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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter April 13, 2019 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles INITIATION OF VOLUNTARY LIQUIDATION PENDING LITIGATIONS Notifications Customs 12/2019 - dated 11-4-2019 - Cus Seeks to amend notification No. 39/96-Customs dated 23.07.1996 so as to extend the exemption provided to the Light Combat Aircraft Programme of the Ministry of Defence till 31.06.2019. GST - States 23/2019 - CT/GST-14/2017/203 - dated 11-3-2019 - Assam SGST Seeks to prescribe the due dates for furnishing of FORM GSTR-3B for the months of April, May and June, 2019 22/2019 - CT/GST-14/2017/202 - dated 11-3-2019 - Assam SGST Seeks to prescribe the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores for the months of April, May and June, 2019 ORDER No. 02/2019-State Tax - dated 4-3-2019 - Assam SGST Assam Goods and Services Tax (Second Removal of Difficulties) Order, 2019 ORDER No. 01/2019-State Tax - dated 4-3-2019 - Assam SGST Assam Goods and Services Tax (Removal of Difficulties) Order, 2019 ORDER No. 4/2018 - dated 28-2-2019 - Assam SGST Assam Goods and Services Tax (Fourth Removal of Difficulties) Order, 2018 ORDER No. 3/2018 - dated 28-2-2019 - Assam SGST Assam Goods and Services Tax (Third Removal of Difficulties) Order, 2018 ORDER No. 2/2018 - dated 28-2-2019 - Assam SGST Assam Goods and Services Tax (Second Removal of Difficulties) Order, 2018 G.O. Ms. No. 36 - dated 8-3-2019 - Tamil Nadu SGST Tamil Nadu Goods and Services Tax (Third Removal of Difficulties) Order, 2019 G.O. Ms No. 35 - dated 7-3-2019 - Tamil Nadu SGST Supersession Notification No. II(2)/CTR/532(d-1)/2017 dated 29/06/2017 G.O. Ms No. 34 - dated 7-3-2019 - Tamil Nadu SGST Prescribe the due dates for furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover upto ₹ 1.5 crores for the months of April, May and June, 2019 under the TGST Act, 2017 G.O. Ms No. 33 - dated 7-3-2019 - Tamil Nadu SGST Exemption from registration for any person engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed ₹ 40 lakhs G.O. Ms No. 32 - dated 7-3-2019 - Tamil Nadu SGST Rate on First supplies upto fifty lakh rupees in any financial year by a registered person Circulars / Instructions / Orders FEMA 29 - dated 11-4-2019 Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 - Opening of Foreign Currency Accounts by Re-insurance and Composite Insurance brokers DGFT 04/2015-20 - dated 12-4-2019 Amendment in proforme of End Use Certificates [Appendix 2S(i), 2S(ii) and 2S(iii) ] for grant of permission for export of items under SCOMET Control List Companies Law 05/2019 - dated 12-4-2019 Filing of one time return in DPT -3 Form Highlights / Catch Notes GST Confiscation of Goods or Conveyance - the petitioner has made a categorical averment in the petition that the amount of tax and penalty has been paid. Under the circumstances, there is no reason for the respondents to withhold the release of the truck. Visit to Get Source Income Tax Stay petition - exemption u/s 12A(a) - assessed market rent for the properties let out - Prima facie case has been made out by the petitioner since the Associate Companies who are their tenants from the date when the petitioner obtained exemption from payment of income tax u/s 12A(a) right from the year 1973 onwards - AO has committed an error in not exercised his discretion for the grant of stay Visit to Get Source Penalty u/s 271(l)(c) - investment in property - assessee accepted total addition in his hand - non disputing addition in merit is fatal in penalty proceedings irrespective of the fact that there is evidence of investment by other persons Visit to Get Source Admission of additional evidences u/r 46A - submitted first time before CIT(A) - The principles of natural justice are breached by learned CIT(A) by not calling for remand report from the AO as well non recording of reasons and justification for admitting the additional evidences - it is fatal to sustaining of appellate order passed by learned CIT(A) Visit to Get Source Exemption u/s 54 - there is no reason to restrict the benefit of deduction upon investment in residential houses are plural - If the word 'a' as employed u/s 54 prior to its amendment and substitution by the words 'one' w.e.f 01.04.2015 could not include plural units of residential houses, there was no need to amend - it clear to operate prospectively from A.Y.2015- 2016. Visit to Get Source Addition u/s 68 - assessee submitted all details alongwith affidavit of lenders - all lender also confirm in response to notice 133(6) - all the three ingredients such as identities of the parties, capacity and creditworthiness of the parties and genuineness proved - addition unsustainable Visit to Get Source Revision u/s 263 - non consideration of provision of law relating to substitution of sales consideration with stamp value u/s 50C for capital gain computation is sufficient to invoke jurisdiction u/s 263 by CIT(A) even if the matter was examined by the AO Visit to Get Source Assessment u/s 143(3) - search and seizure action U/s 132 was taken during pendency of assessment proceedings - proceedings initiated U/s 143(3) stood abated by virtue of search U/s 132(2) under the second proviso of 153A(1) - CIT(A) becomes infructuous Visit to Get Source Special audit u/s 142(2A) - The inability of the assessee to provide particulars with respect to various units (in regard to each of which it had claimed substantial deductions by way of expenses) as well as the adverse remarks made by the NPCC’s auditor do amount to voluminous evidence which also present complexity of the accounts that needed a close scrutiny. Visit to Get Source If commercial principles are applied, then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made. Visit to Get Source Addition on account of bonus paid to the Director employee - distribution of dividend or not - the shareholders were professionally highly qualified. Payment of bonus was a business decision and till it was not proved that same was not paid actually, it could not be disallowed. Visit to Get Source Rejection of books of accounts - A.O has merely followed the order of his predecessor of previous years for making the impugned addition. It is well settled principal that before rejecting the book results, discrepancies should be pointed out in the regular books of accounts by the AO. Visit to Get Source Reopening u/s 148 - accommodation entry - recording of reasons to belief - AO did not mention any material facts in the reasons such as original assessment u/s 143(3), failure on the part of the assessee to disclose fully and truly all material facts - assumption of jurisdiction u/s 147/148 is clearly illegal and bad in Law Visit to Get Source Assessment u/s 153A/153C - recording of satisfaction as the AO of the searched person is mandatory to initiate the proceedings even if AO for both the same and satisfaction recorded as AO of other person i.e. assessee - jurisdiction for issuance of notice u/s 153C cannot be sustained Visit to Get Source Reference to DVO - Determination of cost of acquisition - if the value declared by an assessee on the strength of registered valuer’s report is more than the fair market value then reference u/s 55A for determining fair market value by the DVO cannot be sent - Amendment in Section 55A is prospective Visit to Get Source Expenditure allowable u/s 37 - efforts and services rendered by a third person - The efforts had benefited in the form of increased investment in India resulting in increase in the advisory fee being paid to the assessee - justified in making payment to expand and increase their business and income being an expenditure wholly and exclusively for the purpose Visit to Get Source Addition u/s 43B - delay in remitting the employees contribution to Provident Fund (PF) accounts - the employees contribution to PF required to be allowed even if the same is paid before the due date of filing the return u/s 139(1) Visit to Get Source Denial of approval u/s 35(1)(ii) - deemed university - demonstrate the significant scientific research activity undertaken - while denying there is no holding that activities claimed by the petitioner were genuine or not and funds being paid to the petitioner were intended for the stated purpose or not - Remanded for reconsideration Visit to Get Source Assessee in default u/s 201(1) - 194C vs 194J - service of cooking does not include any technical service - TDS is deductible u/s 194C Visit to Get Source Simultaneous claim of depreciation and deduction of depreciation write back - amount credited in P& L Account due to change in the method of providing depreciation as per the Companies Act - WDV to straight line method - it does not have any tax impact and nothing to do with the claim of the depreciation on assets u/s 32 Visit to Get Source FEMA Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 - Opening of Foreign Currency Accounts by Re-insurance and Composite Insurance brokers Visit to Get Source Corporate Law Restoration of name - modification of master data by modifying the status from “Strike Off” to “Active” - it is possible that creditors could also be aggrieved persons, feeling aggrieved of company’s name being struck off, may file an application for restoration of company’s name, if its name is not restored. - Name restored. Visit to Get Source Indian Laws When an arbitration clause is contained “in a contract”, it is significant that the agreement only becomes a contract if it is enforceable by law. Visit to Get Source IBC After initiation of Corporate Insolvency Resolution Process once moratorium starts no person can recover any amount from the account of the Corporate Debtor. It is true that the cheque dates back to the date of handover but it cannot be encashed after the moratorium starts Visit to Get Source VAT Developer and codeveloper of an SEZ - a developer and co-developer of an SEZ are entitled for exemption from payment of tax under the Act by virtue of Section 11(1)(i) of the HSEZ Act. Visit to Get Source Case Laws: GST 2019 (4) TMI 741 Confiscation of Goods or Conveyance - Levy of Penalty under section 130 of the Central Goods and Services Tax Act, 2017 - neither the owner of the goods nor the person in charge of the conveyance came forward to make the payment of applicable tax and penalty within the time allowed in the order - principles of natural justice - Held that:- In the present case, the petitioner has made a categorical averment in the petition that the amount of tax and penalty has been paid. Under the circumstances, there is no reason for the respondents to withhold the release of the truck in question together with the goods - the respondents are directed to forthwith release the Truck along with the goods contained therein. Issue Notice to the respondents returnable on 12th April, 2019. 2019 (4) TMI 740 Release of Attached Bank Accounts - section 83 of the Central Goods and Service Tax Act, 2017 - Held that:- The bank accounts of the petitioner in respect of which the petition has been filed have been released from attachment. Under the circumstances, the grievance voiced in the petition has been resolved - petition disposed off. Income Tax 2019 (4) TMI 715 Denial of approval u/s 35(1)(ii) - educational and research activities - deemed university - demonstrate the significant scientific research activity undertaken - HELD THAT:- The reasons assigned by the respondents are, in our view, not in keeping with the statutory regime. The respondents seem to have proceeded on the basis that every department of the applicant university must undertake scientific research. However, as stated above, that is not a proper understanding of the provisions, at least insofar as they relate to universities colleges and other institutions. Similarly, Rule 5E(2) expressly recognizes that research activities may be carried out through faculty members or enrolled students of the institution. The respondents were, therefore, in error in disregarding the materials placed by the petitioner on the basis that the research projects were undertaken as part of the students curriculum. The respondents have also placed undue emphasis on the nature of the research undertaken and its commercialization. The petitioner submitted a significant amount of material showing the activities undertaken by it, including publication of research papers, patents granted, and grants and funds received from various national and international agencies. These have been discarded by the respondent on the ground that these research activities have not materialized in a significant way either in form of new theories/models, new hypothesis which has wide acceptance, copyrights, earnings from patents etc. The research papers and patents referred to by the petitioner have also been characterized as the work of particular faculty members rather than attributable to the contribution to the petitioner's university. The respondent s focus on the impact and/or commercial success of the petitioner s research activities is not relatable to any statutory or prescribed criteria for grant of approval under Section 35(1)(ii). Section 43(4) of the Act contains a much broader definition which has been entirely overlooked in the impugned order. Scientific research is no less so because the researcher has not discovered a new theory or invented a patentable product. These results may be achieved only after years of research, or not at all. An assessment of the value of the research at the hands of the respondents, is not contemplated by the Act or the Rules. Further, in view of Rule 5E (2) expressly contemplating research activity carried out through faculty members, the analysis of the respondent appears to be rather sketchy. The question required to be considered by the respondent was whether the activities claimed by the petitioner were genuine, and whether the funds being paid to the petitioner were intended for the stated purpose. On these, the impugned order is silent. It is, therefore, set aside and the respondents are directed to reconsider the petitioner's application dated 23.06.2014 in accordance with the procedure prescribed, and the principles laid down above. 2019 (4) TMI 714 Special audit u/s 142(2A) - denial of principles of natural justice - inability of the assessee to provide particulars with respect to various units - HELD THAT:- In the present case, the nature of proceedings which culminated in the passing of the order u/s 142(2A), to this Court s mind, do not show any unfairness; they in fact highlight that the AO started the enquiry to understand the claims of the assessee as far back as in September. The notice seeking detailed facts issued in late September 2018 could be replied with the relevant details only after two months, i.e. 21.11.2018 by the NPCC. Thereafter too, on not less than three occasions, the AO called for further details. The process of receiving these details continued even after the issuance of the SCN on 18.12.2018. The last of these documents was in fact given on 21.11.2018. It cannot be said that there was no genuine attempt on part of the AO to understand the nature of the assessee s business; its method of accounting or to understand the nuances of its books or documents. So far as the reasons given by the AO are concerned, this Court is of the opinion that the NPCC s argument that the conclusion amounts to mere pretence is unwarranted. The extract of the order clearly reflect the AO s reasoning. The inability of the assessee to provide particulars with respect to various units (in regard to each of which it had claimed substantial deductions by way of expenses) as well as the adverse remarks made by the NPCC s auditor do amount to voluminous evidence which also present complexity of the accounts that needed a close scrutiny. This Court is of the opinion that there is no merit in the writ petition. Furthermore, a perusal of the original file produced by the Revenue would disclose that even as late as in the third week of January, the special auditor designated by the AO, was repeatedly calling for details; the AO had sought for the order to be kept in abeyance. This Court had stayed the direction to conduct special audit. In these circumstances, the time during which the present writ petition was pending, i.e. 17.01.2019 till today shall be excluded for the purpose of computing the period of limitation to carry on and conclude the special audit. The writ petition is, therefore, dismissed 2019 (4) TMI 713 Exemption u/s 54 denied - Profit on sale of property used for residence - investment out of long term capital gains made in one residential house only - Assessee which is a HUF, which has a special character - scope of amendment - HELD THAT:- It is only by deeming fiction of law that a HUF, is treated as a separate assessable entity by including the same in the definition of the word 'person' under Section 2 (31) of the Act. The definition of the word Assessee under Section 2(7) of the Act means a 'person' by whom any tax or sum of money is payable under the Act. Thus, the HUF is also a 'person' and a separate assessable entity under the Income Tax Act, 1961. If the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with effect from 01.04.2015 could not include plural units of residential houses, there was no need to amend the said provisions by Finance Act No.2 of 2014 with effect from 01.04.2015 which the Legislature specifically made it clear to operate only prospectively from A.Y.2015- 2016. The sale being of a residential house does not necessarily restrict the meaning of 'a' to one. If the capital gains arise out of sale of plural of Captial Assets also, including the residential house, it would give rise to taxable capital gains. There is no reason to restrict the benefit of deduction upon investment in residential houses even though such units of residential houses are plural, which is not always so. The word 'a' would normally mean one. But it can in some circumstances include within its ambit and scope plural number also. It may be two or three or even more. Once we can hold that the word 'a' employed can include plural residential houses also in Section 54 prior to its amendment such interpretations will not change merely because the purchase of new assets in the form of residential houses is at different addresses which would depend upon the facts and circumstances of each case. So long as the same Assessee (HUF) purchased one or more residential houses out of the sale consideration for which the capital gain tax liability is in question in its own name, the same Assessee should be held entitled to the benefit of deduction under Section 54 of the Act, subject to the purchase or construction being within the stipulated time limit in respect of the plural number of residential houses also. The said provision also envisages an investment in the prescribed securities which to some extent the present Assessee also made and even that was held entitled to deduction from Capital Gains tax liability by the authorities below. The Assessee-HUF in the present case, in our opinion, complied with the conditions of Section 54 of the Act in its true letter and spirit and, therefore was entitled to the deduction under Section 54 of the Act for the entire investment in the properties and securities. Therefore, in our opinion, Judgment rendered by the Karnataka High Court in CIT Vs.D.Ananda Basappa (2008 (10) TMI 99 - KARNATAKA HIGH COURT) Khoobchand M.Makhija [2013 (12) TMI 1525 - KARNATAKA HIGH COURT] cited at bar by the learned counsel for the Assessee apply on all fours to the facts of the present case. - Decided in favour of assessee. 2019 (4) TMI 712 Stay petition - petitioner obtained exemption from payment of income tax u/s 12A(a) - high pitched tax assessment - assessed market rent for the properties let out to specified person u/s 13(3) - HELD THAT:- Prima facie case has been made out by the petitioner since the Associate Companies who are their tenants from the date when the petitioner obtained exemption from payment of income tax u/s 12A(a) right from the year 1973 onwards. In the instant case, the Income Tax Department has raised the issue only for the Assessment Year 2016-17 even though income tax returns were filed by the petitioner disclosing the tenancy, right from the date when they got exemption from payment of Income tax u/s 12A(a). The Assessing Officer ought to have considered all these aspects and should have granted stay of the impugned order. This Court is of the considered view that the Assessing Officer has committed an error and has not exercised his discretion available to him for the grant of stay in the instant case. However, since the appeal has already been filed by the petitioner as against the order dated 14.12.2018 before the second respondent and as it is a revenue matter involving substantial sums of money, the Appeal will have to be disposed of expeditiously. The Commissioner of Income Tax (Appeals) has got inherent powers to grant stay of recovery as per the assessment order pending disposal of the appeal. This Court has already considered the said issue and held in the decision reported in [2018 (7) TMI 136 - MADRAS HIGH COURT] referred to supra by the learned counsel for the petitioner that when a prima facie case has been made out, the Commissioner of Income Tax (Appeals) is not bound by the internal circular involving high pitched tax assessment. In the instant case also, it is an high pitched tax assessment as seen from the assessment order, which is subject matter of challenge before the Commissioner of Income Tax (Appeals). 2019 (4) TMI 711 Assessee in default u/s 201(1) - non deduction of TDS in appropriate section - 192 vs 194J vs 194C - service of cooking - work contract vs fees for technical services - service of full time doctor covered under salary or fee for professional service - interest under Section 201(1A) - HELD THAT:- TDS on Payment to Monginis Hospitability Services Pvt. Ltd. - 194C vs 194J - HELD THAT:- The concurrent finding of fact rendered by the CIT (A) and the Tribunal that service of cooking does not include any technical service, is not shown to be perverse. In the above view, no fault can be found with the impugned order of the Tribunal. - No substantial question of law arise TDS on Remuneration to Doctor - TDS u/s 192 or 194J - HELD THAT:- It is an agreed position between the parties that this issue stand covered in favour of the respondent assessee by the decision of this Court in case of Commissioner of Income Tax (TDS)I Vs. Asian Heart Institute, [2019 (3) TMI 543 - BOMBAY HIGH COURT]. In the above case, a similar issue raised by the Revenue came to be dismissed by a speaking order dated 5th March, 2019. No distinction in facts and/or law has been pointed to us in the present case from that existing in the above case of Asian Heart Institute (supra), which would warrant our taking different view in this matter - No substantial question of law arise TDS on actual payment recovered directly from the patient by the Doctors - HELD THAT:- Tribunal also independently found that there is no tangible evidence and material on record to show that any amount of fees was credited in the doctors' account or paid to the doctor by the assessee. We note that in the face of concurrent findings of fact that there is no evidence of crediting or making payments to the doctors by the respondentassessee, no liability for deduction of tax under Section 194J of the Act at the hands of the respondentassessee can arise. This in the absence of the finding of fact being shown to be perverse - No substantial question of law arise However, as above question had been answered in favour of the respondent assessee, other questions become academic in the present facts. Thus, not entertained. 2019 (4) TMI 710 TDS u/s 194J - services rendered by the supplier for maintenance of medical equipments - nature of services - HELD THAT:- These services being of routine nature, would not be qualified to be called technical services which would require deduction under Section 194J of the Act. Purpose of this services was only to ensure a proper maintenance of the machinery/equipment so as to ensure long life for the same. Commissioner of Income Tax (Appeals) as well as the Tribunal have on facts come to the conclusion that the services rendered in respect of the equipments are only in nature of maintenance services provided to ensure they function properly and would be able to provide services for a long period of time. This does not involve any technical service. These concurrent findings of the fact has not been shown to be perverse - No substantial question of law 2019 (4) TMI 709 Expenditure allowable u/s 37 - amount paid to ‘Lok Foundation’, an entity registered in Mauritius - fee paid to Lok Foundation for a gamut of services rendered outside India - AO alleged that the consultancy fee was a ploy to siphon away the profits - wholly and exclusively for the purpose of business - HELD THAT:- Payments made by the assessee for the efforts and services rendered by a third person, in the present case by Lok Foundation, cannot be rejected as held in the assessment order as non-business expenditure on the ground that the foreign investors should have made that payment Lok Foundation. This is untenable and unacceptable. The efforts had benefitted the assessee in the form of increased investment in India resulting in increase in the advisory fee being paid to the assessee. AO should not have commented and decided on who should have paid commission. The investors may or may not be interested in paying fee to Lok Foundation. The assessee would be justified in making payment to expand and increase their business and income, which would be an expenditure wholly and exclusively for the purpose of business. Another reason given by the AO was that Mauritius was a tax haven in which tax was payable only @ 3%. He did not advert to the other facts including increase in investment, deduction of tax at source on payment made to Lok Foundation, and also the documents placed and relied upon by the assessee with reference to the services rendered by Lok Foundation. The said documents and factum have been taken into consideration by the first appellate authority. AO had not bothered to even take on record and into consideration the factum that TDS @ 10% had been deducted. Thus, money remitted to Lok Foundation was taxed in India on gross receipt basis without reference to and deducting any expenditure incurred. Further, the Assessing Officer did not refer the question of quantum of fee paid to Lok Foundation to the Transfer Pricing Officer. Findings are primarily findings of fact, drawing inference and conclusions after referring to and based upon evidence and material on record. The findings as recorded are not illogical and perverse, which require interference. We would not reappraise the evidence as a normal appellate court while exercising jurisdiction under Section 260 of the Act - Appeal dismissed. 2019 (4) TMI 708 Allowability of depreciation - religious and charitable trust - HELD THAT:- See RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA [2017 (12) TMI 1067 - SUPREME COURT] and M/S AGRICULTURAL PRODUCE MARKET COMMITTEE. [2018 (6) TMI 1393 - KARNATAKA HIGH COURT] stating when the Income-tax Officer stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. Carrying forward of the losses for being set off against the income of the charitable trust in subsequent year - HELD THAT:- Controversy is covered by the judgment in CIT (Exemptions) v. Ohio University Christ College [2018 (11) TMI 1055 - KARNATAKA HIGH COURT] Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied, then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a) - Decided against revenue 2019 (4) TMI 707 Condonation of the delay of 248 days - non receipt of proper directions to take further course of action against the order of the CIT(A) by AR who appeared before the CIT(A) - HELD THAT:- As relying on MST. KATIJI AND OTHERS [1987 (2) TMI 61 - SUPREME COURT]while explaining and laying down the principles that need to be kept in mind while considering an application for condonation of delay, has emphasized that substantial justice should prevail over technical considerations. The Hon’ble Court also explained that a litigant does not stand to benefit by lodging the appeal late and that the expression ‘everyday’s delay must be explained’ does not mean that a pedantic approach should be taken. The doctrine should be applied in a rational, common sense and pragmatic manner - there was sufficient and reasonable cause for delay of 248 days in filing the appeal before the Tribunal and that it is a fit case for condonation of the aforesaid delay and do so. Failure to pay self assessment tax on the originally declared income - assessee had neither furnished details nor supporting documents to reconcile the difference of income in the revised return vis-à-vis the income declared in the original return of income - HELD THAT:- There has not been proper examination / verification of the matter as though the AO states that no details / corroborating evidences were field, the learned AR submits that corroborating details / reconciliation etc., for revised income of ₹ 15,73,400/- are available on the records of the Department, filed as part of the audited financial statements along with the revised returns. The interest of substantial justice would be served by setting aside the impugned orders of the authorities below and therefore restore the matter to the file of the AO for examination, verification and determination of the correct income of the assessee viz., whether at ₹ 27,94,350/- as per original return of income for Assessment Year 2014- 15 or at ₹ 15,73,400/- as per the revised return of income filed for this year taking into account and addressing all the claims of the assessee. Needless to add, the AO shall afford the assessee adequate opportunity of being heard and to file details / submissions required 2019 (4) TMI 706 Rectification application u/s 254 - HELD THAT:- As perused the material available on record, specifically the order under challenge, we realize that inadvertently the name of the assessee as well as PAN of the assessee has been typed incorrectly which seems to be inadvertent mistake and therefore, we are inclined to allow the rectification sought by the assesseee and held as under: (i) The name of the appellant to be read as Sh. Vikrant Mehra instead of Sh. Vikram Mehra. (ii) The PAN of the assessee to be read as AASPM 2851M instead of AAAAB1049F. 2019 (4) TMI 705 Reference to DVO - Determination of cost of acquisition - reference when value adopted by the assessee is on the higher than fair market value - Registered value vs fair market vale - computation of LTCG - whether reference u/s 55A could be made for determining the fair market value of the property as on 1.4.1981? - effect of amendment in 55A - HELD THAT:- we find that the ITAT in the case of Shri Devendra Rasiklal Shah (supra) has considered judgment of Hon’ble jurisdictional high Court in the case of Gauranginiben S. Shodhan [2008 (4) TMI 292 - GUJARAT HIGH COURT] and has held that if the value declared by an assessee as on 1.4.1981 on the strength of registered valuer’s report is more than the fair market value sought to be determined by the AO, then reference under section 55A for determining fair market value by the DVO cannot be sent. Both the assessee have declared cost of acquisition for the purpose of indexation as on 1.4.1981 more than the one determined by the DVO. Thus, the AO was not possessing any material which can suggest that the value declared by the assessee was less than the fair market value as on 1.4.1981. Therefore, it requires to be re-determined. In the above situation, he cannot make a reference under section 55A to the DVO, and if the reference cannot be made, then cognizance of that cannot be taken for determining long term capital gain assessable in the hands of both the appellants. In view of the above discussion, we allow this fold of grievance and direct the AO to accept long term capital gain disclosed by both the appellants on the basis of registered valuer’s report. - Decided in favour of assessee. 2019 (4) TMI 704 Penalty u/s 271(1)(c) - Defective notice - 50% disallowance of Sales Promotion expenses - quantum proceedings qua addition of on account of disallowance of Sale Promotion expenses is pending before High Court - HELD THAT:- we are of the considered view that in the instant case, not only the notice issued to the assessee u/s 274 read with section 271(1)(c) is defective but AO has not even made himself satisfied at the time of making disallowance / addition in assessment order if the assessee has furnished inaccurate particulars of income or has concealed particulars of his income rather to be on the safer side he has invoked both the limbs of section 271(1). In the instant case also assessee claimed sale promotion expenses which have been disallowed by the AO as well as Ld. CIT(A) specifically on the ground that the assessee has failed to furnish the supporting details to sustain its claim. But at no point of time AO has declared the claim as bogus rather observed that expenses incurred on boarding and lodging and traveling of doctors are neither business expenses nor ethical in natures. We are of the considered view that mere disallowance of sale promotion expenses claimed by the assessee does not amount to concealment of income or furnishing of inaccurate particulars of income and as such penalty cannot be levied. Further more when it is not in dispute that the question as to disallowance of 50% of expenditure claimed by the assessee under the head “Sale Promotion expenses’ is pending adjudication before the Hon’ble High Court. So, when, the question of disallowance of sale promotion expenses is “debatable one penalty cannot be imposed. in view of what has been discussed above, the case of Sundaram Finance Ltd. [2018 (5) TMI 259 - MADRAS HIGH COURT] and other decision, as relied upon by ld. DR for the Revenue are not applicable to the facts and circumstances of the case. However, decision rendered by Hon’ble Apex Court in CIT vs. SSA’s Emerala Meadows [2016 (8) TMI 1145 - SUPREME COURT] and Hon’ble Karnataka High Court in CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] are applicable to instant case. In view of discussion made in the preceding paras AO/CIT(A) have erred in levying /confirming the penalty in this case which is not sustainable in the eyes of law. Consequently penalty stands deleted 2019 (4) TMI 703 Penalty u/s 271(1)(c) - disallowance u/s 14A - quantum proceedings remanded back - HELD THAT:- Without entering into merits of this case the penalty proceedings are not sustainable, hence deleted, as the quantum proceedings have already been remanded back to the AO to decide afresh. So, AO is at liberty to initiate the penalty proceedings, if any, after passing fresh assessment order. Consequently appeal filed by the revenue as well as Cross Objection filed by the assessee are allowed for statistical purposes. 2019 (4) TMI 702 Admission of additional evidences - Rule 46A compliance - submitted first time before CIT(A) - no remand report was called by learned CIT(A) - HELD THAT:- The Ld. CIT(A) also did not refer/forwarded these additional evidences to AO for verification and comments as no remand report was called by learned CIT(A) from the AO. This is a breach of sub-rule 3 of Rule 46A Rules owing to non forwarding of these additional evidences by learned CIT(A) to the AO for its verification and comments. The principles of natural justice are clearly breached. The procedures as are contemplated are not meant to stifle justice but they cannot be simply given go-bye otherwise there will be break down of Rule of Law . Rule of Law is an important ingredient of basic structure doctrine engrained in our Constitution . The assessee ought to have explained before learned CIT(A) as to what prevented it from submitting these additional evidences before the AO as is required under sub-rule 1 of Rule 46A of the 1962 Rules. There is no explanation given by the assessee for non production of these additional evidences before the AO during the course of assessment proceedings nor learned CIT(A) considered appropriate to record reasons and justification for admitting these additional evidences as is required under sub-rule 1 of Rule 46A. It is not the case of the assessee that learned CIT(A) directed assessee to produce these additional evidences as is contemplated vide sub-rule 4 of Rule 46A. Neither it is a case of the assessee where learned CIT(A) has suo moto directed inquiry as is contemplated u/s 250(4). The instant case before us is not covered by these exceptions. There is no dispute as to proposition canvassed by the assessee that powers of learned CIT(A) are co-terminus with the powers of the AO but Rule 46A cannot be simply given go bye other wise it will become otiose . This is never the intention of law makers. We are afraid that decision of Hon ble Supreme Court in the case of Kanpur Coal Syndicate [1964 (4) TMI 18 - SUPREME COURT] cannot come to rescue of the assessee as there is no dispute to the proposition that learned CIT(A) powers are co-terminus with powers of the AO but Rule 46A of the 1962 cannot be given a simple go bye. We are afraid that the decision of Hon ble Bombay High Court in the case of Rallies India Limited [2015 (4) TMI 940 - BOMBAY HIGH COURT] relied upon by the assessee cannot also come to rescue of the assessee. The principles of natural justice are breached in the instant case by learned CIT(A) by not calling for remand report from the AO as well non recording of reasons and justification for admitting these additional evidences which is fatal to sustaining of appellate order passed by learned CIT(A). Addition on account of extensive repairs - leased premises - current repairs - AO alleged that repairs and renovation/improvement of shop/bakery at Bandra is capital in nature giving enduring benefits - Plant and Machinery which was acquired for being installed at Jalal Bakery at Bandra was already capitalized - HELD THAT:- keeping in view the entire factual matrix of the case as elaborated by us in preceding para s of this order , end of justice will be met in this case if the issues in these appeals are set aside and restored to the file of learned CIT(A) for fresh adjudication of these issues after complying with Rule 46A and by following ratio of judgment of Hon ble Bombay High Court in the case of RPG Enterprises Limited [2016 (7) TMI 71 - BOMBAY HIGH COURT]. The assessee is directed to file all necessary evidences and explanations before learned CIT(A) in its defence including complete details of renovation work undertaken by it. The learned CIT(A) is directed to give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law and all relevant explanations/evidence submitted by the assessee before learned CIT(A) in set aside proceedings shall be admitted by learned CIT(A) in the interest of justice and dealt with in accordance with law on merits . The appeal of the Revenue is allowed for statistical purposes. 2019 (4) TMI 701 Addition on account of bonus paid to the Director employee - addition u/s 115-O considering the same as dividend - liability to pay the tax @ 15% on account of dividend distributed by it to its shareholders - whether provisions contained u/s 115-O being non-obstante provisions override the general provisions of section 36(1)(ii)? - HELD THAT:- As decided in NEW SILK ROUTE ADVISORS PRIVATE LTD. VERSUS DCIT-7(1), MUMBAI [2015 (4) TMI 795 - ITAT MUMBAI] Payment of bonus to shareholder-employees had resulted in payment of more taxes in comparison to tax payable had the same amount been paid as dividend to shareholders. So, it could not be held that it was a device to evade taxes. Not only this, it was found that the shareholders were professionally highly qualified. Payment of bonus was a business decision and till it was not proved that same was not paid actually, it could not be disallowed. Hon’ble Delhi High Court in case of Chrys Capital [2015 (4) TMI 949 - DELHI HIGH COURT] held that when shareholders also held directorial position in the assessee’s company, the deduction claimed by the assessee u/s 36 (1)(ii) of the Act in respect of bonus paid to its shareholder employees was allowable. We are of the considered view that AO as well as ld. CIT (A) have erred in making addition on account of bonus paid to the Director employee which is ordered to be deleted. Disallowance of legal and consultancy charges - assessee claimed bogus expenses - HELD THAT:- When the entire case of the Revenue in treating legal and consultancy service charges as bogus hinges upon statement of Shri Ravinder Kumar Shukla, ex-Director of the assessee company, his statement cannot be read into evidence against the assessee unless right to cross-examination of Shri Ravinder Kumar Shukla is not provided to the assessee. Assessee claimed to have paid service tax on the amount paid to M/s. Rockhard Infrastructure Pvt. Ltd. and has also filed no TDS certificate issued by the Income-tax Department to M/s. Rockhard Infrastructure Pvt. Ltd., which fact prima facie goes to prove that the payment was made. So, in these circumstances, we deem it necessary to set aside this issue to the AO who shall provide adequate opportunity of being heard to the assessee by providing the right to cross examine Shri Ravinder Kumar Shukla and to have copies of the documents/ statements relied upon by the AO. Consequently, grounds determined in favour of the assessee for statistical purposes. 2019 (4) TMI 700 Assessment u/s 153A/153C - Non recording mandatory satisfaction - recording of satisfaction as the AO of the searched person vs recording mandatory satisfaction as AO third person i.e. assessee - HELD THAT:- The decision in the case of Ganpati Fincap Services ltd. [2017 (5) TMI 1425 - DELHI HIGH COURT] holds the field and the recording of satisfaction not by the AO of the searched person qua the other person prior to the initiation of the proceedings against the other person is a sine qua non for triggering the proceedings against the other person u/s 153C and, therefore, in the absence of such recording of satisfaction by the AO of the searched person qua the other person, assumption of jurisdiction by the AO by issuance of notice u/s 153C cannot be sustained. There do not have to be two separate satisfaction notes prepared by the AO of the searched person where such person happens to the AO of the other person but one satisfaction note by such AO qua the other person would meet this requirement. However, there is no such satisfaction recorded by the AO of the searched person qua the other person - assessment of jurisdiction for issuance of notice u/s 153C of the Act cannot be sustained and, on that ground, the assessee succeeds in this appeal. - Decided in favour of assessee. 2019 (4) TMI 699 Assessments u/s 153A - no incriminating material found during the course of search - HELD THAT:- In the given facts the AY 2009- 10 will come under the category of completed and non abated assessment and the A.O can make additions in such assessments only on the basis of incriminating material found during the course of search. In the case of the assessee as there is no incriminating material found during the course of search A.O could not make any addition on the basis of information called during the course of assessment proceedings and therefore Ld. CIT(A) has rightly held the impugned proceedings u/s 153A r.w.s. 143(3) of the Act as invalid. Rejection of books of accounts - estimation of Gross Profit on sale of gold and silver bullion - HELD THAT:- Books of accounts and stock records are consistently been maintained by the assessee in the similar fashion. Audited reports by the Auditor under the Companies Acts and Income Tax Act are placed on records. No error is pointed out by the Auditors. A.O has made a general observation that the assessee is having huge amount of cash purchases and cash sales but has not placed or referred to any evidence on record to prove that the assessee is indulged into unaccounted sales and purchases. All the expense are vouched. Ld. A.O has merely followed the order of his predecessor of previous years for making the impugned addition. It is well settled principal that before rejecting the book results, discrepancies should be pointed out in the regular books of accounts by the AO. Therefore we are of the considered view that CIT(A) has correctly allowed the assessee’s appeal by holding that the book results should be accepted and that the action of the A.O rejecting books of accounts and making the addition for low Gross Profit on sale of gold bar and sale of silver bar is devoid of any merit and uncalled for. No inconsistency in the finding of Ld. CIT(A) and the same deserves to be confirmed. Accordingly Grounds of the revenue’s appeal for Assessment Year 2012-13 stands dismissed. 2019 (4) TMI 698 Reopening of assessment u/s 148 - recording reasons to belief - original assessment u/s 143(3) - failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment - HELD THAT:- AO did not mention any material facts in the reasons. The Assessing Officer did not mention that assessee was already assessed under section 143(3) in the original assessment, in which, Assessing Officer has already examined the issue of share capital/premium and what was the material produced before him regarding accommodation entry. AO did not record as to who has provided accommodation entry to assessee in the reasons. Thus, there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment under section 147 of the Income Tax Act, 1961. It is clear that in the instant case the AO reopened the assessment after 04 years from the end of the assessment year and Assessing Officer has failed to specify if there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment under section 147 of the Income Tax Act, therefore, conditions of Section 147 are not satisfied in this case. Further, the reasons are vague and do not disclose any incriminating material against the assessee. The decisions relied upon by Learned Counsel for the Assessee squarely apply to facts of case. Therefore, reopening of the assessment is wholly unjustified in the matter. Assumption of jurisdiction under section 147/148 of the Income Tax Act is clearly illegal and bad in Law Reopening of assessment - received information from DIT (Inv.)-II, New Delhi that assessee has taken accommodation entry - AY 2007-2008 - HELD THAT:- AO has recorded vague reasons based on wrong facts. The escapement of income based on accommodation entry as informed by Investigation Wing have been mentioned at ₹ 3.20 crores which in fact was ₹ 2.20 crores. Such fact is mentioned in the balance sheet of the assessee, copy of which is, filed at which is also supported by the list of Investors filed. The Assessing Officer in the reasons for reopening has also mentioned incorrect F.Y. 2007-2008 instead of F.Y. 2006-2007. Therefore, the reasons are based on wrong facts, which clearly show that there was no application of mind on the part of the Assessing Officer while recording reasons for reopening of the assessment. We, therefore, hold that assumption of jurisdiction by the Assessing Officer for reopening of the assessment is illegal and bad in Law. We, accordingly, set aside the orders of the authorities below and quash the reopening of assessment in the matter. Resultantly, all additions stand deleted. 2019 (4) TMI 697 Addition on account of Reconciliation of Difference in cash balance - HELD THAT:- Ld.CIT(A) while deciding the issue has noted that after considering the audited Balance-Sheet, opening balance and closing balance, AO had not doubted the closing balance cash as on 31.03.2011. Before us, assessee has pointed out that over all cash balance has remained the same. The submission of the assessee has not been controverted by Revenue. Further, no fallacy in the findings of Ld.CIT(A) has been pointed by Revenue - ground of Revenue is dismissed. Addition on account of seized material found - HELD THAT:- Ld.CIT(A) has given a finding that assessee has received ₹ 25 lakh by way of bank transfer of B.N. Chaudhary on 16.07.2011 which was returned in two installments through banks. He therefore held that addition made by the AO on account of cash paid to Mr. Palai was not called for in the case of assessee. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition difference in cash available and recorded in books of accounts - HELD THAT:- Ld.CIT(A) while granting relief has noted that it was not the case of excess cash found or there was unexplained cash found recorded in the cash books. He further held that in case of shortage of cash, no addition was justified as assessee has withdrawn the money and might have spent the same without claiming any expenditure. He accordingly deleted the addition. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition alleged shortage of physical stock of goods - HELD THAT:- The issue in the present ground is with respect to addition on account of alleged shortage of physical stock of goods. AO made addition by working out the G.P. at 22% being the G.P. rate upto the date of survey. Ld.CIT(A) has noted that for working out cost of the spare parts, AO had adopted the GP rate of 22% as found at the time of survey on the basis of GP period upto the date of survey. Ld.CIT(A) observed that in case of shortage of stock, the gross profit ratio on the stock sold outside the books has to be taxed. He worked out the unrecorded profits at ₹ 1,47,964/- and upheld the addition to that extent. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition on account of Deemed Dividend u/s 2(22)(e) - HELD THAT:- Ld.CIT(A) after relying on the decision of Hon’ble Bombay High Court in the case of Universal Medicare [2010 (3) TMI 323 - BOMBAY HIGH COURT] has held that the payment cannot be taxed in the hands of assessee and assessee did not held any beneficial shares in the lending company. Before us, Revenue has not pointed any contrary decision in its support nor has pointed any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition on account of Unproved Creditors - HELD THAT:- Ld.CIT(A) after considering the submissions has given a finding that during the year there were transactions with the aforesaid parties. AO had not doubted the purchases made and consultancy given and the payments made were also not disputed and that AO had accepted all other transactions but held closing balance as unproved. He has further given a finding that Revenue has not proved that the parties were not in existence or material or services were not supplied. He therefore deleted the addition. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. 2019 (4) TMI 696 Exparte order of CIT(A) - sufficient opportunity - sufficient cause in not complying to the notices of hearing issued by the CIT(A) - rejecting the books of accounts u/s. 145(3) thereby making an addition to the manufacturing / trading results - HELD THAT:- We find that AO has passed the exparte order u/s. 144(1) read with section 145(3) of the Act and similarly, the Ld. CIT(A) has also passed the exparte order dated 30.5.2018 by only upholding the order of the AO and did not pass a speaking order, which is not sustainable in the eyes of law. Keeping in view of the facts and circumstances of the case, the issues involved in the main Appeal for AY 2014-15 are set aside to the file of the Ld. CIT(A) with the directions to decide the same afresh, in accordance with law after giving adequate opportunity of being heard to the assessee and pass a speaking order. The Assessee through his counsel is directed to appear before the Ld. CIT(A) on 03.04.2019 at 10.00 AM for hearing and substantiate its claim before him and produce all the relevant evidences 2019 (4) TMI 695 Assessment u/s 143(3) - search and seizure action U/s 132 was taken during pendency of assessment proceedings - CIT(A) quashed assessment on ground of issuance of notice u/s 143(2) by 2nd AO - whether assessment proceeding will be abate? - HELD THAT:- There will be only one assessment order in respect of each of six assessment years in which both the disclosed and undisclosed income would be brought to tax. The assessment or reassessment pending on the date of search shall abate and total income for such assessment years will have to be computed by the Assessing Officer as a fresh exercise. In the case in hand when the assessment proceedings were pending on the date of search on 27/8/2017 then the said proceedings initiated U/s 143(3) stood abated by virtue of search U/s 132(2) of the Act and the impugned order passed by the A.O. is nonest. Consequently the order passed by the CIT(A) also becomes infructuous when the assessment proceedings itself got abated and the only course of determination of the total income of the assessee is in the proceedings initiated U/s 153A of the Act. Neither the assessee nor the Assessing Officer has brought this fact to notice of ld. CIT(A) that a search and seizure action U/s 132 was carried out in the case of the assessee during the pendency of the assessment proceedings. The impugned order passed by the Assessing Officer as well as the ld. CIT(A) would otherwise not survive being nonest. Accordingly, the total income of the assessee would be determined in the proceedings initiated U/s 153A of the Act and there would be no consequence of the proceedings before us. Since the order of the ld. CIT(A) is not valid as the assessment proceedings itself stood abated and the question of validity of the assessment for want of notice U/s 143(2) of the Act does not arise. Accordingly, we set aside the order of the ld. CIT(A) as well as the assessment order passed by the Assessing Officer. 2019 (4) TMI 694 Revision u/s 263 - non consideration of stamp duty value by AO for computation of capital gain - applicability of section 50C - No specific mention regarding substitution of stamp duty valuation against actual sale consideration for computation of capital gain - Reply of assessee also not satisfactory - HELD THAT:- The view canvassed by the assessee, in our considered view, was unsustainable in law. Therefore, even if the matter was examined by the Assessing Officer and it was a conscious call of the Assessing Officer to accept the plea of the assessee, such a situation would not take the matter outside the ambit of Section 263 as the view adopted by the Assessing Officer was clearly unsustainable in law. Having said that, we must add that there can be other legal reasons for grant of relief on merits, and that area is not yet explored by, or before, us. In any case, all that the learned Commissioner has directed is examination of the claim on merits and, for the above reason, we see no infirmity in that direction - Decided against assessee 2019 (4) TMI 693 Penalty u/s 271(l)(c) - Undisclosed investment in purchase of property - assessee accepted total addition in his hand - CIT(A) was of the opinion that only 1/3rd of the above unaccounted cost of land was relating to the assessee and accordingly, he sustained the penalty 1/3 penalty - HELD THAT:- As seen that in the assessment order, undisclosed investment of ₹ 81.60 lakhs was considered and it is not proper on the part of the CIT(A) to consider only 1/3rd of the amount of ₹ 81.60 lakhs for the levy of penalty. Accordingly, we vacate the findings of the CIT(A) and restore the issue back to his file to consider the entire undisclosed amount of ₹ 81.60 lakhs. It is admitted that these two persons, Shri Davis and Shri Pavunny have not made any payment towards the purchase of the said property and also it was on record that the assessee had accepted the addition of the entire amount in his own hands. Accordingly, we remit this issue to the file of the CIT(A) for fresh consideration and decide the issue in accordance with law after giving opportunity of hearing to the assessee. This ground of appeal of the Revenue is partly allowed for statistical purposes. 2019 (4) TMI 692 Addition u/s 68 - unsecured loans and interest thereon - as alleged assessee failed to prove the identity, creditworthiness and genuineness - CIT-A deleted the addition - HELD THAT:- During the course of assessment proceedings upon being called upon by the AO the prove the transactions, the assessee filed the copies of the confirmation, affidavits of the parties, their IT returns, balance sheets and bank statements evidencing all the transactions with the assessee. Even notices issued to these five parties under section 133(6) were duly responded by the lenders with all requisite details evidencing the transactions. CIT(A) considering all these aspects and various judicial decisions came to the conclusion that assessee has proved all the three ingredients as envisaged under section 68 of the Act and deleted the addition by reversing the order of AO. After considering the facts on record vis-à-vis the order of the CIT(A), we are of the considered view that in the present case there is no scope for doubting these transactions as assessee has proved beyond doubt the identity of the parties, capacity and creditworthiness of the parties and genuineness of the transactions. - Decided against revenue 2019 (4) TMI 691 Disallowance u/s 14A read with Rule 8D - disallowance suo-motu by the assessee - absence of recording of dissatisfaction on the correctness of the claim of the assessee of expenditure in relation to exempt income - CIT(A) has deleted the addition, mainly on the ground that no dissatisfaction as to the correctness of the claim of the assessee of expenditure incurred in relation to the exempt income, has been recorded either expressly or otherwise - HELD THAT:- AO has noted that the assessee has not incurred any expenditure to earn the dividend income. This finding of the AO itself is not correct as while computing the addition in the computation portion of the assessment order, he himself has reduced the disallowance of ₹ 2,72,248/- out of disallowance computed on the basis of Rule 8D. Thus, it is evident that the Assessing Officer has not examined the correctness of the claim of the assessee of expenditure incurred in relation to exempt income. In absence of recording of dissatisfaction on the correctness of the claim of the assessee of expenditure in relation to exempt income, which is a prerequisite for invoking the Rule 8D of the Rules, the Assessing Officer is not justified in making the disallowance under Section 14A of the Act, invoking Rule 8D of the Rules. No infirmity in the order of the Ld. CIT(A) on the issue-in-dispute and accordingly, we uphold the same. The Grounds of the appeal of the Revenue are dismissed. 2019 (4) TMI 690 Simultaneous claim of depreciation and deduction of depreciation write back - amount redited in P& L Account due to change in the method of providing depreciation as per the Companies Act 1956 - WDV to straight line method - HELD THAT:- While preparing the computation of total income, assessee reduced above sum from the net profit as per profit and loss account as same was not chargeable to tax as it is merely a book adjustment on account of change in the method of depreciation. It is also supported by the guidelines issued by ICAI. The lower authorities have not understood the correct treatment of the same as the above item credited to the profit and loss account is merely book adjustment by which the profit in the books of account have gone up and as it does not have any tax impact, same is correctly reduced from the taxable income of the assessee. It has nothing to do with the claim of the depreciation on assets which is terms of the provision of section 32 of the Income tax Act. Hence we reverse the finding of the lower authorities and direct the AO to delete the disallowances - Decided in favour of assessee Addition u/s 14A r.w.r.8D - disallowance of interest and indirect expenses - HELD THAT:- Assessee has made investment in shares and mutual funds income of which is exempt from tax. It is also apparent that assessee has share capital and reserve which is far in excess of amount invested in mutual funds where from exempt income may be derived. Therefore, respectfully following the decision of HDFC Bank Ld. Vs. CIT [2014 (8) TMI 119 - BOMBAY HIGH COURT] it is a parent that disallowances on account of interest expenditure cannot be made under rule 8D of the Income Tax Rules 1962 u/s 14A. Further, the ld AO has disallowed indirect expenses equal to 0.5 % on an average investment to which assessee also agreed. It was also admitted by the assessee before the lower authorities. In view of this we direct the ld AO to restrict the disallowances u/s 14A of the Act to ₹ 270481/- only - Decided partly in favour of assessee. 2019 (4) TMI 689 Addition u/s 43B - delay in remitting the employees contribution to Provident Fund (PF) accounts - assessee remitted the employees contribution beyond the due date specified u/s 36(1)(v) - HELD THAT:-As decided in M/S. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. AND VICA-VERSA [2017 (9) TMI 1803 - ITAT VISAKHAPATNAM] the employees contribution to PF required to be allowed even if the same is paid before the due date of filing the return u/s 139(1) of the Act. The Tribunal has followed the decision of ESSAE TERAOKA PVT LTD VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2014 (3) TMI 386 - KARNATAKA HIGH COURT] and TETRA SOFT (INDIA) PVT. LTD. [2015 (10) TMI 1601 - ITAT HYDERABAD] while delivering the above ruling. Therefore, we decided issue in favour of assessee. 2019 (4) TMI 688 Disallowance u/s 14A r.w.r. 8D - disallowance cannot exceed the exempt income itself - HELD THAT:- The issue raised in the present appeal is squarely covered by the judgment of the Hon’ble High Court of Delhi in DCIT Vs. Joint Investment Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] Applying the said ratio to the facts of the present case, we direct the Assessing Officer to restrict disallowance under section 14A of the Act to the extent of exempt income only - Decided partly in favour of assessee. 2019 (4) TMI 687 Reopening of assessment in name of non-existing entity - procedural irregularity OR jurisdictional defect - curable defect u/s 292B - Scheme of merger conceived - HELD THAT:- Provisions of Section 292 B of the Act are not applicable in such a case. The framing of assessment against a non-existing entity/person goes to the root of the matter which is not procedural irregularity but a jurisdictional defect as there cannot be any assessment against a ‘dead person’, The order being framed in the name of a non existing person the same deserves to be quashed. We accordingly do so. - Decided in favour of assessee. 2019 (4) TMI 686 Condonation of delay - Tribunal declining to condone the delay of 445 days in filing the appeal against rejection order - Registration under section 12A rejected - Retrospective registration under section 12A - HELD THAT:- SLP dismissed. Customs 2019 (4) TMI 739 ADD - extension of anti dumping duty - Sunset Review on anti dumping investigation - imports of “Ductile Iron Pipes” - import from China PR - Held that:- What has been submitted for assailing the order appears to be of substance for holding that there is a prima facie case and so far as balance of convenience is concerned for issuing any interim order, we must record here that the entire investigation period and even prior thereto there was no import these commodities in question as recorded. Meaning thereby, one can safely conclude that there is no one interested at present in importing the commodity in question, else there would have been at least some resistance or submission on their behalf to the designated authority. The anti dumping duty in case if not extended for the suitable period, then the same would render the petition infructuous and the entire challenge to the final finding which is, prima facie, appears to be substantive in nature would be rendered without any avail to the petitioner. The extension of anti dumping duty ordered under the notification dated 09/10/2018 be further extended by respondent-Union of India for appropriate period, not less then one month from 09/04/2019 - Notice returnable on 08/04/2019. Corporate Laws 2019 (4) TMI 738 Restoration of name of the 2nd respondent to the register of the Registrar of Companies - modification of master data by modifying the status from Strike Off to Active - Held that:- As per Section 252 of Companies Act, 2013 a company can be restored only on the direction of Hon ble NCLT within a period of three years from the date of the order of the Registrar. The appellants are entitled to file company petition/appeal before the Tribunal under Section 252(3) of Companies Act, 2013. Therefore, the appellants can file petition/appeal under Section 252(3) of the Act. 1st respondent while submitting his reply seems to have only dealt with Section 252(1) of the Companies Act, 2013 and have not dealt with Section 252(3) of the Companies Act, 2013 on the basis of which the appellants are seeking relief for restoration of the name of company which has been struck. As per Section 248(6) of the Companies Act, 2013, the Registrar, before passing of order under Section 248(5), have to satisfy himself that sufficient provision has been made for the realisation of all amount due to the company and for payment or discharge of its liabilities and obligations and, if necessary, to obtain undertaking from the appellant and the assets of the company will be made available for payment. By not responding to the ROC of its notice, the appellants shall not be relieved from the responsibility which they were bound to give in the shape of undertaking under this provision. Seeing the balance sheets and the company s huge investment which the company is having since 2011 and there are large amount of the loan and advances, it is possible that creditors could also be aggrieved persons, feeling aggrieved of company s name being struck off, may file an application for restoration of company s name, if its name is not restored. Thus it would be just and equitable to restore the name of the company to even avoid further legal proceedings. The name of Respondent No.2 company shall be restored to the Register of Companies - appeal disposed off. Insolvency & Bankruptcy 2019 (4) TMI 737 Payment received by the Appellant from the Corporate Debtor on the basis of post dated cheques encashed during the Corporate Insolvency Resolution Process - Section 14 of the I&B Code - Held that:- Clause (b) of Section 14(1) prohibits transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein. As per Clause (c) of Section 14(1) any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under SARFAESI Act, 2002 is also prohibited. Clause (d) of sub-section (1) of Section 14 prohibits the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor. From the simple reading of the provisions it is evident that after initiation of Corporate Insolvency Resolution Process once moratorium starts no person can recover any amount from the account of the Corporate Debtor. It is true that the cheque dates back to the date of handover but it cannot be encashed after the moratorium starts, in view of the specific provisions, to recover the amount from the Corporate Debtor. The impugned order is not interfered with - appeal disposed off. 2019 (4) TMI 736 Initiation of Corporate Insolvency process - Operational debt - Section 7, 8 or 9 of the Insolvency and Bankruptcy Code, 2016 - Held that:- The Hon’ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd [2017 (9) TMI 1270 - SUPREME COURT OF INDIA], has inter alia held that IBC, 2016 is not intended to the substitute to a recovery forum. The Hon’ble Supreme Court in B.K. Educational Services (P.) Ltd. v. Parag Gupta & Associates [2018 (10) TMI 777 - SUPREME COURT], has inter alia, held that provisions of Limitation Act will apply to proceedings or appeals before NCLT/NCLAT. Section 238A of the Code make provisions of Limitation Act would apply to proceedings under the Code. The instant Company petition is not fit case to admit to initiate CIRP, and thus it is only liable to be dismissed. 2019 (4) TMI 735 Initiation of Corporate Insolvency Resolution Process - sub-rule (1) of Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - Held that:- Under Section 10 of the Code the Adjudicating Authority is not empowered to go beyond the record as prescribed under section 10 and the information is required to be submitted in form 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11 and if all the information is provided by the corporate debtor as also the mandatory requirements under Section 10 and form No. 6 are complete then it is to be admitted if otherwise not ineligible under Section 11. Pendency of DRT proceedings and or initiation of action under SARFAESI Act cannot be an impediment or bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code nor it can be a ground to reject the Resolution Petition. A perusal of the petition goes to show that it is complete in all respects. Further, admittedly, M/s. A.P.I. Industries Private Limited is liable to pay financial debts to its Financial Creditors. No other objection has been raised by the Financial Creditors or by any other person. The materials on record clearly establish that financial debt is due from the Corporate Debtor to the Financial Creditors and there is occurrence of debt by the Corporate Debtor in repayment of financial debt. This Adjudicating Authority is of the considered view that this is a fit case to admit the petition triggering Corporate Insolvency Resolution Process and accordingly this petition is admitted under Section 10(4)(a) of the Code - Application disposed off. 2019 (4) TMI 734 Discrimination between two similarly situated ‘Financial Creditors’ - Resolution Plan - Held that:- The question relating to discrimination between two similarly situated ‘Financial Creditors’ fell for consideration before this Appellate Tribunal in “Binani Industries Limited Vs. Bank of Baroda & Anr. [2018 (11) TMI 803 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], where it was held that From the two ‘Resolution Plans’, it will be clear that the ‘Rajputana Properties Private Limited’ in its ‘Resolution Plan’ has discriminated some of the ‘Financial Creditors’ who are equally situated and not balanced the other stakeholders, such as ‘Operational Creditors’. Therefore, the Adjudicating Authority has rightly held the ‘Resolution Plan’ submitted by ‘Rajputana Properties Private Limited’ to be discriminatory. In the present case, the Appellant-‘Srei Equipment Finance Limited’ (‘Financial Creditor’), ‘M/s. Pegasus’- (‘Financial Creditor’) and some other ‘Financial Creditors’ were discriminated qua similarly situated ‘Financial Creditors’ in the ‘Resolution Plan’ originally submitted by Mr. Mahesh Kr. Agarwal and now the ‘Successful Resolution Applicant’ with a view to remove the discrimination has proposed ‘Revised Resolution Plan’. For the said reason, we accept the ‘Revised Resolution Plan’ submitted by Mr. Mahesh Kr. Agarwal ‘Successful Resolution Applicant’ which should be treated to be part of the original ‘Resolution Plan’ as approved by the Adjudicating Authority. The stand taken by the 3rd Respondent- ‘Edelweiss Asset Reconstruction Company Limited’ that they have moved against the order of adjournment before the Hon’ble Supreme Court. In absence of any order of stay and as the ‘Corporate Insolvency Resolution Process’ has completed more than 270 days, we decided to dispose of the appeal, to give effect to the approved ‘Resolution Plan’, not challenged by ‘Edelweiss Asset Reconstruction Company Limited’ Thus, the period of pendency of this appeal before this Appellate Tribunal i.e. from 22nd November, 2017 till today for calculating the period of 270 days - appeal disposed off. Service Tax 2019 (4) TMI 733 Non-speaking order - Valuation - inclusion of raw materials/ parts consumed in providing the impugned services in assessable value - whether the impugned maintenance and services are with respect to immovable property or with respect to “goods and equipment”? - principles of natural justice - Held that:- Both the issues have been decided in a non-speaking and very cryptic manner. No justifiable arguments have been given to decide the taxability on both the issues. It has been summarily held that the assessee has provided the services of maintenance of preservation of power plants, LNG Terminal which are goods and equipment without any discussion or examination whether the maintenance or repair services have been provided with respect to the immovable property or with respect to the “goods and equipment”. Whereas we apparently find that the impugned services to Power Plant/ LNG terminal are with respect to immovable property but we refrain to pass any order in this respect as the party had initially voluntarily deposited the service tax amount after owning their liability towards this service and even raised revised taxable invoices to their customers. Hence, the issue may be examined in totality and a well reasoned order be passed after providing opportunity to the appellants to justify their claim that the said services were in respect of immovable property or not. The matter is remanded back to the Original Adjudicating Authority with the directions that the case may be decided afresh after affording a reasonable opportunity to the appellant to produce all the documents in support of their arguments and decide the matter - appeal allowed by way of remand. 2019 (4) TMI 732 Refund of service tax paid - rejection on the ground that refund claim was time barred and there was no nexus between input services and output services provided - N/N. 27/2012-C(NT) - Held that:- The Learned Commissioner (Appeals) had given is finding that the refund claim was filed within the stipulated period of one year - the appellant is entitled to get the refund of unutilized Cenvat credit since no nexus is required to be established for export of services and the order of Commissioner (Appeals) in holding that no refund is payable to the appellant on the basis of erroneous application of the formula is required to be set aside. Refund allowed - appeal allowed - decided in favor of appellant. 2019 (4) TMI 731 Classification of services - business auxiliary services or not - demanded duty under Section 73A of FA - Held that:- The Learned Commissioner has not gone into all aspects of the submissions made by he Appellants. He has not given any finding as to why he has treated the services as “BAS” where as Show Cause Notice was silent on the same. He has simply concluded that the Appellants did not dispute the categorization or liability - matter requires consideration. Demand of duty of ₹ 3,76,38,173 - Appellants have declared gross amount of ₹ 77,12,19,813 whereas the Show Cause Notice alleges receipt of ₹ 95,42,52,185 - Held that:- Commissioner has not given any findings on various submissions of the Appellants. Therefore the issue needs to go back the adjudicating authority to take into account the submissions made by the Appellants and evidence provided by them before computing the actual tax liability of the Appellants. Valuation - fuel supplied by the customers - inclusion of different reimbursements received by customers - Section 67 of the Finance Act, 1994 - Held that:- The Learned Commissioner has not examined the various services provided by the Appellants before arriving at the tax liability of the Appellants - there is force in the arguments of the Appellants that the tax liability would be limited the consideration received by the Appellants for the services rendered by them not more and not less - These aspects need to be examined in the light of Hon’ble Supreme Court decisions in Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT OF INDIA] and Intercontinental Constructions and Technocrats [2018 (3) TMI 357 - SUPREME COURT OF INDIA]. Appeal allowed by way of remand. 2019 (4) TMI 730 Voluntary Compliance Encouragement Scheme (VCES) - rejection on the ground that the appellant had adjusted its balance of liability against Cenvat Credit and the appellant had not calculated its liability properly - Held that:- The Commissioner (Appeals) has observed that the VCES has no provisions of appeal against the rejection of declaration. It is noted that the Hon’ble Punjab & Haryana High Court in the case of Barnala Builders & Property Consultants vs. Dy. C.C.E. & S.T., Dera Bassi, [2013 (12) TMI 568 - PUNJAB AND HARYANA HIGH COURT] has dismissed the writ petition as withdrawn, with liberty to file an appeal - Further, the Tribunal in the case of C.C.E. & S.T., Jaipur vs Vision Freight Solutions India Ltd., [2018 (4) TMI 1467 - CESTAT NEW DELHI] has held that as per VCES, there is no bar for utilization of credit up to 31.12.2012. However, the above decisions were not examined by the authorities below for ascertaining the facts as to whether the issues are identical or not. The matter should be examined in the light of the above decision - appeal allowed by way of remand. 2019 (4) TMI 729 Imposition of penalty u/s 78 - payment of entire amount of service tax before issuance of the adjudication order - no intent to evade - main contention of the Revenue is that the appellant had not disclosed the tax liability, which was detected by the department and therefore, imposition of penalty is warranted - Held that:- It appears that the records and documents were audited by the audit wing in earlier occasion. Hence, imposition of penalty under Section 78 of the Act is not justified - The Tribunal in the case of Shri P. Vinod vs. Commissioner of Service Tax, Chennai [2018 (6) TMI 11 - CESTAT CHENNAI], in identical situation, has set aside the penalty under Section 78 of the Act. Penalty u/s 78 set aside - demand of service tax along with interest and penalty imposed under Section 70 and 77 of the Act are upheld - appeal allowed in part. Central Excise 2019 (4) TMI 728 Refund of duty paid - duty paid on Road Delivery Charges (RDC) collected from the dealers - principles of unjust enrichment - Held that:- Since there was no occasion for the learned Commissioner to deal with the latest decision of the Tribunal and since the foundation of the impugned order, i.e. the decision of the Tribunal in MERCEDES-BENZ INDIA PVT. LTD. VERSUS COMMISSIONER OF C. EX., PUNE-I [2009 (11) TMI 303 - CESTAT, MUMBAI] is not in existence, it is deemed fit to set aside the impugned orders and remand the matter back to the learned Commissioner to decide the appeals afresh in view of the latest decisions - appeal allowed by way of remand. 2019 (4) TMI 727 CENVAT credit - inputs/capital goods - cement, MS angles, channels etc. - Held that:- It is not disputed that the items were used for work relating to installation of a new kiln in the factory. The appellant had procured duty paid TMT rods, steel rods, TOR steel, TMT bars, TMT rebar coil, steel structures etc. and supplied the same free of cost to CECL for construction of civil structure as well as supporting structures. An amendment was brought to Explanation (2) with effect from 7.7.2009 whereby a restriction was introduced for use of cement, angles, channels etc. for construction as well as for making support structures of capital goods. From the amendment, it can be safely concluded that prior to the amendment, the eligibility of credit on cement, MS angles, channels etc. used for construction, they are not ineligible. Credit allowed - appeal allowed - decided in favor of appellant. 2019 (4) TMI 726 Clandestine removal - undervaluation - cum duty benefit denied - penalty u/r 26 of CER - Held that:- The appellant would have recovered excess amount than invoiced amount to defraud state exchequer by less payment of Central Excise Duty. It appears unacceptable that the cases of sale at Jodhpur and same sale at Ahmedabad, where the Department has recovered the evidences there was under invoicing but for other no under invoicing would have been resorted to. It is evident from the statement recorded by the various persons, it is very evident that the Appellant No. 2 and 3 have planned and execute the undervaluation of excisable goods for the purpose of evading applicable Central Excise duties. The adjudicating Authority has, therefore, rightly imposed penalties on them under Rule 26 of Central Excise Rules - no illegality has been committed by the adjudicating authority on this score. Appeal dismissed - decided against appellant. 2019 (4) TMI 725 CENVAT Credit - input services - Outward Transportation of Goods upto buyer’s premises - Held that:- This very Bench relied upon by the Ld. Advocate in MS ASHOK LEYLAND LTD. VERSUS COMMISSIONER OF GST&CE (SALEM) [2019 (4) TMI 641 - CESTAT CHENNAI] wherein the matters have been remanded to the adjudicating authority to decide the matter afresh in view of the judgments of M/s. Ultra Tech Cements Ltd., M/s. Roofit Industries Ltd. [2015 (4) TMI 857 - SUPREME COURT] and Board’s Circular dated 08.06.2018. Appeal allowed by way of remand. 2019 (4) TMI 724 Classification of goods - Nylon monofilaments yarn - whether classifiable under Chapter hearing 5404.10 of Central Excise Tariff Act, 1985 or otherwise? - benefit of N/N. 5/98-CE dated 2.6.1998 - Held that:- The learned Commissioner accepted the test report relating to the goods seized and dropped the show-cause notices proposing confiscation of the goods. However, the learned Commissioner has not applied the test result for the clearance from 16.8.1998 to 5.11.1998 for which different formula was applied by him in calculating the denierage of the product. Assailing the said approach of the learned Commissioner, it has been submitted by the appellant that for the said period i.e 16.8.1998 to 5.11.1998, neither samples were drawn nor any test had been conducted. Therefore, the confirmation of demand denying the benefit of exemption notification 5/98-CE is incorrect. When samples were tested by the Department, and the result indicated that the denierage declared by the appellant in clearing the goods more or less in confirmity with the test report, hence, in absence of any contra test report for the period prior to 5.11.1998 indicating different denierage of the nylon monofilaments yarn cleared, it is incorrect to arrive at the conclusion that the said yarns were of different denierage on the basis of a theoretical formula. Consequently, the denial of benefit of exemption notification cannot be sustained. Demand set aside - appeal allowed - decided in favor of appellant. 2019 (4) TMI 723 Valuation - annual capacity production - closed stenters to be included or not - abatement for the closure period - the adjudicating authority has confirmed the demand taking into account the closed non-working stenter and also without allowing abatement for the closure period of the said stenters solely on the ground that formal application seeking abatement has not been filed by the appellant - Held that:- The adjudicating authority has confirmed the demand and imposed penalty without affording an opportunity of hearing to the appellant. In these circumstances, it is prudent to remand the matter to the adjudicating authority to pass an appropriate order taking into consideration, the CBEC Circular dated 15/09/1999 and after affording a reasonable opportunity of hearing to the appellant - appeal allowed by way of remand. 2019 (4) TMI 722 Goods manufactured in the factory belonging to State Government and intended for use by State Government - benefit of N/N. 74/93-CE, dated 28.02.1993 - appellant contended that it is an authority constituted by the State of Maharashtra under Section 5 of the Electricity (supply) Act, 1948, as amended and thus, the PSC Poles manufactured by it would be treated as manufactured by a factory of State Government. Held that:- The issue arising out of the present dispute is no more res integra, in view of the decision of the Larger Bench of the Tribunal, in the case of Asst. Engineer (Civil) v. CCE, Raipur [2008 (9) TMI 105 - CESTAT NEW DELHI], wherein it has been held that the factory belonging to the Chhattisgarh State Electricity Board did not belong to the State Government and poles are used by themselves for their electrification and thus, the condition of the notification has not been complied with. Appeal dismissed - decided against appellant. 2019 (4) TMI 721 Finalization of provisional assessment - adjustment of short / excess payment of duty - Rule 7 of the Central Excise Rules, 2002 - Section 11B of the erstwhile Central Excise Act, 1944 - Held that:- The Commissioner (Appeals) was directed to re-consider the decision of the Larger Bench in respect of abatement of cash discount in the case of CCE, Ahmedabad vs Arvind Mills Ltd., [2006 (11) TMI 4 - APPELLATE TRIBUNAL, MUMBAI], as referred by the appellant and also the case of Lucas TVS Ltd. vs CCE, Chennai, [2008 (10) TMI 76 - CESTAT CHENNAI]. It has further been observed that the Commissioner (Appeals) should consider the adjustment of short / excess payment of duty upon finalization of such assessment. In view of the conflict of opinion of two Larger Bench as stated above, the Division Bench had again referred the matter to the Larger Bench. The Larger Bench of the Tribunal, in the case of Gujarat Guardian Ltd. vs Commissioner of Central Excise, Surat, [2005 (5) TMI 127 - CESTAT, MUMBAI], while deciding the reference, has observed that in view of the decision of the Hon’ble Supreme Court in the case of Commissioner vs SKF India Ltd., [2009 (7) TMI 6 - SUPREME COURT], there is no need for reference of constituting of five members bench. The matter is required to be re-examined by the original authority in the light of the decision of the Hon’ble Supreme Court in the case of SKF - Appeal allowed by way of remand. 2019 (4) TMI 720 Valuation - inclusion of cost of drawings and designs provided by the customer in assessable value - Held that:- It appears from the said statement that the cost of drawing and design was formed the part of the final product, which suffered payment of appropriate central excise duty at the time of clearance of finished product from the factory. Further, it is not the case of the department that the appellant had recovered the charges towards drawing and design from its customer. The demand confirmed on the appellant on the cost of drawing and design was not sustainable under the law - appeal allowed - decided in favor of appellant. 2019 (4) TMI 719 Refund claim - duty paid on low sulphur high flash high speed diesel - petroleum products that were directly supplied by M/s Indian Oil Corporation Ltd to the Indian Navy - benefit of N/N. 64/95-CX dated 16th March 1995 - refund denied on the ground of lack of entitlement on those supplies effected to Indian Navy as the goods had been manufactured by M/s Bharat Petroleum Corporation Ltd and supplied to the appellant - Held that:- It is clear that notification no. 64/95-CX dated 16th March 1995 extends the benefit of exemption to supply of stores, including fuel, to the Indian Navy for consumption on board its vessels - It is not in dispute that appellant did effect such supplies to vessels. Reliance placed in he case of INDIAN OIL CORPORATION LTD. VERSUS COMMR. OF C. EX., RAJKOT [2008 (4) TMI 160 - CESTAT AHMEDABAD], where it was held that the appellant are entitled for refund. Appeal allowed - decided in favor of appellant. 2019 (4) TMI 718 Method of Valuation - Scented Supari - whether assessment to be made under section 4A of Central Excise Act, 1944 on MRP declared on the multi-piece packages or under section 4 of the said Act? - Held that:- The process of crushing of betel nuts into smaller pieces and sweetening the same with essential/non-essential oils, menthol, sweetening agents etc., does not amount to manufacture. Therefore, the issue whether section 4 or 4A has to be applied for arriving at the assessable value has no relevance for consideration in this appeal. The impugned order requires to be set aside - appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2019 (4) TMI 717 Developer and codeveloper of an SEZ - exemption from payment of tax - individual industrial unit - Section 7(6) of HVAT Act, 2003 and 11(1)(i) read with Section 19(i) of HSEZ Act, 2005 - time limitation - Held that:- The issue is covered by the decision in the case of Excise and Taxation Commissioner, Haryana Versus M/s Anant Raj Ltd. Rewari and another [2019 (4) TMI 637 - PUNJAB AND HARYANA HIGH COURT], where it was held that a developer and co-developer of an SEZ are entitled for exemption from payment of tax under the Act by virtue of Section 11(1)(i) of the HSEZ Act. The present appeal is also dismissed on merits as well as being time barred. Indian Laws 2019 (4) TMI 716 What is the effect of an arbitration clause contained in a contract which requires to be stamped? Held that:- When an arbitration clause is contained in a contract , it is significant that the agreement only becomes a contract if it is enforceable by law. We have seen how, under the Indian Stamp Act, an agreement does not become a contract, namely, that it is not enforceable in law, unless it is duly stamped. Therefore, even a plain reading of Section 11(6A), when read with Section 7(2) of the 1996 Act and Section 2(h) of the Contract Act, would make it clear that an arbitration clause in an agreement would not exist when it is not enforceable by law. Stamp duty, when paid with penalty (if any), would require adjudication by the stamp authorities, which would take far more than the 60-day period that is laid down by Section 11(13). Undoubtedly, Section 11(13), which was also introduced by Amendment Act 3 of 2016, was enacted keeping one of the important objectives of the 1996 Act in mind, namely, speedy disposal of disputes by the arbitral tribunal, and appointment of an arbitrator having to be made as expeditiously as possible, therefore. Thus, a harmonious construction needs to be given to the provisions of the Maharashtra Stamp Act and Section 11(13) of the 1996 Act by which, if it is possible, both provisions ought to be subserved. A harmonious construction needs to be given to the provisions of the Maharashtra Stamp Act and Section 11(13) of the 1996 Act by which, if it is possible, both provisions ought to be subserved. We have already seen that under the Maharashtra Stamp Act, the object of impounding an instrument that is unstamped is to ensure that stamp duty and penalty (if any) must be paid on such instrument before it is acted upon by any authority. Likewise, under Section 11(13) of the 1996 Act, an application made under Section 11 for appointment of an arbitrator should be disposed of as expeditiously as possible, and, in any event, an endeavour shall be made to dispose of such application at least within a period of 60 days from the date of service of notice on the opposite party. Arguments taken of prejudice, namely, that on the facts of this case, the appellant had to pay the stamp duty and cannot take advantage of his own wrong, are of no avail when it comes to the application of mandatory provisions of law. Even this argument, therefore, must be rejected. The matter is remitted to the Bombay High Court to dispose of the same - appeal allowed by way of remand.
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