Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
April 10, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
GST
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03/2020 - dated
8-4-2020
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IGST
Seeks to provide relief by conditional lowering of interest rate for tax periods of February, 2020 to April, 2020.
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01/2020 - dated
8-4-2020
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UTGST
Seeks to provide relief by conditional lowering of interest rate for tax periods of February, 2020 to April, 2020.
GST - States
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08/2020 - State Tax - dated
11-3-2020
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Chhattisgarh SGST
Chhattisgarh Goods and Services Tax (Second Amendment) Rules, 2020
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F.12(46)FD/Tax/2017-Pt.V-156 - dated
30-3-2020
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Rajasthan SGST
Notify the date from which an individual shall undergo authentication, of aadhaar number in order to be eligible for registration
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F.12(46)FD/Tax/2017-Pt.V-151 - dated
30-3-2020
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Rajasthan SGST
Amendment in Notification No. F.12 (46) FD/ Tax/ 2017-Pt-III-05, dated the 23rd April, 2019
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F.12(46)FD/Tax/2017-Pt.V-150 - dated
30-3-2020
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Rajasthan SGST
Special procedure for corporate debtors undergoing the corporate insolvency resolution process under the insolvency and bankruptcy code, 2016
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F.12(18)FD/Tax/2020-124 - dated
20-2-2020
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Rajasthan SGST
Amendment in Notification No. F.11 (24) FD/Tax/2016-61 dated 01.07.2017
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F.12(18)FD/Tax/2020-123 - dated
20-2-2020
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Rajasthan SGST
Amendment in Notification No. F.12 (56) FD/Tax/2017-34 dated 22.06.2017
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F.12 (46) FD/Tax/2017-Pt-V-118 - dated
13-1-2020
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Rajasthan SGST
Amendment in Notification No. F.12(46)FD/Tax/2017-Pt.-IV-159, dated the 23rd January, 2018
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G.O.Ms.No. 13 - dated
25-2-2020
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Telangana SGST
Option to file / not file FORM GSTR-9 for registered person whose turnover is less than two crore rupees – As a class of Registered person under section 148 of the TGST Act, 2017
Highlights / Catch Notes
GST
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Recovery of GST - CIRP proceedings initiated against the company - Approval of Resolution Plan - the respondents would be acting in a totally illegal and arbitrary manner while pressing for demands raised vide the notices which are impugned in this writ petition and any other demands which they may contemplate for the period prior to the resolution plan being finalized - demand notices are ex-facie illegal, arbitrary and per-se and cannot be sustained - HC
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Filing of Form TRAN-1 - transitional credit - petitioner has committed mistake due to technical/system error and has failed in filing /uploading a declaration electronically in Form GST Tran-1, in fact, one of the column was not filed by the petitioner - The petitioner is permitted to file or revise their already filed incorrect statutory form TRAN-1 - HC
Income Tax
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Revision of order u/s 264 - CIT rejected the review application - Best judgment assessment passed ex parte - The Officers vested with an obligation to discharge judicial functions are legitimately expected to resort to application of mind in a pragmatic and reasonable manner which is conspicuously absent in the instant case. - HC
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Disallowance u/s. 40A(3) - Proof of cash payment on specific request - one more opportunity should be granted to the assessee to prove his case that he was forced to make cash payments under the compelling circumstances and assessee’s case falls in one of situation enumerated under Rule 6DD - AT
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Estimation of income - declaring less GP rate for the year under consideration in comparison to the preceding years - The rejection of books of account would not be ifso facto result an addition if the assessee has declalred the profit in line with the prevailing profit in the trade /industry or in line with the past history of the assessee - AT
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Penalty u/s 271(1)( c) - Addition on account of interest on FDR - Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then in that eventuality no penalty can be levied. - AT
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Penalty u/s 271A - Non maintaining the books of account - Penalty u/s 271B - non-audit of books of accounts - It is clearly a case of impossibility of performance where it is expected that the assessee should get her books of accounts audited when it is a known and admitted fact that there are no regular books of accounts which have been maintained at first place. - AT
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The CIT(Appeals) cannot travel beyond the subject matter of the appeal, which was as to whether fee u/s. 234E of the Act can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law. - AT
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Reopening of assessment - bogus purchases - When the assessee has subsequently requested the AO to provide an opportunity to cross examine the person, whose statement is being relied upon, he ought to have been provided the same or at least he could have been provided with the statement of the said person to enable the assessee to rebut such statement with necessary evidence. - AT
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Validity of reopening u/s.147 - addition u/s.69A on account of gifts - reasons recorded were sufficient to clothe the Assessing Officer to acquire the jurisdiction, to reopen the assessment - in the case of the gift mere identity and payment through account payee cheque does not establishes the genuineness of the gift - AT
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Disallowance u/s 14A r.w.r. 8D - the disallowances made u/s 14A of the Act r.w.r. 8D cannot be the subject matter of disallowances while determining the book profit u/s 115JB - Disallowance needs to be made in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. - AT
Customs
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Import of seismic research vessel with consumable stores - As there is no dispute that the appellant has obtained the Essentiality Certificate issued by Director General of Hydrocarbons that the said goods have been used in connection with the petroleum operations, therefore, relying on the decision in the case of CGG Marine, it is held that the respondent is entitled for the benefit of exemption N/N. 21/2002. - AT
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Refund of excess customs duty paid - No refund can be claimed in respect of any assessment including self assessment unless the assessment itself is challenged and set aside by the appellate authority - Appeal dismissed - AT
Corporate Law
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Aggrieved Persons - removal of nominee director of the Corporate Debtor - powers of Directors in a ‘Compulsory Liquidation’ - There is no simmering doubt that the Directors of a Company appointed by the shareholders in the ‘Annual General Meeting’ are to be removed as per ‘Ordinary Resolution’ passed in the ‘General Body Meeting’. - There is no different opinion on this well settled proposition - the proposal submitted by the Liquidator in terms of the power bestowed on him under the I&B Code, read with Rule, Article 140 (4) of the ‘Articles of Associations’ cannot be ignored - AT
Service Tax
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Refund of excess paid service tax - reverse charge mechanism - the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. - AT
Central Excise
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Maintainability of appeal - Jurisdiction - Same company operating with two registrations with two Different PAN - SCN were issued by the Officer in the particular position and so were the Orders-in-Original - appeal dismissed for non-prosecution - if the Additional Commissioner has issued the show cause notice and his successor Joint Commissioner decided the matter, we find no infirmity at all in such a decision - AT
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Imposition of penalty u/r 15(2) of CCR, 2004 - CENVAT Credit - No evidence of fraud, collusion, wilful misstatement, suppression of facts which are essential conditions for imposition of penalty under Rule 15(2) of CCR, 2004 are evident either from the SCN or from the impugned order - the penalty imposed upon assessee under Rule 15(2) of CCR, 2004 is set aside. - AT
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Valuation - includibility - non-reimbursed portion of the cost of transportation of inputs - If there is some additional consideration for sale, then such additional consideration also has to be included to the transaction value to determine the assessable value. This is precisely what the appellant had done. The Department cannot add separately all the costs incurred by the appellant which have not been reimbursed by the buyer in addition to the price. - AT
VAT
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Intra-state transaction or Inter state sale - CST - transaction of the assesses when the seeds have been procured from the farmers for their onward transmission for certification and other processes to its Kota plant - this aspect of the transaction culminated in the State of U. P. wherein the procurement of the said seeds takes place from the farmers by the assessee through their contractor is an intra-State sale - HC
Case Laws:
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GST
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2020 (4) TMI 269
Recovery of GST - CIRP proceedings initiated against the company - Approval of Resolution Plan - petitioner contended that the issue regarding the resolution plan being final and binding on all parties; whether or not they had been heard by the resolution professional or the COC - whether the resolution plan approved by the COC is binding on the department or not? - HELD THAT:- It is trite to note that as per the amended Section 31 of the IBC referred to supra, the Central Govt., State Govt. or any other local authority to whom, a debt in respect of payment of dues arising under any law for the time being in force are owed, have been brought under the umbrella of the resolution plan approved by the adjudicating officer which has been made binding on such governments and local authorities. The purpose of the IBC is salutary as it has been enacted to ensure that an industry under distress does not fade into oblivion and can be revived by virtue of the resolution plan. Once the offer of the resolution applicant is accepted and the resolution plan is approved by the appropriate authority, the same is binding on all concerned to whom the industry concern may be having statutory dues. No right of audience is given in the resolution proceedings to the operational creditors viz. the Central Govt. or the State Govt. as the case may be. The purpose of the statute is very clear that it intends to revive the dying industry by providing an opportunity to a resolution applicant to take over the same and begin the operation on a clean slate. For that purpose, the evaluation of all dues and liabilities as they exist on the date of finalization of the resolution plan have been left in the exclusive domain of the resolution professional with the approval of the COC. The courts are given an extremely limited power of judicial review into the resolution plan duly approved by the COC. In the case at hand, the situation has proceeded much further. The operational creditors i.e. the Commercial Taxes Department of Govt. of Rajasthan as well as the respondent Commissioner of Goods and Service Tax assailed the resolution plan by filing appeals before Hon ble the Supreme Court with a specific plea that their dues have not been accounted for by the COC in the resolution plan. Thus, the respondents would be acting in a totally illegal and arbitrary manner while pressing for demands raised vide the notices which are impugned in this writ petition and any other demands which they may contemplate for the period prior to the resolution plan being finalized - demand notices are ex-facie illegal, arbitrary and per-se and cannot be sustained - petition allowed - decided in favor of petitioner.
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2020 (4) TMI 268
Filing of Form TRAN-1 - transitional credit - petitioner has committed mistake due to technical/system error and has failed in filing /uploading a declaration electronically in Form GST Tran-1, in fact, one of the column was not filed by the petitioner - HELD THAT:- The High Court of Punbaj and Haryana, in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] has held that Respondents to permit the Petitioner to either submit the TRAN-1 form electronically by opening the electronic portal for that purpose or allow the Petitioner to tender said form manually on or before 15th October, 2019 and thereafter, process the Petitioner's claim for ITC in accordance with law. The petitioner is permitted to file or revise their already filed incorrect statutory form TRAN-1 either electronically or manually within a period of 45 days from today - Petition allowed.
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2020 (4) TMI 267
Filing of Form TRAN-1 - transitional unavailed CENVAT Credit - HELD THAT:- As a similar view has been taken by all other High Courts, the petitioner is permitted to file or revise their already filed incorrect statutory form TRAN-1 either electronically or manually within a period of 45 days from today - The respondents shall be at liberty to verify the genuineness of the claim of the petitioner. However, the petitioner shall not be denied of their legitimate claim of CENVAT/ITC on the ground of non filing of TRAN-1 by 27/12/2017. Petition allowed.
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Income Tax
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2020 (4) TMI 266
Revision of order u/s 264 - CIT rejected the review application - Best judgment assessment passed ex parte - Exemption u/s 11 denied - petitioner not entitled to exemption being a Religious and Charitable Institution - only ground for rejection of the review is that the petitioner did not respond to the notices issued u/s 142 - HELD THAT:- Writ petition is bereft of material. The Officers vested with an obligation to discharge judicial functions are legitimately expected to resort to application of mind in a pragmatic and reasonable manner which is conspicuously absent in the instant case. For that reason, the impugned order Ext.P6 is set aside. The matter is remitted to the Commissioner of Income-tax (Exemption), Kochi to consider the revision petition afresh after affording an opportunity of hearing to the petitioner.
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2020 (4) TMI 265
Reopening of assessment u/s 147 - addition u/s 68 holding that the unsecured loan claimed by the assessee as bogus accommodation entries - HELD THAT:- The assessee has furnished the copies of loan confirmations, copy of PAN Card, copy of income tax returns, acknowledgment for the year ending 31.03.2008, copy of Directors Reports, Auditors Report, Audited Financial statements along with Annexure for the year ending 31.03.2008, copy of bank statement showing receipt and payment of loans, copy of ledger account in the books of appellant and copy of bank statements of the appellant showing the receipts and repayment of loan etc. in respect of the parties from whom, it had obtained loans during the year relevant to the assessment year under consideration. - Decided in favour of assessee.
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2020 (4) TMI 264
Correct head of income - Income from sale of shares - short term capital gain OR business income - HELD THAT:- The assessee is regularly trading in shares over the years and, therefore, there is no justification for treating the transaction as disposal of investments. It is the submission of the Ld. Counsel for the assessee that out of 72 transactions 41 transactions relate to transactions out of opening stock and whatever shares have been purchased during the year have not been sold. It is the submission of the Ld. Counsel for the assessee that it trades only in mutual funds and not in shares. Further the assessee has also paid security transaction tax on all the shares that have been purchased. Since the above submissions of the Ld. Counsel for the assessee is contrary to the findings given by the lower authorities, therefore, considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to adjudicate the issue afresh in the light of the submissions made by the assessee. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. While doing so he is also directed to examine the treatment given by him in the preceding and subsequent year on similar transactions carried on by the assessee - Assessee appeal allowed for statistical purposes.
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2020 (4) TMI 263
Disallowance u/s. 40A(3) - Proof of cash payment on specific request - assessee had failed to produce evidence from the payee , i.e., SPM Sons, Kollam that it insisted on cash payments - HELD THAT:- The assessee has now produced a letter from SPM Sons, Kollam wherein it was stated that it had insisted for cash payments in view of the fact that the goods sold to them were mill goods, which is in high demand - as stated that the assessee s Bank account was located at Punalur and for encashing the cheque/draft would require time. It was further mentioned in the said letter of SPM Sons, Kollam that the purchases were effected in most of the days after the banking hours. Rule 6DD(j) of the I.T. Rules states that when payments are required to be made on dates on which the Banks are closed either on account of holiday or strike, such cash payments would not be liable for disallowance u/s. 40A(3) - assessee has to prove the circumstances under which the assessee was forced to make cash payments and such circumstance falls within one of the conditions enumerated under Rule 6DD of the I.T. Rules - one more opportunity should be granted to the assessee to prove his case that he was forced to make cash payments under the compelling circumstances and assessee s case falls in one of situation enumerated under Rule 6DD of the I.T. Rules. For the above purpose, this issue is restored to the file of the Assessing Officer. Accordingly, Ground Nos. 1 to 5 of the assessee are allowed for statistical purposes. Payments to persons covered u/s. 40A(2) in excess of market value - assessee had paid salary to his mother, his wife and his two brothers - HELD THAT:- Having regard to the fact that the assessee s mother, wife and two brothers had experience in this line of trade, salary was paid to them as compensation for market value of services rendered by them - Disallowance of 50% of salary on facts and circumstances of the instant case is excessive. In order to meet the ends of justice, out of ₹ 5,40,000/- hold that assessee is to be granted further deduction of ₹ 2,70,000/- on account of salary paid to close relatives, for the reason that assessee s father was the previous owner of the business, on his passing away, all his children and his wife were entitled to business. Moreover, it is also a fact that assessee s mother, wife and his two brothers were assisting the assessee in running the day to day business affairs of the assessee. Accordingly,grant further deduction of ₹ 2,70,000/- and confirm the disallowance of ₹ 2,70,000/- out of the total disallowance of ₹ 5,40,000/- made by the Assessing Officer which was confirmed by the CIT(A). Disallowance of Car Expenses - AO disallowed 1/3rd of the expenses claimed on account of four cars owned by the Appellant - HELD THAT:- It is an admitted fact that that the assessee has four relatives who were attending to business and each of them was given a car for business and for its utilization. The assessee has also to go to other places such as Tamil Nadu and Bangalore for making purchases. - 1/3rd disallowance of car expenses is excessive - restrict the disallowance to 1/4th of the car expenses claimed by the assessee. - Decided partly in favour of assessee.
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2020 (4) TMI 262
Estimation of income - Decline in gp - declaring less GP rate for the year under consideration in comparison to the preceding years - HELD THAT:- It is undisputed that the margin in trading of bullion is very less and 1% GP is considered as a reasonable prevailing margin. Thus, 99% of the export turnover can fetch only 1% margin being trading in bullion then in remaining 1.23% turnover of the assessee is representing the sale of jewellery. As per directions of the Bench the assessee has filed the details of exports from which it is clear that out of total turnover ₹ 53.56 Crore the turnover of trading in bullion is ₹ 52.96 Core and the turnover from sale of jewllery is ₹ 6,00,000/-. When around 99% of the turnover of the assessee is from trading of bullion and purchases of bullion made from the Corporation Bank then the GP declared by the assessee at 1.39% is reasonable. The rejection of books of account would not be ifso facto result an addition if the assessee has declalred the profit in line with the prevailing profit in the trade /industry or in line with the past history of the assessee. In the case in hand when the assessee has declared GP at 1.39% of total turnover of ₹ 53.56 Cores out of which about 53 Core turnover is consisting of export of bullion. Thus when almost all the turnover of the assessee is an export of bullion then the margin/GP declared by the assessee at 1.39% is in the line with the profits prevailing in this trade. Neither the AO nor the ld. CIT(A) has appreciated this fact that about 99% of the turnover of the assessee is from trading in bullion, therefore, the addition made by the AO and sustained by the ld. CIT(A) is not justified and the same is deleted. - Decided in favour of assessee.
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2020 (4) TMI 261
Addition u/s 68 as unexplained cash credit - no opportunity to cross examination given to assessee - HELD THAT:- A.O. has based his finding purely on the basis of the findings of the other officers and the material gathered at the back of the assessee. In our considered view, the assessee should have been confronted with the material so gathered and the assessee was ought to have been given opportunity to cross examination. Considering these facts, the impugned assessment order is set aside to the file of the A.O. to be decided afresh. The A.O. would verify the claim of the assessee, which he had filed in the form of additional evidences before Ld. CIT(A) and would also make independent enquiries, if he so deem fit while framing the assessment afresh. Assessee's grounds raised in the appeal are allowed for statistical purposes.
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2020 (4) TMI 260
Exemption u/s 11 - Charitable activity u/s 2(15) - whether by rendering specific services to members and non-members for a fee, a trade, professional or similar association can be said to be carrying on a business activity? - HELD THAT:- As relying on PHD CHAMBER OF COMMERCE INDUSTRY VERSUS DIRECTOR OF INCOME TAX-EXEMPTIONS [ 2012 (11) TMI 429 - DELHI HIGH COURT] we find that categorical finding given by the Ld. CIT(A) that the assessee in the instant case is not engaged in any activity of trade, commerce or business so as to fall within the mischief of first proviso of section 2(15) of the Act, is not controverted by the Revenue before us. Hence exemption u/s 11 could not be denied to the assessee. In any case, we find that the assessee had not claimed any expenditure in the sum of ₹ 2,34,58,706/- in its income and expenditure account which factual finding given by the Ld. CIT(A) had also not been controverted by the Revenue before us. Hence, there cannot be any disallowance of the said sum treating the same as surplus in the assessment. - Decided against revenue.
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2020 (4) TMI 259
Penalty u/s 271(1)( c) - Addition on account of interest on FDR - difference in method of calculating the interest income - assessee was maintaining multiple accounts and was estimating the accrual income by way of interest on unmatured Fixed deposit and this estimation can be at variance with the working of the bank - HELD THAT:- Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then no penalty can be levied. We are conscious of the fact that law for making addition in quantum proceedings is different from the law for imposing penalty. In recognition of this fundamental difference, both proceedings have been kept separate and independent. Provisions of Section 271(1)( c) of the Act give discretionary powers to the authority levying penalty to levy or not levy penalty in the case of concealment of income or furnishing inaccurate particulars of income. Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] laid down a ratio that penalty should not be imposed merely because it is lawful to do so. AO has to exercise his discretion judiciously. Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then in that eventuality no penalty can be levied. Our this view is fortified by the decision in the case of CIT vs Reliance Petroproducts (P) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT ] - Decided in favour of assessee.
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2020 (4) TMI 258
Penalty u/s 271A - Non maintaining the books of account and other documents - HELD THAT:- In this case the AO noted that the assessee has not maintained any books of accounts and as such he has committed a default within the meaning of provisions of sec 44AA of the Act which made the assessee liable for penalty u/s 271A - AO thus imposed the penalty u/s 271A which was confirmed by the ld. CIT(A). During the course of hearing, the Bench noted that the assessee did not maintain the books of account as provided u/s 44AA as the gross receipts of the assessee from business was more than ₹ 10 lacs - assessee did not advance any controverting arguments against the findings of the lower authorities. We find no reason to interfere with the order of the ld. CIT(A). Thus the solitary ground of the assessee as to confirming of penalty u/s 271A of the Act by the ld. CIT(A) is sustained. Penalty u/s 271B - non-audit of books of accounts - HELD THAT:- We have upheld the levy of penalty under section 271A for non-maintenance of books of accounts. Once the penalty has been levied for non-maintenance of books of accounts, there cannot be penalty again for non-audit of books of accounts which were not kept at first place. It is clearly a case of impossibility of performance where it is expected that the assessee should get her books of accounts audited when it is a known and admitted fact that there are no regular books of accounts which have been maintained at first place. Our view is fortified by the decision of Rajmal Parsuram Todi [ 1996 (8) TMI 102 - GAUHATI HIGH COURT] wherein it was held that when a person commits an offence by not maintaining the books of accounts as contemplated under section 44AA, the offence is complete and after that, there can be no possibility of any offence as contemplated under section 44AB and therefore, the imposition of penalty is erroneous.
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2020 (4) TMI 257
Late fee u/s. 234E - intimation u/s. 200A - delay in filing the TDS statement - Fee for default in furnishing statements - CIT-A declared the return of TDS filed u/s. 200(3) as non est - HELD THAT:- In the case of Manoj Kumar Jaiswal [ 2019 (5) TMI 528 - ITAT BANGALORE] this Tribunal decided identical issue holding that the Act contains provision for declaring a return of income filed as invalid u/s.139(9) of the Act. There is no such provision for declaring a return of TDS as invalid. There is no power conferred, either under those provisions or under any other provisions of the Act, to declare the return of TDS filed u/s. 200(3) as non est. The Tribunal also held that in appeal against an order u/s.200A of the Act, the provision of law applicable, in so far as the powers of CIT(A) in an appeal u/s.200A of the Act, was clause (c) of section 251 and that clause empowers the CIT(A) to pass such orders in the appeal as he thinks fit. The Tribunal held that a reading of the aforesaid clause would show that the CIT(Appeals) in the cases to which the said clause applies, can pass such orders as he thinks fit, but that power is circumscribed by the words in the appeal . Therefore, the CIT(Appeals) cannot travel beyond the subject matter of the appeal, which was as to whether fee u/s. 234E of the Act can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law. We allow the appeals of the Assessee by holding that the conclusion of the CIT(Appeals) holding that return of TDS filed by the assessee is non est in law is not valid in the eyes of law and the said direction is directed to be deleted and the order of the CIT(Appeals), to this extent, is held to be bad in law. - Decided in favour of assessee.
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2020 (4) TMI 256
Reopening of assessment - bogus purchases - Denial of opportunity to cross examine a person whose statement is being relied upon to make the addition - HELD THAT:- It is settled position of the principles of natural justice that the assessee should not be deprived of an opportunity to cross examine a person whose statement is being relied upon to make the addition in the hands of the assessee. When the assessee has subsequently requested the AO to provide an opportunity to cross examine the person, whose statement is being relied upon, he ought to have been provided the same or at least he could have been provided with the statement of the said person to enable the assessee to rebut such statement with necessary evidence. Thus deem it fit and proper to remand the issue to the file of the AO with a direction to provide a copy of the statement (wherein the assessee s name is mentioned as beneficiary) to the assessee and provide it with an opportunity to cross examine such person, if necessary. For the AY 2009-10, the assessee had also filed a copy of the affidavit of Mr. Rajender Jain retracting the statement made by him during the course of search. In such a situation, it is even more important that the assessee should be given an opportunity to cross examine the party particularly when he has confirmed the transaction made by the assessee. Another factor which could go in favour of the assessee is that the assessee has also shown the sale of such diamonds subsequently to one of the parties in Hyderabad who have been confirmed the transaction and the assessee has also received the consideration through banking channels. There cannot be any sale of stock if there were no purchases. Therefore, this factor also needs to be considered - assessments for both the years are set aside and are remanded to the file of the AO for reconsideration and for re-adjudication as directed above.
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2020 (4) TMI 255
Correct head of income - Income from purchase of shares - LTCG OR business income - Whether the purchase of shares are shown under the head stock-in-trade or under the head investments? - HELD THAT:- Since the department has not pointed out any material change in the facts of the present case, we have no reason to take a different view. Hence, respectfully following the decision of the coordinate Bench rendered in assessee s own case for the assessment year 2006-07 [ 2014 (1) TMI 1599 - ITAT MUMBAI ] set aside the findings of the Ld. CIT(A) and allow this ground of appeal of the assessee. Accordingly, we direct the AO to treat the income of the assessee amounting to ₹ 74,05,599/- under the head income from short term capital gains. Disallowance u/s 14A read with rule 8D - assessee earned exempt income and not made any suo moto disallowance stating that it had not incurred any expenditure in relation to the earning of the said exempt income - HELD THAT:- We notice that the Ld. CIT (A) has confirmed the disallowance amounting to ₹ 9,74,375/- computed by the AO against the exempt income of ₹ 4,21,042/-, which is contrary to the ratio laid down by the Hon ble Delhi High Court in the case of Joint Investments [ 2015 (3) TMI 155 - DELHI HIGH COURT ] as the disallowance confirmed by the Ld. CIT (A) is more than the exempt income earned by the assessee. The Hon ble Delhi High Court in the case of Joint Investments vs. CIT, has held that section 14A and Rule 8D cannot be interpreted to mean that the entire tax exempt income can be disallowed. In the present case, the assessee has earned exempt income of ₹ 4,21,042/- on which the AO made disallowance of ₹ 9,74,375/-. In view of the ratio laid down by the Hon ble Delhi High Court in the aforesaid case, the disallowance u/s 14A cannot exceed exempt income of the relevant year. Findings of the Ld.CIT (A) are contrary to the law laid down by the Hon ble Delhi High Court. Hence, following the ratio laid down by the Hon ble Delhi High Court in the aforesaid case, we set aside the findings of the Ld. CIT (A) and direct the AO to restrict the disallowance to the exempt income earned by the assessee during the relevant year.
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2020 (4) TMI 254
Disallowance of the claim of bad debt - Disallowance of interest expenditure - HELD THAT:- No infirmity in the order of the CIT(A) regarding the decision in respect of both these issues. Regarding bad debts, he has given a categorical finding that this claim is not allowable neither under section 57(iii) nor under 36(1)(vii) of the IT Act, 1961 and regarding disallowance of interest expenditure also, he has given a categorical finding that this amount is not allowable under section 57(iii) of the IT Act, 1961 and it is not allowable as a business expenditure because the assessee has not produced any details to show that the expenditure was related to his business / trading activity and that overdraft was used for the purpose of business. Hence, decline to interfere in the order of the CIT(A). - Decided against assessee.
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2020 (4) TMI 253
Delayed payment of employees contribution to Provident Fund - addition u/s 2[24][x] r.w.s. 36[1][va] - payment made before the due date for filing the return of income by the appellant - HELD THAT:- Assessee has made deposits within the financial year but the fact remains that this ground of appeal was not raised before the CIT (Appeals). Accordingly, we restore this ground of appeal to the file of CIT (Appeals) to adjudicate on merits and allow allow additional ground of appeal for statistical purposes. Whereas in respect of claim of additional depreciation, the learned Authorised Representative submitted that the assessee has evidences and proof that the computer is an essential part of plant and machinery installed at the factory premises. We found the assessee has not produced any evidence in the appellate proceedings. Hence we consider it proper to remit the disputed issue to the file of CIT (Appeals) for adjudication considering the evidences filed by the assessee. Disallowance u/s 14A r.w. Rule 8D(2) - restricting the disallowance of expenditure to the extent of dividend income - HELD THAT:- We found the assessee has surplus funds and relied on the decision of CIT Vs. Microlabs Limited [ 2016 (4) TMI 219 - KARNATAKA HIGH COURT] held that when investments are made out of common pool of funds and non-interest bearing funds were more than the investments in tax-free securities, no disallowance of interest expenditure under section 14A can be made. Thus we restrict the addition to the extent of ₹ 38,857. Disallowance under Section 40(a)(ia) with respect to interest paid to Tata Capital Ltd. - Non deduction of TDS - AR submitted that the recipient has offered income in their assessment, therefore, there is no requirement to make addition - HELD THAT:- When a query was raised to the learned Authorised Representative regarding obtaining of Certificate from Auditor in Form 26A that the recipient has offered the income in their Assessment. The learned Authorised Representative submitted that the information is available with the assessee and prayed for an opportunity to substantiate before lower authorities. Accordingly to meet the ends of justice, we restore this issue to the file of CIT(Appeals) to consider the submissions of the assessee duly support with evidence of Form 26A and adjudicate on merits. Disallowance of interest on advances provided to the sister concern - AO has disallowed interest @ 12% p.a. - HELD THAT:- We found from the financial statements the assessee has sufficient own funds in comparison to the advances provided to the sister concerns, further out of surplus funds of ₹ 5,78,67,588 as on 31.03.2013, the advances to sister concerns are to the extent of ₹ 39.91 lakhs and investments of ₹ 77.74 lakhs and both aggregating to ₹ 117.65 lakhs which is comparatively lower than surplus funds as on 31.3.2013. Hence the presumption would arise that the advances to sister concern and investments are out of interest free funds/surplus funds. We support our view relying on the decision of Hon'ble Bombay High Court in the decision of CIT Vs. Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT]. We respectfully follow the ratio of judicial decision and the presumption that advances to sister concerns are out of interest free funds and accordingly direct the Assessing Officer to delete the interest disallowance.
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2020 (4) TMI 252
Validity of reopening u/s.147 - addition u/s.69A on account of gifts - HELD THAT:- Assessing Officer to establish the fact of escapement of income at the stage of issue of notice the only question which is required to be seen is, whether there was any relevant material on which a reasonable person could have formed the requisite believe and whether material would conclusively prove the escapement of income is not a concern at that stage. In this case, also not only the material coming on record before the Assessing Officer was relevant but also had live link nexus with the income escaping assessment because the donor was found to be; firstly, accommodation entry provider; and secondly, he has admitted that he has given bogus gift to various beneficiaries in lieu of cash and in the list of such beneficiary not only the assessee s name had appeared but also the PAN and the gift also garb co-related to the relevant entries in the bank account. Thus, we hold that reasons recorded were sufficient to clothe the Assessing Officer to acquire the jurisdiction, to reopen the assessment. The ground that, Assessing Officer had not obtained the satisfaction u/s.151 before issuance of notice is also not correct because Assessing Officer has specifically stated that satisfaction was obtained from the Addl. CIT wherein he has stated that he is satisfied with the reasons recorded by the Assessing Officer. Thus, this ground is also not tenable. Thus, the reopening of the assessment u/s.147 r.w.s. 148 is valid and the order of the Ld. CIT (A) on this count is upheld. Addition on account of gift - A Donor cannot have natural love and affection to hundreds of people where gifts were given without any occasion and that to be in several lakhs. Another important factor is that the donor has stated to have gifted huge amount of gifts to various persons and Assessing Officer has even noted 9 such persons also on the basis of information. Once, he has confirmed that he is actually an entry provider and admitted that he has given bogus gifts in lieu of cash, then mere filing of memorandum of gift and affidavit of the donor cannot lead to a conclusive inference that gift is genuine. Mere identification of the donor and movement of the gift through banking channels definitely cannot prove the genuineness of the gift when the credibility of the donor itself is dubious coupled with the fact that his completely a stranger then in our opinion genuineness of the gift does not stand establish. Various courts have held that in the case of the gift mere identity and payment through account payee cheque does not establishes the genuineness of the gift which has been held so by the Hon ble Jurisdictional High Court in the case of Sajan Dass Sons [ 2002 (11) TMI 24 - DELHI HIGH COURT ]. Accordingly, the gift of ₹ 5 lac is confirmed. - Decided against assessee. .
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2020 (4) TMI 251
Disallowance u/s 14A r.w.r. 8D - Whether appellant has sufficient interest free ftinds and not incurred any expenditure for earning tax free income - whether the investments which have yielded the exempted income in the year under consideration should only be considered for the purpose of the disallowance under rule 8D (2)(iii) of income tax rule? - HELD THAT:- We find support and guidance from the order of Calcutta Tribunal in the case of REI Agro Limited Vs. DCIT [ 2013 (9) TMI 156 - ITAT KOLKATA] wherein it was held not all investments become the subject-matter of consideration when computing disallowance under section 14A read with rule 8D. The disallowance under section 14A read with rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this income which does not form part of the total income In the case of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] passed recently wherein it was held that the disallowances u/s 14A of the Act read with rule 8D of Income Tax Rules for the administrative expenses will be determined considering only those investments which yielded exempt income during the year. We direct the Assessing Officer to compute the disallowance as per Rule 8D by taking into consideration only those shares/investments, which have yielded exempted income in the year under consideration. Hence the ground of appeal of the assessee is partly allowed. Addition of the disallowance made u/s 14A of the Act while computing book profit u/s 115JB - HELD THAT:- It is settled law that the amount of disallowance made by the AO u/s 14A of the Act cannot be imported while determining the profit u/s 115JB of the Act. In this regard, we rely on the judgment cited by the Ld. AR for the assessee in the case of Alembic Ltd. [ 2017 (1) TMI 513 - GUJARAT HIGH COURT] Also note that in the recent judgment of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] that the disallowances made u/s 14A of the Act r.w.r. 8D cannot be the subject matter of disallowances while determining the book profit u/s 115JB. Disallowance needs to be made in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. In holding so, we draw our support from the judgment of Hon ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. [ 2014 (11) TMI 1169 - CALCUTTA HIGH COURT] wherein it was held that the disallowance about exempted income needs to be made as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently Determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently - HELD THAT:- There is no mechanism given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/determine the disallowance. Therefore in the given facts circumstances, we feel that adhoc disallowance will service the justice to the Revenue and assessee. We, therefore, are directing for the ad-hoc disallowance to avoid the multiple proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance at 1% of the exempted income as discussed above under clause (f) to Explanation-1 of Sec. 115JB - We also find to bring this fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. But now we note that there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently. Therefore our action for restoring back the issue to the file of AO would unnecessarily cause further litigation. Thus we limit the disallowance on an ad-hoc basis @ 1 % of the exempted income as per the clause (f) to Explanation-1 of Sec. 115JB of the Act. Thus the ground of appeal of the assessee is partly allowed.
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Customs
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2020 (4) TMI 250
Refund of SAD - N/N. 102 of 2007-customs - goods exempted under the UP VAT Act, 2008 - HELD THAT:- The issue decided in the case of M/s.Goyal Impex and Industries Limited vs M/s.DO Best Infoway Space [ 2019 (9) TMI 1331 - MADRAS HIGH COURT ] where it was held that The respondents are directed to pass an appropriate order for refunding the Special Additional Duty paid by the writ petitioner - petition allowed.
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2020 (4) TMI 249
Foreign Going vessel - shipping stores consumed aboard the vessel - benefit of exemption available to ship stores - Department relies upon a Certificate of Indian Registry given for the vessel registered on 21/07/1998 at Mumbai - HELD THAT:- Though the Department alleges that the vessel has been on the coastal run, no evidence to that effect has been brought on record either by way of any permission granted for coastal run by Customs or D.G. Shipping or any copy of the log book of the vessel has been submitted. Moreover, we find from the judgment of the Hon'ble Supreme Court in UNION OF INDIA VERSUS VM SALGAONCAR BROS. (P) LTD. [ 1998 (3) TMI 134 - SUPREME COURT ] that such vessels which are engaged in transshipment of export cargo from the port to the mother vessels stationed at highseas are sea going vessels and are rightly eligible to be held as foreign going vessels in terms of Section 2(21) of the Customs Act, 1962. The vessel M.V. Sunrise was engaged in the carriage of goods between ports mentioned above to the high-seas. Going by the definition contained under the clause (iii) of the inclusive clause, it is found that the vessel is a foreign going vessel and accordingly, the exemption available to the ship stores is rightly held by the learned Commissioner(Appeals) to be admissible - appeal dismissed - decided against Revenue.
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2020 (4) TMI 248
Import of seismic research vessel viz., M.V.CREST RADIANT-5 with consumable stores such as marine gas oil, hydraulic, lubricating gas oil, grease, paints thinners - benefit of N/N. 21/2002-CUS dt.01.03.2002 - Denial of benefit on the ground that the marine gas oil imported by the appellant is having the characteristics of light diesel oil - HELD THAT:- The issue came up before this Tribunal in the case of M/S C.G.G. MARINE VERSUS THE COMMISSIONER C C. E, VISAKHAPATNAM [ 2016 (6) TMI 709 - CESTAT HYDERABAD] where it was held that what was imported was Marine Gas Oil and not Light Diesel Oil and hence the benefit of exemption under CN 21/2002, Sl.No.217, against the Essentiality Certificate issued by the Director General of Hydrocarbons, will be available to said Marine Gas Oil. As there is no dispute that the appellant has obtained the Essentiality Certificate issued by Director General of Hydrocarbons that the said goods have been used in connection with the petroleum operations, therefore, relying on the decision in the case of CGG Marine, it is held that the respondent is entitled for the benefit of exemption N/N. 21/2002. Benefit allowed - appeal dismissed - decided against Revenue.
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2020 (4) TMI 247
Enhancement of redemption fine on the imported goods - enhancement of penalty - goods were removed from the Customs area by the importer appellant without filing bill of entry and without paying any duty whatsoever - confiscation - HELD THAT:- It is true that after removing the goods, the importer had, on his own, filed a bill of entry and when it was discovered that the goods were removed, has explained that they were removed by mistake as well as their own mistake because of which their importer goods were mixed up and taken out all along with some domestic goods from the custody of the custodian. It is also true that they have returned the goods to the customs after such discovery. These are mitigating factors in this case. The value of the goods declared was ₹ 83,13,505/-. The maximum redemption fine imposable on confiscation is equal to the market value of the goods. However, the adjudicating authority has imposed a fine of only ₹ 2,50,000/-. The penalty which is imposable under section 112 is equal to the value of the goods. However, the penalty which is imposed, is a small fraction of the value of the goods i.e. ₹ 30,000/- only. Both fine and penalty are fair and not unreasonable - considering the totality facts of the case, it is found that reduction of redemption fine from ₹ 2,50,000/- to ₹ 2,00,000/- and penalty from ₹ 30,000/- to ₹ 25,000/- would meet ends of justice. Appeal allowed in part.
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2020 (4) TMI 246
Export of iron ore fines with Fe content claimed to be less than 62% - benefit of N/N. 62/2007-CUS dated 03.05.2007 - HELD THAT:- To ascertain the Fe content so as to extend the benefit of said exemption notification, sample was drawn and tested in the Customs Laboratory, Visakhapatnam, where its Fe content was reported as 62.67%. The said sample was retested at the CRCL, New Delhi to ascertain its Fe content, when the case was remanded by the Hon ble Andhra Pradesh High Court, while disposing the writ petition filed by the appellant challenging the initial test report. In the retest also the Fe content of the iron ore fines was found to be more than 62%. Needless to emphasize the samples drawn by the department had been in accordance with the procedure prescribed under the Customs Act and the Rules made thereunder; also in the presence of both the parties i.e., department as well as the representative of the appellant, whereas the samples drawn by the appellant and tested in private laboratory was without the knowledge or presence of the departmental officer. Hence, test report of the said samples cannot be relied upon against the test report of the Government laboratories. Appeal dismissed - decided against appellant.
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2020 (4) TMI 245
Refund of excess customs duty paid - refund rejected on the ground that before filing a refund claim, the appellant should have first challenged the assessment of the bills of entry which they did not do - whether the appellant is entitled to refund of excess duty paid when the bills of entry are finalised or otherwise? - HELD THAT:- This issue has been a point of contention and Hon ble Apex Court in the case of Flock India Pvt Ltd., [ 2000 (8) TMI 88 - SUPREME COURT ] and Priya Blue Industries Ltd., [ 2003 (11) TMI 600 - SC ORDER ] held that the assessment order has to be first challenged before a refund claim can be filed under Section 27. The reason for this is the Officer sanctioning the refund cannot sit in judgment on the assessment done by the Assessing Officer. An assessment is a quasi judicial function exercised by the Assessing Officer against which an appeal lies before the Commissioner (Appeals) and not before the Officer sanctioning the refund. Sanction of refund is a mere mechanical process of seeing if duty was paid in excess and refunding the same. No refund can be claimed in respect of any assessment including self assessment unless the assessment itself is challenged and set aside by the appellate authority - Appeal dismissed - decided against appellant.
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Corporate Laws
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2020 (4) TMI 244
Aggrieved Persons - removal of nominee director of the Corporate Debtor - powers of Directors in a Compulsory Liquidation - Section 169 of the Companies Act, 2013 - Appellants contends that the Appellants can only be removed by adhering to the procedure specified in terms of Sec 169 of the Companies Act, 2013. Also, it is the plea of the Appellants that the ingredients of Sec 169 of the Companies Act, 2013 restrict the powers of removal of PR to those provided under the Act - HELD THAT:- It cannot be lost sight of that a Director removed under Section 169 of the Companies Act, is not deprived of his right to receive compensation for the loss of office if he is otherwise entitled to it, as per the Act 2013 and by virtue of his term of appointment, a removal a Director in terms of the Article of Associations is not a defective one - As per section 169 (8) of the Companies Act, 2013 (old Section 284(7) of 1956 Act) enjoins that compensation or damages in the case of wrongful removal of a Director and the same can be claimed not only in respect of the termination of the Office but also any other offence which all terminate along with the office like that of Managing Director . When a Corporate Debtor is Liquidated, the Liquidator shall file an Account of Liquidation exhibiting in what manner it was conducted and how the Corporate Debtor s Assets were Liquidated. A Final report shall form part of Application for dissolution of a Corporate Debtor to the Adjudicating Authority, to be filed under Section 54 of the Code - In terms of Regulation 38 of the Liquidation process regulations 2016 a Liquidator with the permission of Adjudicating Authority, may distribute among the stakeholders the assets that are to be readily or gainfully sold because of its peculiar character or other circumstances. As a matter of fact, the application praying for permission before the Adjudicating Authority under sub-Regulation shall identify the assets provide, a value of asset, mentioning the endeavours to sale the assets if any and to provide reasons for such distribution. There is no simmering doubt that the Directors of a Company appointed by the shareholders in the Annual General Meeting are to be removed as per Ordinary Resolution passed in the General Body Meeting . - There is no different opinion on this well settled proposition. It cannot be gained said that the Appellant ( Nicco Parks and Resort Pvt. Ltd ) is bound by the terms of Agreement and the Appellant is bound by the proposal and is to present the same before the Annual General Meeting for its accord/approval, without any iota of doubt. As a matter of fact, the proposal submitted by the Liquidator in terms of the power bestowed on him under the I B Code, read with Rule, Article 140 (4) of the Articles of Associations cannot be ignored and a self-serving decision being arrived at in this regard. The Appellant ( Nicco Parks and Resorts Pvt. Ltd ) is not required to be informed of the reasons behind the replacement of existing Nominee Directors by the Liquidator , although the said Directors were elected as Directors because of the fact that they had secured the shares of Nicco Parks and Resorts Pvt. Ltd , in an individualistic manner. No wonder, unless and until the Liquidator permits the Nominee Directors to continue, they do not have any right in this regard. The Appellants in Company Appeal (AT) (Ins) No.1518 of 2019 and Company Appeal (AT) (Ins) No.224 of 2020 had acted against the Liquidator, the impugned orders passed by the Adjudicating Authority in discharging their Nominee Directors position w.e.f. 17.10.2017 etc., are free from any legal flaws - Appeal dismissed.
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Service Tax
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2020 (4) TMI 243
Refund of excess paid service tax - reverse charge mechanism - time limitation - period April, 2017 to June, 2017 - HELD THAT:- Every refund claim arises on account of fact that the same was not required to be paid. Reference can be made to the Hon ble Madras High Court decision in the case of Assistant Commissioner of Service Tax, Chennai vs. Nataraj Venkat Associates [2014 (5) TMI 179 - MADRAS HIGH COURT] laying down that the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. Refund cannot be allowed - appeal dismissed - decided against appellant.
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2020 (4) TMI 242
Export of services - services were rendered to a foreign company and the receipts were in foreign currency - services rendered post November 2011 - demand of service tax - HELD THAT:- Appellant now claim to have documents to show that remittances in respect of all these services were received by them in fully convertible foreign currency. Appellant fairly admits that they were not able to produce these documents before the adjudicating authority. Thus, the Ld. Adjudicating authority must have an opportunity to consider all the evidence which the appellant now claims to possess and determine the service tax liability and penalties if any. Matter remanded to the adjudicating authority without passing any remarks on the merits of the case, with a direction to give the appellant reasonable opportunity for being heard and presenting documents in their support - appeal allowed by way of remand.
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Central Excise
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2020 (4) TMI 241
Maintainability of appeal - Jurisdiction - Same company operating with two registrations with two Different PAN - SCN were issued by the Officer in the particular position and so were the Orders-in-Original - appeal dismissed for non-prosecution - Petitioner first filed the appeal before the wrong forum - Later, after transfer of appeal, failed to make pre-deposit - Petition failed appear before the Tribunal - they again failed to appear before the Tribunal in the remand proceedings - recovery of differential Central Excise duty along with interest and penalties. Jurisdiction - HELD THAT:- In the hierarchy of the Department of Customs Central Excise, below the Commissioner are the Additional/Joint Commissioner, both are at the same level and the officer after completing some years of service as Joint Commissioner, is granted a non-functional selection grade and is called Additional Commissioner instead of Joint Commissioner. It is not the case that the Joint Commissioner is subordinate to the Additional Commissioner or Additional Commissioner is supervisory authority for the Joint Commissioner. Therefore, at the same post one occupant of the office could be an Additional Commissioner and his successor could be a Joint Commissioner or vice versa - In this case, if the Additional Commissioner has issued the show cause notice and his successor Joint Commissioner decided the matter, we find no infirmity at all in such a decision. As far as the contention that the Unit at Puddukkottai was a joint venture between the appellant and M/s Godavari Prestressed Pipes Structures Pvt. Ltd. is concerned, there is nothing in the records to show that a different legal entity has been created or that a PAN has been taken in the name of a different legal entity. In both the units (at Hyderabad and Puddukkottai), the registration was done in the name of Taaher Ali Industries Projects Pvt. Ltd. i.e. the appellant. Evidently, one legal entity should have been only one PAN. Since the Central Excise Registration is PAN based, once an application is made along with correct PAN, only one Central Excise Registration can be issue - On a perusal of the joint venture agreement entered into by the appellant and M/s Godavari Prestressed Pipes and Structures Pvt. Ltd., it is seen that the name of the joint venture Taher Ali Industries Projects Pvt. Ltd., Hyderabad with the same address as the appellant. Both the units at Hyderabad and Puddukkottai, Tamilnadu are functioning in the name and style of Taher Ali Industries projects Pvt. Limited . Appeal dismissed - decided against appellant.
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2020 (4) TMI 240
Imposition of penalty u/r 15(2) of CCR, 2004 - CENVAT Credit - capital goods - pig iron moulds - assessee has taken 100% Cenvat credit on pig iron moulds falling under Chapter 84 of Central Excise Tariff Act, 1985 by declaring them as inputs - Rule 4(2)(a) of CCR, 2004 - HELD THAT:- In this case, from the impugned order it appears that the learned Commissioner has, after going through the show cause notice, the reply in defence and other records of the case, has held that the assessee was indeed entitled to the Cenvat credit which they have availed but they have only availed it in advance. It is also clear that they have availed the credit under the head of inputs whereas they could have availed it only under the head of capital goods . In fact, she allowed the entire Cenvat credit for this reason and has only demanded interest for the Cenvat credit availed well in advance. No evidence of fraud, collusion, wilful misstatement, suppression of facts which are essential conditions for imposition of penalty under Rule 15(2) of CCR, 2004 are evident either from the SCN or from the impugned order - the penalty imposed upon assessee under Rule 15(2) of CCR, 2004 is set aside. Revenue s appeal is allowed by remanding the matter to the original authority for requantification of the interest involved after giving both sides adequate opportunity of being heard and presenting their case. Appeal allowed in part and part matter on remand.
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2020 (4) TMI 239
Valuation - includibility - whether the non-reimbursed portion of the cost of transportation of the input material incurred by the appellant is includable in the assessable value under section 4 of the Central Excise Act, 1944? - HELD THAT:- The appellant is entitled to avail CENVAT Credit of the duty paid on all inputs and service tax paid on all input services which they have used, whether or not the same has been reimbursed separately by the buyer. As long as there is a transaction value, the transaction value becomes the assessable value under section 4 of the Central Excise Act, 1944. If there is some additional consideration for sale, then such additional consideration also has to be included to the transaction value to determine the assessable value. This is precisely what the appellant had done. The Department cannot add separately all the costs incurred by the appellant which have not been reimbursed by the buyer in addition to the price. The demand made in the impugned order and the penalties imposed are unsustainable - Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (4) TMI 238
Imposition of penalty u/s 67(1) of the Kerala VAT Act, 2003 - violation of principles of natural justice - HELD THAT:- An opportunity of personal hearing was offered in Exts.P8 and P9 notice, on 17.01.2019. But the appellants submitted adjournment applications seeking three week's time, on the premise that they are trying to file the returns and to remit the tax due, in the meanwhile. It was also stated that the Charted Accountant of the appellant is not in station to prepare the documents and to appear for the hearing. Evidently, the 1st respondent adjourned the hearing to 31.01.2019, on accepting the request of the appellant. But on 31.01.2019 also, the appellant submitted applications for adjournment stating the very same reasons. We are not in a position to hold that, the observations contained in the impugned order that the appellant had failed to submit any objections, is factually incorrect. As a consequence, we find no reason to disagree with the learned Single Judge on the findings with respect to the above said aspects - Appeal dismissed.
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2020 (4) TMI 237
Intra-state transaction or Inter state sale - transaction of the assesses when the seeds have been procured from the farmers for their onward transmission for certification and other processes to its Kota plant - HELD THAT:- The procurement of such seeds is taxable within the State of U. P. It has been admitted that the farmers are paid 90 percent of the price at the stage of when the said transaction takes place and the remaining amount is paid depending upon the quality of certification of the seeds issued by the unit at Kota. The Tribunal has rightly held that this aspect of the transaction culminated in the State of U. P. wherein the procurement of the said seeds takes place from the farmers by the assessee through their contractor is an intra-State sale which is totally covered by the provisions of Trade Tax Act. There is no infirmity with the order of the Tribunal which has delved into all the aspects including various contracts and determined that sale of seeds by farmers is taxable in U.P. - There is no material on record which can lead this Court to take a different view other than taken by them. There is no reason to interfere with the same. Revision dismissed.
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2020 (4) TMI 236
Imposition of penalty - Appealable order u/s 67 of the Kerala Value Added Tax Act - principles of natural justice - HELD THAT:- The references in the assessment order to the opportunity of hearing on 23.4.2018, 10.5.2018 and 31.01.2019, the submission of the petitioner cannot be even suggested for the reason that the notices are dated 18.12.2018. The aforementioned arguments are not able to cut ice in view of the reference as it was pertaining to the opportunity given after issuance of notice dated 10.4.2018 for production of books of accounts and the date of opportunity of hearing was after the notice dated 18.12.2018. There are no justification in this writ petition to bring the matter within the realm of judicial review to form an opinion that the principles of natural justice were flouted - petition dismissed.
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