TMI Tax Updates - e-Newsletter
April 6, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy FEMA Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI Short Notes

1. Facility of Form SUGAM (ITR-4) - List of person who are eligible and who are not eligible to avail the facility of simple ITR-4 SUGAM form - For the AY 2019-20

  Income Tax:

2. Facility of Form SAHAJ (ITR-1) - List of person who are eligible and who are not eligible to avail the facility of simple ITR form - For the AY 2019-20

  Income Tax:

Articles

1. LEVY OF GST ON JOB WORKS FOR LIQUOR

   By: Dr. Sanjiv Agarwal

2. THE PURCHASE OF GOODS IS NOT ENTITLED TO CLAIM REFUND OF DUTY MADE UNDER PROTECT BY THE MANUFCTURER

   By: DR.MARIAPPAN GOVINDARAJAN

3. Goods And Service Tax - Registration and Negative list concept

   By: AKT associates

News

1. GST - Concept & Status - AS ON 1st April, 2019

Notifications

Customs

1. 30/2019 - dated 4-4-2019 - Cus (NT)

Exchange Rates Notification No.30/2019-Custom(NT) dated 04.04.2019

GST - States

2. 14/2019-State Tax - dated 28-3-2019 - Himachal Pradesh SGST

Supersession the notification No. 8/2017- State Tax, dated the 30th June, 2017

3. 13/2019-State Tax - dated 28-3-2019 - Himachal Pradesh SGST

Prescribe the due dates for furnishing of FORM GSTR-3B for the months of April, May and June, 2019

4. 12/2019-State Tax - dated 28-3-2019 - Himachal Pradesh SGST

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

5. 11/2019-State Tax - dated 28-3-2019 - Himachal Pradesh SGST

Prescribing Time Period for Filing GSTR-1 for those Registered Persons having Aggregate Turnover up to 1.5 Crore rupees in the preceding financial year or the current financial year

6. 555-F.T. - 6/2019-State Tax (Rate) - dated 29-3-2019 - West Bengal SGST

Seeks to notify, by exercising powers conferred under section 148 of WBGST Act, 2017, certain class of persons in whose case liability to pay tax shall arise on the date of issuance of completion certificate or on its first occupation, whichever is earlier.

7. 554-F.T. - 5/2019-State Tax (Rate) - dated 29-3-2019 - West Bengal SGST

Seeks to amend notification No. 1137-F.T. dated 28.06.2017 so as to specify services to be taxed under Reverse Charge Mechanism (RCM) as recommended by Goods and Services Tax Council for real estate sector

Income Tax

8. 32/2019 - dated 1-4-2019 - IT

Income-tax (Second Amendment) Rules, 2019

SEZ

9. S.O. 1517(E) - dated 1-4-2019 - SEZ

Central Government de-notifies an area of 0.906 hectares, thereby making resultant area as 10.241 hectares,at Zamin Pallavaram village, Tambaram Taluk, Kancheepuram District in the State of Tamil Nadu

Circulars / Instructions / Orders

DGFT

1. 02/(2015-2020) - dated 5-4-2019

Amendment in Appendix 2 - K of Foreign Trade Policy, 2015-2020.

2. 01/(2015-2020) - dated 4-4-2019

Amendments in Para 2.16 of Hand Book of Procedures of FTP 2015-20

Companies Law

3. 04/2019 - dated 4-4-2019

Relaxation of additional fees and extension of last date of filing e-form CRA-2 (Form of intimation of appointment of cost auditor by the company to Central Government) in certain cases under the Companies Act, 2013

Highlights / Catch Notes

GST

• Turbine Generator Set for Waste-to-Energy Project Classified with 5% GST Rate.

  Case-Laws - AAAR : Classification of goods - Rate of GST - turbine generator set to be supplied by the applicant to the buyer for use in waste-to-energy project - The product is attracting 5% levy.
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• IIM Bangalore's Long-Duration Postgraduate Programs Exempt from GST as Educational Services Under Legal Framework.

  Case-Laws - AAAR : Educational institute or not - IIM - the long duration post graduate programs offered by IIMB will be exempt from GST
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• IIMB Exempt from IGST for Online Journals and Periodicals from Non-Taxable Territories.

  Case-Laws - AAAR : Educational institute or not -IIM - IIMB will be eligible for exemption from payment of IGST in respect of supply of online journals and periodicals received from a person located in a non-taxable territory
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Income Tax

• Income-tax (Second Amendment) Rules, 2019: Updated Procedures for Filing ITR for Assessment Year 2019-2020 to Enhance Accuracy and Compliance.

  Notifications : Income-tax (Second Amendment) Rules, 2019 - Filing of Returns (ITR) for the Assessment Year 2019-2020
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• Reopening of Assessment u/s 147 Challenged; Section 50C Not Applicable to Stock in Trade Sale.

  Case-Laws - HC : Reopening u/s 147 - Applicability of Section 50C on sale of Stock in trade - reasons show narration of provisions which were not applicable on assessee to the assessment year in question - notice of reopening of assessment is set aside
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• Assessing Officer Needs CIT/Pr.CIT Approval to Expand Income Tax Assessment Scope Beyond CBDT Directives.

  Case-Laws - AT : Scope of limited scrutiny - other disallowance not covered in notice - The CBDT directives are binding on the Assessing Officer and in case, Assessing Officer finds that the assessment has to be made on extensive basis due to the reason that there are incidences of tax evasion found he can extend the assessment by taking due permission from CIT/Pr.CIT - other disallowance not sustainable
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• AO's Disallowance u/s 14A and Rule 8D Lacks Required Satisfaction, Highlighting Procedural Oversight.

  Case-Laws - HC : Disallowance u/s 14A r.w.s 8D - AO did not in any manner reject explanation of the assessee but merely proceeded to make disallowance bu/s 14A - satisfaction of the AO about the correctness of the expenditure offered for disallowance by the assessee is a pre-condition for making disallowance
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• Sale of Sub-Tenancy Rights: Income from Other Sources or Capital Gains? Key Tax Implications u/ss 55(2) and 2(14).

  Case-Laws - AT : Taxability of sale of sub-tenancy rights - Income from Other Sources OR Income from Capital Gains - when tenancy is recognised as capital asset within meaning of Section 55(2) , as to why sub-tenancy cannot be treated as capital asset more so , capital asset is so widely defined u/s 2(14)
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• Pr.CIT can't revise assessment u/s 263 if AO's thorough inquiry finds no discrepancies in profit and expenses.

  Case-Laws - AT : Revision u/s 263 - Once AO has carried out detailed inquiry and verification of the documents and was satisfied with the net profit shown by the eligible unit as well as the nature of expenses incurred by eligible and non eligible units and examined the entire details, then without there being any discrepancy or defect found by the Ld. Pr.CIT, he cannot simply set aside the assessment for passing a fresh assessment order. - no revision permissible
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• Chennai Port Trust Rent Remission: Assessee's Unpaid Collections Taxed as Income Under Income Tax Act Section 41(1.

  Case-Laws - HC : Addition u/s 41(1) - remission or cessation - rents collected from its customers - once the Assessee had enjoyed the collected amounts as its income without paying it to the Chennai Port Trust, they were under obligation to be taxed u/s 41(1)
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• Construction Costs: Assured Returns to Customers Must Be Capitalized, Not Revenue Expenses, in Construction Projects.

  Case-Laws - AT : Allowability of revenue expenses in construction business - giving assured returns to customers from whom capital was received should form part of construction project and should be capitalized - these expenses are not in nature of ‘selling cost’
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• Co-operative credit society serving only members qualifies for Section 80P income tax deduction, no public business found.

  Case-Laws - AT : Deduction u/s 80P - Co-operative Credit society and doing banking business for their members - Nothing came into noticed that the assessee was doing the business in public at large - deduction is allowable
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• Assessment Reopening u/s 148 Invalid Due to Lack of Independent Judgment, Section 147 Assessment Quashed.

  Case-Laws - AT : Reopening u/s 148 - There is no crucial link between the information made available to the Assessing Officer and the formation of belief of escapement of income - simply reopened the case on the basis of information provided by the Investigation Wing without any independent application of mind - assessment u/s 147 quashed
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• Reassessment Valid u/s 147: Nexus Established for Deemed Dividends u/s 2(22)(e) of Income Tax Act.

  Case-Laws - AT : Reopening of assessment u/s 147 - deemed dividend u/s 2(22)(e) - necessary nexus has been established between the material in possession of the AO and the formation of a prima facie belief that the income has escaped assessment - no infirmity in assumption of jurisdiction u/s 147
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• Supreme Court SLP doesn't block Section 11 exemption; Allahabad High Court affirms Tribunal's Section 12AA registration.

  Case-Laws - AT : Exemption u/s 11 - Tribunal has allowed registration u/s 12AA in favour of the assessee, which was confirmed by the Hon’ble Allahabad High Court - Merely because SLP of the Department is pending before Hon’ble Supreme Court is no ground to deny exemption u/s 11.
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• Debenture Redemption Premium Recognized as Allowable Liability; Costs Allocated Over Debenture Period for Tax Purposes.

  Case-Laws - HC : Allowability of redemption premium on debentures - liability incurred by the assessee to discharge the liability covered by the debentures at premium is in the year of issuance hence, has to be spread over the period covered by debentures
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• Taxpayer's Apartment Sale Gains Classified as Long-Term Capital Gains from Allotment Date Based on Enhanced Property Rights.

  Case-Laws - AT : LTCG - sale of apartment - rights were obtained by the assessee vide reservation of allotment letter - execution of agreement in assessee’s favor was nothing but mere improvements in the assessee’s existing rights in the property - gains were Long-Term Capital Gains in nature as counted from allotment date
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• Fraudulent Property Registration: Sale Deed Value Accepted Over Stamp Value for Capital Gains u/s 50C.

  Case-Laws - AT : Distress sale - fraudulent registration of same property to another persons who has no right or title over the property - adoption of stamp value u/s 50C as sales consideration for Capital gain computation is not called for in such circumstances - Value shown in the sale deed accepted as market value.
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Customs

• New Exchange Rates for Customs Valuation Announced in Notification No.30/2019-Custom(NT) Effective from April 4, 2019.

  Notifications : Exchange Rates Notification No.30/2019-Custom(NT) dated 04.04.2019
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• Legal Interpretation Confirms Pea Import Restrictions Remain Despite Notification Withdrawal Until September 30, 2018.

  Case-Laws - HC : Import of restricted item or not - Peas - There was a restriction and insofar as that notification continuing the restriction till 30th September, 2018 having been withdrawn does not mean that the restriction is not in place.
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• Circumstantial Evidence Insufficient in Classification Dispute Over 'Embroidery Needles' vs 'Sewing Machine Needles'.

  Case-Laws - AT : Circumstantial evidence, such as stickers on the packing, that part of the consignment declared to be ‘embroidery needles’ was, admittedly, composed of ‘sewing machine needles’ and that a different model number designates ‘embroidery needles’, are not acceptable in a dispute on classification.
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• Reversal of CENVAT Credit Allows Full 98% Duty Drawback on Additional Customs Duty Without Withholding.

  Case-Laws - AT : Duty Drawback - CENVAT credit so availed had been reversed - There is no justification for withholding of the prescribed percentage of drawback at 98% of the additional duty of customs.
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• Endorsements on Receipts by Appraising Officer and Assistant Commissioner Are Not Appealable Decisions Before Commissioner (Appeal).

  Case-Laws - AT : An endorsement by the appraising officer and Assistant Commissioner on any receipt cannot be considered as decision which could have been appealed against before the Commissioner (Appeal).
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DGFT

• DGFT Announces New Fee Structure for TMA Scheme Reimbursement Applications to Support Exporters with Freight Costs.

  Circulars : Scale of Fee for application for reimbursement of benefits under Transport and Marketing Assistance (TMA ) notified.
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• Export Authorization for Restricted Goods Now Valid for 24 Months Instead of 12.

  Circulars : Validity period of export authorisation for restricted (Non-SCOMET) goods enhanced from 12 months to 24 months.
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Corporate Law

• Deadline Extended for Filing e-form CRA-2 Under Companies Act 2013; No Additional Fees for Specific Cases.

  Circulars : Relaxation of additional fees and extension of last date of filing e-form CRA-2 (Form of intimation of appointment of cost auditor by the company to Central Government) in certain cases under the Companies Act, 2013
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• Deadline Extended for Filing E-Form CRA-2 on Cost Auditor Appointment; Fee Requirements Relaxed for Some Companies.

  Circulars : Relaxation of additional fees and extension of last date of filing e-form CRA-2 (Form of intimation of appointment of cost auditor by the company to Central Government) in certain cases under the Companies Act, 2013
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Indian Laws

• Double Jeopardy Argument Rejected: Civil Penalty and Criminal Action Don't Violate Article 20(2) of Indian Constitution.

  Case-Laws - HC : Double jeopardy - penalty is civil in nature imposed by the statutory authority - criminal action even otherwise being not violative of Article 20(2) - argument of double jeopardy rejected.
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Service Tax

• CENVAT Credit Approved for Hotel & Spa Project Construction at Milroc Kadamba u/r 2(l) Conditions Met.

  Case-Laws - AT : CENVAT Credit - input/input services - construction of said Hotel & Spa Project at Milroc Kadamba - They have fulfilled the conditions specified in Rule 2(l) - credit allowed.
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Case Laws:

• GST

• 2019 (4) TMI 387
  Extension of time for filing of Form GST TRAN-I - transition to GST regime - transitional credit - Held that:- As the petitioner has moved the aforesaid application, the Assistant Commissioner/Commissioner GST may consider the above application and pass appropriate order in accordance with law - petition disposed off.

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• 2019 (4) TMI 386
  Imposition of penalty, redemption fine and confiscation under section 130 of CGST Act - Held that:- Considering the fact that the petitioner has already deposited tax and penalty under section 129 of the IGST Act, by way of ad interim relief, the respondents are directed to forthwith release Truck No. GJ10 W 7711 along with the goods contained therein. However, the petitioner shall file an undertaking before this court within a week from today to the effect that in case the petitioner, ultimately, does not succeed in the petition, he shall duly cooperate in the further proceedings. Issue Notice returnable on 10th April, 2019.

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• 2019 (4) TMI 385
  Release of seized goods alongwith vehicle - goods detained for the lack of genuineness of the goods in transit and for not tendering E-way bill for goods in movement - the petitioner has sent a representation dated 13.3.2019 (Annexure P-10) to respondent No.2, but no action has so far been taken thereon - Held that:- Without expressing any opinion on the merits of the case, we dispose of the present petition by directing respondent No.2 to take a decision on the representation dated 13.3.2019 (Annexure P-10), in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of one week from the date of receipt of the certified copy of the order.

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• 2019 (4) TMI 384
  Manual filing of refund application - Held that:- Issue notice. Re-list on 28th March, 2019.

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• 2019 (4) TMI 383
  Classification of goods - Rate of GST - turbine generator set to be supplied by the applicant to the buyer for use in Waste-to-energy project - whether covered under St.No.234 of Schedule I of N/N. 1/2017-IGST(Rate) dated 28.06.2017 as Renewable energy devices and parts for the manufacture of waste to energy plants/devices ? - Held that:- In the instant case, the impugned item is a Turbine Generator Set. The Appellant has secured a contract from Jindal Urban Waste Management (Guntur) Ltd (JUWML) for the complete design, engineering, manufacture and supply of Turbine generator Set. JUWML(Guntur) is a Company formed by the promoter M/s. JITF Urban Infrastructure Ltd to execute waste to energy project in Guntur The waste to energy project will be integrated facility for processing Municipal Solid Waste (MSW) delivered by Guntur Municipal Corporation. A waste to energy plant converts municipal and industrial solid waste by burning waste at very high temperatures and using the heat to generate steam, The steam so generated is used to drive the turbine that creates electricity. The waste to energy plant consists of many equipments/devices starting from the stage where the MSW is dumped in a pit, segregated and incarnated, to the final stage of generation of electricity which is uploaded to the grid. The turbine generator set is one such equipment/device in the entire process chain of a waste to energy plant - The Turbine Generator set by itself does not qualify as a waste to energy plant. The turbine generator set together with the boilers, air cooled condensers and a host of other parts, constitute a waste to energy plant. The Turbine Generator Set is an integral part in the process of converting waste to energy and hence the supply of Turbine Generator set for a waste to energy plant project will get covered in the description of item at (e) in Col 3 of SI. No. 234 of Schedule I, It is emphasized that a turbine per se will not be eligible for the concessional rate of 5% GST under Sl.No. 234 of Schedule I. It is only when the turbine is supplied for the setting up of the waste to energy plant that the same will be covered under the said Sl.No. 234. The CBIC in its Circular No 80/54/2018-GST dated 31.12.2018, at Para 11, has clarified that the concession of 5% rate as per entry SI No 234 of Notification No 01/2017 would be available only to such machinery, equipment, etc which fall under Chapter 84, 85 and 94 and used in the initial setting up of renewable energy plants and devices including Waste to Energy Plants. The supplier must satisfy himself that the goods falling under Chapter 84, 85 and 94, say a turbine or a boiler, are required in a waste to energy plant and would be used in a waste to energy plant - In the Appellants case, as can be seen from the terms of the contract and the project report, the Turbine Generator set is to be supplied to Jindal Urban Waste Management (Guntur) Ltd, a company formed to execute the waste to energy project awarded by the Government of Andhra Pradesh - thus, the said turbine generator set is eligible for the levy of 5% GST in terms of Sl.No 234 of Schedule I of Notification No 01/2017 IT (R) dated 28406.2017.

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• 2019 (4) TMI 382
  Exemption from GST - Educational institute or not - long duration post graduate diploma/degree granting programs offered by the IIMB, other than those specifically mentioned in Sl.No 67 of Notification No 12/2017 CT(Rate) dated 28th June 2017 - supply of online educational journals or periodicals to the IIMB - Held that:- All IIMs (which includes IIMB) became eligible for exemption as an educational institution with effect from 31st January 2018 under entry Sl.No. 66 of Notification No.12/2017 CT(R). However, post 31st January 2018, the exemption under Sl.No. 67 loses its relevance since the IIMs are now covered under the entry Sl.No 66. However, the entry Sl.No.67 was deleted only with effect from 01.01.2019 vide Notification No. 28/2018 CT (R) dated 31.12.2018. Therefore, during the period January 2018 to 31st December 2018 both the entries at Sl. No. 66 and 67 were in force granting exemption to the services provided by IIMs. It is trite law that if there are two or more exemptions available to an assessee, he can claim the one which is more beneficial to him - during the period 31st January 2018 to 31st December 2018, IIMB can avail the exemption under either Sl.No. 66 or Sl.No. 67 of Notification No 12/2017 CT(R) dated 28.06.2017 as amended. With effect from 31st January 2018, the long duration Post graduate diploma/degree programs offered by IIMB, where a degree/ diploma is conferred as recommended by the Board of Governors as per the power vested on them under the IIM Act, 2017, will be eligible for exemption from GST by virtue of Sl.No 66 of the Notification No 12/2017 CT(R) dated 28.06.2017 as amended. Supply of online educational journals or periodicals to the IIM - plea of the Appellant is that since they are to be considered as an educational institution post enactment of the IIM Act, 2017, the supply of online journals and periodicals to their institution should be given the benefit of exemption under Sl.No 10 of Notification No. 09/2017 IT(R) - Held that:- IIMB is an educational institution as defined in clause 2(y) of the Notification No 12/2017 CT (R) dated 28.06.2017 and it is an educational institution which offers qualification recognized by law. Therefore, the receipt of online journals and periodicals by IIMB from a person located in a non-taxable territory will be eligible for exemption from payment of IGST in terms of Sl.No 10 of Notification No 09/2017 IT (R) dated 28.06.2017 as amended - In the case of online journals and periodicals received by IIMB from domestic service providers, the exemption from payment of GST will be available to the domestic suppliers on intra-state supplies by Virtue of Sl.No. 66 (b) (v) of Notification No. 12/2017 CT (R) dated 28.06.2017, and exemption on inter-state supplies will be available Vide Sl.No. 69 of Notification No 09/2017-IT (R) dated 28.06,2017 as amended vide Notification No 02/2018 IT (R) dated 25.01.2018.

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• 2019 (4) TMI 381
  Profiteering - supply of Vitrified Tiles Super Nano Plus - benefit of reduction in the rate if tax not passed - contravention of the provisions of Section 171 of CGST Act, 2017 - Held that:- The base price of the product per box was Rs. 294.50 prior to 15.11.2017 and had remained the same even after GST rate reduction w.e.f. 15.11.2017. Therefore, the benefit of rate reduction appears to have been passed on. This Authority agrees with the DGAP s Report dated 28.09.2018 and accordingly, holds that the allegation of profiteering is not sustainable - the provisions of Section 171 of the CGST Act, 2017, have not been contravened and there is no merit in the application forwarded by the Applicant No. 1 - application dismissed.

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• 2019 (4) TMI 380
  Profiteering - Gypsum Board - benefit of reduction in the rate of tax not passed on - contravention of the provisions of Section 171 of CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case and the invoices placed on record that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017 instead the rate of tax in the pre GST era which was 14.75% has increased to GST @ 28% in the post GST era. Therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017 as there is no reduction in the rate of tax. Application dismissed.

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• 2019 (4) TMI 312
  Manual filing of refund application - Held that:- The Court permits the Petitioner to file a refund application manually in terms of Rule 97 A of the CGST Rules. The Petitioner will file such application not later than ten days from today. If such application is filed, the officer concerned will fix a date for consideration of the said application and will give at least 3 days advance notice to the Petitioner.

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• Income Tax

• 2019 (4) TMI 379
  Registration u/s 12AA denied - assessee trust is not a charitable organization, as the Trust has not fulfilled the conditions laid down for registration in Section 12AA - ITAT allowed claim - HELD THAT:- SLP dismissed.

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• 2019 (4) TMI 378
  Accrual of income - real income theory - Interest on NPAs to be taxed on accrual basis - HELD THAT:- Delhi High Court in case of CIT Vs. Vasisth Chay Vyapar Ltd [2010 (11) TMI 88 - DELHI HIGH COURT] held that interest on NPAs cannot be taxed on accrual basis. It was noted that NBFC would be governed by the directions issued by the Reserve Bank of India and RBI directives provided that under certain circumstances, a loan or advance would be treated as NPA. The Court on the real income theory held that such interest would not be taxable. We notice that the decision of the Delhi High Court in case of Vasisth Chay Vyapar Ltd (supra) was carried in the appeal by the Revenue before the Supreme Court. The Supreme Court in the judgment reported in [2018 (3) TMI 56 - SUPREME COURT OF INDIA] approved the decision of the High Court and dismissed the appeal. Under these circumstances, this question is not entertained. Disallowance u/s 14A r.w.s 8D - HELD THAT:- Sub-section (2) of Section 14A provides that the Assessing Officer shall determine the amount of expenditure incurred in relation to income which is examined for tax if he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. The satisfaction of the Assessing Officer about the correctness of the expenditure offered for disallowance by the assessee therefore is a pre-condition. In the present case, we have perused the order of assessment in which the Assessing Officer had called upon the assessee to justify the limited disallowances voluntarily offered. The assessee made detailed representation inter alia pointed out that the assessee had not made any expenditure in the nature of administrative expenses. However, to avoid proceedings, a suo motu disallowance was made. AO did not in any manner reject this explanation of the assessee but merely proceeded to make disallowance by invoking Section 14A and applied Rule 8D which the Tribunal correctly reversed.

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• 2019 (4) TMI 377
  Charitable activity u/s 2(15)- Addition of interest holding that the income is exempt u/s 11(5) and the proviso to Section 2(15) - object of the assessee club - HELD THAT:- The main object of the assessee club as noted above is to provide golf facilities to the members for promotion of the sport. The Tribunal correctly held that there was no element of the assessee's activity being in the nature of trade, commerce or business. Once the applicability of the proviso to Section 2(15) is ruled out, the question of the exemption under Section 11 of the Act would arise. Clause (a) of sub-section (1) of Section 11 provides that subject to the provisions of Sections 60 to 63, the income derived from the property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes shall not be included in the total income of the previous year of the person in receipt of the income. The assessee had invested its surplus funds in specified deposits earning interest which reduced the assessee's loss. In terms of sub-section (1) of Section 11 of the Act, therefore, such income was exempt from tax. The Tribunal, therefore, correctly granted relief to the assessee. No question of law arises.

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• 2019 (4) TMI 375
  Reopening u/s 147 - Notice u/s 148 - assessee is a builder - Applicability of Section 50C on sale of Stock in trade - statement in survey partner never admitted that the flats were sold at a price higher than what was reflected in the document. In other words, he did not admit to any cash payment not recorded in the documents. - HELD THAT: - However, in absence of voluntary surrender by the assessee of any additional income, it was simply not possible for the Revenue to make any addition on the ground of the difference between the stamp valuation and the sale price of the property in question. As noted, Section 43CA of the Act was inserted w.e.f 1.4.2014 and therefore, had no applicability to the assessment year in question. The attempt on the part of the Assessing Officer to make the addition with the aid of the statement of the partner of the assessee and reference to the correct stamp valuation, is simply invalid. What the Assessing Officer wishes to do is to adopt a stamp valuation for the properties in question, superimpose the statement of the partner of the assessee of the declaration of certain additional income and extrapolate such statement to fit within the scheme of Section 43CA of the Act - notice of reopening of assessment is set aside

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• 2019 (4) TMI 374
  Exemption u/s 10(10C) - amount received on voluntary retirement from retirement from Bank - fulfillment of conditions as prescribed under Rule 2B - CBDT letter dated 8th May, 2009 state that retiring employees of the RBI would be eligible for exemption u/s 10(10C) - HELD THAT: - In view of the judgment in CHANDRA RANGANATHAN VERSUS CIT [2009 (10) TMI 498 - SUPREME COURT OF INDIA], we do not find any merit in the present writ appeal filed by the Revenue. The same is liable to be dismissed and the same is accordingly, dismissed

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• 2019 (4) TMI 373
  Bad debts written off - HELD THAT:- The allowance of written off bad debts in non-rural branches will be confined to the excess allowed from the provision made and deduction allowed for non-rural branches. We make it clear that in making the computation, there can be no consideration of the provision for bad debts for rural branches as granted under sub-clause (viia) of Section 36. Appellant is not a financial corporation entitled to deduction u/s 36(1) (vii) - HELD THAT:- This Court in the Federal Bank Limited v. Assistant Commissioner of Income Tax [2011 (1) TMI 1184 - KERALA HIGH COURT]. Hence the question is answered against the assessee and in favour of the revenue. Exemption 10(23G) - HELD THAT:- it is only proper that the Assessing Officer considers the certificates produced by the assessee and grant allowance to the extent the claim is substantiated. Revaluation of Interest Rates Swaps (IRS) - interest rates fluctuations in the market - HELD THAT:- lower authorities have taken a view that it is only a notional revaluation and there can be no deduction allowed for the same. We confirm the order of the lower authorities and answer the question against the assessee and in favour of the revenue. Addition u/s 14A - HELD THAT:- Issue against the revenue and in favour of the assessee in C.I.T. v. Essar Teleholdings Pvt.Ltd. [2018 (2) TMI 115 - SUPREME COURT OF INDIA]. It has been held by the Hon ble Supreme Court that the machinery provision for giving effect to Section 14A of the Income Tax Act came into effect only from the assessment year 2008-09. Hence, there can be no application of Section 14A to the subject year. The question is answered against the revenue and in favour of the assessee. Deduction u/s 36(1)(vii) - HELD THAT:- The procedure as prescribed therein would also be a write off. It is the contention of the assessee Bank that the assessee had actually written off the amounts as has been found in Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT]. In such circumstances, it is only proper that the Assessing Officer verify the Balance Sheet of the assessee, produced for the year and decide the question of deduction under Section 36(1)(vii)of the Act, in consonance with Vijaya Bank (supra) and the declaration made therein.

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• 2019 (4) TMI 372
  Addition u/s 41(1) - remission or cessation - credits in the books of the Assessee in the nature of rents collected by the Assessee from its customers and payable to the Chennai Port Trust - HELD THAT:- The amounts have been received by the Assessee in the course of carrying on their business. By efflux of time, it had become the Assessee s own money. There has been no claim laid against the said money. Consequently, we hold that the amount in question could be treated as Assessee s income under Section 41(1) for Assessment Year 2003-2004 by the Assessing Authority. In Kesaria Tea Company [2002 (3) TMI 1 - SUPREME COURT] determined that the dispute between the Assessee and the Sales Tax Department was still going on.The dispute was whether the sales tax was at all payable. The facts of the present case are distinguishable. TAMP which is the Tarriff Authority for Major Ports had finally fixed the storage charges payable. The Assessee had taken shelter on the ground that the storage charges had not been finally quantified, but the liability to pay the same to Chennai Port Trust was not disputed and therefore the liability of Assessee to pay back to customers had ceased and had infact become the income in the hands of the Assessee and consequently, the reasoning given by the Tribunal that the Assessee is not liable since there was a dispute pending, no longer survived. The disputes have concluded. The Assessee had enjoyed the said amounts as its income collected but without paying it to the Chennai Port Trust. They were under obligation to be taxed on the said amount, as per Section 41(1) - Decided in favour of the Revenue

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• 2019 (4) TMI 371
  Deduction u/s 80 HHC - export of cured coffee by assessee - distinction between the goods or merchandise manufactured or processed by the Assessee and the export of trading goods - stand of the Revenue is that the process of coffee by the sister concern on job work and the request or on behalf of the Assessee amounts to processing by Assessee - contention of the Assessee is that such job work done by the third party cannot be said to be on behalf of the Asseseee and therefore even if such processing is done, cured coffee will remain trading goods , covered by clause (b) of Section 80 HHC (3) - Tribunal concluded that the Appellant engaged in export of cured coffee even though the raw coffee was cured by others with a view to re-compute the deduction under Section 80 HHC applying the statutory formula applicable to the exporter of processed goods as against the formula adopted by the Appellant applicable to the export of trading goods HELD THAT:- We are unable to accept the contention raised on behalf of the Assessee. The words Manufacture or Processing by the Assessee are wide enough to cover the processing of coffee undertaken by the third party on behalf of the Assessee also. The job work was assigned to the third party by the Assessee undoubtedly and therefore the same cannot be said to have purchased such cured coffee from the sister concerns. Therefore the sub clause (a) will apply and not the sub clause (b) as contended by the Assessee. Revision u/s 263 - No merit in the contention raised the Assessee, because in view of the clear definition of direct and indirect costs in the Explanation (d) (e) in Section 80HHC of the Act. The said bifurcation by Assessing authority would not bind the CIT (Administration) to invoke his revisional powers under Section 263 of the Act. The learned CIT (Administration) has clearly given reason in the Show cause notice u/s. 263 issued by him that the Assessing Authority has adopted indirect cost as per the clause (b) to the extent of Rs. 2,89,563/- only as against Rs. 9,52,932/- and therefore excess deduction u/s. 80 HHC to that extent has been allowed by the Assessing Authority. Hence, Section 263 was invoked by CIT (Administration) to revise the said assessment order. Upon the query made by the Court about the working of two figures of indirect costs i.e., sum of Rs. 2,89,563/- as taken by the Assessee and a sum of Rs. 9,52,932/- as taken by the CIT (Administration), the learned counsel for the Asssessee was unable to give the details with regard to the same, except submitting that the Assessee has maintained separate Books of Accounts for both type of goods and therefore the figures of indirect costs as disclosed by the Assessee and accepted by the Assessing Authority, ought to have been accepted by the CIT (Administration) as well. We are not impressed by the said submission made on behalf of the Assessee. Computation of exact amount of deduction under Section 80HHC is a fact finding exercise. Section 260 A enables the High Court to decide only the substantial questions of law and not return any finding of facts, which are arrived at by the Tribunal, which is the final fact finding body. Unless the finding of facts are shown to be perverse, the High Court cannot hold such findings to be erroneous , in any manner and they are binding on the High Court. We do not find any such perversity in the findings by the learned Tribunal - Decided in favour of the Revenue and against the Assessee. Computation of deduction u/s 80HHC - Whether interest income and lease income should not be reckoned in the computation of eligible profits in the ultimate quantification of deduction on the ground of no direct nexus of the said deposits and the leasing activity of the business? - HELD THAT:- Though the lease rental income earned by the Assessee cannot be taxed as income from other sources under Section 56 of the Act, but the lease rent in the hands of the Assesee cannot be said to be income derived from export business of the Assessee. However, the definition of Clause (baa) under the Explanation to Section 80HHC, includes such other receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature are included in such export profits to the extent of 10% by excluding 90% thereof by the deeming fiction viz., clause (baa) of the Explanation. No reason to deprive the Assessee before us in the present case of the said benefit to the extent of 10% by applying clause (baa) as quoted above. Therefore, to that extent only the aforesaid question is answered in favour of the Assessee and against Revenue.

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• 2019 (4) TMI 370
  Allowability of redemption premium on debentures - Year of maturity or spared over of life of debenture - Whether discount of debenture is equivalent to premium on debenture - HELD THAT:- Liability already incurred in the case of debentures issued at a discount for making necessary funds available for utilization during the entire period covered by the debentures has been highlighted in the above verdict as well, to give exactly similar application for the issuance of debentures as well. It is not a judgment to support the case projected by the assessee and to sustain the relief granted by the Tribunal. As decided in MADRAS INDUSTRIAL INVESTMENT CORPORATION LIMITED VERSUS CIT [1997 (4) TMI 5 - SUPREME COURT] liability incurred by the assessee to discharge the liability covered by the debentures at premium is in the year of issuance and this, naturally, has to be spread over the period covered by debentures. The assessee is not correct in saying that it is a liability which would happen only on maturity of debentures. The liability is certain and is already undertaken; quantum of which is also certain and known. By virtue of this, the extent of loss suffered has to be applied in respect of each year covered by the debentures, to an appropriate extent. We are of the view that the Tribunal went wrong in passing Annexure C order, upsetting Annexures A and B orders passed by the Assessing Officer and the CIT [Appeals]. Delayed payment of employees and employer s contribution to PF and ESIC - due date - HELD THAT:- The gist of the finding and declaration of the law is to the effect that the law laid down by the Supreme Court [granting the benefit of reduction] could be claimed only in respect of Employer s contribution and not applicable in the case of Employee s contribution. This vital distinction has been carved out by the Division Bench of this Court in [2015 (9) TMI 560 - KERALA HIGH COURT]. We are in full agreement with the view expressed by the Division Bench and we answer the substantial question of law to the said extent in favour of the Revenue and against the Assessee, holding that the Employees Contribution requires to be disallowed. Allowance of 80IA deduction from gross total income - HELD THAT:- As per Annexure C order, caused the matter to be reconsidered by the Assessing Officer, by ordering remand. It is pointed out that, after the remand, the Assessing Officer virtually reiterated the stand taken earlier and it was answered against the assessee. There is no case for the assessee that the matter has been taken up any further and hence it has attained finality. As it stands so, there is no substantial question of law in relation to the said issue.

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• 2019 (4) TMI 369
  Deduction u/s 10AA - assessee had claimed the dedction without setting off of unabsorbed depreciation - AO and DRP had restricted the same by first setting off of unabsorbed depreciation from business income and then allowing deduction u/s 10AA - HELD THAT:- Allowability of deduction under section 10AA of the Act before setting off of unabsorbed depreciation is settled by the ratio laid down by the Apex Court in the case of CIT & Anr. Vs. M/s. Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT]. The assessee is entitled to claim deduction under section 10AA of the Act before setting off of unabsorbed depreciation from business income. Hence, the ground of appeal No.2 raised by assessee is allowed. Income from other source - interest on income tax refund which was then clubbed with income from business - HELD THAT:- Referring to the statement of total income filed for the year under consideration and the perusal of the same clearly reflects that income from other sources comprised of interest on income tax refund of Rs. 55,244/-, which was then clubbed with income from business at Rs. 4,51,295/- and the gross total income was declared at Rs. 5,06,539/-. This is a mistake at the end of Assessing Officer. Accordingly, we direct him to adopt the income from other sources at Rs. 55,244/-. The ground of appeal No.3 raised by assessee is thus, allowed.

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• 2019 (4) TMI 368
  Income from House Property - addition of deemed rent from unsold units lying in closing stock - incorrectness of the decision of the AO and the CIT(A) in making addition under the head income from house property - HELD THAT:- This is not a case where Assessing Officer invoked the provisions relatable to the head of income i.e. profits and gains from business or profession. The unsold flats were never let out and assessee never earned rental income. As the Assessing Officer merely attempted to tax under the head income from house property and the same is now not approved by various Benches of the Tribunal in Cosmopolis Construction [2018 (9) TMI 1621 - ITAT PUNE], M/S. C.R. DEVELOPMENTS PVT LTD [2015 (5) TMI 1161 - ITAT MUMBAI], M/s. Runwal Constructions [2018 (2) TMI 1707 - ITAT MUMBAI] wherein it was held that Further, it is an undisputed fact the provisions of section 23(5) of the Act was amended by the Finance Act, 2017 w.e.f. 01.04.2018 and, therefore, these provisions will not come to the rescue of the Assessing Officer for bringing the deemed income on such unsold flats to taxation under the head income from house property . Therefore, the ground no.1 raised by the assessee is allowed.

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• 2019 (4) TMI 367
  Disallowance of exemption u/s.54 - Profit on sale of property used for residence - scope of amendment - Investment made in Residential house outside India - scope of amendment made u/s.54 - Whether allowably of exemption only in case residential house situated in India is effective from 1.4.2015 i.e. A.Y. 2015-16 and therefore not applicable in the current assessment year? - HELD THAT:- The said amendment is held to be prospective in the case of Leena Jugalkishor Shah(2016 (12) TMI 351 - GUJARAT HIGH COURT) to be held applicable from AY 2015-06 and subsequent assessment years. Presently we are concerned with AY 2014-15 which is prior to aforesaid amendment in Section 54 of the 1961 Act and hence we are of the considered view that the assessee is entitled for deduction u/s. 54 of the Act on the investment made in residential property situated outside India from long term capital gains earned on sale of property situated in India. The appeal of the assessee is allowed.

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• 2019 (4) TMI 366
  Scope of limited scrutiny - Other disallowance not covered in notice - contravention and violation of binding circular of CBDT in Instruction No.7/2014 dt.26.09.2014 - HELD THAT:- We notice that Assessing Officer has verified the expenses etc., which is not the mandate of limited scrutiny. The CBDT directives are binding on the Assessing Officer and in case, Assessing Officer finds that the assessment has to be made on extensive basis due to the reason that there are incidences of tax evasion found. Assessing Officer can extend the assessment by taking due permission from CIT/Pr.CIT. In this case, there is no issue of any tax evasion and the Assessing Officer suo motto did the extensive assessment even though the mandate was to make limited scrutiny. Rejection of books of accounts u/s 145 - estimation of income net profit @5% of the ‘cost of stock put for sale’ - HELD THAT:- For the sake of judicial precedent, we are intended to proceed with the estimation but the issue before us is not on rejection of books or estimation of income. Before us, whether limited scrutiny mandate can be extended. As per the CBDT directive, Assessing Officer cannot do so without following proper procedure. In the given case, Assessing Officer has made extensive assessment without mandate. Therefore, we need to restrict ourselves to address this issue. However, we direct the Assessing Officer to accept the books of account since he has not found any discrepancies in verification of deposits and turnover as per limited mandate.- the ground raised by assessee is allowed.

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• 2019 (4) TMI 365
  Penalty u/s 271(1)(c) - defective show cause notice issued u/s 274 - HELD THAT:- Notice issued u/s. 274 r.w.s 271 of the Act, placed on record, does not specify the charge of offence committed by the assessee viz. whether had concealed the particulars of income or had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. See COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee.

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• 2019 (4) TMI 364
  Allowability of revenue expenses in construction business - expenses related to assured returns on capital investment - capital as part of WIP or revenue - POCM method followed - preliminary expenses u/s 35D - HELD THAT:- The nature of expenses incurred by assessee by giving assured returns to customers from whom capital was received from customers which should form part of construction project. In our opinion these expenditure are to be considered as part of capital project. Thus such capital expenditure spending would impact Balance Sheet and cannot form part of Profit & Loss account directly. We thus do not agree with analogy applied by CIT(A) regarding assured returns expenses in the nature of ‘selling cost’. Assessee placed reliance upon decision of CIT vs M/s Doomketu Builders [2013 (4) TMI 668 - DELHI HIGH COURT]. It is observed that the issue before Hon’ble Court was, whether business in real estate development was set up during relevant accounting year, which is not the case before us. There is no dispute regarding the business being set up during the year. We are therefore of the view that assured returns to be capitalized/shown as work-in-progress. As regards other expenses deleted by Ld.CIT (A), it is observed that assessee stated it to be in the nature of professional charges and commission. No details regarding the same was furnished by way of vouchers/bills, to ascertain true nature for its allowability. Before CIT(A) also assessee has not filed any details, and merely submitted that these are preliminary expenses. Audited accounts filed before us also do not reveal exact nature of these payments. Thus it could not have been ascertained whether these expenses were incurred towards professional charges & commission. Even before us, assessee did not file any details/evidences/documents, which could throw light on nature of expenses. We therefore uphold the view taken by AO and restore disallowance towards other expenses. As regards a sum of Rs. 35, 370/-, it is observed that assessee has not provide details regarding the same either before Ld.AO or Ld.CIT(A). We therefore uphold the disallowance by Ld.A.O - decided against assessee.

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• 2019 (4) TMI 363
  Addition on account of difference in the amounts in respect of 7 creditors - notice u/s 133(6) remained undelivered, no confirmation/reply filed - Evidence filed before CIT(A) with application u/r 46A - parly admitted - HELD THAT:- According to assessee, the amount in question have been repaid by assessee in subsequent year through banking channel which fact also need verification. It, therefore, appears that the documentary evidences filed on record have not been appreciated by the authorities below and that CIT(A) did not adjudicate upon the issue on merits, therefore, the matter requires reconsideration at the level of the AO. We, accordingly, set aside the orders of the authorities below and restore the matter in issue to the file of Assessing Officer with a direction to re-decide the issue as per Law, by giving reasonable, sufficient opportunity of being heard to the assessee. The assessee is directed to produce sufficient evidences and material on record to prove that the sundry creditors amounts were genuine and that assessee repaid the amounts subsequently through banking channel. The Assessing Officer shall also take into consideration the decisions relied upon by the Learned Counsel for the Assessee above. Appeal of assessee is allowed for statistical process.

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• 2019 (4) TMI 362
  Depreciation on electrical equipment - @ 15% OR 10% - electrical equipment vs electrical fittings - HELD THAT:- Equipments are part and parcel of the plant and machinery and, therefore, eligible for depreciation @ 15%. We, accordingly, direct the AO to allow deprecation @ 15% on the electrical equipment.

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• 2019 (4) TMI 361
  Eligibility for exemption u/s 11 - registration u/s 12AA - HELD THAT:- Tribunal has allowed registration u/s 12AA in favour of the assessee, vide order dated 29.04.2014. The order of the Tribunal has been confirmed by the Hon’ble Allahabad High Court. The AO granted exemption u/s 11 to the assessee in AY 2010-11, vide order dated 16.11.2017 u/s 148/147. Merely because SLP of the Department is pending before Hon’ble Supreme Court is no ground to deny exemption to assessee u/s 11. AO shall have to verify the condition of Section 11 of the Act before passing the assessment order afresh and shall have to grant exemption u/s 11 of the Act because of the orders passed by the Tribunal granting registration u/s 12AA of the Act in favour of the assessee. We, accordingly, set aside the orders of the authorities below and restore the matter in issue to the file of AO with direction to grant exemption to the assessee u/s 11 of the Act after satisfying the conditions of the same as per law by giving reasonable sufficient opportunity of being heard to the assessee. Addition made on account of infrastructure fund - HELD THAT:- The assessee has now been granted registration u/s 12AA of the Act and thus, assessee is entitled for exemption from income u/s 11 of the Act as per law. Even if the infrastructure reserve fund may be treated as income of assessee, it will have to be examined, whether, assessee is entitled for exemption u/s 11 of the Act on the same income. Therefore, it would depend upon fundings with regard to exemption u/s 11 of the Act. We have already restored the issue of exemption u/s 11 of the Act to the AO for fresh decision as per law. No authorities below have not appreciated the fact that assessee claimed that infrastructure fund was received for development activities from the State Authorities, the assessee has to spend the amount on the same as per approval of the State Authorities. Thus, there may not be any profit element out of the same sources. It may also be noted here that whatever amount has been spent by assessee on the same issue, the AO has accepted that assessee spent the same amount as per the directions of the State Authorities. Then in that event it is difficult to believe that part amount is capital receipt and part would be Revenue in nature. Therefore, there was no justification for Ld. CIT(A) to hold that the impugned receipt is Revenue in nature. This issue also requires reconsideration in view of the fact that assessee is entitled for exemption u/s 11 of the Act - Appeal of assessee is allowed for statistical purposes.

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• 2019 (4) TMI 360
  Levy of penalty u/s 271(1)(c) - defective notice - non specified the exact charge, viz., whether the charge is that the Assessee has furnished inaccurate particulars of income or concealed particulars of income by striking out the irrelevant portion of printed show cause notice - HELD THAT:- The standard proforma of notice under section 274 without striking of the irrelevant clauses would lead to an inference of non-application of mind by the Assessing Officer. The Hon ble Supreme Court in the case of Dilip N. Shroff vs. JCIT [2007 (5) TMI 198 - SUPREME COURT] has also noticed that where the Assessing Officer issues notice under section 274 in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. Thus levy of penalty suffers from non-application of mind. Thus the manner in which the AO has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 19.03.2013 without striking off the irrelevant words, the penalty proceedings show anon-application of mind by the Assessing Officer and is, thus, unsustainable. - Decided in favour of assessee.

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• 2019 (4) TMI 359
  Reopening of assessment - deemed dividend addition u/s 2(22)(e) - HELD THAT:- The conditions for invoking the provisions of section 2(22)(e) are satisfied and given the fact that no original assessment has happened, the income to that extent has escaped assessment. The Assessing officer thus has the tangible material in his possession to form a prima facie view that the advances are in nature of deemed dividend u/s 2(22)(e) and income to that extent has escaped assessment. It is a trite law that before invoking jurisdiction u/s 147 AO has to record a prima facie belief that income has escaped taxation and there should be a nexus between the material and the formation of belief that income has escaped taxation. In the instant case, the necessary nexus has been established between the material in possession of the Assessing officer and the formation of a prima facie belief that the income has escaped assessment. - Decided against assessee Deemed dividend addition u/s 2(22)(e) - HELD THAT:- In case of M/s Raj Auto Wheels Private Limited advances to the tune of Rs. 51 lacs for the purposes of business and therefore, to that extent, the same would not be considered and reduced for the purposes of determining the deemed dividend in hands of the assessee. Further, there is a payment of Rs. 18.50 lacs made on 18.01.2010 which has been returned on the very next day on 19.01.2010 and the same appears to be a current account transaction and not to be considered for determining the deemed dividend. There is nothing on record in terms of remaining advances either for business purposes or any current account transaction. The fact that such advances have been repaid in the subsequent financial year will not provide any relaxation from the rigours of section 2(22)(e). Therefore, remaining advances to the tune of Rs. 32.45 lacs will be considered for determining deemed dividend. The AO has determined the accumulated profits at Rs. 28.35 lacs of M/s Raj Auto Wheels Private Limited which has not been disputed by the assessee. The lower of the two i.e, Rs. 28.35 lacs has thus been rightly brought to tax as deemed dividend u/s 2(22)(e) - Decided against assessee Cash deposit in his bank account maintained with the Bank of Baroda, Ajmer - HELD THAT:- When an amount is found deposited in the assessee’s bank account, the onus is on the assessee to explain the source of such deposits. In the instant case, the explanation of the assessee is that source of such deposits is the withdrawal of cash from his capital account maintained with his proprietary concern M/s Govind Garg & Co. - AO’s finding is that the assessee has not produced the cash book in support of the said explanation to which the assessee has contended that he was never asked to produce the cash book at first place. In view of the contradictory stand taken by both the parties, we believe that it would be just and fair that the assessee is given one more opportunity to produce the cash book of his proprietary concern M/s Govind Garg & Co. before the AO. The matter is accordingly set-aside to the file of the AO to examine the same afresh Rental income from Bank of Baroda - rent has been paid in HUF bank account however, by mistake, the TDS has been deducted by the Bank by quoting assessee’s PAN and it has wrongly been reflected in assessee’s Form 26AS - HELD THAT:- Mere reflection of a transaction in assessee’s Form 26AS cannot be made a sole basis for bringing certain transaction to tax especially where the assessee is contending that such transaction doesn’t belong to him and but belong to the HUF. However, it is for the assessee to demonstrate that such transaction doesn’t belong to him especially where HUF is a related entity and the assessee has access to the records of the HUF and is being controlled by the assessee. We accordingly believe that where the HUF is the right full owner of the subject rental income and it has already included the same in its return of income, the same cannot be brought to tax in the hands of the assessee. Addition on account of interest income - HELD THAT:- Interest income has been shown in other income of Rs. 1,63,317/- in the books of account of the proprietary concern M/s Govind Garg & Co as clear from the journal entry and P & L A/c and the same cannot be brought to tax in the hands of the assessee. The matter is accordingly set-aside to the file of the AO to examine the aforesaid contention so raised and where the same is found to be correct and duly offered to tax in hands of M/s Govind Garg & Co, delete the impugned addition. In the result, ground is allowed for statistical purposes.

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• 2019 (4) TMI 358
  LTCG - sale of apartment - right to own / obtain conveyance of immoveable property - possession v/s acquisition - commencement certificate itself for construction of flat sold was issued by MCGM to builder only 08.04.2009 and the purchase agreement was registered in December 2009 - part performance u/s 53A of the property Act - HELD THAT:- Whatever rights were obtained by the assessee vide reservation of allotment letter dated 16/03/2005, the same rights have been transferred during the impugned AY as against the argument of revenue that the rights first got converted into new asset upon execution of agreement between the assessee and the builder which has been sold subsequently. In our opinion, the execution of stated agreement in assessee’s favor was nothing but mere improvements in the assessee’s existing rights in the property. Undisputedly, the right to own / obtain conveyance of immoveable property was a capital asset in terms of judgment of CIT Vs Tata Services Ltd. [1979 (1) TMI 26 - BOMBAY HIGH COURT] and CIT Vs Sterling Investment Corporation Ltd. [1979 (2) TMI 19 - BOMBAY HIGH COURT]. Therefore, the conclusion drawn by first appellate authority that the gains were Long-Term Capital Gains in nature as counted from 16/03/2005 would require no interference on our part. The appeal stands dismissed to that extent. Manner of computation of the gains - indexation benefit against the cost of acquisition - assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010 - HELD THAT:- Assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010. As against the same, the assessee has sought indexation of full cost on the basis of index for 2005, which, in our considered opinion, is not justified. Logically, the indexation was to be done by applying the indexes of the respective years in which the payments were actually made by the assessee which is in line with the decision of this Tribunal rendered in Lakshman M.Charanjiva Vs ITO [2014 (3) TMI 181 - KERALA HIGH COURT]. Therefore, taking the same view rendered in Nirmal Kumar Seth Vs CIT [2011 (10) TMI 7 - ALLAHABAD HIGH COURT], we direct Ld. AO to work out the indexed cost after applying indexes of the respective years in which the payments has actually been made by the assessee. Short term capital gain - sale of additional garage - bifurcation of sale - HELD THAT:- Additional garage has been purchased by the assessee only during November, 2009 which establishes that is was capable of being transacted separately and therefore, constitute a separate capital asset in the hands of the assessee. Therefore, the gain from transfer of this additional garage would be short-term capital gains only. Since the sale consideration is composite one, Ld. AO, with assistance of the assessee, is directed to bifurcate the sale consideration on some reasonable basis to work out the resultant gains.

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• 2019 (4) TMI 357
  Reopening u/s 148 - reopening on the basis of report of the Investigation Wing - bogus accommodation entries - HELD THAT:- we hold the notice issued under Section 148 of the Act to be invalid for two reasons :-(i) the notice is issued for the purpose of verification of genuineness, identification and creditworthiness of the transaction, which is not permissible; (ii) the Assessing Officer has recorded his satisfaction on the basis of mere report from the Investigation Wing. There is no crucial link between the information made available to the Assessing Officer and the formation of belief of escapement of income. There is no basis for coming to the conclusion that the assessee received accommodation entries. The Investigation Wing alleged that the companies which issued cheques to the assessee company are companies of Shri S.K. Jain group and they are entry providers. However, the basis for such conclusion is missing. There is no mention that any document was seized from Shri S.K. Jain group or any director of the 12 companies which have given cheques to the assessee has given the statement that they have provided accommodation entries to the assessee. The Assessing Officer has simply reopened the case on the basis of information provided by the Investigation Wing without any independent application of mind. There is no tangible material which formed the basis for the belief that income has escaped assessment. It is a settled law that when there are two views, the view in favour of the assessee is to be followed and moreover, there are at least two decisions subsequent to the decision of Paramount Communication (P) Ltd. [2017 (4) TMI 188 - DELHI HIGH COURT], wherein their Lordships have quashed the notice issued under Section 148 on the basis of information from the Investigation Wing. The facts in the case of the assessee are almost identical to the facts in the case of RMG Polyvinyl (I) Ltd. [2017 (7) TMI 371 - DELHI HIGH COURT] and Meenakshi Overseas Pvt.Ltd. [2017 (5) TMI 1428 - DELHI HIGH COURT] While taking the above view, we quash the notice issued under Section 148 of the Act and consequently, the assessment completed in pursuance thereto. Accordingly, ground Nos.1, 1.1 and 1.2 of the assessee’s appeal are allowed.

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• 2019 (4) TMI 356
  Taxability u/s 44BB - compensation received on account of loss of equipment in hole - revenue receipt or capital receipt - The CIT(A) held that the compensation received on account of loss of equipment in hole is not includable in the taxable receipts of the assessee under section 44BB - HELD THAT:- Compensation for destruction and loss of capital asset which were utilized on a rig owned by ONGC was capital receipt and not taxable as revenue receipt under section 44BB Issue stand concluded in favour of the assessee. Departmental Appeal has no merit and the same is accordingly dismissed.

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• 2019 (4) TMI 355
  Revision u/s 263 - allowing the claim of deduction u/s 80IC by AO - order erroneous or prejudial to interest of revenue - HELD THAT:- from the perusal of the various show cause notice and order sheet entries as incorporated in the impugned order, we find that Assessing Officer has required the assessee to furnish details of various streams of revenue giving the details of manufacturing process and the modus operandi, details of purchases, details of various sundry creditors, justify the fall in net profit rate, justify the various expenses claimed in P&L account, asked the furnished the ledger and bills, vouchers bank statement, etc. In response to various proceedings which lasted for almost more than 22 months, if assessee had filed all the details, then it cannot be held that Assessing Officer has framed the assessment without any inquiry or examination of record. We have already observed above that the finding of the ld. Pr.CIT that these documents are not available on assessment record has been found to be incorrect. Even otherwise also, if assessee has explained and reply to each and every point raised in the show cause notice along with documents and reasons submitted before the AO then it was incumbent upon Pr. CIT, at least to examine those replies and records so as to prima facie come to a conclusion that such a reasoning given by the assessee is divorced from the facts and material on record which is not tenable. It is a well settled law that if CIT is of the view that Assessing Officer has not carried out proper inquiry or there is inadequate inquiry, then he must give and record a finding that the order of inquiry made is erroneous. This can happen only if some kind of inquiry is conducted by the PCIT and he is able to establish the error or mistake made by the AO. CIT himself had to undertake proper inquiry and give reason for coming to the conclusion that assessment order was erroneous and prejudicial to the interest of revenue. This has been further reiterated in the case of Pr. CIT vs. Modi care Ltd [2017 (9) TMI 1238 - DELHI HIGH COURT] and CIT vs. Sun Beam Ltd. [2009 (9) TMI 633 - DELHI HIGH COURT] DR as well as Pr.CIT has much harped upon Explanation 2, but the said explanation will only be applicable when the order of the Assessing Officer has been passed without making inquiry or verification which should have been made. Here the observation of the Pr.CIT that Assessing Officer has not carried out any inquiry because replies and certain issue which was raised by him are not there in record, has already held found to be incorrect. Once Assessing Officer has carried out detailed inquiry and verification of the documents and was satisfied with the net profit shown by the eligible unit as well as the nature of expenses incurred by eligible and non eligible units and examined the entire details, then without there being any discrepancy or defect found by the Ld. Pr.CIT, he cannot simply set aside the assessment for passing a fresh assessment order. Thus, under these facts and circumstances, we hold that the impugned order passed u/s.263 cannot be sustained and same is quashed. Thus assessment order passed by the Assessing Officer and the claim of deduction u/s.80IC is sustained and appeal of the assessee is allowed.

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• 2019 (4) TMI 354
  Disallowance u/s 14A read with Rule 8D - voluntary disallowance by assessee - recording of satisfaction - HELD THAT:- Out of the remaining expenses of Rs. 10.90 lacs, the tax-payer further voluntarily disallowed an amount of Rs. 5.45 lacs as an expenditure incurred in relation to earning of an exempt income within contemplation of Section 14A, which was 50% of the expenses claimed by the tax-payer. Revenue went ahead and disallowed Rs. 2.41 crores u/s 14A albeit the tax-payer never claimed expenses of that magnitude. AO did not recorded any satisfaction as to what is basis of disallowing expenses to the tune of Rs. 2.41 crores u/s 14A while the total expenses debited to Profit and Loss Account (net of voluntary disallowance of Rs. 4.13 lacs) was only Rs. 10.90 lacs. Based on peculiar factual matrix of the case, the said appeal was decided by tribunal vide its order dated 08.05.2018 wherein suo moto disallowance of 50% of the total expenses offered for disallowance u/s 14 by the tax-payer voluntary in the return of income filed with the Revenue was accepted by the tribunal, while the factual matrix in assessee’s case is entirely different as we have discussed in details in preceding para’s of this order. Based on our detailed discussions in the preceding para’s of this order, we are restoring the issue back to the file of the AO for fresh adjudication of disallowance of expenditure incurred in relation to the earning of an income which does not form part of the total income having regard to the accounts of the assessee. The assessee is directed to produce before the AO for verification its working of computing disallowance of expenses u/s 14A being incurred in relation to earning of an exempt income having regard to accounts of the assessee. The assessee is also directed to produce before the AO complete details as to how its investments portfolio in securities is managed and handled. AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law. The evidences/explanations submitted by the assessee shall be admitted by the AO and shall be adjudicated on merits in accordance with law. This disposes of ground no. 1 to 7 raised by the assessee in its memo of appeal filed with tribunal

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• 2019 (4) TMI 353
  Unexplained credit u/s. 68 - addition made towards unsecured loans - verification additional evidence filed before CIT(A) - HELD THAT:- The assessee has segregated credits into three parts, as per which, credits in the form of return of advances given by the assessee to various parties in the earlier period, credits in the form of maturity proceeds of FDs and cash deposits; finally, credits in the form of unsecured loan accepted from various parties. As regards first kind of credits, i.e. repayment of advances given to various parties, although the Ld.CIT(A) has stated that the assessee has filed complete details, but whether these documents were part of AOs records or not is a question needs to be examined. Insofar as credits in the form of maturity of FD also, there is no discussion in the order of Ld.CIT(A) with regard to the source of such FDs. As regards unsecured loan taken from various individuals, the primary objection of the AO is with regard to genuineness of transactions and creditworthiness of the parties. But, the Ld.CIT(A) recorded his finding only on the issue of identity of the parties ignoring the other two aspects brought out by the AO including capacity of the parties to explain source of investments. According to the AO, none of the creditors had sufficient income to explain source, but there is no discussion in the order of the CIT(A) about this observation. Insofar as loan taken from Aditya Patel of Rs. 50 lakhs, the assessee, before the AO has claimed that he had accepted loan from the party for which assessment details have been filed. Before the Ld.CIT(A), the assessee has made an altogether different submission to argue that even though Aditya Patel is having minimum income in his return of income, but the source of credit was from loan for which details of company alongwith PAN was submitted to the AO. Before us, the asessees has come out with one more argument that this is an advance received from the party against sale of certain agricultural land which has been finally adjusted towards sale consideration of land - issue needs to be examined by the AO in light of the claim of the assessee that sufficient evidence has been filed in order to prove identity, genuineness of transaction and creditworthiness of the parties. Disallowance of interest expenditure - HELD THAT:- We find that the assessee has filed complete details of interest expenses paid to Shamrao Vithal Co-operative Bank Ltd towards funds borrowed to make various income generating investments. When the assessee has offered to tax interest income generated from investments, corresponding expenses incurred including interest on loan borrowed from banks needs to be allowed as deduction. CIT(A), after considering relevant facts, has rightly allowed interest paid to Shamrao Vithal Co-operative Bank Ltd. We do not find any error in the findings of the Ld.CIT(A) while deleting addition made towards interest. Hence, we are inclined to uphold the findings of Ld.CIT(A) and reject ground taken by the revenue.

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• 2019 (4) TMI 352
  Deduction u/s 80P - The assessee is an AOP running a Co-operative Credit society and doing banking business for their members - CIT(A) has allowed the claim holding that banking business and the service of the assessee was not by the public at large - HELD THAT:- The assessee was not banking license as required Section 22 of the Act Banking Regulation Act. The assessee society was providing the finance facility to its limited members. However, on appraisal of the object of the assessee society, we noticed that there is a provision of nominal member whose liability limited to subscribe the shares of the society. However, they have not right to interfere in the object, function in the society. Nothing came into noticed that the assessee was doing the business in public at large. There is a lot of difference between cooperative bank and cooperative society. The law relied by the Ld. Representative of the revenue i.e. Citizen Co-operative Society Ltd. speaks about this fact that the society was in the business of co-operative bank and was carrying on banking business for public at large. The factual position in the said cases is quite different to the fact of the present case. CIT(A) has decided the matter of controversy in view of the decision of Bombay High Court in the case of Quepem Urban Credit Co-operative Society [2015 (6) TMI 573 - BOMBAY HIGH COURT] - decided against revenue

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• 2019 (4) TMI 351
  Disallowance made u/s 14A r.w. Rule 8D - no exempt income received - HELD THAT:- Admittedly, since, the assessee has not earned any dividend income in the assessment year under consideration, the ld. CIT(A) rightly following the decision in the case of Redington (India) Ltd. v. Addl. CIT [2017 (1) TMI 318 - MADRAS HIGH COURT] and directed to delete the addition. - Decided in favour of assessee.

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• 2019 (4) TMI 350
  Levy of penalty u/s 271C - assessee in default in not deducting tax out of payments made u/s 201(1) for purchase of software license and for availing other related software - HELD THAT:- The Tribunal in Capgemini Technology Services India Ltd. Vs. DDIT [2019 (4) TMI 308 - ITAT PUNE] held that the payments made by assessee for use of software were not taxable as royalty and hence, the assessee has not defaulted in not deducting tax at source out of such payments. Consequently, there is no merit in raising the demand under section 201(1) and charging interest under section 201(1A) of the Act. Similar stand was in respect of subscription charges, etc. Once the assessee has been held to be not in default and demand cancelled under section 201(1), penalty levied under section 271C for such default fails. Hence, the assessee is not liable for levy of any penalty under section 271C of the Act. Hence, grounds of appeal raised by the Revenue are dismissed.

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• 2019 (4) TMI 349
  Eligible for deduction u/s 80IA - benefit of deduction unit-wise without setting off of loss / profit of other eligible units - whether each windmill constitute a separate undertaking and the profit or loss of that undertaking alone will be considered for the purpose of deduction u/s 80IA or the sum of profit or loss of all five undertakings together is eligible for deduction u/s 80IA - HELD THAT:- The co-ordinate bench of ITAT, Mumbai Bench “C” in the case of Punit Construction Co vs JCIT (2018 (2) TMI 1703 - ITAT MUMBAI] has considered an identical issue in light of number of windmills and after considering relevant provisions of the Act, including sub section (5) of section 80IA, held that deduction has to be given unit-wise without considering profit or loss of other eligible units. Also Referring to decision of Hon’ble Delhi High Court in the case of CIT vs Dewan Kraft Systems Pvt Ltd [2007 (2) TMI 149 - DELHI HIGH COURT] we are of the considered view that the Ld.CIT(A) was right in allowing the benefit of deduction u/s 80IA in respect of each unit without setting off of loss incurred by other eligible units. Hence, we are inclined to uphold the findings of CIT(A) and dismiss appeal filed by the revenue.

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• 2019 (4) TMI 348
  Stay of demand - ALP adjustment u/s. 92CA on the payment of corporate services, sales and marketing services and denial of benefit of deduction u/s. 80IB by holding that the activity of the appellant does not amount of manufacturing - HELD THAT:- The assessee could not make out a strong prima facie case on the receipts of addition to the returned income. However, considering the fact that the appellant already paid Rs. 2 crores out of the original demand of Rs. 6,91,49,730/-, the balance demand will be stayed subject to payment of Rs. 1 crore on or before 31st March, 2019. This stay shall stand vacated, in case the assessee-company seeks any adjournment from hearing of appeal without any just and reasonable cause.

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• 2019 (4) TMI 347
  Distress sale - sale of property under pressure - adoption of stamp value u/s 50C as sales consideration for Capital gain computation - assessee is a daughter of a retired army officer - fraudulent registration of same property to another persons who has no right or title over the property - harassment by Revenue and Registration Department of the State Government - HELD THAT:- When the document was executed and registered on 11.06.1997 in favour of the assessee, who is none other than a daughter of an army officer, the very same Sub Registrar has registered another document said to be executed by the very same vendor on 20.07.1999 in favour of Shri I.A.J. Balan, Shri I.P. Andrew Raj, Shri I.S.J. Rozario, Shri I. Francis Jeyaraj and Shri I. Jerome Michael Pushpanathan. Tahsildar is the competent authority for grant of patta. When it was brought to his notice about the fraudulent issue of patta in favour of the third party, the Tahsildar ought to have cancelled the patta immediately and a patta should have been granted in favour of the assessee. Unfortunately, the Tahsildar has not acted on the petition received even from an army officer. Even though a report was said to be prepared, the Tahsildar failed to forward the same to the higher authorities. Circumstances under which the sale deed executed by the assessee through her father Col. V.N. Lingappan is a distress sale. When the property was sold under pressure and this Tribunal is of the considered opinion that adopting guideline value under Section 50C is not called for. Under normal circumstances, this Tribunal would have remitted back the matter to the file of the Assessing Officer for referring the matter to the valuation officer. In this case, we are not doing so since the Assessing Officer himself accepted that the property was sold under pressure. This Tribunal is of the considered opinion that remitting back the matter to the file of the Assessing Officer for the purpose of making reference to the valuation officer would tantamount not only harassing the assessee further but also rubbing the salt on the would again and again. This Tribunal is of opinion that the assessee executed the sale deed, the apparent sale consideration disclosed in the sale deed has to be considered as market value and the same has to be adopted for the purpose of computing capital gain. Hence, this Tribunal is unable to uphold the orders of both the authorities below. Accordingly, orders of both the authorities below are set aside and the addition made by the Assessing Officer is deleted. - Decided in favour of assessee

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• 2019 (4) TMI 346
  Taxability of sale of sub-tenancy rights - Income from Other Sources OR Income from Capital Gains - Acquiring of interest/title in the premises as subtenancy - transfer/assignment of tenancy/occupancy rights by wife of the assessee outgoing tenant in favour of incoming tenant - HELD THAT:- we hold that amount received by the assessee from Dr Maninder Chhabra was on account of transfer of capital asset being interest held by the assessee in ground floor of said shop towards occupancy rights which was acquired by way of permission granted by landlord and also with the consent of his wife supported with uninterrupted possession and usage of ground floor of said shop by the assessee since 1994 for running his clinic till the date of agreement i.e. 24.06.2013 (almost 20 years or so) , which was further supported by payment of rent by assessee to his wife for such occupancy/usage of said premises and hence the said sum of Rs. 1,40,00,000/- received by the assessee was rightly been offered to income-tax by the assessee under the head 'Income from Capital Gains‘ in the return of income filed with the Revenue. Under these circumstances, we donot find any reasons that when tenancy is recognised as capital asset within meaning of Section 55(2) , as to why sub-tenancy in favour of the assessee cannot be treated as capital asset more so , capital asset is so widely defined u/s 2(14) - decided against revenue

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• 2019 (4) TMI 345
  Addition of deemed dividend U/s 2(22)(e) - amount shown as alleged advance to the assessee in different Companies - HELD THAT:- Since in the present case advances have been made admittedly to tide over short term deficiency in the cash credit limits, usage of funds for the purpose of business of the said concern, which admittedly are all interrelated, is established. And since the goodwill of the entire group rests on the proper functioning of all the companies in the group, which in turn affects the business of the all companies in the group also, the impugned advances, we unhesitatingly hold, are for the purpose of business only and not in the nature of loans and advances simpliciter benefiting any substantial or beneficial shareholder only. The impugned advances in the present case amounting to Rs. 69,998/- do not qualify as loans and advances for the purpose of treating them as deemed dividend as per the provisions of section 2(22)(e). Addition of deemed dividend U/s 2(22)(e) for advances given to Swami Devi Dayal Hi-tech Education Academy - charitable trust registered u/s 12AA - HELD THAT:- following decision in SH. ROSHAN LAL JINDAL VERSUS THE D.C.I.T. [2017 (9) TMI 1098 - ITAT CHANDIGARH] we uphold the order of the CIT(A) deleting the addition made u/s 2(22)(e) on account of advances made to societies registered u/s 12A. Addition on account of provision 40(a)(ia) - brand was registered in the name of M/s Heera Moti Spices Pvt. Ltd. who was charging 4.1% royalty on the total turnover since no TDS was deducted - HELD THAT:- We restore the issue back to the A.O. to verify the documents filed by the assessee proving that the taxes have been paid by the recipient of brand charges and thereafter to decide the issue in accordance with law. We may add that the assessee be given due opportunity of hearing in this regard. The ground of appeal allowed for statistical purposes. Addition made on account of a seized document - cash transactions of receipts and payment undertaken by the assessee, which in the absence of any plausible explanation available were surrendered by the assessee to the extent of peak credit but were treated entirely as unexplained and the entire receipts added to the income of the assessee - additional evidences produced during assessment proceedings - HELD THAT:- We consider it fit to restore this issue back to the A.O. to adjudicate it afresh after considering and verifying the additional evidences filed by the assessee. We may add that the assessee be given due opportunity of hearing in this regard.

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• 2019 (4) TMI 311
  Stay petition - HELD THAT:- Stand over to 7th March, 2019. Before such date the petitioner would file their rejoinder. In the meantime, we expect the petitioner to file appeals before the Tribunal for the remaining assessment years and it would be open for the petitioner to request the Tribunal to file the stay petitions at an early date.

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• 2019 (4) TMI 310
  Demand u/s 201(1)/201(1A) - whether demand within time limit allowed under section 201(3) - TDS u/s 194C on the reimbursement of the meal vouchers to the affiliates (restaurants/eating joints etc) by the assessee, which used by the employees of the assessee s customers for the purchase of food and non-alcoholic beverages - HELD THAT:- As relying on assessee own case [2018 (4) TMI 316 - ITAT MUMBAI] the order passed under section 201(1) and 201(1A) having been passed after expiry of two years from the financial year wherein the TDS statements were filed by the assessee u/s 200 is barred by limitation, hence, has to be declared as null and void. - Decided in favour of assessee

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• 2019 (4) TMI 309
  Stay of outstanding demand of tax and interest thereon - DR submitted that absolute stay of demand should not be granted and the assessee should be asked to pay some amount of tax - assessee stated that the assessee has got 60 days time to file an appeal before the Tribunal pursuant to CIT(A)’s order and he submitted that it is understood that during that period no coercive action should be taken. - HELD THAT:- We are inclined to grant early hearing in this case and stay as under: The registry is directed to fix the case for early hearing on 25.02.2019 and short stay in this case is granted upto 25.03.3019. In the result, the stay applications filed by the assessee are disposed off as above.

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• Customs

• 2019 (4) TMI 344
  Import of restricted item or not - Peas - case of petitioner is that there was no restriction on peas import from 1 st July, 2018 till 29 th August, 2018 and import of peas with bills of lading on and between these dates should be allowed to be cleared by the Customs and the Directorate General of Foreign Trade - petitioner argues that the policy has been amended by respondent no.2 (DGFT) and it had no jurisdiction to amend it. Held that:- In paras 21, 22 and 23 of the affidavit in reply, the legal position is clarified and summarised in para 30 by urging that the notification has already been issued by the Central Government and not by the DGFT. The DGFT has only signed the notification on behalf of the Central Government. A perusal of all the notifications in the field leaves us in no manner of doubt that it is the Central Government which has made the amendments and all that the DGFT has done is to make the amendments in the import policy of peas under Chapter 7 of the ITC(HS), 2017, Schedule 1 (Import Policy). The second contention is that there was a restriction imposed by Notification No.15/2015-2020 dated 2nd July, 2018 on import of peas, but that was withdrawn by the second respondent by notification of 29th August, 2018. In view thereof, there is no restriction in force during the period 1st July, 2018 to 29th August, 2018 and the purported restriction was imposed only from 30th August, 2018. At the time of the import of goods i.e. on 28th August, 2018, no restriction was prevailing and not permitting clearance of imported goods is unsustainable. Once the notification of 25th April, 2018 is extended till 30th September, 2018 and the notification of 29th August, 2018 not wiping out the restriction as projected, but promptly restoring the earlier notifications and continuing the restriction till 30th September, 2018, further extending it by the notification at Exhibit B till 31st December, 2018, makes the position clear. There was a restriction and insofar as that notification continuing the restriction till 30th September, 2018 having been withdrawn does not mean that the restriction is not in place. The restriction is continuing and withdrawal of the notification will not have that effect as urged by Mr.Shah. The respondents committed no error in refusing to take note of the representation dated 4th December, 2018, copy of which is at Exhibit M to the petition. That representation is based on an incorrect and improper understanding of the notifications as well as the provisions of the Customs Act, 1962 - petition fails and is thus dismissed.

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• 2019 (4) TMI 343
  Release of consignments - issuance of “Detention Certificate” for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(1) of Handling of Cargo in Customs Areas Regulations 2008 - Held that:- The petitioner will remit the entire duty component of the consignments imported by him in case were such duty is leviable as per paragraph 15(iii) above along with a bank guarantee for the 10% of the invoice value. In cases where the duty impact is neutral, the petitioner shall furnish a bank guarantee for the 10% of the invoice value. Upon satisfaction of the aforesaid conditions, the consignment shall be released forthwith. Waiver of Demurrage and Container Detention Charges - Held that:- In the light of Rule 6(l) of the Handling of Cargo in Customs Areas Regulations, 2009, which provides that the Customs Cargo Provider shall not, subject to any other law for the time being in force, charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be, there shall be a waiver of demurrage charges. Petition disposed off.

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• 2019 (4) TMI 342
  Condonation of delay - Time limitation of appeal - period of limitation as prescribed under Section 129D of the Customs Act, 1962 - Held that:- The appellant would strenuously contend that there are sufficient records to show that the appeals are not barred by limitation and this Court should pursue the appeal files and examine as to whether the appeals are barred by limitation - such an exercise cannot be done by us in exercise of the jurisdiction under Section 130 of the Customs Act. To be noted, the Commissioner(Appeals), which is a fact finding Authority has rendered a finding that in many of the cases, the review orders have been passed after the stipulated period of 3 months from the date of communication of the order in original since the date of dispatch of the impugned order could not be ascertained with authenticity and the delay in such cases were not considered. The onus is on the appellants that the review orders have been passed within the stipulated time. If the department was unable to discharge such onus, then the consequence has to necessarily follow. The Tribunal also pointed out that the Commissioner (Appeals) has flagged the number of days of noncondonable delay in each of the cases which has not been disputed by the Department. Therefore, the Tribunal held that they are not inclined to interfere with the order passed by the Commissioner (Appeals). Before us the Department cannot seek for a roving enquiry or for re-adjudication of facts which has been done by the Tribunal. The order passed by the Tribunal confirming the order passed by the Commissioner (Appeals) rejecting the appeals on the ground of limitation alone requires to be confirmed - there is no substantial questions of law arising for consideration in these appeals - appeal dismissed.

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• 2019 (4) TMI 341
  Imposition of ADD - Classification of imported ‘needles’ - sewing machine needles or embroidery needles? - N/N. 31/2017 (ADD) dated 22nd June 2017 - Held that:- Both Revenue and the assessee are not in disagreement that ‘embroidery needles’ are distinct from ‘sewing machine needles.’ From the orders of the lower authorities, we are unable to ascertain the distinction between the two. There is also no reference to any authentic source for the distinction between the two noted by the original authority. Circumstantial evidence, such as stickers on the packing, that part of the consignment declared to be ‘embroidery needles’ was, admittedly, composed of ‘sewing machine needles’ and that a different model number designates ‘embroidery needles’, are not acceptable in a dispute on classification. We are unable to decide on the appropriate classification. It would have been simplest of tasks on the part of the original authority to have drawn samples for testing by the chemical laboratory or any other competent laboratory for determining if the goods were indeed ‘embroidery needles’ as claimed by importer or were ‘sewing machine needles’ as held by lower authorities - matter remanded back to the original authority for carrying out necessary tests. Appeal allowed by way of remand.

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• 2019 (4) TMI 340
  Principles of natural justice - relevancy of statements that are not tested in cross-examination - acquittal of the appellant in proceedings under section 135 of Customs Act, 1962 - Held that:- It would appear that the evidence against the appellant on his alleged involvement with the ineligible availment are the forensic reports and his admitted association with the assessment of the shipping bill. The principles of natural justice mandate that, in the absence of corroborative evidence, oral/written deposition should be subjected to test for attaining credibility. It is the right of an accused, especially in the context of reliance on opinions of expert, to be granted an opportunity to discredit an allegation by confronting the expert whose opinion is peremptory and without any reasoning. That is possible only upon being offered cross-examination and being furnished with documents. The foundation for the upholding of the allegations has not been properly laid. The structure built on such weak foundation does not survive. Matter remanded back to the original authority for compliance with principles of natural justice and due consideration of the submissions made by the appellant before that authority - appeal allowed by way of remand.

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• 2019 (4) TMI 339
  Duty Drawback - legality of withholding of additional duties of customs, amounting to Rs. 47,07,366/-, that had been discharged at the time of import - Held that:- Doubtlessly, the importer is entitled to avail CENVAT credit of additional duties under CENVAT Credit Rules, 2004 which, in this context was available in two tranches prescribed for capital goods. It is also not in dispute that CENVAT credit so availed had been reversed. It would appear that the provisions of CENVAT Credit Rules, 2004, pertinent to officers of central excise and service tax, has been drawn upon by officers of customs, without authority to do so, for denying claim of drawback. CENVAT credit is a facility that enables the discharge of duty of excise on excisable goods out of common pool and the availment of such credit is, by no stretch of law or procedure or imagination, a discharge of excise duty liability; in fact, the availment arises from, in this instance, from the discharge of additional duties of customs. Under section 74 of Customs Act, 1962, the eligibility is to the extent of 98% of any duty has been paid on importation . The duties of customs, for the purpose of this dispute, is the aggregate of the basic customs duty and the additional duty of customs and as section 74 of Customs Act, 1962 is thus applicable to the whole of this duty put together, it was improper on the part of lower authorities to disaggregate this. Furthermore, though the appellant had availed CENVAT credit on entry of the capital goods into the premises of the appellant, factum of exports would disentitle them from such availment ab initio. It is in pursuance of such disallowance that the credit so availed was reversed. It may not, therefore, be deemed to have been retained by the appellant at all. There is no justification for withholding of the prescribed percentage of drawback at 98% of the additional duty of customs as held by the two lower authorities - appeal allowed - decided in favor of appellant.

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• 2019 (4) TMI 338
  Exemption from SAD - benefit of N/N. 53/2003-Cus dated 01/04/2003 - DFCE Scheme - Held that:- Initially though the appellant had claimed exemption from SAD under notification 53/03-Cus but, subsequently, they made a claim under notification 20/06-Cus which this tribunal in the first round prima facie held that the exemption should be available and for eligibility of the said notification matter was remanded. Accordingly, though the Adjudicating authority, once again confirmed the demand, but the Commissioner (A) set aside the demand holding that the appellant is entitled for exemption under notification 20/06-Cus. - once the notification 20/06 was made applicable, the only condition to avail such exemption is the imported goods are exempted from payment of basic Custom Duty and CVD. As per the notification 53/03, the basic Custom Duty and CVD are exempted. The goods are eligible for exemption notification 20/06-Cus. - appeal dismissed - decided against revenue.

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• 2019 (4) TMI 337
  Jurisdiction of officers of DRI to issue Show cause notice - Proper officer - Imposition of ADD - import of ‘citric acid monohydrate’ - principle of finality of litigation - Held that:- The principle of finality of litigation may have the effect of sanctifying illegal proceedings if, ignoring the issue of jurisdiction, merit alone is considered before the competence is decided by the Hon’ble Supreme Court. The inequity of a recovery upheld now with jurisdiction being nullified later is not particularly appealing to a judicial institution. Should it be held otherwise, there is no detriment to Revenue as the proceedings would then be reinstated. Considering the criticality of competence to issue show cause notice, the ends of justice will be appropriately met if the impugned order is set aside and the matter remanded back to the adjudicating authority to be decided afresh after the question of jurisdiction of officers of Directorate of Revenue Intelligence to issue notice for finalisation of assessment is settled.

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• 2019 (4) TMI 336
  Appellate order before Commissioner (appeals) - internal discussions between the officers - Exemption from payment of Additional Customs Duty - importation of goods under these seven DFIA s - Held that:- It is quite evident that the said endorsement is not a decision in itself which could have been appealed before Commissioner (Appeal). Further from the endorsement it is also not evident that whether the same was ever communicated to the respondent. Such an endorsement by the appraising officer and Assistant Commissioner on any receipt cannot be considered as decision which could have been appealed against before the Commissioner (Appeal). Such an endorsement is nothing but part of internal discussions between the two. Commissioner (Appeal) was clearly in error when he entertained the appeal against the endorsement made on the request letter of the Appellants and passed the impugned order. Such an order cannot be sustained. Matter remanded to original adjudicating authority for consideration of the request letter dated 30th July 2008.

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• 2019 (4) TMI 335
  Benefit of exemption - import of paver finishers capable of laying bituminous pavement of 7 meter and above - N/N. 21/2002-Cus dated 01.03.2002 - sub-contract - clearance of electronic Sensor Paver Vogele-Model Super 1800-2 with AB 600 – 2TV Screed for working upto 9.5 Mtrs for laying Bituminous Pavement - Held that:- The issue is well settled by the decision of larger bench of Tribunal in case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS RAMKY INFRASTRUCTURE LTD AND OTHERS [2014 (6) TMI 615 - CESTAT MUMBAI (LB)], where it was held that From the purchase order and from the packing list, we find that the accessories i.e. bolt-on extensions were separately ordered. In a situation when bolt-on extensions are not imported, the relevant question would then be whether the machines still qualify for exemption under Notification 21/2002. Certainly, the benefit of the Notification is not available to such machine. Appeal and the cross-objections filed by the Revenue is dismissed.

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• Corporate Laws

• 2019 (4) TMI 334
  Official Liquidator obtained possession of the flat - exparte order - seeking consequential directions upon Official Liquidator to remove lock and seal put on the flat in question and hand over possession thereof to applicant - HELD THAT:- Earlier order for possession was also exparte on a ‘letter for direction’. Due process of law for eviction by adjudication on eviction proceedings, with leave obtained under section 446, was not resorted to by Official Liquidator. There was no dispute raised by Mr. Chowdhury regarding manner in which Official Liquidator obtained possession of the flat except submission that notices issued prior thereto by the office, addressed to applicant at his address of the flat, went unserved. As such the application for, inter alia, recall of order dated 5th May, 2017 is allowed in part as the order was obtained exparte and there appears error of fact apparent on face of it, the flat being occupied and not locked. However, as aforesaid, applicant having had thereafter relinquished possession, other prayers in the application cannot be granted.

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• Insolvency & Bankruptcy

• 2019 (4) TMI 333
  Corporate insolvency process - total outstanding debts - claim adjudication by RP - RP not empowered by the I & B Code to adjudicate a claim - HELD THAT:- RP himself left the column of reason blank for non-admission of the claim, which, in our view, is not in conformity with the provisions of the I 8b B Code. He was required to register the claim as put forth by the Operational Creditor after his verification from necessary vouchers and other documents to mention the same while preparing the Memorandum of Information, so as to apprise the Resolution Applicant. Our such view finds support from the decision in Arcelormittal India (P.) Ltd.2018 (10) TMI 312 - SUPREME COURT OF INDIA and Vijay Kumar Jain v. Standard Chartered Bank [2019 (2) TMI 97 - SUPREME COURT] Therefore, by placing reliance on the above stated judgment, we are of the considered opinion that the RP has not been empowered by the I & B Code to adjudicate a claim. Hence, the present application succeeds on this limited legal ground alone, because it is found that the RP has rejected/non-admitted claim of the Applicant without showing any reason in the impugned communication. Hence, such communication dated 14.05.2018 is not legally sustainable and liable to be set aside. For the aforesaid reasons, the RP’s communication dated 14.05.2018 is hereby set aside. RP is directed to update the total claim of the present Applicant, as being an Operational Creditor, submitted before him, in the relevant documents, i.e. List of Creditors and Memorandum of Information, as per the norms and criteria adopted for the purpose of consideration of a Resolution Plan for other related proceedings, so that proper apportionment of the payable amount can be made. It is pertinent to note here that the total claim of the Applicant seems to be less than 10% of the entire debts due by the Corporate Debtor company. Therefore, in such situation, in case a Resolution Plan is not approved, then the applicant would certainly get minimum payment as per the criteria adopted and norms fixed for liquidation value of the assets of the Corporate Debtor company, however, the present Applicant is having less than 10% of the claim of the entire debts payable by the Corporate Debtor, is having no locus to oppose the proposed Resolution Plan, which is now under consideration (IA 431 of 2018) by this Adjudicating Authority, under Section 31 of the I & B Code. In view of the above given the present application deserves to be partly allowed. The Resolution Professional is hereby directed to register the Applicant’s total claim in the list of the Operational Creditors/claimants in other documents so as to apprise the CoC and also to communicate to the Applicant urgently.

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• FEMA

• 2019 (4) TMI 332
  Guilty pf provisions of section 8 and section 40 of FERA - diaries relied upon by the prosecution as an evidence - HELD THAT:- The present proceedings are an offshoot of the "Jain Hawala Diaries case [2013 (8) TMI 400 - DELHI HIGH COURT] which ended in quashing of the criminal proceedings as a result of the judgment of the Hon ble High Court in L.K. Advani vs. CBI [1997 (4) TMI 524 - DELHI HIGH COURT] wherein, it was held that the diaries relied upon by the prosecution are inadmissible in evidence and cannot be called books of accounts. On the basis of the entries of the dairy M-207/93 two criminal complaints bearing CC No. 61/1/91 and 107/1/96 were filed before the ACMM. After the recording of the pre-charge evidence the Trial Court has discharged the present Appellant and the same has been upheld by the appellate court on the ground that the said entries are inadmissible in evidence as no case is made out based on the same. The same was decided on merit. The said order of discharge has not been set-aside as of today. It is a settled law that the rulings of the Supreme Court are binding under Article 141 of the Constitution of India, wherein a higher court has rendered a particular decision, said decision must be followed by a subordinate or a lower court unless it is distinguished or over-ruled or set aside.

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• PMLA

• 2019 (4) TMI 331
  Offence under PMLA - attachment of property - HELD THAT:- Section 8 deals with adjudication by the adjudicating authority which as per Section 8(3) authorizes, the adjudicating authority to confirm the attachment of the property if it is involved in money laundering. Hence, while the attachment powers are with the adjudicating authority the power to confiscate, release or restore to a claimant of the said property lies specifically with the Special Courts. This Tribunal has not been assigned any specific powers under PMLA, 2002 with relation to confiscation, release or restoration of the property attached. Since the Special Court has initiated the proceedings in the present case and taken cognizance of the same, it is my considered view that the Special Court has to decide the case including the offence of money laundering as discussed above, which in any case only the Special Court can decide and not the Appellate Tribunal. The scheme of things as it exists under the PML Act shows that it is the same property which can be provisionally attached, thereafter this attachment can be confirmed by the adjudicating authority, that the order with regard to the same property would become final after an order of confiscation is passed by the Special Court (Section 8(3)(b), or released or restored as per Section 8(6) or Section 8(8) second proviso as the case may be. It would be appropriate to keep this appeal in abeyance until the Special Court who has already taken cognizance finally disposes of the case. The interim orders are also vacated.

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• Service Tax

• 2019 (4) TMI 330
  Recovery of arrears in installments - Garnishee proceedings - failure to pay liability towards interest on delayed payment of admitted liability of service tax - attachment of bank accounts - Held that:- On plain reading of Section 68, Section 69 and Section 70 of the Finance Act, 1994 and Rule 6 of the Service Tax Rules 1994, it is clear that the liability to pay self-assessed service tax/ admitted tax within the prescribed period is binding on the petitioners as service tax being an indirect tax, the petitioners have already collected such tax from their customer. As the writ petitioners have delayed in making such payment, interest is charged on the petitioners and in such a case, the interest on delayed payment of self-assessed tax/ admitted tax has taken the character of self-assessed tax/admitted tax. The application dated 8th January, 2019 though remains pending before the Commissioner, the Deputy Commissioner of CGST & CX, Kolkata, the respondent no. 3 has rightly issued garnishee notice under Section 87 of the Finance Act, 1994 for non-payment of interest on self-assessed/ admitted service tax. Petition dismissed.

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• 2019 (4) TMI 329
  Refund of unutilized CENVAT credit - Car Parking Charges - Held that:- It is not disputed that the appellants have availed the said charges for car parking facilities within their premises. It is very much necessary for appellants to have this service - the rejection of refund on Car Parking Charges is unjustified. Other issues requires verification by the refund sanctioning authority - Appeal is thus partly allowed and partly remanded.

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• 2019 (4) TMI 328
  Classification of services - appellant engaged in test substance of agrochemicals, Pharmaceuticals, industrial chemicals, drugs and cosmetic products - classifiable as Scientific or Technical Consultancy Service or Technical Testing and Analysis Service? - Held that:- The appellant are only collecting the sample, modify the sample making Protocol, conduct the analysis preparing the report and submitting the result/report to the client. In this process it is no where coming out that the appellant is providing any service of Scientific and Technical/Consultancy Service to the client. It is only after the receipt of the report the client do consultation with the scientific or Technical expert to obtain there consultancy, therefore, the process carried out by the appellant is limited to conduct the analysis of the sample and giving report the appellant who has no authority to give any consultancy on the analysis and report conducted by them - In the present case the Testing and Analysis of sample of and preparation of its report is not carried out by Scientist or Technocratic or any Science or Technology Institution or Organization. For this reason also the service does not classify as Scientific or Technical Consultancy Services. Business Auxiliary services - service received from abroad - applicability of Section 66A of the Finance Act, 1994 - Held that:- The service received from abroad is liable to service tax under section 66(A) of the Finance Act, 1944 w.e.f 18.04.2006. Penalty - Held that:- The service tax was not paid in time under the bonafide belief. Accordingly, the appellant have made out a good case for waiver of penalty under Section 80. Accordingly, penalty imposed by the lower authority are set aside. Appeal allowed in part.

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• 2019 (4) TMI 327
  CENVAT Credit - input/input services - construction of said Hotel & Spa Project at Milroc Kadamba - denial of credit on the ground that Appellant has not provided any output service in relation to construction of the hotel building to another person - Held that:- The hotel construction is not the end activity of the appellants. Rather their end activities are providing various taxable services like accommodation, restaurant services, spa services and other related services in the said Hotel and they have availed credit in respect of these services which are other than construction service. They have, therefore, fulfilled the conditions specified in Rule 2(l) ibid and thus the appellant is entitled to the credit of the same under the provision of Rule 3(1) ibid. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2019 (4) TMI 326
  Rectification of Mistake - error apparent on the face of record or not - Held that:- The text of notification as 11/2010-ST as available of the website of Central Board of Indirect Tax (Formerly Central Board of Excise and Customs) and also on the website indiabudget.gov.in, do not contain any subject. The subjects indicated have come from the various private publication. However for the purpose of consideration of the exemption contained in the notification the text of Notification is considered and for that reason we do not find any error apparent on record on this account in the order. However the subject “Regarding exemption to the taxable service provided for distribution of electricity.” mentioned in the para 5.1 of the order after “NTF. NO. 11/2010- ST, DT. 27/02/2010” is deleted to align the notification as reproduced in the order with the notification as it is available on the above mentioned official websites. ROM application disposed off.

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• Central Excise

• 2019 (4) TMI 325
  Clandestine removal - chewing tobacco - Retraction of statements - penalty on firm as well as on employees - Held that:- We have gone through the order passed by the first appellate authority wherein, statement of the family members of the employees and others have been recorded from which, we find that the particular trade in which, the assessee was engaged, viz., manufacture of chewing tobacco is a cottage industry in and around the said area. The statement of one of the employee s wife, viz., Mr.M.Chandramohan who appears to be a non literacy woman states that she did not know wherefrom her husband brings the tobacco and she only put them into the plastic pouches and seal them with a candle. Therefore, certain leverage can be granted to the assessee, considering the nature of trade and the trading practices which have been violated. Therefore, this Court is of the view that the penalty imposed on the firm has to be vacated in toto. The appeal filed by the assessee is partly allowed and the penalty imposed on the assessee-firm is deleted - the demand of duty stands confirmed.

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• 2019 (4) TMI 323
  SSI Exemption - exemption not taken for some unit, therefore exemption denied for other units as well - Held that:- It is evident from the show cause notice against which this order has been confirmed against the appellants by the Lower Adjudicating Authority and Ld. Commissioner (Appeals) that states in para 8 thereof about in the show cause notice C.No. 7676-7678 dated 07.07.2005 decided in the case of M/S ICEBERG GOODS LTD., SHRI DHEERAJ GOEL, DIRECTOR, SHRI R.S. GUPTA, GENERAL MANAGER VERSUS CCE, ROHTAK [2015 (9) TMI 875 - CESTAT NEW DELHI] - The present Appeal before this Tribunal is pertaining to the same period and the fact that the Adjudication by the Tribunal has already been done for the earlier period 2003-04 and 2004-05 and the amount is also same i.e. Rs. 22,67,593/- this amount included the demand for period April to July 2005 as well. In view of the above, we are of the considered view that the department had not produced any order contrary to the order of this Tribunal. The same is applicable in the case in hand being recent judgment. Appeal allowed - decided in favor of appellant.

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• 2019 (4) TMI 322
  Valuation - inclusion of drawings and designs supplied by their customers in assessable value - Rule 6 of The Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - revenue neutrality - extended period of limitation - penalty - difference of opinion - Held that:- Various points of difference emerging on the issue.

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• 2019 (4) TMI 321
  Time Limitation - Classification of goods - tanker trailer - Waste and Scrap of iron and steel generated - filing of declaration - suppression of facts or not - difference of opinion - Held that:- As there is difference of opinion, the matter is placed before the Hon ble President for reference to third Member to decided the following issue: Whether the appeal is to be rejected as held by learned Member (Technical) upholding the entire duty and interest as also penalty imposed upon them?

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• 2019 (4) TMI 320
  Scope of SCN - classification of goods - communion wafers - Held that:- We cannot decide on a classification that has not been pleaded before us. Once the classification proposed by Revenue is found to be inappropriate, that claimed, while clearing the goods, will sustain even if it may appear to be inappropriate - The mandate of the law pertaining to recovery of duties not paid or short-paid will have to be followed to the letter. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (4) TMI 324
  Process amounting to manufacture or not - conversion of wet blue leather into finished leather - Held that:- The issue involved in this writ petition is squarely covered by a decision of the Division Bench of this Court in the case of GOLDEN LEATHERS VERSUS SECY., TAMILNADU SALES TAX APPELLATE TRIBUNAL [2010 (4) TMI 535 - MADRAS HIGH COURT], where it was held that Conversion of wet blue leather into finished leather through several process such as splitting, shaving, neutralizing, bleaching, dyeing, fat-liquoring, stuffing, setting out, samming, drying, staking, and finishing. Wet blue leather loses its identity as wet blue leather and becomes a different commodity with a distinct identity in the market and in the industry concerned. Activity amounts to a manufacturing activity. Petition allowed.

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• 2019 (4) TMI 319
  Levy of CST - Cancellation of F-Forms - CST levied treating the transaction of stock transfer as an the inter-state section under the deeming section of Section 6A of CST Act - vires of Rule 8 (10) of the CST rules - Held that:- The Court is satisfied that the Petitioner has made out a prima facie case for grant if an ad interim order in its favour. It is accordingly directed that till the next date of hearing, the impugned notification dated 18th June, 2018 issued by the Respondent No.2 shall remain stayed. List on 5th August, 2019.

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• 2019 (4) TMI 318
  Interpretation of statute - Assessment of Turnover - classification of goods - imported access control systems, intrusion alarm systems, conventional fire alarm, analog conversory systems, closed circuit television and electronic spares - assessment confirmed by interpreting the petitioner's goods as falling under Entry No.14(iii) of Part D of the First Schedule instead of Entry 13(i) of Part C of the First Schedule - erroneous interpretation of the legislative intent. Held that:- The Tribunal did not take note of the earlier order passed by the Tribunal dated 24.01.2006 in STA.Nos.273 and 294 of 2004 which arose in similar circumstances for the earlier two assessment years. Each assessment year is distinct and independent. However, there is a similar caveat to the said submission that if the nature of transaction is identical for more than one year, then obviously the department cannot take a different stand, unless there are distinguishing circumstances pointed out by the Assessing Officer or the Appellate Authority or the Tribunal. In the instant case, probably the Tribunal was not aware of the earlier orders passed in favor of the assessee. Thus, the two orders on the same type of transactions cannot be left to remain inconsistent with each other. Matter remanded to the Tribunal to take note of the decision in the assessee's own case in STA.Nos.273 of 2004 and 294 of 2004, dated 24.01.2006, which has been accepted by the department and pass fresh orders on merits and in accordance with law.

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• Indian Laws

• 2019 (4) TMI 317
  Refusal of the respondents to extend the provisions of the Employees Pension Scheme, 1995 to them - changes brought about by the Employees' Pension (Amendment) Scheme, 2014 - Held that:- There is no merit in the SLP - SLP dismissed.

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• 2019 (4) TMI 316
  Rectification of mistake/recall of order - mistake apparent on the face of record - Held that:- The apparent error is that it was not brought to our notice that the Parliament, consequent upon the decision of this Court in Ahmadabad Pvt. Primary Teachers Association [2004 (1) TMI 639 - SUPREME COURT], had amended the definition of employee as defined in Section 2(e) of the Payment of Gratuity Act by amending Act No. 47 of 2009 with retrospective effect from 03.04.1997. This amendment, in our opinion, had a direct bearing over the issue involved in this appeal - we recall our order dated 07.01.2019 passed in this appeal. As a consequence, the appeal (Civil Appeal No. 2530 of 2012) is restored to its original number for its disposal on merits in accordance with law. Payment of gratuity amount to teacher - teacher comes within the scope of employee or not - whether the Courts below were justified in holding that respondent No.4 was entitled to claim gratuity amount from the appellant (employer) under the Act? - Held that:- The issue in question was subject matter of the decision rendered in the case of Ahmadabad Pvt. Primary Teachers Association. This Court had examined the question in the light of the definition of the word employee defined in Section 2(e) of the Act as it stood then - The decision rendered in Ahmadabad Pvt. Primary Teachers Association, therefore, led the Parliament to amend the definition of employee as defined in Section 2 (e) of the Payment of Gratuity Act by amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997 - It is clear from the statement of Objects and Reasons of the Payment of Gratuity (Amendment) Bill, 2009 introduced in the Lok Sabha on 24.02.2009. In the light of the amendment made in the definition of the word employee as defined in Section 2(e) of the Act by Amending Act No. 47 of 2009 with retrospective effect from 03.04.1997, the benefit of the Payment of Gratuity Act was also extended to the teachers from 03.04.1997 - the teachers were brought within the purview of employee as defined in Section 2(e) of the Payment of Gratuity Act by Amending Act No. 47 of 2009 with retrospective effect from 03.04.1997. The effect of the amendment made in the Payment of Gratuity Act vide Amending Act No. 47 of 2009 on 31.12.2009 was twofold. First, the law laid down by this Court in the case of Ahmadabad Pvt. Primary Teachers Association was no longer applicable against the teachers, as if not rendered, and Second, the teachers were held entitled to claim the amount of gratuity under the Payment of Gratuity Act from their employer with effect from 03.04.1997 - in the light of the amendment made in the Payment of Gratuity Act as detailed above, reliance placed by the learned counsel appearing for the appellant (employer) on the decision of Ahmedabad Pvt. Primary Teachers Association is wholly misplaced and does not help the appellant in any manner. It has lost its binding effect. Petition dismissed with costs quantified at Rs. 25,000/payable by the appellant to respondent No.4(teacher).

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• 2019 (4) TMI 315
  Salary for the period appellant have rendered their services - interim order - Held that:- Since the appellants have served as per the interim order, obviously they have to be paid the salary for the period they have rendered their services. Non-payment of salary to them for the period they have served under the interim order or otherwise would tantamount to taking begar from them, which is prohibited under Article 23 of the Constitution of India. The appellants shall be entitled to salary for the period they have rendered their services. The salary, if not paid, shall be paid to the appellants within four weeks from today - appeal disposed off.

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• Law of Competition

• 2019 (4) TMI 314
  Penal offence under Section 42(3) of the Competition Act - It is argued that since failure to pay penalty under Section 43 is not failure to comply with the orders or directions within the meaning of Section 42(2), such failure cannot lead to prosecution for the offence under Section 42(3) - Held that:- It is well settled that use of a comma and word “or” between two parts of a clause makes the two parts disjunctive. Noticeably, in the clause defining the offence punishable under Section 42(3), the failure to pay the fine imposed under sub-section (2) of Section 42 is included as one of the possible reasons leading to such criminal action, it being provided by a disjunctive clause, the words “or fails to pay the fine imposed under sub-section (2)”being preceded and followed by a comma. The comma (,) appearing prior to the said words separates it from the words “if any person does not comply with the orders or directions issued”. The use of comma (,) is with a purpose. It indicates that a cause of action for criminal complaint to be filed in the court of CMM arises in two possible situations, viz., (1) there has been a failure on the part of a person to “comply with the orders or directions” issued to him under the law or (2) on account of failure to pay fine imposed for non-compliance with orders or directions of the Commission under specified provisions (i.e., Sections 27, 28, 31, 32, 33, 42A and 43A), the Commission, after inquiry, having found absence of “reasonable cause”. The suggested interpretation of Section 42(3) of the Competition Act does not commend itself to this court. Double jeopardy - Held that:- The argument of double jeopardy can be rejected by pointing out that the penalty under Section 43 is civil in nature imposed by the statutory authority (the Commission) in exercise of the powers conferred on it by the law, the criminal complaint alleging offence under Section 42(3) carrying the additional element of failure to comply further with the said direction, the criminal action even otherwise being not violative of Article 20(2). The petitioner in the second and third captioned matters has raised questions of fact about extent of his responsibilities, his ignorance, non-service of some of the notices or processes, generally referring to cessation of his role as the Honorary Secretary of FDA after 30.10.2013. These questions of fact would need inquiry and scrutiny of evidence. The forum of Section 482 Cr.P.C. is not the correct one to embark upon such inquiry. Petition cannot be accepted and is dismissed.

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