated 08.10.2008, could not have been dislodged by the A.O on the basis of the contents of an uncertified copy of an agreement to sell , dated 25.02.2008, which on the basis of our aforesaid observations would not even be in the nature of a secondary evidence within the meaning of Sec. 63 of the Indian Evidence Act, 1872. Deposits in bank account of assessee's husband - The observations of the A.O that the cash deposits in the bank accounts of Shri. Kulwant singh (Assessee's husband) were sourced from the on-money that was received by the assessee, being devoid and bereft of any substance and, being nothing short of an allegation in the thin air, cannot be subscribed on our part. We, thus, in the backdrop of our aforesaid deliberations vacate the observations of the A.O that the alleged on-money received by the assessee on sale of the land in question was deposited by her in the bank accounts of her husband, viz. Shri. Kulwant Singh (supra). Circle rate of the property - Assessee from, viz. the circle rate of the property in question that was prevailing at the time of execution of the sale deed; and the rate at which an adjoining piece of land during the relevant period was sold, undeniably had a strong bearing in not only proving that the land in question was sold as per the consideration disclosed in the registered sale deed, but was also indispensably instrumental in proving the falsity of the agreement to sell , dated 25.02.2008, and the contents thereof. We, thus, are not inclined to subscribe to the view taken by the lower authorities that the aforesaid circle rate and the comparative sale transaction had no bearing on the adjudication of the issue in hand. Suppressed sale consideration/on-money as the assessee s unexplained money u/s 69 - Receipt of on-money cannot be brought within the meaning of unexplained investment. But then, on a careful perusal of the assessment order, we find, that the A.O had triggered the provisions of Sec. 69, for the reason, that the assessee had deposited the on-money in the bank accounts of her husband, viz. Shri. Kulwant Singh. However, as we have already vacated the view taken by the lower authorities that the alleged amount of on-money received by the assessee was parked in the bank accounts of her husband, viz. Shri. Kulwant Singh, therefore, the applicability of Sec. 69 of the Act is ousted on the said count itself. Be that as it may, as we have already vacated the addition made by the A.O on the basis of the contents of the uncertified copy of a agreement to sell , dated 25.02.2008, which has been held by us as a dumb document that could not have been acted upon by the A.O, therefore, we refrain from adverting any further qua the validity of invocation of Sec. 69 We, herein, holding the agreement to sell , dated 25.02.2008 as a dumb document, thus, set aside the order of the CIT(A) and vacate the addition of ₹ 1.50 crore (supra) made by the A.O.- Decided in favour of assessee.
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Customs
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2022 (3) TMI 240
Seizure of seized vehicle - Bill of Entry was also forged - fraudulent availment of benefit of the exemption N/N. 3/57 dated 08.01.1957 - HELD THAT:- A perusal of the Seizure Memo impugned in the writ petition shows that the car in question was imported into India in the name of a diplomat by fraudulently availing the benefit of exemption Notification No.3 of 57 dated 08.01.1957. The vehicle was detained for further investigation and it was found that the registration of the vehicle was done in the name of a non-privileged person by forging the Bill of Entry and other documents and accordingly seized under Section 110 of the Customs Act, 1962, under a reasonable belief that the vehicle was liable to confiscation under the provisions of the said Act. The Petitioner is unable to render any justification for claiming the release of the vehicle and as aforementioned has not been able to explain as to how he came in possession of the vehicle. In view of the allegations in the Seizure Memo and in the absence of the justification or grounds for release of the vehicle as well as considering the fact that as per the Seizure Memo, the Bills of Entry were forged and benefit of the exemption Notification was wrongly availed, we see no reason to interfere and set aside the Seizure Memo, at this stage. The present writ petition is wholly frivolous and misconceived and there are no reason to entertain the writ petition - petition is dismissed with costs of ₹ 1,00,000/-, to be deposited by the Petitioner with the Delhi State Legal Services Authority, within five weeks from today.
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2022 (3) TMI 239
Import of gold bars - Other than Nominated agency - utilization of imported gold in manufacture and export the same - date of the import of the gold in the facts and circumstances of the case? - applicability of provisions of Notification No. 34/2017 dated 18/10/2017 - the gold was freely importable or not, prior to the Notification dated 18/12/2019. What should be the date of the import of the gold in the facts and circumstances of the case? - HELD THAT:- The relevant date for import of the goods by air is the date on which Airway bill is issued that on which date goods left the last airport in the country from which the import is affected. Admittedly, in this case the Airway bill has been issued on 17/10/2017 and thereafter there is no control of the importer or the seller of the goods. In that circumstance, in the facts and circumstances of the case, the relevant date for import by air is the date on which Airway bill has been issued i.e. 17/10/2017 - the date of import of the impugned gold is 17/10/2017. Whether the provisions of Notification No. 34/2017 dated 18/10/2017 are applicable to the facts of the case or not? - HELD THAT:- As it is already been held that the date of import of the impugned gold is 17/10/2017, further, it is found that the provisions of Notification No. 34/2017 dated 18/10/2017 are applicable, if the Nominated agency imports the gold, the same is required to be manufactured and exported thereof - But in the case in hand, the appellant has imported goods as a Normal importer and filed Bill of Entry as a Normal importer in terms of RBI Guidelines, therefore the provisions of Notification No. 34/2017 dated 18/10/2017 are not applicable to a Normal importer of gold and the said notification is came to be issued after the date of import - Notification No. 34/2017 dated 18/10/2017 is not applicable to the facts of this case. Whether prior to the Notification dated 18/12/2019, the gold was freely importable or not? - HELD THAT:- As per the Notification dated 18/12/2019, it has been held that after issuance of the Notification dated 18/12/2019, only Nominated agencies can import the gold with end use condition which otherwise means that prior to issuance of the Notification dated 18/12/2019, the gold was also freely importable - prior to the notification dated 18/12/2019, the gold was also freely importable by the Normal importer in terms of RBI Guidelines. The appellant imported the goods as a normal importer, therefore, the restrictions contained in Notification No. 34/2017 dated 18/10/2017 are not applicable to the appellant and the import has been done prior to introduction of the Notification dated 18/10/2017 - appeal allowed - decided in favor of appellant.
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2022 (3) TMI 238
Cancellation of Let Export Order - denial of duty drawback - confiscation of red sanders - prohibited goods - sufficient evidences present or not - penalty on corporation as well as on partner of corporation - HELD THAT:- There are no whisper that the Appellants have performed an act of omission or commission in the respect of the prohibited red sander wood which was substituted in the container which was stuffed by them at ICD Janori in the presence and supervision of proper officer of Customs. Appellants admittedly were dealing in the export of Vegetable and Fruits. Undisputedly and admittedly the container at ICD Janori was stuffed with 27000 Kgs of the onions, for which the proper shipping bill was filed by them. After stuffing the container was sealed with the Central Excise Bottle Seal and was handed over to the ICD Janori for transportation to the gate way port. In similar facts and circumstances in case of Maheshwari Rocks (I) Pvt Ltd [ 2009 (10) TMI 803 - CESTAT CHENNAI ] where it was held that there is no evidence against the appellants regarding their involvement in the substitution of the cargo or tampering of the seal. In the circumstances, we confirm our prima facie view, set aside the confiscation of the container and the penalty imposed on M/s. Caravel Shipping Services Pvt. Ltd. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2022 (3) TMI 237
Sanction of Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 (for brevity The Act ) read with Companies (Compromises, Arrangements and Amalgamation) Rule, 2016 - HELD THAT:- The Tribunal, in view of the settled law, is empowered to dispense with the meeting of shareholders if they have given their consent. Further, in view of Section 230(9) of the Companies Act, 2013, the Tribunal is empowered to dispense with calling of a meeting of creditors or class of creditors where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of notices also issued - the scheme is approved - application allowed.
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Insolvency & Bankruptcy
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2022 (3) TMI 236
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - HELD THAT:- From the perusal of the page 150, Vol.-I of the Appeal which is the Financial Statement of the Respondent ending on 31.03.2017 for amount of ₹ 54,71,783/- is shown under the heading of Long Term Borrowing - Further, page 165, Vol.-I of the Appeal which is the Financial Statement of the Respondent ending on 31.03.2016 for amount of ₹ 54,71,783/- is shown under the heading of Long Term Borrowing . Further, page 208, Vol.-I of the Appeal which is the Account Ledger Confirmation of the Appellant duly signed by the Respondent s authorized signatory starting from 01st April 2015 to 31st March 2016 shows that the amount of ₹ 54,71,783/- as a Long Term Borrowing . Similarly, certificate given by B.C. Patel Co., Chartered Accountants (at page 209, Vol.-I of the Appeal) after verified from the ledger account and other relevant documents shows that the Respondent had an outstanding of ₹ 89,24,630/- till 31st December 2019. - the Ld. Adjudicating Authority while passing the impugned order did not peruse the aforesaid documents. The matter is remitted back to the Ld. Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, Ahmedabad with a request to hear the parties and after perusing the aforesaid documents whereby the Respondent categorically acknowledged the debt, pass fresh orders within twelve weeks from the date of receipt of this judgment - Appeal allowed by way of remand.
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2022 (3) TMI 235
Validity of possession notice - guarantee given by the Corporate Debtor - filinf of Form-D - Applicant has locus standi to file this Application or not - applicability of Regulation 21-A IBBI (Liquidation Process) Regulations, 2016 - relevancy of joint consortium executed on 14.03.2014 - validity of permission given by the Liquidator to Respondent No. 1 for realizing the schedule property. Whether Form-D is filed in time? - HELD THAT:- On the basis of the contentions made in the counter the argument is that the Form-D is fabricated with an ante-date. But the fact remains that the mail is sent on 18.10.2019 on which date the contentions of the Applicant are not known to either Respondent No. 1 or Liquidator/Respondent No. 2. Hence, the question of ante-dating Form-D may not arise. Apart from that, the argument wanes into insignificance, since, the last date for submission of the claim form stands to be on 18.10.2019. The date mentioned as 17.10.2019, as the date of submission of Form-D, in the counter, might be due to the fact that the Form-D was dated as such. When there is no scope found to be existing for ante-dating it, the only conclusion would be that it is due to the reason of the date, on the Form being 17.10.2019. There is no evidence to show that the Liquidator had any reason to conspire with Respondent No. 1 and allow him to ante date the Form - it can be accepted that Form-D is filed by Respondent No. 1 within time. Section 12 of the Limitation Act does not come into play, hence, the objection raised by the Applicant's Counsel in that regard is found as not merited. Whether the Applicant has locus standi to file this Application? - HELD THAT:- The Respondents contend that the Applicant does not have locus standi to file this application. But the said point was not reiterated in the arguments. However, the Applicant is an Ex-Director of the Corporate Debtor, hence, if the asset forms the part of the liquidation estate he would be benefited. Hence, he would have locus standi to file the application. Whether Regulation 21-A IBBI (Liquidation Process) Regulations, 2016 is applicable? - HELD THAT:- Section 53(1)(b)(i) cannot be read to mean that the said amounts have to be deposited before the liquidation commencement date. It does not mean that the 24 months wages have to be deposited before the liquidation commencement date. It only means, that the workmen's dues pertaining to the period of 24 months prior to liquidation commencement date have to be deposited. No time limit is mentioned. The words liquidation commencement date apply to the period of wages and not to the time of depositing. When there is no limitation specified as on the liquidation commencement date, the Respondent cannot be expected to deposit the amount specified under Section 53. Hence, it can be concluded that Section 21 -A, as it stands by the date of filing of this Application, is not applicable to Respondent No. 1. Whether the joint consortium executed on 14.03.2014 has any relevance to this case? - HELD THAT:- It can be seen that the consortium is dated 14.03.2014 and as mentioned in the counter of Respondent No. 1 the Corporate Debtor has acquired the schedule property by way of registered sale deeds in the year 2016 as evidenced by the letter dated 11.11.2017 filed in annexure-6 by the Applicant. By the date of consortium the said property was not in existence. It is also contended that the said consortium pertains only to the movable properties and not the immovable properties. A Perusal of the consortium agreement would support the said contention. Hence, this point is answered by holding that the joint consortium executed on 14.03.2014 has no relevance. Whether the permission given by the Liquidator to Respondent No. 1 for realizing the schedule property needs interference? - HELD THAT:- Indubitably, a right or cause of action would enure to the lender (financial creditor) to proceed against the principal borrower, as well as the guarantor in equal measure in case they commit default in repayment of the amount of debt acting jointly and severally. It would still be a case of default committed by the guarantor itself, if and when the principal borrower fails to discharge his obligation in respect of amount of debt, for, the obligation of the guarantor is coextensive and coterminous with that of the principal borrower to defray the debt, as predicated in Section 128 of the Contract Act. As a consequence of such default, the status of the guarantor metamorphoses into a debtor or a corporate debtor if it happens to be a corporate person, within the meaning of Section 3(8) of the Code - It was categorically held that there is no reason to limit the width of Section 7 of the Code despite law permitting initiation of CIRP against the corporate debtor, if and when default is committed by the principal borrower. There need not be any further demur to hold that the CIRP can be initiated in respect of the guarantee given by the Corporate Debtor to the principal Borrower which is a Joint Venture Company. Petition dismissed.
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2022 (3) TMI 234
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The Financial Creditor has invested its money for a project and the corporate debtor has failed to complete the project and infact changed the entire project into another type of project. Therefore, it is well within the rights of the financial creditor to recall its financial debt as the project is not the same. In view of the documents placed on record, the financial creditor proved that financial debt was given to the corporate debtor and the corporate debtor has defaulted in repayment of said financial debt. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence or existence of default. What is material is that the default is for at least ₹ 1 Lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. The corporate debtor has failed to show that there is no debt or default in existence so as to avoid the provisions of the Code. The applicant has also placed copies of Form- 26AS showing deposit of TDS on interest over financial debt deposited by the corporate debtor. In the facts it is seen that the applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had provided financial facility to the respondent corporate debtor and the respondent acknowledged the same debt in its Balance Sheets and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. In terms of Section 7 (5) (a) of the Code, the present application is here admitted - Moratorium declared.
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PMLA
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2022 (3) TMI 233
Principles of natural justice - constitutional validity of section 45 of PMLA not dealt with - HELD THAT:- The High Court has not dealt with the mandatory twin requirements but has granted indulgence to the respondent(s) on extraneous consideration. However, in the peculiar facts of the present case as the respondent(s) are reportedly senior citizen(s) and had cooperated during the investigation as noted by the High Court, these special leave petitions need not be interfered - SLP disposed off.
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2022 (3) TMI 232
Seeking grant of Regular Bail - funds from the Term loan were diverted to 25 non-contracting parties - Proceeds of crime - misappropriation or diversion of funds - siphoning off of funds - constitutional validity of Section 45 of PMLA - HELD THAT:- Time and again, it has been opined by Courts across the country that bail is the rule and jail an exception. Besides reiterating this view, the Supreme Court in Sanjay Chandra [ 2011 (11) TMI 537 - SUPREME COURT ] has further laid down that both factors, i.e. severity of the punishment and gravity of the offence, have to be simultaneously weighed while determining whether or not to grant bail to an accused. In P. Chidambaram [ 2019 (10) TMI 879 - SUPREME COURT ], it was held by the Supreme Court that even though gravity of the offence is an important factor for determining whether or not to grant bail, and economic offences of the nature involved in the case were prima facie grave, it is not a rule that bail shall inevitably be denied. No case may be seen as setting a precedent with respect to grant/rejection of bail, except on principle, and it will be for the Court concerned to determine the gravity of the charged offence in each case based on the facts and circumstances. Further, the gravity of the offence is a factor which is in addition to the triple test/tripod test. In matters of regular bail under Section 439 Cr.P.C., a Court must consider aspects, including but not limited to, the larger interest of the State or public, whether the accused is a flight risk, whether there is likelihood of his tampering with evidence, whether there is likelihood of his influencing witnesses, etc. Apart from these, another factor relevant to the question of bail would be the gravity of the alleged offence and/or nature of the allegations levelled, which may serve as an additional test and can be applied while keeping in view the severity of the punishment that the offence entails - It is equally well-settled that economic offences constitute a class apart and need to be visited with a different approach, given their severity and magnitude. Albeit these offences are likely to adversely impact the economic fabric of the country, bail shall not be denied to a person accused of an economic offence in a routine manner. Each case must be adjudged on the basis of the peculiar facts and circumstances, while striking a balance between the right to personal liberty of the accused and the interest of the society in general. Be that as it may, in 2017, the constitutional validity of Section 45 PMLA came to be challenged before the Supreme Court in Nikesh Tarachand Shah [ 2017 (11) TMI 1336 - SUPREME COURT ], wherefore, by a judgment rendered in 2018, explicating the defects inherent in the provision and the challenges posed thereby, the Supreme Court held that the twin conditions imposed by Section 45(1) PMLA were manifestly arbitrary, discriminatory and violative of Articles 14 and 21 of the Constitution of India. Coming to the present case, it is noted that the applicant is a qualified Chartered Accountant, having deep roots in the society. He was not arrested in the scheduled offence and the charge sheet came to be filed without arrest. Thereafter, he was formally admitted to regular bail in the scheduled offence and his passport has already been seized by the ACB, Srinagar. The applicant has also admittedly joined investigation on a number of occasions. The evidence in the case is primarily documentary in nature, which has been seized. Under these circumstances, this Court is of the opinion that the applicant is not a flight risk and fears, if any, of his fleeing from justice can be allayed by imposing conditions and taking measures such as issuance of LOCs, etc. The statements of the witnesses having been recorded under Section 50 PMLA and the documents relevant to the investigation having been collected, the apprehensions regarding the applicant influencing witnesses and/or tampering with evidence are unfounded. This Court is of the view that the applicant satisfies the triple test for grant of bail - there are no reasonable ground for believing that the applicant is not guilty of the alleged offence. From a prima facie view of the material placed on record and in light of the gravity of the alleged offences, it cannot be said either that the applicant is not likely to commit any such offence while on bail. The bail application is dismissed.
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2022 (3) TMI 231
Money Laundering - provisional attachment of property - scheduled offences - murder - attempt to murder - abduction - extortion - criminal intimidation - kidnapping - cheating - can the petitioner be prosecuted for the offences u/s.3 and 4 of the PMLA? - HELD THAT:- The petitioner, being the Managing Director of the Pothy brothers, has been prosecuted for purchasing the impugned property from the daughter of an alleged criminal. The word alleged criminal is carefully used because Sridhar is no more alive for him to contest the allegations against him. For mulcting criminal liability u/s.3 and 4 of the PMLA, the prosecution should place materials before the Court to show that the person has not only acquired the property by committing a scheduled offence, but, he should have projected that property as untainted - In this case, it is the definite case of the prosecution that the impugned property was acquired by Sridhar in the name of his wife by committing various criminal activities. Of course, a name lender to the principal accused can also be brought within the net of section 3 r/w 4 of the PMLA as abettors. In other words, where the principal offender projects a tainted property as an untainted one, not only will he be held liable, but also all others who had helped him to project the tainted property as untainted. It is not the case of the prosecution that the petitioner herein was projecting a tainted property as an untainted one nor is it their case that the petitioner had abetted D. Sridhar in projecting a tainted property as an untainted one. The petitioner was only a bonafide purchaser of the impugned property from the daughter of D. Sridhar. This sale deed is a registered document, which the prosecution themselves rely upon - A perusal of the averments in the sale deed shows that the petitioner had paid various amount by RTGS to Kumari, the mother of Dhanalakhmi Sridhar on 31.12.2015, 13.01.2016 and 23.02.2016 and has also deducted TDS for that. This payment to the mother of Dhanalakshmi Sridhar, which has been reflected in the sale deed itself, cannot amount to an offence u/s.3 r/w 4 of the PMLA. The prosecution of the petitioner u/s.3 and 4 of the PMLA in S.C.No.74 of 2017 is an abuse of process of law. Ergo, this Criminal Original Petition is allowed.
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Service Tax
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2022 (3) TMI 230
Liability of service tax - appellants are partners of partnership firm and they received certain renumeration and distribution of profit and same amount is shown as profit in their income tax returns - HELD THAT:- The service recipient at the best in this case is only a partnership firm. The partner of a partnership firm is none other than the same, therefore, one would cannot provide service to oneself. As there is no recipient of service in this case, no service has been provided by the appellant. In the income tax returns, the figures shown by the appellants as sale of service is just a portion of the profit earned by them from the partnership firm. In that circumstance, on merits itself, the appellants are not liable to pay service tax. There are no merit in the impugned orders - appeal allowed - decided in favor of appellant.
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2022 (3) TMI 229
Levy of service tax - management, maintenance or repair services - supply of tangible goods services - electric motor winding job - works contract services - composite services - present dispute is for the period 2009-2010 to 2012-2013 during which period the appellant carried out the following two activities under various work orders received from the Delhi Jal Board - time limitation - HELD THAT:- The work orders enclosed in the appeal paper book that the contract was not given by the Delhi Jal Board to the appellant to supply diesel Gensets although they were an important component of the contract. Supply of Diesel Genset was not the essence of contract. The essence of contract was making supplementary arrangements for pumping water during power failure . This arrangement required the appellant to supply Diesel Gensets, load them, unload them, check their batteries, operate them, connect them to the pump sets, when there is power failure and switch over the pumps back to the main line once the power is restored. Thus, the appellant was required to make the entire arrangements for pumping water when there was power failure - The appellant has already discharged service tax under the head Management, Maintenance and Repair Services. As far as the cost of diesel, mobile oil, etc. is concerned, these were required for the maintenance, incurred by the appellant and reimbursed by the Delhi Jal Board. Therefore, these reimbursements cannot be called consideration for rendering service. Therefore, the entire demand made in the show cause notice and confirmed in the impugned order towards supply of tangible goods service needs to be set aside. Electric motor winding job - HELD THAT:- Undisputedly this service required both winding of the motors and also using the materials required for such service. Thus, it was a composite works contract which involved both rendering service and supplying material. The Revenue also does not dispute that it is a composite contract. However, there is a break up in the contract and 20% of the total amount received is attributed by the Delhi Jal Board towards services and 80% towards material. The appellant has paid service tax on 20% and VAT on the 80% of the amount - the demand of service tax on the 80% of the value of the contract attributed towards the goods cannot be sustained. The issue is squarely covered in favour of the appellant by the decision of this Tribunal in COMMISSIONER OF SERVICE TAX VERSUS M/S. RAJ ENGINEERING [ 2016 (11) TMI 485 - CESTAT NEW DELHI ]. At any rate, if the contract is for a composite works contract, it should be treated as a separate species of contract and it is chargeable to service tax only under the head of works contract service . The demand of interest and the penalties imposed also cannot be sustained and need to be set aside - Appeal allowed.
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Central Excise
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2022 (3) TMI 228
Maintainability of appeal - time limitation - condonation of short delay in filing the appeal in the first round of assessment before the Commissioner of Central Excise - HELD THAT:- The issue involved in this civil miscellaneous appeal is covered by a judgment of the Hon'ble Supreme Court in COMMISSIONER OF CUSTOMS CENTRAL EXCISE VERSUS M/S HONGO INDIA (P) LTD. ANR. [ 2009 (3) TMI 31 - SUPREME COURT] where it was held that the High Court has no power to condone the delay in filing the reference application filed by the Commissioner under unamended Section 35-H(1) of the Central Excise Act, 1944 beyond the prescribed period of 180 days and rightly dismissed the reference on the ground of limitation. In the light of the aforesaid judgement, which is squarely applicable to the facts of the present case, this civil miscellaneous appeal stands dismissed.
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2022 (3) TMI 227
Process amounting to manufacture or not - appellant had labelled or relabeled and re-packed activated carbon from bulk to retail or carried out any other process to render it marketable so that its activities fall under Chapter Note 9 to Chapter 38 of the Schedule to Central Excise Tariff Act, 1985 - liability of Central Excise Duty - HELD THAT:- It is undisputed that the appellant is selling activated carbon in bags with its own name pre-printed on them. Thus, if the appellant is selling the goods with its own name on the packets, it is labeling the product. Whether it is also packing from bulk to retail packs? - HELD THAT:- From the data presented, which is also the basis of the SCN, it is evident that the appellant had in some cases packed 25 kg bags into 50 kg bags, i.e., from smaller bags to larger bags which cannot be called packing from bulk to retail. It is the other way round. Whether the appellant is also carrying out any other process so as to render the product marketable? - HELD THAT:- The appellant s position has constantly been that it has not carried out sieving or any other process and hence the activity would not amount to manufacture and hence no duty is payable. Its purchase invoices did not indicate the grade of the activated carbon. On its request, in some of the invoices the suppliers had indicated the grade later. Hence, there was a difference in hand writing which is presumed by the Revenue to be manipulation of invoices. It produced letters from the suppliers to buttress this assertion. Apart from the fact that its purchase invoices / bill of entry do not indicate the grade of the material, while the sale invoices indicate the grade there is no other evidence brought on record by the Revenue that the Activated Carbon was sieved by the assessee. Since the assessee is registered with the Central Excise Department, officers could have gone and inspected and found out if the appellant had the equipment required for sieving the activated carbon to the required grades and was also carrying out this process. In the absence of such direct evidence, the Commissioner has drawn an indirect inference that material was received was sieved only on the ground that the purchase invoices did not have the grade of the material but the sale invoices - this discrepancy may be a cause for doubt but it required further investigation especially when the assessee had categorically denied having ever sieved the material before repacking. In the absence of any positive evidence, the finding in the impugned order that the assessee had carried out this process, cannot be accepted. Since it is found that the assessee has not packed from bulk to retail and there is no evidence, apart from the differences in the invoices, that the assessee actually carried out the process of sieving, the material to the required grade, the assessee is not covered by Chapter Notice 9 to Chapter 38. The processes carried out by the assessee of repacking from retail to bulk and labelling do not amount to manufacture - demand alongwith demand with interest and penalties do not sustain. Appeal allowed - decided in favor of assessee.
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CST, VAT & Sales Tax
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2022 (3) TMI 226
Maintainability of petition - Input tax credit - juristic person - HELD THAT:- The writ petition preferred by Tata Steel Ltd., which is a juristic person, could not have been dismissed as not maintainable when it had challenged the denial of input tax credit to the unit at Naomundi, in respect of the purchases made and utilised in the said unit. Interpretation of statue - Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005 - HELD THAT:- The period involved in the present appeal are the financial years 2006-07 and 2007-08. These aspects have to be considered. Learned senior counsel for the appellant has stated that the appellant may consider challenging these amendments and notification, if required and necessary. The impugned order interpreting Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, as it existed before the Jharkhand Value Added Tax (Amendment) Ordinance, 2011, with an order of remand to the High Court for a fresh decision, is set aside - appeal allowed.
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2022 (3) TMI 225
Maintainability of second appeal - compliance with the pre-deposit or not - Vera Samadhan Yojna 2019 scheme - Validity of assessment order - HELD THAT:- One of the conditions to avail the benefit of the scheme was that if any Appeal was pending on the date, when the dealer would apply for the scheme, such appeal should have been withdrawn. In such circumstances referred to above, the writ applicant herein requested the Tribunal to permit him to withdraw the Appeal. The Tribunal vide order dated 13.02.2020 permitted the writ applicant to withdraw the Second Appeal. Today, the writ applicant is in a fix. He is here before this Court because he has not been able to avail the benefit of the scheme and at the same time, his Second Appeal before the Tribunal has also gone. However, we should take notice of the fact that for the purpose of availing the benefit under scheme, the writ applicant was obliged to deposit an amount of ₹ 21 Lakh. However, the payment of only ₹ 10 Lakh was made. Since the writ applicant failed to make the requisite deposit of the amount, the writ applicant was not in a position to avail the benefits of the Scheme - the only option now left for the writ applicant is to get his appeal which was once filed before the Tribunal heard on merits. However, the order passed by the Tribunal referred to above is coming in the way of the writ applicant. The order passed by Tribunal dated 13.02.2020 in Second Appeal No.441 of 2019 is set aside and the Tribunal is directed to restore the Second Appeal No.441 of 2019 to its original file and hear the same on its own merits and dispose of the same within a period of three months from the date of the receipt of the writ of this order - application disposed off.
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2022 (3) TMI 224
Validity of assessment order - impugned order having allegedly been rendered, without any hearing - opportunity of hearing was not granted to the petitioner - violation of principles of natural justice - HELD THAT:- An assessment order issued under section 25(1) of the KVAT Act is impugned in this writ petition. The jurisdiction of the High Court to interfere in matters relating to assessment of tax arises only when there is an infringement of fundamental rights or when the taxing authorities have assumed a jurisdiction not vested in it or when there is a violation of the principles of natural justice or when there is a challenge to the vires of the Statute. A perusal of the notices issued by the respondent as Ext.P2 and Ext.P5 reveals that the latter of the notices dated 05.01.2021 was for a different amount and therefore the petitioner ought to have replied to the specific allegations mentioned in the said notice dated 05.01.2021. Failure to consider the reply dated 08.05.2018, is, therefore, not material, since the officer had, subsequent to the original notice, issued a fresh notice within the period of limitation raising a different set of allegations - failure to consider Ext.P3 reply given by the petitioner, while issuing Ext.P11 order of assessment, does not vitiate the assessment order. The petitioner was granted sufficient opportunity to contest the assessment proceedings and his failure to do so cannot be regarded as a violation of the principles of natural justice to invoke the discretionary jurisdiction of this Court under Article 226 of the Constitution - the writ petition stands dismissed.
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2022 (3) TMI 223
Violation of principles of natural justice - Validity of the reassessment order - sufficient opportunity has been granted for production of books or not - Section 39(1) of the Karnataka Value Added Tax Act, 2013 - HELD THAT:- It is to be noted that adherence to principles of natural justice in the proceedings prior to issuance of show cause notice would not take away the right of the petitioner to claim availing of the opportunity of personal hearing in the proceedings post issuance of show cause notice. In light of the request of the petitioner for affording an opportunity of personal hearing as per the reply at Annexure-D, assessment order passed without affording an opportunity of personal hearing is in violation of the principle of natural justice and therefore, the impugned assessment order is liable to be set aside. The matter is remanded back for reconsideration by respondent No.3 from the stage of receipt of reply to the proposition notice. The opportunity of personal hearing as requested is to be afforded - re-assessment order is set aside - petition allowed by way of remand.
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